UNDERSTANDING

BUYERS + MARKETS

Principles of Marketing Week 4

Learning ObjectivesThe Market

Defining the MarketUnderstanding and Approaching the MarketThe Market is…Types of Markets

Learning ObjectivesThe Buyers

Defining the MarketUnderstanding and Approaching the MarketThe Market is…Types of Markets

Defining the MarketImpossible to define precisely, but we’ve discussed it’s definition as:

A group of potential buyers with needs and wants and the purchasing power to satisfy them.

Markets are people whether they are individuals or groups.

Without people there would be no need to market

Understanding and Approaching the Market

People and organizations must meet certain basic criteria in order to represent a valid market

Must be a true need or want for the product, service idea that can be recognized or latentMust have the ability to pay for the productMuch have the authority to buy the productThose that meet the criteria must be large enough to be profitable for the marketer

Understanding and Approaching the Market

All five previous criteria must be met to equate a market.

Failure to meet even one may negate the visibility of a marketLook at the pharmaceutical industry

Why do some diseases remain uncured?

The Market is a PlaceThinking of the market as a place “the marketplace” is a common practice of the general public.

Such locations do exist as geographical areas within which trading occurs.In this context we can think of world markets, international markets, American markets, regions, states, cities, and parts of cities.

A shopping center, a block, a portion of a block and even the site of a single retail store can be called a market.

The Market is a PlaceMost times marketers try to define the people of a marketplace.However, the place description of a market is important as well.Goods must be delivered to customers attracted towards particular places where transactions are made

The identification of markets is useful for market decision making purposes.

The Market is a PlaceFactors such as the following are all affected by the geographic market.

Product featuresPriceLocation of facilitiesRouting salespeoplePromotional design

A market might be somewhere other than a geographic region, such as a catalogues or ad that allows you to place an order

The Market is an Economic Entity

A market is characterized by a dynamic system of economic forces.The 4 biggest economic forces are: Supply, Demand, Competition, and Government Intervention.Terms Buyer’s and Seller’s market describe different conditions of bargaining strength

The Market is an Economic Entity

Placing labels on markets allows us to design strategies that match a particular economic situation.

Buyer’s market, abundance of product, prices are low, and customers dictate the terms of the sale.The interactions of these economic factors is what creates a market.

Type of MarketsNow that we have defined markets in a general sense, it is useful to discuss the characteristics of the primary types of markets:

Consumer marketsIndustrial markersInstitutional marketsReseller markets

Type of MarketsConsumer Markets

Include those individuals and households who buy and consume goods and services for their own personal use.Not interested in reselling the product or setting themselves up as a manufacturer.There are thousands of new products, services and ideas being introduced each day

The increased capability of consumers to both afford these products, the size and complexity and future growth potential of the consumer market is staggering.

Type of MarketsIndustrial Markets

Include organizations and the people who work for them, those who buy products or services for use in their own businesses or to make other products.These type of markets function differently than do consumer markets and the buying process in particular different.

Type of MarketsInstitutional Markets

Includes various types of profit and non-profit institutions such as, hospitals, schools, govt agencies, and churchesDiffer from the typical business in that they are not primarily motivated by profits or market share.Tend to fulfill more intangible needs.Whatever profits exist after all expenses are paid are put back into the institution.The set of controls and restrictions means marketers must use different strategies to be successful.

Type of MarketsReseller Markets

All intermediaries that buy finished or semi-finished products and resell them for profit are part of this market.Operate under unique business characteristicsProducers are cognizant of the fact that successful marketing to resellers is just as important as successful marketing to consumers

BuyersWhat is a Buyer?

A predetermined group or individual who fits the target market, and that is either already an existing customer of a product or service and/or a person who the marketer hopes will become a customer.

BuyersUnderstanding buyers has been, in the past, a more simple process.With the introduction of the internet, particularly social media, buyer behavior is more difficult to understand The relationship between business and buyers is undergoing the most significant transformation in decades.

Continually redefines our knowledge of how buyers make decisions.

BuyersUnderstanding buyers has been, in the past, a more simple process.With the introduction of the internet, particularly social media, buyer behavior is more difficult to understand The relationship between business and buyers is undergoing the most significant transformation in decades.

Continually redefines our knowledge of how buyers make decisions.

CONCLUSIONTopics we have covered:

The Marketing ConceptMarketing Research ProcessStrategic Marketing and Market CharacteristicsUnderstanding Buyers and Markets

CONCLUSIONEach of these elements is building towards the final project which encompasses all the parts of the marketing plan.

CLASS PRESENTATIONS