Fundamentals of Marketing

Section 1.04

RELATIONSHIP OF GOALS, TACTICS, & STRATEGIES TO THE MARKETING MIX

Mission Statement – the guiding principle for all business decisions and provides direction for planning. Goals/Objectives – established on a yearly basis and

support the mission statement. Goals must be measurable and have a deadline. Strategies – are then developed to accomplish

goals and it reflects the method to achieve the goal (what to do). Tactics – are then developed to accomplish

the strategies; it is the how things will be done, daily actions.

Marketing The Marketing Concept is the idea that a

business should strive to satisfy customers’ needs and wants while generating a profit for the firm. Customer Satisfaction is very important.

Repeat customers are what make businesses successful

Customer Relationship Management

If businesses don’t make money, they don’t do it!

Fundamentals of Marketing Marketers realize that not every product can appeal to

everyone.

Marketers examine two key factors to define their market: Who is interested in a product? Who can afford their product?

A market is made up of all people who share similar needs and wants and who have the ability to purchase your product. MUST MEET BOTH CRITERIA TO BE INCLUDED

Examples of a Market Luxury Suites at Yankees Stadium

Prices range from $600,000 and $850,000 Rich, Men, Sports Fans

Malt-O-Meal Frosted Flakes $1.41/box at DollarDays International

Lower Income, Kids/Single Parents

Hollister Co. Santa Monica Jacket $140 jacket

Teenage Girls, Colder climate areas, Medium-High Income Families

Target Market & Market Segmentation Market Segmentation is the process of classifying

customers by needs and wants. Goal is to identify the group of people who are most

likely to become customers. This specific group is known as a Target Market

All marketing strategies are directed towards the target market. Provides the focus of your marketing campaign. Marketer’s must develop a clear target market before developing a

marketing strategy.

Consumer v. Customer A product may have more than one target market.Example: Low Sugar Fruity Pebbles

Identify the consumer: ChildrenIdentify the customer: Parents*Most five year olds do not purchase their Fruity Pebbles

Same Product--- Different Approach

To target parents you would use commercials that advertise how healthy they are and air them on a Saturday night.

To target children you would use commercials that focus on how fun the cereal is, the bright colors, the cool characters and air this commercial on Saturday mornings.

Target Market To develop a clear picture of their target market,

businesses create customer profile lists of information about the target market. Age Income Level Ethnic Background Occupation Attitudes Lifestyle Geographic Residence

Understanding these characteristics allows you to make better choices

The Marketing Mix The Marketing Mix includes four basic

marketing strategies called the four P’s:1. Product2. Place3. Price4. Promotion5. *People

These are the tools that marketers use to influence potential customers

The 4 P’s…. Product: What you decide to make and sell. Includes the

features, benefits, packaging, name, and brand.

Place: Deals with how and where a product will be distributed.

Price: Price is what is exchanged for the product. Reflects what a customer is willing and able to pay.

Promotion: Refers to decisions about advertising, personal selling, sales promotion, and publicity.

Pick a product

MARKET SEGMENTATION

Market Segmentation

The key to marketing & selling is to know your customer You have to know what is cool, in order to

continually reach your audience

Not all customers are the same Use certain methods to reach certain

customers

Market Segmentation

Market Segmentation is the process of identifying a target market by dividing the market into segments according to customer needs and characteristics. Basically you take a target market and

break down into even smaller markets. This process is done so that marketers can

sell their products or services more effectively.

Market Segmentation Facts

Why do marketer’s use market segmentation? Very costly to target all groups

Must find the group of consumers who you have a clear competitive advantage

Use research to determine if the costs of development are effective

Specific information allows you to know your customers: Buying Behavior, Values, Fashion Interests, etc…

Market Segmentation = Jeans Most people in America wear Jeans

Not everyone wears the same type of jeans

Market Segmentation: Price

Market Segmentation

There are four key factors that marketers use to determine how to segment a market:

1. Demographics

2. Geographic Variables

3. Psychographic Variables

4. Buying Behavior

Demographics

Demographics: Refers to statistics that describe a population in terms of personal characteristics. Age (Baby Boom, Generation X, Generation Y,

Generation Z) Gender (Male v. Female) Occupation Education Income

Disposable: Money left after taxes Discretionary: Money left after taxes & basic needs have been

paid Marital Status Ethnic Background

Psychographics

Psychographics involves grouping people with similar lifestyles, as well as shared attitudes, values, & opinions. Examples:

Latest Diet Trends Environmental

Concerns

Geographics

Geographics: Refers to segmenting customers based on where they live. Segment a market geographically can be done:

Locally, Regionally, Nationally, or Globally

Hispanic cultures are prevalent in L.A., Miami, New York, Texas, Arizona, etc..

African American cultures are prominent in the south

States with high teen percentages: Alaska, Utah, Arizona, Texas, California, & Idaho

Market Segmentation

Behavioral Buyers: Accounting for the type of shopping they prefer.

Online, In-Store, Catalog

Safety Issues concerning identity

Mass Marketing v. Segmentation Mass Marketing: Occurs when a

company uses a single marketing strategy to reach all customers Products has universal appeal and few features

to differentiate them from competitors. Not as popular as it used to be because

companies prefer to cluster consumers.

Niche Marketing: Narrowing down your market and using precision to create your products

Top Ten List Exchange list of wants and needs

Based on your partners needs and wants you need to come up with a new product or service to meet one of their needs.

You need to make decisions about the 4 P’s What is the product or service you want to create? What is the price you are going to sell it for? Where will you sell it? How will you promote it?

Assignment List 10 needs and wants in your life at the bottom of

your sheet Hello Kitty Track/Cross Country Ipod Stuffed Animal Car Smart Water Monster Energy Drinks Snuggie Blanket

•Walgreen's

•Wal-Mart

•CVS

•Thermal Water Bottle

•Keeps water at 10 degree

•Drops chewing gum out the bottom

•Brail Censored buttons to guide all users

$9.99

•Commercial of athletes using my product

•Buy One, Get One Free

•Breast Cancer Awareness Month promotion

•Hello Kitty, Bye Bye Worries!

W

G

AssignmentGo around and take a

picture(s) of the following: Target market of Ardrey Kell

Demographics Age Gender Ethnic Background Income

Psychographics Activities

Play sports Clubs

Attitudes Workout Video games

Personality & Values Class Clowns Religious Drama

Geographics Does anyone have similar

characteristics based on a geographical location Dallas Cowboys Fans Students who have just

moved here Certain Middle Schools

Buying Behavior Brands Colors Fads

Target Market Assignment Part IIUpload pictures on Tuesday

Label each picture based on what component of a target market you chose

Determine the following for each groupCharacteristics that appeal to this groupAn item that they would purchasePromotional methods you would use to attract

them

Demographics: Age & GenderHigh School Students

Female

Some characteristics of a product that would appeal to this audience are…..

An item that this demographic would purchase

Promotional methods that we would use for this demographic are….

PsychographicsBuying StylesBackpackersCustomer looking for

comfort Casual

Products that might appealCinch Sack BagAccessories like a rubber

bracelet

To promote we would go to lunches and give 5 free bracelets away to increase awareness

DemographicsGender: Female

What appeals to them

Product that interests them

How would you promote the

Buying BehaviorCharacteristics that appeal to this groupConverse Shoes

An item that they would purchaseGRHS SocksFlat billed hat

Promotional methods you would use to attract themBuy One, Get One ½ Off

GeographicsCharacteristics

that appeal to this group

An item that they would purchase

Promotional methods you would use to attract them

Psychographics: SportsProduct: T-shirts geared towards each major sport. (football, softball, baseball, basketball)

Competitive slogans against other schools.

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Promotion: We will give people who are on the teams half price off their shirts so they can promote them, so it can get the word out.