Marketing Concepts - WordPress.com · The traditional Coca-Cola bottle is one of the most...

For a farmer, this pumpkin field represents significant income at the beginning of October but, come November, this same field would mean a huge financial loss!

Seasonal

Try to sell a Christmas tree the day after Christmas, or a snowblower on the hottest day in August. Ice cream parlours have lineups from July to the end of August, but are often closed in January and February. These examples demonstrate that many products are popular only during a specific time or season. The product becomes popular again only when that season returns. The new season, however, brings with it new styles. Even Christmas ornaments change in style from year to year. Retailers, wholesalers, importers, and manufacturers of seasonal products need to make the most of their selling season. These businesses must keep adequate stock. However, if they have too much inventory left over at the end of the season, many of the products will be out of style when the season starts again the next year. This balancing of product quantity with sales is called inventory management.

Review Questions 1. What are two major roles of marketing?

2. What is the most important way to measure the impact of marketing?

3. List and describe briefly the three parts of effective brand identification.

4. List a product not mentioned in the text for each of the stages in the product life cycle.

1. the four Ps of marketing2. the two Cs of marketing

Keep in Mind Marketing Concepts Did you know that Sony Corporation had portable digital audio technology two years before Apple did? What Sony did not have, however, was a way to connect this technology to a product and connect the product to a consumer. Apple figured that out and put together a marketing mix that saw the iPod become one of the most successful products in the past decade. Sony missed out by not having the right marketing concepts.

You can divide marketing into two major concepts: the product concept and the market concept. Product concept marketers can answer questions about a firm’s internal operations: What should our company make and sell? What

238 UNIT 2 Functions of a Business NEL

price will stimulate sales and generate a profit? Where and how do we sell the product? What advertising and promotion should we create for the product to boost sales? These make up the four Ps of marketing: product, price, place, and promotion.

Market concept marketers work with the external environment by examining both the competitive market and the consumer market. The competitive market consists of all the products or services that might take sales away from a firm. The consumer market consists of all the people who are or might at some point be interested in buying the product or services. These make up the two Cs of marketing: competitive market and consumer market.

The Four Ps of MarketingA good marketing campaign considers the four Ps of marketing: product, price, place, and promotion. All four elements must be combined properly to have an effective campaign. When all four parts are assembled, it is called the marketing mix.

Products and Services

Businesses develop products and services for two reasons: because they can and because they see a need. Good product and service development takes into account quality, design, features, and benefits.

Quality

Ralph Waldo Emerson wrote, “If a man can…make a better mousetrap than his neighbour, though he build his house in the woods, the world will make a beaten path to his door.” Simply put, if you improve the quality of your product, you will attract more customers. Vacuum cleaners that pick up more dirt, dry cleaners who sew on buttons, skateboards with better wheels, movie theatres with stadium seating and great sound, and jeans with higher-grade denim are all examples of products that are of better quality than other similar products. Many established brand names take pride in their quality, and consumers come to depend on it.

Low quality is a part of product development as well. Most consumers know that you pay for quality. If some products can meet a consumer’s needs and be less expensive because they don’t provide high quality, that product or service has a good chance for success as well. For example, Food Basics and no-name products remove the frills but lower the price.

“Igniting the Buzz: I-Buzz”from The World of Business DVD

The World of Business DVD

NEL CHAPTER 8 Marketing 239

Design

Most often, we think of style and design in relation to clothing. Jeans, for example, come in many different styles—slim fit or wide leg, button fly or zipper, straight leg or flare. Every detail is part of the design, from the colour of thread used in the stitching to the colour of the denim itself. However, every product has a design component. We often buy one product instead of another because we like the way it looks. For example, all cars will transport us from one place to another, but many of us would prefer to get there in a Porsche.

Even if the product itself is not interesting to look at (e.g., liquid detergent), the package design can capture the customer’s attention. When designing a package, product developers consider the package’s functions. Packages protect the product from light, dirt, germs, air, water, tampering, and damage. A good package also makes it easy for the consumer to use the product—for example, cartons with spouts, bottles with handgrips, or resealable cereal bags. Consumers may also identify a particular product by the shape or colour of the package design. The traditional Coca-Cola bottle is one of the most identifiable packages in the world.

Package labels also help consumers identify the product and can make the product stand out from the competition.

Product (or service)• quality• design• features• benefits• service and support

The Four Ps ofMarketing

The Marketing Mix

Promotion• how our company encourages

consumers to buy a product (coupons, contests, premiums, samples, special events)

Price• how our product compares

with the competition• customer’s perception of

our product’s value• impact on sales and profit

Place• how our product gets to

the consumer (channels of distribution)

Figure 8.3 The Marketing Mix

Not only is the Coca-Cola Classic brand name distinct, but so is the shape of the bottle.

Product designers also create product features that you cannot see, such as the flavour of a soft drink or the scent of a perfume.

Business Fact


An attractive label can help sell a product. For example, Arizona Iced Tea shrink-wraps colourful plastic labels around the entire bottle. This labelling method, which results in a bottle that attracts consumers’ attention, has helped sales. Labels also provide information about a product’s size, weight, ingredients, and nutritional content.

Services have a design feature as well. Even if the business is web-based, the web page design is important. A computer repair shop can look sterile and high-tech or down-and-dirty and hands-on. A hairstylist’s shop can be a luxury spa or a busy salon. Each design feature of the business attracts a specific type of customer.

Features

Product developers consider the features of products, such as the material used in construction, the scent, the size, or the taste. Pillows are foam or feathers. Perfumes all smell differently. Cocoa Krispies cereal does not taste the same as Raisin Bran. Detergents come in liquid or powder, large boxes or small, scented or unscented.

Service providers outline what they do. As a car rental company, is pickup part of the service? As a house-cleaning firm, do you do windows? If you were a DVD rental place, how long would you allow customers to keep new releases? Service features are in the details.

Benefits

People buy most products and services for a particular purpose—towels for drying, furnace repair for warmth, microwaves to cook food quickly. But some towels are more absorbent than others, some furnace repairers more efficient, and some microwaves cook food faster. Each product or service has benefits that attract different consumers. The consumer must perceive these benefits in order to be interested enough to buy.

The Product/Service Mix

Retail stores provide services that add value to the products they sell. These include delivery, installation, extended warranties, alterations, advice, carry-outs, gift-wrapping, and free parking. Many stores provide coffee or relaxation areas. Some have a cafeteria or restaurant. Every service that a store offers gives consumers another reason to select that store instead of another.

On the other hand, many service businesses also sell products. Movie theatres sell popcorn, video stores sell candy,

Arizona Iced Tea’s packaging is designed to catch consumers’ attention.


veterinarians sell pet food, universities sell sweatshirts, and salons sell hair care products. The right product/service mix can increase sales to existing customers. It can also attract new customers by helping the store be competitive.

Price

Pricing decisions can make the difference between a successful product and a failure. You could have a well-designed, top-quality product with great features, but if the consumer thinks the price is too high, you will not sell it. Consumers are very price aware these days, especially with the ability to check out competing prices on the Internet. To compare prices, all they need to do is spend a few minutes at their computer.

If you lower the price to sell more product, you might increase your profit, but you could also end up with less. For example, let’s assume the total cost of producing your gadget is $25.

■ If you can sell 100 gadgets at $100 each, you will make a profit of $75 for each gadget sold (because it costs $25 to make). Your total profit will be 100 × $75 = $7500.

■ If you lower the price to $50 per unit and sell 1000 gadgets, you will only earn $25 profit for each gadget you sell, but your total profit will increase to $25 000 because 1000 × $25 = $25 000.

■ However, if you lower the price to $50 and sell only 200 gadgets, you will still earn $25 profit for each gadget but your total profit will only be 200 × $25 = $5000.

Clearly, marketers need to know how price sensitive their product is: how much sales will go up or down when the price goes up or down.

Price must always be similar to the price of competitive products. If the product appears to be similar, but carries a much higher price, the marketing mix should increase the promotional component and make sure consumers know they are paying more for more.

Place (Channels of Distribution)

Channels of distribution are the paths of ownership that goods follow as they pass from the producer to the consumer. They are the methods that a business uses to sell and distribute its products. A product does not change as it moves through


channels of distribution (also known as a distribution chain). If a product does change in any way, it has reached the end of that particular channel. For example, a farmer sells wheat to a business that stores grain. Because it does not change the product, the storage company is part of the wheat’s distribution chain. The storage company then sells the wheat to a flour mill, and the mill processes the wheat into flour. Because the mill does change the wheat into another product, the channel of distribution for the wheat ends, and a new channel of distribution for the flour begins. A marketer can use three types of channels of distribution: direct, indirect, and specialty channels.

Direct Channels

Selling directly to the consumer is the simplest form of distribution. It has a number of advantages. Other channels of distribution use intermediaries or businesses that take possession of the goods before consumers do. Intermediaries add costs to a product so that they make a profit. Eliminating intermediaries cuts out these costs.

Direct channels of distribution connect buyers to the businesses providing the goods or services. This connection is known as a maker–user relationship. Through this relationship, consumers can inform businesses about their needs. Consumers may also feel more confident because they know the actual source of the products they are buying.

Direct• the business that makes the product

sells it directly to the consumer (e.g., at a farmers’ market, bakery, or factory outlet store)

• allows for direct communication between producers and consumers

Indirect• the business sells to an intermediary who

then sells the product to the consumer• the intermediary could be a retailer, or it

could be an importer or wholesaler who will then sell to a retailer

• intermediaries add to the cost of a product

Specialty• the consumer buys

from a place other than a retail store (e.g., vending machine, catalogue, website)

Channels ofDistribution

Figure 8.4 Channels of Distribution


This farmer is selling his produce to customers through a direct channel of distribution.

Indirect Channels

Indirect channels of distribution have one or more intermediaries. These intermediaries might be importers, wholesalers, or retailers.

Importers

Many foreign businesses want to sell their products in Canada. An importer searches for these businesses, negotiates distribution deals with foreign manufacturers, buys the manufactured merchandise, stores it in Canada, if necessary, and then sells it. This arrangement makes it easier for foreign businesses to ship their goods to Canadian customers. Sometimes, importers arrange only delivery of foreign products to Canadian businesses. In this way, they assume no risk in buying the goods.

Normally, importers hire a sales force to sell the products across Canada. When an importer actually buys the foreign merchandise and distributes it nationally, the foreign business usually gives the importer exclusive rights to the product. Having exclusive rights means that no other business can buy or sell these products in Canada. An exclusive distribution deal is usually for a year or more. (Review Chapter 4 on International Business.)

Why would an importer want to have exclusive rights to a product? Why would a manufacturer want to give exclusive rights to an importer?

Stretch Your Thinking


WholesalersWholesalers buy goods from producers or importers and resell the goods to retailers. Retailers use wholesalers, rather than buying directly from suppliers, for a number of reasons. Manufacturers often require retailers to purchase a minimum quantity of goods. Smaller stores may not have the space or money to buy in such large quantities. Wholesalers can afford to buy in volume and will sell to retailers in much smaller quantities. As well, wholesalers are usually located close to retailers, which means wholesalers can provide storage space and reduce transportation costs. Retailers who use wholesalers, however, often pay more for a product than those who buy directly from the manufacturer. RetailersIn the distribution chain, retailers link directly to consumers. Retailers buy merchandise that consumers want, have it in stock when consumers want it, and display the merchandise so consumers can examine it in an easy-to-reach location. Specialty ChannelsA specialty channel of distribution is any indirect channel of distribution that does not involve a retail store. There are many different specialty channels, including vending machines, telemarketing, catalogue sales, e-commerce, and door-to-door sales.

Wal-Mart is known for its low

prices. The company tries to do

everything it can to shave a few

cents off the selling price of its

products. The company pays low

wages and discourages labour

unions. Numerous charges have

been levelled against Wal-Mart

for age discrimination (laying

off workers when they get old in

order to make room for younger,

less costly employees), failure

to pay overtime, and widespread

sex discrimination to keep women

at lower wages. In the United

States, where Wal-Mart is based,

almost 70 percent of Wal-Mart

workers can’t afford to participate

in the company’s health insur-

ance plan, which costs about 20

percent of a worker’s paycheque.

Some people view Wal-Mart’s

employee practices differently.

They argue that everyone who

works for Wal-Mart makes the

choice to work there and knows

the wages being offered when

they take the job.

Most consumers are grateful

to Wal-Mart for keeping prices

low. It is considered a better

retailer than most other compa-

nies because it carries the mer-

chandise consumers want at a

lower price than competitors, and

merchandise is always in stock,

when the customer wants it.

Would you be willing to pay

more for the items you buy at

Wal-Mart if the extra money Wal-

Mart received went to benefit

its employees?

Ethical, Moral & Legal Considerations

Canadian Tire is just one familiar retail centre that is constantly stocked with large quantities of merchandise.

NEL Chapter 8 Marketing 245

Figure 8.5 Specialty Channels of Distribution

Vending MachinesVending machines sell everything from soft drinks to blue jeans. Marketers can place their products in vending machines where consumers work, study, shop, rest, eat, or travel. If the manufacturer owns the machine, it dispenses only their products—there is no competition unless a rival producer’s machine is nearby.

Catalogue SalesCatalogues from retailers, such as Sears, provide information about merchandise that consumers can purchase by mail, by phone, or at the store. However, there are also catalogue distributors who sell mainly by mail. Lee Valley Tools, for example, makes a high quality line of woodworking tools. It offers these to consumers primarily through its catalogues (it also has retail stores across the country). Catalogues are expensive to produce when they are printed in colour and include photos taken by professional photographers. But catalogue businesses can be very successful, and many companies have added online catalogues to their distribution chain.

E-commerceBy far the most important specialty channel is e-commerce: selling online. Almost all major retailers provide customers with an online catalogue and electronic shopping cart. Online shopping offers consumers convenience and competitive prices. For manufacturers and retailers, distribution costs are much lower. For importers and wholesalers, it is possible to sell directly to consumers, cutting out intermediaries entirely. Online shopping allows even small entrepreneurs to compete globally. You can buy almost anything online today, have it shipped within 24 hours, probably save money, and never have to leave your home.

TelemarketingMany businesses use the telephone to sell products and services. Businesses may hire a telemarketing company to create a sales pitch—a scripted presentation that anticipates consumer responses. Telemarketing companies may set up call centres, or they may hire an independent call centre. Call centres use automatic call distributors (ACDs)—computers that automatically dial phone numbers. Telemarketers may call at random, or they may get lists of targeted recipients from coupons, contest-entry forms, or surveys that consumers complete. The main problem with telemarketing is that it often annoys consumers, which may lead to negative reactions to the product or service.


Promotion

Most people associate advertising with promotion. That part of promotion will be covered later on in this chapter, under a separate section. Promotion, though, means more than advertising. Promotion is any attempt to sell a product. Sales promotion encourages consumers to buy a product by using coupons, contests, premiums, samples, and special events.

Coupons Coupons offer consumers money off the price of a product. When a consumer presents a coupon at a checkout counter, the cashier treats it as cash. On average, Canadian consumers are exposed to more than 1200 coupons a year. Most coupons end up in the trash. Advertisers measure the effectiveness of a coupon promotion by the redemption rate, or the percentage of coupons that consumers actually use. An average redemption rate is 5 percent. In general, the larger the value of the coupon, the higher the redemption rate will be.

Contests Contests are an exciting way to increase brand recognition and sales. By law, businesses must organize contests so that anyone can enter—the business cannot require consumers to buy a product in order to enter. As a result, you often see “no purchase required” included in contest rules. Businesses, however, can make it easier for consumers who buy the product or service to enter contests. Purchasers of the product may receive an entry form at the cash register, for example, or receive a game card to scratch or collect.

There are laws that forbid the use of gambling in contests. Contests must require people either to demonstrate a skill—for example, drawing a logo, thinking up a name, responding to a quiz—or to answer a skill-testing question (usually a simple math problem). Consider the Tim Hortons “Roll Up the Rim to Win” contest. People could enter their name in the contest by writing to the Tim Hortons head office, but most consumers bought coffee in specially marked cups and “rolled up the rim” themselves to see if they had won a prize. Contestants did not have to exhibit a skill to enter, but winners did have to answer a skill-testing question.

NEL ChaPter 8 Marketing 247

Premiums

Premiums are giveaways—something a consumer gets free with the purchase of a product. Premiums can be unrelated to the product—for example, a free CD with the purchase of a certain amount of coffee, or a free T-shirt with the purchase of a case of pop. To establish brand recognition, these free products usually carry the company’s logo.

Many businesses encourage brand loyalty by giving free products to regular customers. Coffee and sandwich shops, florists, video-rental businesses, and CD retailers issue customer loyalty cards. These cards are stamped each time the customer buys the business’s product. When the card is completed, the consumer is entitled to a free product. Because the consumer must buy the product to get the premium, this method of promotion ensures sales.

Samples

Samples encourage brand trial. Usually, samples are small “trial” sizes of the product being promoted. Often, the company distributes these samples door to door. Sometimes, marketers hire product-sampling businesses to set up booths in supermarkets, big box stores, and shopping centres. They give out samples of the product to shoppers passing by. They also provide information about the product, its price, and where it can be found in the store. Sampling is a very effective method of sales promotion, and it usually results in increased sales. Costs are very high, however.

Special Events

Marketers organize special events to attract customers and increase product sales. Authors visit bookstores to autograph their newly published books. Sports heroes, television stars, actors, and music celebrities take part in special events that promote their athletic shoe, new perfume, latest movie, or current CD. Sometimes, special events also include other types of sales promotions, such as contests, premiums, and samples. The main purpose of a special event is to excite consumers, encourage their participation, and, ultimately, get them to buy the product. Consumers are more likely to buy if they are having fun.

When customers buy this box of Kellogg’s Raisin Bran, they will get two scoops of raisins and a free gift.


The Two Cs of Marketing In order to properly put together a marketing mix, the marketing department must consider two major external factors: the competition and the consumer. These are called the two Cs of marketing.

The Competitive Market

The competitive market consists of all the sellers of a specific product, and is expressed most often in terms of the total dollars spent annually on this product. Table 8.1 defines the size of that market in dollars. For example, the American soft drink industry is worth $68 billion, which means all the manufacturers, bottlers, importers, and distributors share that $68 billion among themselves. The percentage of the market that a company or brand has is called its market share.

Assume that in 2007, the soft drink market is worth $70 billion, and the leading soft drink brands and their market shares are as illustrated in Table 8.1.

The total market share for these top seven brands is 62.9 percent—almost two-thirds of the market. That leaves only 37.1 percent of the market for the other 200 brands available in the United States. However even one-tenth of a 1 percent share of this market is worth $68 million!

Competitive Market• other businesses that

compete with us for consumer dollars

Direct Competition• other sellers of

products similarto ours

Indirect Competition• other spending needs

that may draw customer dollars away from our products

Consumer Market• characteristics of

people who buy our products

Demographics• age • gender• family life cycle• income• ethnicity and culture

Lifestyle• values, beliefs,

and motivations

The Two Cs ofMarketing

Figure 8.6 The Two Cs of Marketing

Although Coca-Cola Classic has the largest market share of the soft drink industry, Coca-Cola still has to share the competitive market with other soft drink companies, such as Pepsi.


Estimated U.S. Market Share for Major Soft Drink Brands*

Brand % Market Share

Coca-Cola Classic 16.5

Pepsi 12.3

Diet Coke 10.2

Mountain Dew 6.5

Diet Pepsi 5.9

Sprite 5.8

Dr. Pepper 5.7

Total 62.9

*2007

Table 8.1

Coca-Cola has a major portion of the cola segment of the soft drink market. A market segment is a part of the overall market that has similar characteristics. The soft drink market would have flavoured segments, such as root beer (Barq’s has the largest piece of that pie), a diet segment (Diet Coke is the leader here), and an energy drink segment (Red Bull owns this market segment).

A company can increase market share in two ways. The first is by increasing the size of the overall market. When energy drinks became popular, a whole new segment of the overall beverage market was created. New soft drink users were added

The energy drink Red Bull played a major role in expanding the beverage market.


to the market, and the size of the market increased, meaning many competitors could see an increase in sales.

The second way to increase market share is by taking sales away from competitors. If you look at the market shares of U.S. beverage brands next year (or next month, perhaps), you will see different market shares, as Sprite attracts more customers than Mountain Dew, or Diet Pepsi takes customers away from Diet Coke. Market shares are like pieces of a pie. If five people are sharing the pie and one person gets half, all the others get much smaller pieces. For the last 100 years or so, Coca-Cola has always had the biggest piece.

Competition among Products

The most obvious type of competition is competition among similar products. All products compete for the consumer’s money in some way. If you have $25 and decide to spend it taking a friend to a movie, each theatre and each movie competes for your money. Once you spend $25 on the movie, that $25 is gone—you can’t spend it on anything else. So it’s not just movies and theatres that compete for your $25; CDs, pizzas, clothes, and any other products you might buy also compete for your money. This type of competition is called indirect competition because the products or services are not directly related to each other. Every business is in competition with every other business for your discretionary income. Discretionary income is the income you have that is not committed to paying for basic necessities, such as food, clothing, and shelter. Disposable income, on the other hand, is used to pay for basic necessities. It is the amount of income left after taxes have been paid.

Products that are very similar are in direct competition. The consumer chooses among them because of minor differences. There really is not a large difference between two brands of sunscreen—they both have the same sun protection factor, both are waterproof, and both are non-greasy. These products compete mainly on image. Other products compete directly in more obvious ways, through all of the quality, price, design, features, and benefits that compose the product (see the four Ps of marketing, earlier in this chapter).

The Consumer Market

Companies also compete by studying the consumer market, or the types of consumers who buy their products. These consumers can be identified in at least two ways: by demographics and by lifestyle.

Products in direct competition


Demographics

Demographics is the study of obvious characteristics that categorize human beings. Businesses use demographics to target specific consumers. Examples of demographic variables are age, gender, family life cycle, income level, and ethnicity and culture.

Age

Children want toys, teens want computer games, adults are interested in cars, and seniors may want more products related to health or retirement activities. Age defines our tastes, as well as our needs and wants. Some age groups are consumers, but not often customers. For example, an adult—most often a parent—usually directs his or her child’s purchases. Businesses consider this adult a gatekeeper, or a person who makes buying decisions for others. Cereal makers compete by selling their products to the gatekeepers, advertising that their cereal is low in sugar or has added vitamins for good health. However, cereal makers also know that children have some influence over the decisions that their gatekeepers make, so these companies also target young people in their advertisements.

Gender

Many products, like jeans and athletic shoes, are worn by both genders. However, businesses that sell jeans and shoes still distinguish between their men’s and women’s product lines. The businesses market their men’s athletic shoes to the male market and their women’s athletic shoes to the female market.

In the area of shopping, gender roles have changed a great deal. At one time, women did the family grocery shopping and men purchased the family car. Today, the act of shopping has become a task for males and females alike, and purchase decisions are more likely to be shared. A number of successful businesses have recognized this change. Many products that were formerly targeted at females (detergents, disposable diapers, food products) or males (cars, power tools, sporting equipment) are now being advertised and sold successfully to both genders.

Family Life Cycle

Newly married couples need furniture. Parents with a new baby need a crib, carriage, and car seat. A couple with three teenagers wants to save for their children’s college or university educations. Retired seniors want to travel. Your stage in the family life cycle often determines your wants and needs. Businesses are aware of this demographic. They compete for consumer dollars in


different ways for various groups. For example, a cruise could be a honeymoon for a newly married couple, a break for a couple with a baby, a family holiday for a couple with teenagers, or a retirement escape for a senior. The advertising, destination, onboard activities, and meals will all depend on the type of customers the cruise is trying to attract.

Income Level

Consumers are often grouped by how much money they have or earn. This grouping affects what products or services a business tries to sell them. Products such as Kellogg’s Corn Flakes are targeted at consumers in every income bracket, but a Mercedes automobile could be purchased only by wealthy customers. Businesses have many ways of determining the income of specific groups of consumers. One way is to look at the postal codes of affluent, or upper-income, neighbourhoods. If a consumer has an address in this postal code, it is likely that he or she has a high income. Similarly, a business can look at programs for ballets, book readings, and other special events in the community to find out who sponsors these events. If a business wants to target a particular high-income group, it might place an advertisement in a certain type of publication, such as a luxury travel magazine.

Businesses that make or sell luxury goods and services are interested in the wealthy customer, but most manufacturers and retailers make and sell products to consumers with average incomes. These businesses are mainly interested in competing for the discretionary income that almost all consumers possess. They sell their products and services to everyone.

What products would this family buy… …that this family wouldn’t need?


Ethnicity and Culture

Canada has a diverse population with a wonderful mix of customs and traditions. Many cities have ethnic communities with stores and businesses that target the various wants and needs of a particular ethnic group. These businesses compete for a cultural market by importing goods from the consumer’s country of origin or producing goods reflective of that country. The food-service sector has a multitude of restaurants that reflect different cultural tastes in food. Newspapers and magazines in Canada are available in more than 100 languages. Of course, many of the products and services that first attracted the business of a specific ethnic group now compete for the business of all Canadians. Italian restaurants, for example, certainly have many non-Italian customers.

Lifestyle

Lifestyle is less obvious than demographics but equally important to businesses competing for specific groups of consumers. Lifestyle is the way people live, which includes their values, beliefs, and motivations. The study of lifestyles is called psychographics.

A person’s beliefs influence what he or she purchases. An environmentally conscious person would not buy an SUV, for example. A sedentary person would not be interested in running shoes or skis. These lifestyles cross all demographic boundaries. Unless companies consider lifestyle marketing, the potential consumers in these groups will miss their message.

Review Questions 5. What are the four Ps of marketing?

6. Provide an example for each of the following:

a) slogan

b) family life cycle

c) premium

d) specialty channel of distribution

e) product/service mix

7. What are the two Cs of marketing?

8. Define and give an example of market share.

9. Explain two possible ways in which a business could increase its market share.


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