CHAPTER 2: BASIC MARKETING CONCEPTS

I. MARKETING CONCEPTS

A MARKETING CONCEPT RECOGNIZES 2 MAIN OBJECTIVES FOR A BUSINESS:

1. TO SATISFY CUSTOMER NEEDS AND WANTS

2. TO MAKE A PROFIT

A. SALES VS. MARKETING ORIENTATION

BUSINESS USED TO BE SALES ORIENTED IN WHICH LITTLE CONCERN WAS GIVEN TO

CUSTOMER WANTS.

COMPANIES NOW FOCUS ON MARKETING OREINTATION

WHICH BRINGS LONG TERM CUSTOMER SATISFACTION.

EX: WARRANTIES, GUARANTEES, 100% SATISFACTION

B. CUSTOMER VS. CONSUMER

CUSTOMERS BUY

CONSUMERS USE

II. WHAT IS A MARKET?

TO BE SUCCESSFUL, A BUSINESS MUST IDENTIFY A GROUP OF POTENTIAL CUSTOMERS THAT IT WOULD LIKE TO REACH

A. CONSUMER MARKET-

A POTENTIAL CUSTOMER WHO WILL BUY A PRODUCT FOR PERSONAL, HOUSEHOLD USE.

EX. TOILET PAPER, TOOTHPASTE, FOOD, CLEANING SUPPLIES

B. INDUSTRIAL MARKET-

ALL POTENTIAL CUSTOMERS WHO WILL BUY A PRODUCT FOR BUSINESS USE.

EX. GFS, COCA-COLA, XEROX

III. MARKETING MIX

INCLUDES FOUR BASIC MARKETING STRATEGIES, ALSO CALLED THE 4 P’S (PG. 22 FIGURE 2-2)

A. PRODUCT DECISION-

WHAT TO MAKE, WHEN, HOW MANY, BRAND NAME

B. PRICE DECISION-

WHAT PEOPLE ARE WILLING AND ABLE TO PAY.

C. PROMOTION DECISION-

ALL DECISIONS ON EDUCATION POTENTIAL CUSTOMERS ABOUT THEIR PRODUCT. ALL FORMS OF MEDIA.

D. PLACE DECISION-

HOW A PRODUCT WILL BE DISTRIBUTED; DIRECT OR INDIRECT.

IV. MARKETING APPROACHES

THERE ARE TWO APPROACHES THAT CAN BE USED TO MARKET A PRODUCT:

A. MASS MARKETING-

ONE MARKETING PLAN TO TARGET ALL CUSTOMER

EX: CHEWING GUM, MILK

B. MARKET SEGMENTATION-

IDENTIFYING TARGET MARKETS AND DEVELOPING PRODUCTS THAT APPEAL TO THEM.

CUSTOMERS ARE MARKETED IN 4 WAYS:

1. DEMOGRAPHICS- DESCRIBES A POPULATION IN

TERMS OF PERSONAL CHARACTERISTICS:

EX: AGE, GENDER, INCOME, EDUCATION, OCCUPATION, ETHNIC BACKGROUND

2. PSYCHOGRAPHICS- STUDIES OF CONSUMERS

BASED ON SOCIAL AND PSYCHOLOGICAL

BEHAVIOR.

TRENDS:BEING HEALTH, EXCERISE, TIME, CONVENIENCE

3. GEOGRAPHICS-SEGMENTATION BASED ON WHERE PEOPLE

LIVE.

LOCAL VS. NATIONAL VS. INTERNATIONAL

4. PRODUCT BENEFITS- STUDYING A CONSUMERS NEEDS AND WANTS

EX. TENNIS SHOES INDUSTRY, SHAMPOO