Transcript The Marketing Concept

Basic Marketing
Concepts
Chapter 2
Section 2.1 – The Marketing Concept
The Marketing Concept
• Businesses must satisfy customers’ needs
and wants in order to make a profit.
• Competition forces businesses to
embrace this idea.
– They must have the right goods and services
at the right time, at the right price, and at the
right place for purchase.
Customers vs.
Consumers
• Part of fulfilling a person’s needs is determining
if they are a customer or a consumer.
– Customer are the ones who buy a
product (good or service).
– Consumers are those people who
actually use the product.
• Ex: You parents buy you new shoes, but you are the one
who wears them. You are the consumer and your parents
are the customer.
• Note: Make sure to keep in mind that for certain businesses
a person is not the customer, but rather other businesses
are. Nike sells primarily to department stores not to
individual consumers.
What is a Market?
• All customers who share common needs and
wants, and who have the ability and willingness
to buy the product, are considered a market.
– Market can also be a companies percentage of total
sales in their industry. Ex: Nike sales 48% of all cross
trainers in the U.S.
• So how do we determine what customers share
common needs and have the ability to
purchase?
Target Marketing
• Focusing all marketing decisions on a very
specific group of people you want to reach.
– The more information you have on this group the
easier it is to make marketing decisions
• Businesses will frequently create what they call
a customer profile, which is a breakdown of the
characteristics of the target market. (age,
income, ethnic background, geography)
The Marketing Mix
• The Marketing Mix is comprised of 4 strategies. These
strategies should be carefully planned and considered
before selling your product.
• Also know as the Four P’s
–
–
–
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Product Strategies
Place Strategies
Promotion Strategies
Price Strategies
• It’s important that your product (good/service) fits the
target market you’ve selected.
Product Strategies
• Includes what product to make, how to
package it, what brand name to use and
what image to project.
– Ex: As CEO of Widgets Inc. I decided there is
a need for extra large widgets, I decide the
best name for them would be Ginormous
Widegets, and they should come in packs of
14.
Place Strategies
• Determine how and where a product will
be distributed.
– Ex: As CEO of Widget Inc. I decide to have
warehouses in 3 major U.S. cities and to
operate M-Sa 9-6pm. I am also providing
shipping to most areas in the U.S. only.
Price Strategies
• Price strategies should reflect what
customers are willing and able to pay.
– Ex: Through research I found that most companies
need around 10-12 widgets at a time. The packages
of 14 Widget Inc. sells fulfill that need. I also have
determined that a price of $239.99 per pack allows
me to cover my cost and make a reasonable profit.
Promotion Strategies
• Deals 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.
–Ex: Widget Inc. spends a great deal of money
advertising in business journals, employing salespeople,
creating informational documents, and creating and
dispersing radio/TV advertisements. They also send out
press releases, take time to give interviews, and
support a little league team in each city they have a
warehouse.
Bringing it all Together
The Marketing Concept
Marketing Research
Product
Marketing Segmentation
Price
Consumers
Place
Promotion