THE THE MARKETING MARKETING

CONCEPT CONCEPT AND AND

PRODUCT PRODUCT SELECTIONSELECTION

THE THE MARKETING MARKETING

CONCEPT CONCEPT AND AND

PRODUCT PRODUCT SELECTIONSELECTION

Microsoft Graphics Online

Objectives• 53 – Select a product for a specific

market• 54 – Predict the market for a

specific product using the market share factor

• 55 – Relate the marketing concept to customers needs and wants

• 56 – Develop a marketing strategy fpr a hypothetical business

The Marketing Concept

The plan for successful businesses. The Marketing Concept states that businesses

must satisfy customer wants and needs in order to make a profit.

Competition forces businesses to use the marketing concept.

A business must have the right goods and services at the right time, the right price, and at the right place for purchase.

Businesses must also communicate this

information to the customer.

Customers Vs Consumers

• Customers buy the product• Consumers are the people who

actually use the product• In the majority of purchases the

customer and the consumer are the same individual

• There are exceptions to this – Gift purchased by an individual for

another person •Manufacturer sells to a retailer who

ultimately sells to the customer

What is a Market?A market is all potential customers who

share common needs and wants, and who have the ability and willingness to buy the

product.

Markets are also defined by the total sales in

a product categories by competing companies. Everyone who buys a Coke is a part of the soft drink market.

Target MarketingFocusing all marketing decisions on a

very specific group of people you want to reach.

The more information you have on your target market, the easier it is to make the marketing decisions necessary for profit.

Marketers spend money on market research to more accurately identify the

important characteristics of the target market’s customer profile.

The Marketing Mix• The marketing mix contains four basic

marketing strategies known as “The 4 P’s of Marketing”

Product Place Price Promotion

• These strategies involve the decisions businesses must make.

• The success of the Marketing Mix depends on how well the target market is defined and how

well the strategies are directed toward the target audience

PRODUCT STRATEGIES• What product to make • How to package the product• What brand name to use • What image to project• Example

•Polaroid chose to introduce the I-Zone camera that is a pocket size indoor camera with an indoor flash that produces instant mini photos or

photo stickers. The camera comes in

fashion colors and is named the I-Zone

Place Strategies

• How a product will be distributed• Where a product will be distributed• Example

– Polaroid chose to reach customers through

–Mass Market Stores - Wal-Mart–Specialty Stores – Hilo Hattie’s –Targets were in the United States

Price Strategies• Must reflect what customers are willing

and able to pay • Must reflect what cost the market will

bear• Example

– Polaroid – Suggested Retail for the I- Zone was $24.99

-Included trial pack of 6 exposure sticker film, two AA batteries -Film is priced at $5.99 and

$6.99 for sticker film

Promotion Strategies• How potential customers will be told about

a new product• What message will be used • When the message about the new product

will be delivered • What inducements to buy will be used • Example

•Polaroid wanted to create an image of self expression and creativity

•Polaroid used TV commercials, a public relations campaign, and a web site with

interactive activities

Customer Needs and Wants

• Needs – items necessary for survivalMedicineFoodBasic Clothing

• Wants – Items consumers would like to have but that are not necessary for survival

Gourmet FoodDesigner Clothing

Market Share

A firm’s percentage of the total sales volume generated by all competitors in a given market.

Businesses constantly study their market share to see how well they are dong with a given product in relation to their competitors.

Market Position

A company’s relative standing in relation to their competitors.

To monitor market position a firm must keep track of the changing size of the market and the growth of its competitors.

Pricing may also play a role in establishing and maintaining a firm’s market share and market position.