Indicator 1.04 – Employ marketinginformation to develop a marketing plan Marketing Part II
THE MARKETING MIX REVIEW Includes four basic P? strategies called the 4 P’s or elements of P? marketing. For each strategy, decisions P? have to be made for each product the P? business offers to best reach their target market.
WHY ARE MARKETINGSTRATEGIES IMPORTANT IN THEMARKETING MIX? Marketing plan is created with marketing strategies for the marketing mix. Marketing strategies are important because they are the framework of conducting business. They guide the allocation of a business’s resources. It unites the marketing activities throughout the business and everyone is on the same page. Eliminates chaos and confusion.
What is a Market? A market are those who have: A need or desire, and The ability to pay, and The willingness to buy (soon)
MASS MARKETING Mass Market is when the group is considered as a whole with all the marketing activities; using a single marketing plan. Ex. Chewing gum & light bulbs
MASS MARKETING Advantages Disadvantages: Don’t have to pay for Diversity of the the production of similar audience products Unable to track return, Can price and distribute low response rates one type of product Nonpersonal more easily than many Beliefs that everyone is Can send one the same promotional message to Low profit margins everyone High competition Easier to manage, cost effective Predictable response rates Easy to set up.
WHAT IS A TARGET MARKET? Identified segments of the market that a business wants to have as their customers. For example, teenagers, mothers-to- be, single mothers, American Family, men .vs. women, or college freshman. Each example has wants and needs that can be targeted and utilized to develop effective strategies to reach
TARGET MARKET A target market are those who: Are grouped within a market by what they have in common Are the customers the business seeks to attract
IMPORTANCE OF TARGET MARKETS A target market represents the people most likely to buy what you sell. These people have something in common that solidifies their desire for your product or service. And that something distinguishes them from the market at large.
Importance of Target Markets Every customer belongs to a number of markets Customers are targeted in the consumer market, and businesses are targeted in the industrial market The same customer or business can be included in more than one target market Markets usually change over time
SEGMENTATION Market Segmentation Market segment is a is the process of subgroup of a larger dividing a larger market that share one market into smaller or more parts. characteristics.
MARKET SEGMENTATION Advantages: Disadvantages: Providing the More expensive, products customers more difficult to want produce Effective Expensive to set up communication Requires more Higher response rate, marketing research Repeat and loyal customers Personal
WHY IS MARKET SEGMENTATION BEING USED MORE? Better matching of customer’s needs Better profits & opportunities for growth Repeat customers Target market communication More businesses operating globally creates more competition & greater market share via market segments It is more efficient in the long run.
4 TYPES OF MARKET SEGMENTATION Demographic Psychographic Geographic Behavioral
DEMOGRAPHIC SEGMENTATION Statistics that describe a population by personal characteristics such as age, gender, income, marital status, ethnicity, education, & occupation.
DEMOGRAPHIC Example: Gender: indicates purchase preferences (female) Origin or heritage: race, ethnicity, nationality (Caucasian) Religion (Christian) Social or economic status: education level, occupation, income (Middle-Class) Life stage: age, generation, marital status, family life cycle, family size. (Teens)
PSYCHOGRAPHIC SEGMENTATION Defined: Markets Characteristics reflect divided by social and consumer buying psychological behaviors. The characteristics. characteristics are (Lifestyles, morals, valu Interests, Habits, Activiti es, & interests) es, Lifestyles, Opinions, & Hobbies. These reflect who your customers are. Businesses that use Marketing principles to guide their decision making must evaluate and reevaluate their customer’s wants and needs continuously to
PSYCHOGRAPHIC Example: It gives a clearer picture of customers’ needs and wants based on personality and lifestyle. Snowboarder: LOVES cold and outdoors, free- spirited, not into authority, fun-loving, has lots of friends
GEOGRAPHIC SEGMENTATION Markets divided by It is valuable where the customer information because lives. businesses can tailor their product mix based on location. Characteristics are nations, states, region s, counties, cities, or neighborhoods.
GEOGRAPHIC Example: Determine customers’ purchase preferences according to climate, political boundaries, or population density Marketers discover: Where their markets are located Who their competitors are Which media will reach their customers Businesses can market to customers based on location
BEHAVORIAL SEGMENTATION Segmenting a market Types of behavioral base on the way segmentation: customers use a Product Benefits product or behave Usage toward a product. (How a consumer Loyalty responsdsto a Occasions product.)
BEHAVORIAL Example: Customer questions in behavioral marketing: How will the product benefit me? Am I ready to buy it? When will I use the product/ On what occasions? How often? Am I in a comfortable buying pattern? Do I feel loyal to a particular brand?
ACTIVITY Choose a partner! Cut out ads from magazines for 3 products of your choice. Create a small poster with the products listing the target market the product and ad are designed to attract. For EACH product – you need to identify the following market segmentation for that product: Demographics Geographics Psychographics Behavioral You may use the internet to research product
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