Lesson Planning Guide - · PDF fileActivity C (math) Review and Assessment ... Chapter 4 Markets 53 addition, because of your age, ... 4-2. The Consumer Market

Chapter ObjectivesAfter studying this chapter, students will be able to• list the four characteristics of a market.• explain the difference between the consumer market and the business market.• list the four categories of customers in the business market.• distinguish between a consumer and a customer.• describe the difference between a mass market and a market segment.• explain why marketers segment a mass market.

Student Text OutlineIntroductory Text

I. A Group of BuyersII. Consumer Market vs. Business Market A. Consumer Market B. Business Market

III. Customer vs. ConsumerIV. Market Segments A. Choosing Your Target Market B. Segmentation and the Marketing ConceptV. Marketing Strategy

Terms

marketconsumer marketbusiness marketB2CconsumerB2Bproducerresellerinstitutiongovernment

mass marketmarket segment

marketing strategy

Teaching ResourcesWB: Terms, Activity AMEH: Activity Buffet—Reading and Vocabulary

WB: Consumer Market or Business Market? Activity BTR: Types of Business Customers, Master 4-1 (transparency)TR: B2B Market, Master 4-2 (project)

WB: What Fraction Is That Segment? Activity C (math)

Review and AssessmentStudent TextReality Checks, pp. 53, 54, 55, 57, 58, 60, 61Chapter Review, pp. 62–63

Review Concepts, Think Critically, Connect to Business, Explore Careers, Connect to the Internet

Teaching ResourcesWB: Terms, Activity ATR: Chapter 4 Test, Reproducible Test MasterMEH: Activity Buffet—Assessment, Content Review, and GamesEV: ExamView® Assessment Suite CD

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Lesson Planning GuideChapter 4Markets

CH_04.indd Sec3:51CH_04.indd Sec3:51 7/2/2009 12:05:24 PM7/2/2009 12:05:24 PM

Business Administration and Marketing Performance Indicators

• Explain the concept of market and market identifi cation. (MP:003/CS)• Identify market segments. (MP:004/MN)• Select target market. (MP:005/MN)• Explain the concept of marketing strategies. (MP:001/CS)• Explain the nature of marketing plans. (MP:007/CS)

DECANational DECA provides a calendar that suggests activities for the school year. You may suggest that your DECA members and offi cers use

the calendar as a guide to plan their program of work. The program of work should be the activities your DECA chapter would like to do this school year. You may want to organize your chapter into committees and have each committee present their ideas. The following committees are often useful: fi nance, social, civic, public relations, and leadership activities. After the committees have suggested their activities, have the membership vote on which ones they want to accomplish this school year. The list of activities for the year for a DECA chapter is known as your DECA Program of Work. Once the activities are voted on, you may want to have the committees create a customized DECA calendar for your chapter.

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TM


4 MarketsMarkets

After studying this chapter, you will be able to

■ list the four characteristics of a market.■ explain the difference between the

consumer market and the business market.

■ list the four categories of customers in the business market.

■ distinguish between a consumer and a customer.

■ describe the difference between a mass market and a market segment.

■ explain why marketers segment a mass market.

Marketing Termsmarketconsumer marketbusiness marketB2CconsumerB2Bproducerresellerinstitutiongovernmentmass marketmarket segmentmarketing strategy

How many different ways can you use the word market? Here are some examples:1. I’m going to the market for some dinner

ingredients.2. The market is up today.3. The market for SUVs is down.4. I’m not in the market for a new

computer.5. We are thinking of expanding our market

in Europe.6. How large is the ice cream market?As with many words in the English language, the word market has many meanings. It comes from a Latin word meaning trade. In ancient times, a market was the place where people met to trade goods

Have students divide a sheet of paper into two columns. Have them label one column “Consumer Market,” and write all the marketing terms that relate to the consumer market in that column. Have them label the other column “Business Market,” and write all the marketing terms that relate to the business market in that column. Have students compare and discuss the terms in each column.

• WB: Chapter 4 Terms, Activity A. Use this activity to preview or review terms.

• For more vocabulary activities, see Activity Buffet—Vocabulary in the MEH.

• Have students read the objectives and predict what they will learn for each one. Then ask them to list the vocabulary terms that most likely go with each objective.

• For more prereading and reading activities, see Activity Buffet—Reading in the MEH.

Write the term market on the board. Ask students to write as many sentences using this term as they can. Give them fi ve minutes. Then have them read the introductory paragraphs on pages 51–52 of the text. Have students read their sentences aloud, and have the class decide the meaning of the term market in each sentence. Here are six possible meanings for the term market: (1) a store, (2) the stock market, (3) demand, (4) a group of people interested in buying, (5) geographic area where the product is sold, (6) how many dollars customers spend each year on a product.

Vocabulary Builder

Resources

Prereading Activities

Introductory Activity


As an introduction to markets and target markets, have students list in their journals all the items they purchased in a week and why they purchased each item. This exercise might help students understand why we buy and how businesses segment markets.

Ask, “Is everyone who wants a product part of the market for that product?” Have students develop their own list of the criteria for being in the market for a product.

Part 1 Marketing Dynamics52

and services. The word market still keeps some of that original meaning.

In sentence 1, market means a store, in this case, a grocery store. In sentence 2, market refers to the stock market, a special kind of market where stocks are traded. In sentence 3, market means demand. In sentence 4, market means a group of people interested in buying, 4-1. In sentence 5, market means a geographic area where a product is sold. In sentence 6, market means how many dollars customers spend each year on a product, ice cream.

Throughout this book, the word marketwill be used, and it will have different meanings in different contexts. You will have to pay attention to the context of the word, to make sure you understand which meaning of market is being used.

A Group of BuyersWhen you buy a soft drink, you become

one of the millions of people in the soft drink market. Do you know someone who hates soft drinks and never buys or drinks them? That person is not part of the soft drink market. In the simplest terms, a market is a group of people who want a product and are able to buy it. (Remember that productincludes goods, services, and ideas.)

Is everyone who wants a product part of the market for that product? Think of a Ferrari, a trip around the world, a luxury home in Key West, or some other tremendously expensive product or service that you want. You may want the product. You may even be willing to buy it. However, you probably cannot afford to buy it. In

4-1

One of the meanings of the term market is a group of people interested in buying a product.

Journal Writing

Critical Thinking

Review with students the different written events they might choose to do. Explain the difference among the Individual Series Events, Management Team Decision Making Events, and the many options in written events. If students are interested in doing written events, they will need to start soon. Obtain the names of former DECA members who have consented to mentor students. Give these names to students who are interested in preparing written DECA events. Have the students prepare questions about their events to discuss with the mentor.


Chapter 4 Markets 53

addition, because of your age, you might not have the authority or be legally allowed to buy the product. Marketers want to sell their products to a market that consists of people with the following four characteristics:■ need or want the product■ able to buy the product■ willing to buy the product■ have the authority to buy the product

As you learned in Chapter 1, people who buy products are called customers. People who are in the market and might buy a product are often called potential customers.

Name a product that you want. Based on the four characteristics of a market, are you part of the market for that product?

✓✓ Reality CheckReality Check

Consumer Market vs. Business Market

There are two types of markets: the consumer market and the business market. The consumer market consists of customers who buy products for their own use. The business market consists of customers who buy products for use in a business, 4-2.

The Consumer MarketThe consumer market is the one with

which you are most familiar. Customers in the consumer market are people like you, your family, and your friends. Customers in the consumer market buy groceries, clothes, things for the home, cars, gifts, and so on. Most of the commercials you see on TV are aimed at customers in the consumer market. The consumer market is sometimes referred

Types of Markets

Consumer Market

You

Me

Family

Friends

Producers

Resellers

Institutions

Government

Business MarketIndividuals buying products

for their own useBusinesses buying products

for making new products, resale,or running the business

4-2

One of the main ways to look at markets is to divide them into the consumer market and the business market.

Organize the class into groups. Have each group list four products and describe the group of people who would be part of the market for that product. Then have them describe another group that would not be part of the market. Have the groups present their products and markets.

Ask, “What is the difference between a customer and a potential customer?” (A customer is a person who has bought a product. A potential customer is a person who might buy a product, but has not yet.)

WB: Consumer Market or Business Market? Activity B. Students read scenarios and label them B2B or B2C. They then read descriptions of customers and label them consumer or one of the four types of business customers.

(Student response. I want a car, am willing to buy one, and have a driver’s license (am legally able to buy a car), but I am not in the market because I cannot afford to buy one now. I am in the market for a DVD because I want the DVD, am willing to buy it, and have the money to purchase one.)

Cooperative Learning

Critical Thinking

Resource

Reality Check Answer



to as B2C, which stands for business selling to consumers.

Customers in the consumer market use the products they buy for themselves, 4-3. They do not use purchases to sell to someone else or to make something to sell. In other words, people in the consumer market consume (use up) the products they buy. People in the consumer market do not use their purchases for a business. A consumer is a member of the consumer market. A consumer buys products for his or her own use.

When you buy a gift or things for your family to use at home, you are still part of the consumer market. However, as soon as you buy something to sell to someone else, that purchase is part of the business market. For example, if you buy beads to make jewelry to sell to your friends, that bead purchase is part of the business market. Suppose you mow lawns as a part-time job. If you buy a lawnmower to use, that lawnmower purchase is part of the business market, 4-4.

Give at least three examples that show how you are part of the consumer market.


The Business MarketCustomers in the business market buy

products for use in a business. (Remember that the term product includes goods, services, and ideas.) In other words, a customer in the business market is a business that buys products from another business.

4-3

B2C stands for the consumer market, that is, businesses selling to consumers. Consumers use their purchases for themselves.

4-4

If you buy a lawnmower for your own use, that purchase is part of the consumer market. If you buy a lawnmower to use in a lawn service business, then the lawnmower purchase is part of the business market.

Organize students into groups. Have each group make a list of four B2C businesses. Then have them choose one product that each business sells and describe how the consumer “consumes” the product, in other words, uses it “for his or her own use.” (Student response. Sears, power drill—make a cabinet for his or her own kitchen.)

(Student response. I go to K-Mart and buy a DVD, a hamburger, and a pair of socks, all for me to use.)

Review the meaning of the terms market, consumer market, business market, B2C, and consumer. Answer questions 1–3 under Review Concepts and questions 1–4 under Think Critically at the end of the chapter.



Review It Now



The business market is sometimes referred to as B2B, which means business selling to business, 4-5.

The business customer uses the products it buys for the business. How are products used in a business? There are three types of business uses for products:■ Making New Products. Many businesses

buy products to make new products. These types of businesses are often referred to as producers. Producers buy raw materials and other products; they then form them into goods for the consumer market. For example, a bakery buys flour. The bakery is part of the business market because it buys the flour from a business; it then uses the flour to make new products, such as bread, cakes, and cookies. Those new products will then be sold to the bakery’s customers.

■ Resale. Many businesses buy finished goods to sell to consumers. Most stores buy goods from other businesses. The stores then sell those goods to you. For example, Walmart buys audio players from Sony and other manufacturers. Walmart is part of the business market because it buys audio players from a business; it then sells them to its customers.

■ Running the Business. Every business needs goods and services to run the business. Most businesses buy equipment and office supplies to run their businesses. For example, an accounting firm buys ten computers for its accountants to use. The computers are used to run the business; they are not part of the business’s product. The product of the accounting firm is accounting services.Whether a purchase is part of the

consumer market or the business market depends on who buys the product and what the product is used for. Some businesses sell products to both the consumer market and the business market. For example, if a restaurant buys bread and cakes from the bakery, the transaction between the bakery and the restaurant is part of the business market, B2B. If you go to the same bakery and buy bread and cake for your family, the transaction between the bakery and you is part of the consumer market, B2C.

For each of the three business uses, name a specifi c business and describe a product it purchases and its business use.


Types of Business CustomersThere are four types of customers in the

business market: (1) producer, (2) reseller, (3) institution, and (4) government, 4-6.

A producer is a business that makes goods and services. Producers of goods include manufacturers, farmers, mining operations, and construction companies. They buy raw materials and other products to make new products. Producers can be large corporations or small businesses. For example, PepsiCo and the local dairy farm are producers. Producers of services include airlines, beauty salons, and Internet service

4-5

B2B stands for the business market, that is, businesses selling to businesses. This lumber company sells its lumber to a sawmill company.

Organize students into small groups. Have each group develop a list of businesses that sell to businesses. You might give students the Yellow Pages or other business directory to help them. Then ask the groups to identify for each business a product that is sold to a business and what type of business buys that product.

Can you think of any products that are now sold in the consumer market that at one time were sold only to businesses? (Student response. Computers, electric/battery powered toothbrushes.)

(Student response. Make new products—bakery buys fl our, sugar, butter, fruits and makes breads and pastries; Resale—retail store buys clothing and resells it to customers; Running the business—beauty salon buys hair dryers, curling irons, shampoo, and hair dyes to use to provide services to customers.)


Critical Thinking




providers. Southwest Airlines and the local beauty parlor are producers.

A reseller is a business that buys fi nished products to resell at a profi t. The resellers that you probably are most familiar with are retail stores. Retailers buy products from a business then resell them to consumers. Resellers can be large corporations or small businesses. Target, Sears, and J.C. Penney are large corporate resellers. A local fl ower shop is also a reseller.

There are also resellers who sell to other businesses. These businesses buy products to sell to other businesses. This type of reseller is called a wholesaler. You will learn more about wholesalers and retailers in Part 5.

An institution is a nonprofi t corporation, such as a school, hospital, or charitable organization. Institutions buy goods and services to use in running the institution. The American Cancer Society and your school are examples of institutions. When an institution

4-6

Producer, reseller, institution, and government are the four types of business customers.

ResellerRetailers, wholesalers

GovernmentFederal, state, county, and local

InstitutionSchools, hospitals, charitable organizations

ProducerManufacturers, miners, farmers, construction,

and service and idea providers

Types of Business Customers

TR: Types of Business Customers, Master 4-1 (transparency). Use this transparency to present or review the four types of business customers.

What products does your school buy? (Student response. Food for the cafeteria, paper supplies, books, magazines, newspapers, pens, pencils, bathroom supplies, cleaning supplies, computers, services of teachers, counselors, accountants, cafeteria workers, maintenance workers.)

What items are purchased by your business where you work? (Student response. Paper supplies, computers, scanners to scan inventory.)

Resource

Critical Thinking

Workplace Connection



buys products, it is part of the business market. For example, your school buys food for the cafeteria from a food distributor. Your school is part of the business market.

Government consists of the organizations and institutions that run a geographic area, such as a country, and includes federal, state, county, and local governments. In many countries, including the United States, government is the largest customer group. In the United States, all governments together spend over two trillion dollars a year. Governments buy a wide range of products, from apples to zippers. Examples of government customers include the U.S. Army and the local mayor’s offi ce.

Other terms for the business market include industrial market, organizational market, and commercial market. The term industrial market is used because many of the businesses that sell to each other are considered industries. An industry is a group of businesses that produce similar goods or services. Examples of industries include the following: advertising, automobile, banking, broadcasting, construction, farming, steel, and petroleum.

Organizational market is used because organization is another word for business and includes institutions, governments, and nonprofi t corporations. Commercial market is used because the term commercialmeans involved in buying and selling on a large scale. Sometimes the term commercialimplies a for-profi t business and the term organizational implies a nonprofi t business.

For each type of business customer, brainstorm as many specifi c businesses and organizations as you can.


Customer vs. Consumer

As you may have noticed, many of the terms used in marketing have more than one meaning. The term consumer is one of these terms. Most of the time, the term consumerrefers to the consumer market, 4-7. When the newspapers or a marketing text say, “Consumers do this” or “Consumers think that,” they are referring to members of the consumer market. In this context, the term consumer is used to distinguish the consumer market from the business market.

The term consumer also has a more general meaning. The term consumer is used to refer to the person who actually uses a product that is purchased. In this context, the term consumer is used to distinguish the user of the product from the customer, that is, the buyer of the product. What is the difference?

First, think of a product that you buy for yourself, such as a snack. You are the customer because you bought the snack. You are also the consumer because you ate the snack. When marketers develop a marketing mix for the snack, they will consider you as the target market and develop the marketing mix with you in mind.

4-7

The term consumer has more than one meaning. Most often, it refers to the consumer market.

TR: B2B Market, Master 4-2 (project). Students identify and research a B2B business, and present their fi ndings in a paper.

This mnemonic device might help students remember the difference between customer and consumer: Both words contain the letter U. However, the U in consumer is a long U. When you say “consuuuuu-mer” it rhymes with long U sound in “uuuuu-ser.” The consumer is the user of a product. When you say “customer,” the U is the short U sound. It is the same short U sound in the word “buyer.” The customer is the buyer of the product. The customer is not always the consumer (user) of the product.

You might give students the Yellow Pages or other business directory to help them answer the Reality Check. Students might enjoy doing this activity in small groups. (Producer—Coca Cola, Frito Lay; Reseller—J.C. Penney’s, Sears, Target; Institution —hospital, March of Dimes, local college; Government —Congress, police department, state legislature.)

Review the meaning of the terms B2B, producer, reseller, institution, and government. Answer questions 4–8 under Review Concepts and questions 5–7 under Think Critically at the end of the chapter.

Resource

Vocabulary Builder


Review It Now



Now consider a product that you buy for someone else, 4-8. For example, imagine that you are a parent buying food for your baby. The parent is the customer, that is, the one who actually buys the product. However, the parent does not eat the baby food. The parent is not the consumer. The baby is the consumer, the one who actually uses (consumes) the product. When marketers develop a marketing mix for baby food, they must consider the customer (parent) who buys the product and the consumer (baby) who actually eats the product. The baby food must meet the needs of the baby (the consumer) not the parent (the customer). However, the price, place, and promotion of the baby food must appeal to the parent, the person who will actually buy the baby food.

The parent is still part of the consumer market, even though he or she does not consume the baby food. The parent did not buy the baby food to sell to someone else; therefore, the parent is still part of the consumer market (not the business market).

In the business market, the customers are often not the consumers. Many businesses have a special department that buys all the products needed for the company. This department is often called the purchasing department. This department researches the products that the business needs, and then buys the best products at the best prices. Workers in the purchasing department are often called purchasing agents. For example, the purchasing agent will research then purchase computers for the fi nance department. The purchasing agent is the customer. The employees in the fi nance department are the consumers; that is, they are the ones who use the computers. When marketers develop a marketing mix for the computers, they will keep both the purchasing agent and the fi nance department employees in mind.

Describe a situation in which you were the customer but not the consumer. Was your purchase part of the consumer market or the business market? Explain your answer.


Market SegmentsWhat do marketers see when they look

at a market? First, they see a group of buyers. Everyone in the group seems pretty much alike. For example, a company that makes carbonated cola beverages sees everyone who likes and buys cola drinks as their market. When all the customers for a type of product are considered together, they are referred to as a mass market.

4-8

When is the customer not the consumer? When he or she buys something that someone else uses.

(Student response. I bought a book as a gift for my brother. In this case, I was the customer but not the consumer. However, this purchase was part of the consumer market because it was a personal use, not a business use; that is, I did not resell the book.)

Have students identify a product that was sold to the mass market about 100 years ago and is still sold today. Then have them research how that same product has been changed to appeal to segments of that mass market. (Student response. Ivory soap bars were fi rst sold in 1879. New products based on the original Ivory soap to appeal to different segments include Ivory Body Wash, Ivory Liqui-Gel, Ivory Liquid Dishwashing Soap, Ivory Snow Powder [laundry detergent for baby clothes and delicates], Ivory Snow Liquid [liquid laundry detergent for baby clothes and delicates].)

For students who have diffi culty with English, make concepts concrete. Have groups of students role-play different purchasing scenarios. If possible, use some simple props, such as an apron or hat for the salesperson and some products such as books, food cans or boxes, pens, and beverage containers. After the role play, point to the customer/consumer, and ask, “Customer or consumer?” If the student gave the purchase to someone else, then point to that person and ask, “Customer or consumer?” Have students call out the answers. Then ask, “Consumer market or business market?” Have students call out the answer. Make sure you and the students are clear after each question what the proper answers are; otherwise, students might be confused. All students will enjoy this activity.


History/Social Studies

Meeting Special Needs



However, when marketers look more closely at this mass market, they begin to see differences in wants and needs among the buyers. For example, cola companies noticed that a large part of their market wanted caffeine-free cola drinks. The cola companies decided to target this part of the cola market. They developed caffeine-free cola drinks.

The process of looking at a large market and dividing it into smaller groups with similar wants and needs is called marketsegmentation. The verb to segment means to divide. The noun segment means a part of something large. A market segment is a part of a mass market. A market segment is a subgroup of a larger market, 4-9. Everyone in that subgroup has similar wants and needs for a particular product. Those needs are different from those of the other segments or the mass market. A large market can

have many market segments. You can often recognize the market segments by the varieties of the product that are available. For example, the cola market has the following market segments: diet, caffeine-free, caffeine-free diet, and low-carbohydrate.

Choosing Your Target Market

One of the main purposes of market segmentation is to help a business fi nd a target market. As you learned in Chapter 1, a target market is the specifi c group whose needs and wants your company will focus on satisfying. A mass market can be a company’s target market. When William Wrigley Jr. developed chewing gum, his target market was the mass market of people who are able to chew gum. He was able to

Market Segmentation

Mass MarketEveryone has the same wants and needs

Cola

Segmented MarketThe people in each segment have similarwants and needs for a particular product.

Those wants and needs are different from those of the other segments.

Regular

Diet

LowCarbohydrate

Caffeine-freeDiet

Caffeine-freeRegular

4-9

A market segment is a subgroup of the mass market.

WB: What Fraction Is That Segment? Activity C (math). This activity uses a marketing research situation to review fraction concepts.

Organize students into small groups. Have each group choose (or assign to each group) a mass market, such as car buyers, clothing buyers, home buyers, bicycle buyers, bread buyers, computer buyers. Have students identify as many segments as possible in fi ve minutes. At the conclusion of the activity, have each group present its mass market and the segmented market.

Recall the exchange bag activity. Were there any items that did not appeal to you because you are not in the target market for the product? (Student response. There was candy in my bag, but I cannot eat sugar due to diabetes, so I traded it to someone who wanted it.)

Resource


Part 1 Activity Revisited



satisfy the mass market with one product. (However, as time went on, the Wrigley Company did segment its market to provide additional fl avors and sugar-free gum.)

It is usually very diffi cult to meet the needs and wants of a mass market with one product. The reason for this is that the mass market usually consists of people with very different needs and wants for the product. For example, there is a mass market for clothing, in the sense that everyone needs clothing. However, there are many, many segments in the clothing market. For example, children have different clothing needs from adults. Children need different sizes as well as different styles, 4-10. A clothing manufacturer will want to develop a marketing mix for a specifi c segment of the clothing market. A clothing manufacturer might select the segment of businesswomen as its target market. The manufacturer will

then develop a marketing mix that meets the needs and wants of businesswomen. The same manufacturer might select a second target market, businessmen, and develop a marketing mix with businessmen in mind.

Market segmentation is a tool that marketers use to help them visualize possible target markets. You will learn more about target markets and segmenting a market in Part 3.

You can often tell that a market has been segmented by the variety of products in one product category. For example, almost everyone needs shampoo (the mass market), but people need different types of shampoo for different types of hair (market segments). Here are some shampoo types and the mar-ket segments they serve: dandruff shampoo for customers with dandruff, oily hair sham-poo for customers with oily hair, color-safe shampoo for customers who color their hair, and chlorine-removing shampoo for customers who swim in chlorinated pools.

Choose a product category, for example, toothpaste. Describe at least two market segments for this product category.


Segmentation and the Marketing Concept

Think of the mass market for radio. It includes everyone who listens to radio. Here are some examples of people in the mass market for radio: people who like hip-hop; people who like country and western music; people who like jazz; people who only listen for the news, traffi c, and weather reports on the way to work; people who like classical music; people who listen to sports; and people who like talk radio shows. Some of these people do not enjoy listening to other kinds of music or programs. For example,

4-10

Everyone needs clothing; however, there are many different segments in the clothing market.

Organize students into small groups. Give them fi ve minutes to list as many specifi c products and their target markets as they can. Have the groups present their products and target markets in round robin fashion. Ask students whether they agree with the target markets for the specifi c products. (Student response. Decaffeinated coffee—people who want coffee but not caffeine.)

You are part of the teen target market. Which products do you think try to appeal specifi cally to teens? List three. Why do you think that? (Student response. Video games, cell phones, certain clothing. The commercials always show teenagers using and promoting the products.)

(Student response. Young children—cartoon characters on toothpaste container; People with sensitive teeth—sensitive teeth toothpaste with potassium nitrate.)

The United States is increasingly a multicultural society with people who speak a variety of languages. In addition, the increase in global marketing means that workers will need to know the languages of the countries in which they are marketing products. Learning a foreign language can help you in this multilingual environment. You might want to start learning a foreign language now. Knowing another language may help you get a job. Keeping your language skills current is a lifelong process. You can watch foreign language TV, listen to programs in foreign languages on the radio, and read foreign language newspapers, in addition to formal language studies in school. Make friends with people who speak the language you choose to study, and speak with them in their native language.


Critical Thinking


Lifelong Learning



most of the people who like classical music do not enjoy hip-hop. How can one radio station meet all the needs and wants of a mass market?

A radio station that tried to meet the needs and wants of everyone in the mass market would have to include a little bit of everything. The station might have some news, weather, and traffi c in the morning, some jazz, some hip-hop, some classical, some sports, and some talk shows. The result might be that no one would like the radio station. The mass market for radio is made of people who all want radio, but they want different kinds of programs. It is very diffi cult to meet the needs and wants of everyone in a mass market.

The marketing concept says that the best way to make a profi t is by satisfying customer needs and wants. Since it is often impossible to satisfy the needs and wants of everyone in a mass market, a company can often more successfully follow the marketing concept by targeting a market segment, rather than a mass market. The marketers can then focus on satisfying the customers in that market segment. The marketers will be able to follow the marketing concept because they will be better able to satisfy the customers in this market segment. Many businesses have more success when they try to satisfy the needs and wants of a small market segment made of customers with similar needs.

In the radio station situation, each station chooses a market segment to target. The mass market for radio can be divided into

market segments based on the type of music and programs that the market segment likes. Each market segment consists of people who want the same kinds of programs. Market segments for radio might include hip-hop, soft rock, hard rock, country and western, jazz, classical, talk shows, and news.

List two radio stations with which you are familiar. Describe the market segment that is the target market for each station. Describe the typical person who might listen to each station.


Marketing StrategyOne of the major tasks of the marketing

function of business is to develop a marketing strategy. A marketing strategyis the selection of a target market and the development of a marketing mix to meet the needs and wants of the target market. The target market and marketing mix decisions are part of a document called a marketing plan. As you learned in Chapter 1, the marketing plan provides the guidelines for all marketing activities. The marketing plan states the target market and the marketing mix. The marketing plan includes all the details for how the decisions will be carried out. The seven functions of marketing are usually covered in a marketing plan.

Have students work in groups to arrange a panel of advertising executives from local radio stations. Have students choose a variety of stations. Have them prepare questions ahead of time. Make sure the questions cover identifying the target market for the station, the advertisers, and the relation to the type of music. Have students take notes during the panel. After the panel and the speakers have left, have students discuss what they have learned. As an extension activity, have each group draw up plans for a new radio station, including type of music, target market, and advertisers.

(Student response. WBBM—all news for anyone who wants a quick update on news, weather, and sports; typical listener is an adult commuting to work. WFMT—classical music for everyone who enjoys this type of music, such as music students and adults who also buy opera and orchestra tickets.)

Review the meaning of the terms mass market, market segment, and marketing strategy. Answer questions 9–12 under Review Concepts and question 8 under Think Critically at the end of the chapter.

Speaker/Panel


Review It Now


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Chapter 4 ReviewChapter 4 Review

Remember This

■ A market is a group of people who (1) want a product, (2) are able to buy it, (3) are willing to buy it, and (4) have the authority to buy it.

■ The consumer market consists of customers who buy products for personal use. The business market consists of customers who buy products for use in a business.

■ The three business uses for products are (1) making new products, (2) resale, and (3) running the business.

■ There are four categories of customers in the business market: (1) producers, (2) resellers, (3) institutions, and (4) government.

■ Consumers use (consume) products; customers buy (purchase) the products.

■ One of the main purposes of market segmentation is to help a business fi nd a target market.

■ A marketing strategy consists of a target market and a marketing mix.

Review Concepts

1. Use the word market in two different sentences with two different meanings.

2. Are you part of the market for coffee? Explain your answer.

3. Explain the difference between the consumer market and the business market.

4. Give an example of each of the three business uses of products.

5. List three products that could be sold both to the consumer market and the business market, and explain a use in each market.

6. Describe the difference between a producer and a reseller.

7. Name an institution with which you are familiar. List ten products that institution would need to buy to run the institution.

8. List four synonyms for the business market.

9. Explain how a person can be a customer but not a consumer.

10. What is a market segment? 11. Why might a marketer want to segment

a market? 12. What is a marketing strategy?

Think Critically

1. Name a product that you would like to own. Explain whether a marketer would consider you part of the market for that product.

2. Name ten businesses that sell to the consumer market.

3. List ten goods that you buy (or your family buys) that are part of the consumer market.

4. List fi ve services that you buy (or your family buys) that are part of the consumer market.

5. Imagine that you are planning to open a retail store. List ten products that you would have to buy to run the store.

1. Answers may vary. Encourage students to use sentences different from the ones at the beginning of the chapter.2. Student response. Yes—I want the product, am able and willing to buy it, and have the authority to buy it. No—I do not like coffee and am not willing to buy it, even though I am able and have the authority to buy it.3. Businesses buy products for use in the business; consumers buy products for their own use.4. Student response. Making new products—jeans manufacturer buys fabric to make jeans; Resale—K-Mart buys bicycles to sell; Running the business—retail store buys cash registers.5. Student response. Pencils—consumers use to do homework; A retail business uses for sales associates to write orders; Laundry detergent—consumers use to do their own laundry; A health club uses to launder the towels; Air travel—consumers use to visit friends; a business uses to send workers to a meeting.

Review Concepts Answers

6. A producer is a business that makes something new. A reseller buys a fi nished product, and usually does not do anything to that product, then sells it to customers.7. Student response. My school—(list 10:) books, computers and software, Internet service, desks and chairs, teachers (educational services), nurse (medical services), electricity, telephone services, food (cafeteria), paper plates and plastic utensils, soap, paper towels.8. B2B, industrial, organizational, commercial9. When a person buys a product for someone else, that person is the customer but not the consumer.10. Part of a larger market with similar wants and needs for a particular product.11. The business might be better able to meet the needs and wants of a market segment than the mass market.12. Target market plus marketing mix.


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6. Imagine that you are a manufacturer. Name a product that you would like to manufacture. List three materials (goods) you would have to buy to make that product. Explain why these purchases would be part of the B2B market.

7. Can a business sell the same products to both the consumer market and the business market? Explain your answer and give an example.

8. Suppose a marketer chose you and people like you as a target market. What label would you give your market segment? List at least fi ve characteristics of your market segment.

Connect to Business

1. Visit a local business, a department in a large store, or use the business where you work. Describe the market segment you think that business has chosen as its target market. Then arrange to interview a manager. Find out the target market that this business has chosen. Find out how the business chose that target market.

2. Visit a local business or use the business where you work. Name the business. List the products the business has purchased to resell to customers or to make into new products to sell to customers. List the products the business has purchased to run the business.

3. Visit the library or surf the Internet to fi nd advertisements from businesses

that sell to other businesses and organizations. Select one of the ads, make a copy, and then write a report that describes the business that advertised, the product it advertised, and the target market for that product. How will the purchasing business use that product?

Explore Careers

1. Would you like to work for a company that sells to businesses? Visit a job search Web site, such as www.careeronestop.org(careeronestop) or www.monster.com.Search for B2B marketing jobs. Select one that appeals to you. If you were in that position, what would you be doing? What qualifi cations would you need? Why does this position appeal to you?

2. Obtain the “Want Ads” section of a newspaper. Cut out all the marketing-related jobs, including sales. Organize the ads into B2C jobs and B2B jobs.

3. Find a company that sells equipment to businesses, for example, John Deere (www.deere.com). Visit the Web site. Describe the company and its products. Explore the Web site to learn about careers in marketing with the company. Choose one career or job. Name the job title and describe what you would do if you had that job. What would a typical day be like? What are the qualifi cations for this job? Would you like this job? Explain why or why not.

MEH: Activity Buffet—Content Review, Games, and Vocabulary. Use activities from these buffet categories to review chapter content and vocabulary.

Select from various assessment options: Chapter 4 Test, Reproducible Test Master in the TR; Activity Buffet—Assessment in the MEH; and the ExamView® Assessment Suite CD.

Resources Review

Resources Assessment

What language is predominately used in the country you are researching? To trade with this country, would you need to speak this language? Add this information to your IBP notebook.

International Business Project


http://www.careeronestop.org

http://www.monster.com

http://www.deere.com

Chapter 4 ReviewChapter 4 Review

Connect to the Internet

1. Visit the Web site of a business that sells products to the consumer market. Types of businesses you could visit include automobile manufacturers, fast-food restaurants, sports equipment, clothing, and books. Print the home page. What is the mass market for this Web site’s products? Based on the Web site, which market segment did this business choose to target? Describe the target market.

2. Visit the Web site of a government organization. For federal government Web site ideas, visit www.fi rstgov.gov,and click on the A-Z Agency Index. Your local county, city, or state may also have a Web site. Choose one of these government Web sites. Print the home page. What is the purpose of this Web site? Describe the target market.

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Would you prefer to work for a B2C business or a B2B business? Explain your answer.

Journal Writing

Have students identify groups in the community who rely on community support for food, housing, or transportation. Appoint a student committee to locate areas in the community that could benefi t from having volunteers. Have them develop a plan for providing volunteers.

Citizenship and Service


http://www.firstgov.gov

Documents

Lesson Planning Guide - · PDF fileActivity C (math) Review and Assessment ... Chapter 4 Markets 53 addition, because of your age, ... 4-2. The Consumer Market