1. Fundamentals of Marketing
Chapter 1, Section 3

2. Critical Thinking…
Take 2-3 minutes to reflect on one recent marketing trend you have noted (either through the media or by your own observation)
You will share your observation in a few minutes!
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3. Key Terms Market Consumer market Industrial market Market share
Target market
Customer profile
Marketing mix
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4. Market and Market Identification
FYI: There are A LOT of terms in this section that are important for your future studies in Marketing…PAY ATTENTION AND TAKE GOOD NOTES!
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5. The Reality…
Marketers know that their products or services cannot appeal to EVERYONE
It is essential that marketers look for people who:
A) have an interest or need for their product and,
B) have the ability to pay for their product
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6. Market
All people who share similar needs and wants and who have the ability to purchase a given product
Note: Just because a group of people are in one market does not mean they will all be a part of another. For example, if I am a part of the tennis market, I may not be a part of the SUV market.
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7. Consumer versus Industrial Markets
Consumer Market
Consists of consumers who purchase goods and services for personal use
Consumers’ purchase goods and services based on these main areas:
Save money
Make life easier
Improve appearance
Create status in the community
Provide satisfaction related to some other personal motivation
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8. Consumer Versus Industrial Market
Also called business-to-business (B2B) market, includes all businesses that buy products for use in their operations.
Goals are different in this market:
Increase profits
Improve productivity
Increase sales
Decrease expenses
Make their work more efficient
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9. Consumer versus Industrial Market
Companies producing products for the consumer market classify resellers as a part of the industrial market
Therefore, these companies require two distinct marketing plans to reach each market!
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10. Market Share
A market is further defined by the total sales in the product category
Market Share
A company’s percentage of total sales volume generated by all companies that compete in a given market
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11. Market Share, cont.
Knowing one’s market share helps marketers analyze their competition and their status in a given market
Market shares change all the time as new competitors enter the market and the size of the market increases or decreases in volume
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12. Target Market and Market Segmentation
Businesses know that not EVERYONE will buy their products or services
They look for ways to offer their products or services to the people who are most likely to be interested
This involves segmenting, or breaking the market into smaller groups that have similar wants and needs
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13. Target Market and Market Segmentation
Segmentation goes beyond classification into the consumer or industrial market
Market segmentation seeks to find the group of people most likely to become customers
The group that is identified for a specific marketing program is the target market
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14. Target Marketing – Why?
Identifying a target market is very important because all marketing strategies are directed at this group.
When a business fails to identify a target market, its marketing plan has no focus.
Identifying a target market correctly is a key to success.
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15. Consumers versus Customers
A product may have more than one target market
Case Study Example: Build-a-Bear knows they need to target children and parents differently.
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16. Consumers versus Customers, cont.
Case Study Example, cont.:
Children are the consumers, the ones who will ask for the bears and play with them
Parents are the customers, the ones who need to approve it, and the ones who will pay
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17. Customer Profiles Lists information about the target market such as
Age
Income Level
Ethnic Background
Occupation
Attitudes
Lifestyle
Geographic Residence
Businesses develop these to get a clear picture of their target market
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18. Think Critically & Discuss…
Work in a group of four (4) to build a customer profile for Dierberg’s
You will share with the class in 10 minutes
Be prepared to back up your ideas!
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19. Marketing Mix
These are the tools marketing professionals use and control to influence potential customers
Include the four basic P’s of marketing strategies:
Product
Place
Price
Promotion
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20. Marketing Mix, cont.
Some would add a 5th “P”, PEOPLE, as it is necessary to have a clearly defined target market before you can create marketing strategies
All of the “P’s” are interconnected
Actions in one area, affect decisions in another
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21. Product
This “P” revolves around making decisions about what to make and sell
Some marketing strategy examples of this P include:
Features of the new iPhone
The brand name of a new Nabisco breakfast food
How to package a new organic Hershey candy bar
What the warranty of a Sony Bravia LCD will entail
How to update and improve the Ford Focus so it can remain competitive
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22. Place The means of getting the product into the consumer’s hands
It is important to know where one’s target market shops!
Examples of marketing decisions based on place include:
Whether a local bakery should build additional stores on the Illinois side of the river
Whether Build-a-Bear should create a website where customers can purchase their products
Whether Tropicana should have products shipped via air or rail
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23. Price What is exchanged (monetarily) for the product
This strategy must consider what customers are willing and able to pay
Examples of pricing strategy decisions include
Toyota’s suggested manufacturer’s retail price on the Camry
Wal-Mart offering credit terms (i.e., their own credit card) at their stores
Hollister having an “End of Summer Sale” on select items
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24. Promotion
Deal with how potential customers will be told about a company’s products
Examples of promotion strategy include
The 2010 Nike Shock campaign:
The message used (language, style, approach)
The media that is used to spread the word about the shoe
The special offers Nike will employ to create buzz and business
The timing of the campaigns and the product roll-out
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25. Quick Review…
What is the difference between the consumer and industrial markets?
What is the relationship among market segmentation, target markets, and customer profiles?
Name the four P’s of the marketing mix and explain the importance of a target market for each of them.
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