Marketing Essentials: Target Markets & Strategies
Marketing Essentials: Target Markets and Strategies
Marketing is the crucial task that links a business to its customers by identifying and fulfilling their needs. It ensures the right product is available at the right price, in the right place, and at the right time.
Understanding Markets
Markets refer to the group of consumers who are interested in a product, have the resources to purchase it, and are legally permitted to do so.
A target market is the specific segment of the market that a business has decided to serve.
Types of Markets
- Consumer markets: Goods and services bought directly by the final user.
- Industrial markets: Goods and services bought for use in the production process.
Consumers will consider a product valuable if it meets their needs.
Marketing Objectives and Strategy
Marketing objectives are goals set for the marketing department to help achieve the overall objectives of the business.
- Should be determined by senior management.
- Should be SMART (Specific, Measurable, Achievable, Relevant, Time-bound).
- Should align with the overall aims and mission of the business.
- Provide a sense of direction and allow progress to be monitored.
Marketing strategy: A long-term plan established for achieving marketing objectives.
Societal Marketing
Societal marketing considers not only the demands of customers but also the effects on all members of the public affected when firms meet those demands.
Supply and Demand
Demand varies with price. Factors affecting demand include:
- Consumer income
- Prices of substitutes and complementary goods
- Population size and structure
- Advertising and promotion spending
Supply varies with price. Factors affecting supply include:
- Costs of production
- Taxes imposed
- Subsidies given
- Weather conditions
Market Size
Market size is the total level of sales by all producers within a market. It helps marketing managers to:
- Assess whether they should enter a market.
- Calculate their own market share.
- Identify growth or decline.
Interdepartmental Relationships
Marketing and Finance Departments
- The finance department uses sales forecasts to construct cash-flow forecasts and operational budgets.
- The finance department ensures sufficient capital is available for marketing budgets.
Marketing and HR Departments
- Sales forecasts are used to devise a workforce plan.
- Ensure recruitment and selection of appropriate staff to meet demand.
Marketing and Operations Departments
- Sales forecast are used to plan the capacity needed.
Market and Product Orientation
Market orientation: An approach basing product decisions on consumer demand. The chances of new product development (NPD) failing are reduced, and customer feedback is used.
Product orientation: Making products that can be produced and then trying to sell them.
Market Growth and Share
Market growth: The percentage change in the total size of a market over a period. The pace depends on factors like economic growth, consumer incomes, and the emergence of new markets and products.
Market share: The percentage of sales of any one business in the same market. Benefits include retailers being keen to stock the product, and the potential to use market leadership in advertising.
Niche and Mass Marketing
Niche marketing: Identifying and exploiting a small segment of a larger market.
Mass marketing: Selling the same products to the whole market with no attempt to target specific groups within it.
Market Segmentation
Market segmentation: Identifying segments within a market and targeting different products or services to them. Different groups are based on:
- Geographic differences
- Demographic differences
- Psychographic differences