MC - Marketing Concepts [OVERVIEW]

Marketing Concepts

Introduction

"Marketing is the activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." American Marketing Association

All types of businesses utilize marketing. After thinking about the definition for a minute, can you name a business that does NOT use marketing?

You might have named a doctor or a local church but they do use advertising, promotion and perhaps the newest form of marketing, social media. How about a non-profit organization like the Red Cross? Would you believe they have over half a million followers on Facebook? The Red Cross might focus on helping people in need but they also spend millions of dollars on advertising.

How about a company like Nike? Well, Nike spent $1.7 Billion dollars just on advertising in 2006 but "Nike's spending on TV and print advertising in the U.S. has dropped by 40% since 2009, even as its total marketing budget has steadily climbed upward to hit a record $2.4 billion in 2011. "There's barely any media advertising these days for Nike," says Brian Collins, a brand consultant.

Nike spent nearly $800 million on 'nontraditional' advertising in 2010. Nike's biggest audience use to be the Super Bowl when 200 million tuned in; now with social media they can hit that figure daily.
http://management.fortune.cnn.com/2012/02/13/nike-digital-marketing

Essential Questions

  1. What is marketing?
  2. How are the 4P's of marketing interrelated?
  3. What kinds of marketing strategies do businesses use?
  4. What business activities are related to each function of marketing?
  5. Why is marketing important?
  6. What are the steps in the marketing planning process?
  7. What is a SWOT analysis?
  8. What is market segmentation?
  9. How does the marketing concept relate to customers' wants and needs?

Key Terms

  • Marketing - Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. American Marketing Association
  • Marketing Mix - The mix of controllable marketing variables that the firm uses to pursue the desired level of sales in the target market. The most common classification of these factors is the four-factor classification called the ''Four Ps''-price, product, promotion, and place (or distribution). Optimization of the marketing mix is achieved by assigning the amount of the marketing budget to be spent on each element of the marketing mix so as to maximize the total contribution to the firm. Contribution may be measured in terms of sales or profits or in terms of any other organizational goals.
  • Functions of Marketing - There are seven basic functions of marketing: Distribution, Financing, Marketing Information Management, Pricing, Product/Service Management, Promotion, and Selling.
  • Situation Analysis - The systematic collection and study of past and present data to identify trends, forces, and conditions with the potential to influence the performance of the business and the choice of appropriate strategies. The situation analysis is the foundation of the strategic planning process. The situation analysis includes an examination of both the internal factors (to identify strengths and weaknesses) and external factors (to identify opportunities and threats). It is often referred to by the acronym SWOT.
  • Marketing Concept- The idea that you must satisfy a customer's needs and wants in order to make a profit.
  • Customer - The actual or prospective purchaser of products or services.
  • Target Market - The particular segment of a total population on which a business focuses its expertise to satisfy that submarket in order to accomplish its profit objectives.
  • Market Segmentation - The process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinct marketing strategy. The process begins with a basis of segmentation-a product-specific factor that reflects differences in customers' requirements or responsiveness to marketing variables (possibilities are purchase behavior, usage, benefits sought, intentions, preference, or loyalty). Segment descriptors are then chosen, based on their ability to identify segments, to account for variance in the segmentation basis, and to suggest competitive strategy implications (examples of descriptors are demographics, geography, psychographics, customer size, and industry). To be of strategic value, the resulting segments must be measurable, accessible, sufficiently different to justify a meaningful variation in strategy, substantial, and durable.
  • Demographic - The study of total size, sex, territorial distribution, age, composition, and other characteristics of human populations the analysis of changes in the make-up of a population.
  • Geographic - Market segmentation based on where your target market lives. Includes local markets, regional markets, national markets, and global markets.
  • Psychographic - The process of dividing markets into segments on the basis of consumer life styles, attitudes, behavior, and drives. These are social in origin, for example the need for self-actualization, status, and belongingness. Also can include values, activities and interest.

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