Basic%20Marketing%20Concepts

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Basic Marketing Concepts
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Customers vs. Consumers

• Customers BUY the product.
• Consumers USE the product.

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What is a Market?

• All potential customers who share common needs
  and wants, and who have the ability and
  willingness to buy the product, are considered a
  market.

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The Marketing Concept
U.S. Game Console Market
A market can be described as the people who are
potential customers of a product, as well as by
the classification of a product in a category.
Would you be considered part of the market for
game consoles? Why or why not? What other markets
are you part of?
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Target Marketing

• Focusing all marketing decisions on a very
  specific group of people who you want to reach.

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Customer Profile

• Includes information about the target market
  with regard to the age, income level, ethnic
  background, occupation, attitudes, lifestyle, or
  geographic residence of the targeted customers.

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Marketing Mix

• The 4 Ps
• Product
• Place
• Price
• Promotion

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Product Strategy

• What product to make
• How to package it
• What brand name to use
• What image to project

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Place Strategies

• How and where a product will be distributed

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Price Strategies

• Reflects what the customers are willing and able
  to pay.

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Promotion Strategies

• How will the customer be told about the product
• What will the message be
• When and where will it be delivered
• With what inducements

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Marketing Mix for a New Juice Tropicanas Light
n Healthy Juice
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Graphic Organizer
The Marketing Mix
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Market Segmentation
What You'll Learn

• Market segmentation and the four methods commonly
  used to segment a market
• Current demographic, psychographic, and
  geographic trends

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Market Segmentation
Why It's Important
Businesses must know who their customers are to
achieve success. In other words, they must know
their markets. This section will introduce you to
the U.S. marketplace and the different ways
businesses classify and characterize its segments.
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Market Segmentation

• A way of analyzing a market by specific
  characteristics in order to create a target
  market
• May segment a market by
• Demographics
• Psychographics
• Geographics
• Product benefits

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Demographics

• Statistics that describe a population in terms
  of personal characteristics
• Age
• Gender
• Income
• Ethnic background
• Education
• Occupation

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Age

• When marketers study age, they classify everyone
  according to certain generations
• The last 3 generations were
• Baby Boom Generation
• Generation X
• Generation Y

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Baby Boom Generation

• Born between 1946-1964 (76 million)
• Large size
• Great spending power 51 of the wealth

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Generation X

• Born between 1965-1976 (40 million)
• Savvy and skeptical consumers
• Better educated
• Financially cautious and conservative

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Generation Y

• Born between 1977 1997 (77 million)
• Computer Revolution
• 130 million in spending power
• Influences 250 million in purchases

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Gender

• Gender neutral products may use different
  advertising media and messages when trying to
  reach men and women.

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Market Segmentation
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 womens market
  with Jockey underwear for women and doubled
  its sales.

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Income

• Disposable
• Money left after taking out taxes
• Necessity items

• Discretionary
• Money left after paying for basic living
  necessities such as food, shelter and clothing
• Luxury items

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Market Segmentation
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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Market Segmentation
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

• Studies of consumers based on social and
  psychological characteristic
• Attitudes
• Values
• Lifestyles

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Market Segmentation
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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Geographics

• Based on where people live
• Local markets
• Regional markets
• National markets
• Global markets

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Product Benefits

• Companies market benefits, not simply the
  physical characteristics of a product.

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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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Basic Marketing Concepts
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