Basic Marketing Concepts

Customers vs. Consumers

Customers BUY the product.
Consumers USE the product.
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.
The Marketing Concept
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?
U.S. Game Console Market
Target Marketing
Focusing all marketing decisions on
a very specific group of people
who you want to reach.
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.
Marketing Mix
The 4 Ps
1. Product
2. Place
3. Price
4. Promotion
Product Strategy
What product to make
How to package it
What brand name to use
What image to project
Place Strategies
How and where a product
will be distributed
Price Strategies
Reflects what the customers
are willing and able to pay.
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
Marketing Mix
for a
New Juice:
Tropicanas
Light n
Healthy
Juice
Graphic Organizer
The Marketing Mix
The Marketing Concept
Consumers
Marketing Research Marketing Segmentation
Product Price Place Promotion
What You'll Learn
Market segmentation and the four
methods commonly used to segment
a market
Current demographic,
psychographic,
and geographic trends
Market Segmentation
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.
Market Segmentation
A way of analyzing a market by
specific characteristics in order to
create a target market
May segment a market by:
1. Demographics
2. Psychographics
3. Geographics
4. Product benefits
Demographics
Statistics that describe a
population in terms of
personal characteristics
Age
Gender
Income
Ethnic background
Education
Occupation
Age
When marketers study age, they classify
everyone according to certain
generations
The last 3 generations were:
Baby Boom Generation
Generation X
Generation Y
Baby Boom Generation
Born between 1946-1964 (76
million)
Large size
Great spending power 51% of
the wealth
Generation X
Born between 1965-1976 (40
million)
Savvy and skeptical consumers
Better educated
Financially cautious and
conservative
Generation Y
Born between 1977 & 1997 (77 million)
Computer Revolution
$130 million in spending power
Influences $250 million in purchases
Gender
Gender neutral products may
use different advertising media
and messages when trying to
reach men and women.
Market Segmentation
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.
Demographics: Gender
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
Market Segmentation
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.
Demographics: Ethnicity
Census 2000
Market Segmentation
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?
Psychographics
Studies of consumers based
on social and psychological
characteristic
Attitudes
Values
Lifestyles
Market Segmentation
Geographics refers to segmentation of the
market based on where people live. Marketers
study geographics in relation to:
Geographics
ethnic concentrations
age
ethnic background
income
Geographics
Based on where people live
Local markets
Regional markets
National markets
Global markets
Product Benefits
Companies market benefits, not
simply the physical
characteristics of a product.