Chapter 2 – Basic Marketing Concepts

Objectives 2.1

State the Marketing concept – to make a profit a business must focus all of its efforts on satisfying the needs and wants of its customers.

Distinguish customers from consumers – customers buy a product, consumers use it.

What constitutes value for customers – it is satisfaction gained from use of a good or service.

Terms 2.1

Marketing concept – to make a profit a business must focus all of its efforts on satisfying the needs and wants of its customers

Customers – buy a product.

Consumers – use it (product).

Value – is satisfaction gained from use of a good or service.

Objectives 2.2

What constitutes a market? – A group of all potential customers who share common needs and wants, and who have the ability and willingness to buy the product.

Suggest two basic ways to identify a business’s potential customers – customers who buy the product and customers who don’t buy the product.

List ways to segment a market – geographic, demographic, psychographic and product benefit.

Explain how to construct a customer profile – use geographic, demographic and psychographic data.

Terms 2.2

Market – A group of all potential customers who share common needs and wants, and who have the ability and willingness to buy the product.

Mass Marketing – Is the use of a single marketing plan to reach all consumers.

Market Segmentation – Is dividing the total market into smaller groups of people who share specific needs and characteristics.

Geographics – where people live.

Demographics – statistics that describe a population in terms of personal characteristics.

Psychographics – involves the study of consumers based on lifestyle, attitudes and values that shape it.

Customer Profile – is a remarkably complete picture of a prospective customer.

Objectives 2.3

Identify 4 P’s of marketing mix – product, place, price and promotion.

How are 4 P’s used to reach customers: Product – what to make, how to package it, what to name it, what image to project. Place – how and where to distribute it. Price – what are customers willing to pay. Promotion – what message will be told, when and where to deliver message and what inducements to buy.

Define Positioning – what you do to get into the mind of the prospect.

Terms 2.3

Target Marketing – is focusing all decisions on the specific group you want to reach.

Marketing Mix – is the collective mix of (product, price, place and promotion).

Positioning – what you do to get into the mind of the prospect.