Transcript The Marketing Concept

Marketing Essentials
Chaper 2: The Marketing Concept
Chapter 2 n Basic Marketing Concepts
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SECTION 2.1
The Marketing Concept
What You'll Learn
 The marketing concept
 The difference between customers and
consumers
 What a market is and how it can be
described
 The four Ps of the marketing mix
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The Marketing Concept
The Basic Concept
The marketing concept states that
businesses must satisfy customers' needs
and wants in order to make a profit.
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Customers vs. Consumers
Customers buy a product.
Consumers use the product.
 Example: Parents who buy video games
from retailers are customers. The kids who
play the video games are the consumers.
 Example: Baby formula: Consumer?
Customer?
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What is a Market?
A market is all potential customers who
share common needs and wants and who
have the ability and willingness to buy the
product.
Could be the: Young, old, male, female, poor,
rich, jock, etc…….. A combination or just
one.
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The Marketing Mix
The marketing mix comprises four basic
marketing strategies known as the four Ps:
 Product
 Place
 Price
 Promotion
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The Marketing Mix
Product strategies include what product to make,
how to package it, what brand name to use, and
what image to project.
Place strategies deal with how and where a product
will be distributed.
Price strategies should reflect what customers are
willing and able to pay.
Promotion strategies deal with how potential
customers will be told about the new product, what
the message will be, when and where it will be
delivered, and with what inducements to buy.
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The Marketing Mix
• Product, Place, Price, Promotion
Let’s think of some products/services that are
trending NOW…
What would be the marketing mix for…
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SECTION 2.1
The Marketing Concept
Target Marketing
Target marketing is focusing all marketing
mix decisions on the specific group of
people you want to reach.
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Thinking Critically
Many women's magazines like Glamour and
Elle publish advertisement for men's cologne.
Explain the rationale for this practice.
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2.1
ASSESSMENT
Reviewing Key Terms and Concepts
1. What does the marketing concept state?
2. Who are the customers of Sony Electronics
and Hershey Chocolates? Who are their
consumers?
3. What is a market?
4. What is target marketing?
5. What are the four Ps of the marketing mix?
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Market Segmentation
Dividing the total market into smaller
groups of people who share specific needs
and characteristics is the essence of
market segmentation.
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Market Segmentation
Analyzing Markets
Businesses may segment a market by:
 demographics
 psychographics
 geographics
 product benefits
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Demographics
Demographics refers to statistics that
describe a population in terms of personal
characteristics. These include:
 age
 gender
 income
 ethnic background
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Demographics: Age
When marketers study age, they classify everyone
according to certain generations, because each
generation tends to have shared experiences and
common bonds.
See chart in your notes! You will be using these
throughout the semester.
What will the next generation be called? Here are
some experts thoughts: Digital Natives, Generation
Like and the Selfie Generation
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Demographics: Gender
Companies can expand their markets by
marketing to the other gender, or by marketing
their products differently to men and women.
 Example: Jockey entered the women’s
market with Jockey underwear for women
and doubled its sales.
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Demographics: Income
Marketers want to know how much money
is available for spending on different
products. They look at two types of income
measurement:
 disposable income
 discretionary income
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Demographics: Income
Disposable Income = money left over after taxes.
 Important for companies that produce and
distribute necessities
Discretionary Income = money left after paying
for food, shelter, and clothing.
 Important for companies that produce and
distribute luxury items
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Demographics: Ethnicity
Marketers often segment the market by ethnicity.
The three largest ethnic groups within the
United States are African-Americans, Hispanics,
and Asian-Americans. These three groups will
account for 33 percent of the U.S. population
in 2005.
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Census 2000
The United States conducts a census
every ten years to determine the
characteristics of the population. Which
ethnic group is declining? Which ethnic
groups are increasing? What effects
will these ethnic changes have on
marketing in the United States?
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Psychographics
Psychographics involves studies of
consumers based on social and psychological
characteristics.
In addition to segmenting people by their
leisure time interests, marketers observe
trends and changes in households, the
economy, politics, and the workplace.
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Geographics
Geographics refers to segmentation of the
market based on where people live. Marketers
study geographics in relation to:
 ethnic concentrations
 age
 ethnic background
 income
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Product Benefits
Segmenting a market by product benefits
involves studying consumers' needs and wants.
 Example: Different shampoos are marketed
to people with different hair care needs.
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Thinking critically
How can Procter and Gamble market
household products to a male market segment?
What problems might P&G encounter in that
endeavor?
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Top 10 Trending Products of 2015
• What would be the market for these products
that are trending?
• Here's the link of the top 10 trending in 2015
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2.2
ASSESSMENT
Reviewing Key Terms and Concepts
1. What do demographics, psychographics,
geographics, and product benefits have in
common?
2. How can a market be segmented using
demographics?
3. What does the study of psychographics
involve?
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2.2
ASSESSMENT
Reviewing Key Terms and Concepts
4. Provide one example of how a marketer can
segment a market based on product benefits.
5. Of what significance are the combined
African-American, Hispanic, and
Asian-American populations to marketers?
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