Chapter 2 Basic Marketing Concepts1 Marketing Essentials Chaper 2: The Marketing Concept.

Chapter 2 Basic Marketing Concepts 1

Marketing Essentials

Chaper 2: The Marketing Concept

Chapter 2 Basic Marketing Concepts

SECTION 2.1

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

The Marketing Concept


The Marketing Concept

The marketing concept states that businesses must satisfy customers' needs and wants in order to make a profit.

The Basic Concept


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?

Customers vs. Consumers


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.

What is a Market?


The marketing mix comprises four basic marketing strategies known as the four Ps:

The Marketing Mix

Product Place Price Promotion

Slide 1 of 3


The Marketing MixProduct 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.

Slide 2 of 3

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.


The Marketing Mix

• Product, Place, Price, PromotionLet’s think of some products/services that are

trending NOW…

What would be the marketing mix for…

8


SECTION 2.1 The Marketing Concept

Target marketing is focusing all marketing mix decisions on the specific group of people you want to reach.

Target Marketing


Thinking Critically

Many women's magazines like Glamour and Elle publish advertisement for men's cologne. Explain the rationale for this practice.


2.1 ASSESSMENT

Reviewing Key Terms and Concepts1. 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?


Dividing the total market into smaller groups of people who share specific needs and characteristics is the essence of market segmentation.

Market Segmentation


Market Segmentation

Businesses may segment a market by:

Analyzing Markets

demographics

psychographics

geographics

product benefits


Demographics refers to statistics that describe a population in terms of personal characteristics. These include:

Demographics

age

gender

income

ethnic background


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

Demographics: Age


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.

Demographics: Gender


Marketers want to know how much money is available for spending on different products. They look at two types of income measurement:

Demographics: Income

disposable income discretionary income

Slide 1 of 2


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

Demographics: Income

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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

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 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.

Psychographics


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


Segmenting a market by product benefits involves studying consumers' needs and wants.

Product Benefits

Example: Different shampoos are marketed to people with different hair care needs.


Thinking critically

How can Procter and Gamble market household products to a male market segment?What problems might P&G encounter in that endeavor?


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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https://ecommerce.shopify.com/guides/what-to-sell/trending-products


2.2 ASSESSMENT

Reviewing Key Terms and Concepts1. 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?

Slide 1 of 2


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?

Slide 2 of 2

Chapter 2 Basic Marketing Concepts1 Marketing Essentials Chaper 2: The Marketing Concept.

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