Lesson Summary

A Market is a group of customers or potential customers. The market starts with the total population, then Potential markets that have an interest, then Available markets that have the money, then Target markets that are the customers the company has determined to serve (the served market), then finally the Penetrated markets who have already bought your products and/or services.

The Marketing Department’s key responsibilities is to determine the needs, which represent items such as food, housing, and clothing, and wants which represent cultural based items such as makeup or vacations.

Marketing needs to know how their decisions could lead to problems for other departments within the company. Microenvironment deals with internal factors that can influence the company directly. Macroenvironment deals with the external factors outside of the company’s direct control.

Market Research helps companies understand and analyze their customers. Market research mostly focuses on the following four types of information: Demographic characteristics, which would include the age, race, sex, education, marital status, housing, income, and number of children. Buying behaviors, which studies how customers buy products such as in a retail store or online. Lifestyle or psychographics that researches the type of hobbies, sports, and even personality traits and sexual orientation. And Customer Satisfaction, which surveys on the perceived value of the overall product, and whether they are likely to purchase more product in the future.

There are basically two types of market research; primary market research, which involves surveys, observations and experimental approaches, and secondary market research, which involves checking articles in newspapers, magazines, and books.

Four strategies marketers use as a competitive edge is to best determine if they are Market leaders who are looking to dominate the industry, Market Challengers who are looking to challenge the market leaders, Market Followers who are happy to stay at their current position, and Market Nichers who are looking at just a few specialized target markets.

Market Segments are parts of a market that are different from one another. Six common segmentation strategies are Geographic, Demographic, Psychographic, Behavioristic, Product, and Sales channel.

The 4 P’s of the Marketing Mix refers to the Product, Price, Place, and Promotion. They are the foundation to the marketing mix. There is also the 7 P’s, which include People, Process, and Physical Evidence (including Packaging). Positioning, which is also sometimes known as one of the P’s, can be part of the marketing mix as well.

A strategic decision companies face is to choose whether they will compete on price or quality. Marketing would then focus its efforts on the results of that decision. Companies also compete on service such as post-sales support and warranties.

Whenever a new product is released, 2.5% of the buyers will be the innovators, 13.5% will be the early adopters, 34% will be the early majority, 34% will be the late majority, and 16% will be the laggards. This tends to follow the product life-cycle curve in which in the introduction phase, the sales are slow and the challenge is finding the innovators and early adopters. In the growth phase, the sales rise and the challenge is to beat the competitors getting to the early adopters. In the maturity phase, sales growth levels off and in the decline phase, the sales decrease. These last two phases hold the late majority and laggards.

The difference between marketing and sales is basically; marketing sells the idea of a product and/or service to everyone, whereas sales sells the product and/or service one-on-one.

The different possible sales types are Order Takers, Active Selling, Inside Sales, and Outside Sales. The sales force needs to be properly organized, motivated and compensated in order to have the right size to do the workload, alignment to cover all needs, and keeping them happy and selling. A common system used by marketing and sales to learn more about customers' needs and behaviors, is CRM or Customer Relationship Management.

LESSON 10 - BUSINESS BASICS PART III - MARKETING & SALES

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