Chapter 10 MK - Marketing, Competition, Customer

Marketing Overview

• Chapter Title: Marketing, Competition and Customer

Learning Objectives This Unit

1. Understand the role of marketing

2. Analyze market changes – reasons, factors, competition

3. Identify strategies for responding to market changes

4. Distinguish between mass and niche marketing

5. Explore market segmentation

Key Terminologies

• Market: Total number of current and potential customers for a product/service.

• Customer Relationship: The management of interactions with current and potential customers.

What is Marketing?

• Definition: Marketing involves identifying customer needs and satisfying those needs.

• Scope: It is more than just sales and advertising.

• Core Question: Marketing should always address the question: "What do customers want to buy – now and in the future?"

Understanding Marketing Activities

• Components of Marketing:

  • Sales

  • Promotion

  • Market research

  • Distribution

Role of Marketing

• Identify customer needs

• Satisfy customer needs

• Build customer relationships

• Maintain customer loyalty

• Anticipate changes in customer preferences

Market Changes

• Consumer spending patterns may change gradually or drastically based on industry and product.

• Factors Contributing to Changes:

  • Taste and trend changes

  • Technological advancements

  • Changes in disposable income

  • Aging population

Importance of Market Awareness

• Understanding market changes is crucial for competitiveness.

• Businesses must respond by:

  • Maintaining good customer relationships

  • Improving existing products

  • Releasing new products

  • Keeping costs low to maintain competitive pricing

Consequences of Failing to Adapt

• Case Study: Film Manufacturers

  • Fujifilm: Diversified and adapted to market changes.

  • Kodak: Failed to adapt, resulting in bankruptcy due to changing market dynamics.

Classwork Assignment

• Focus Areas: Analyze Kodak’s situation concerning:

  • Identifying customer needs

  • Satisfying customer needs

  • Building customer relationships

  • Maintaining customer loyalty

  • Anticipating changes in customer needs

• Consider: Which two aspects Kodak should have focused on and provide justification.

Defining a Market

• Market: Total number of current and potential customers for a specific good or service.

• Market Segment: Subgroup of an overall market with similar characteristics or needs.

• Target Market: Specific group of consumers for focused marketing strategies.

Market Examples

• Overall Market:

  • Game enthusiasts

  • Skincare and beauty consumers

• Market Segment:

  • FPS game players

  • Individuals with acne concerns

• Target Market:

  • Teens and young adults, ages 15-25, with specific gaming preferences and financial constraints.

Market Types

1. Mass Market:

   • Products aimed at a large number of people with general needs.

   • Advantages: High sales volume, economies of scale.

   • Disadvantages: Highly competitive, less specialization.

2. Niche Market:

   • Products tailored for a small, specialized group of consumers.

   • Advantages: Focused target, less competition within the niche.

   • Disadvantages: Lower sales volume, difficulty in scaling.

Market Segmentation Importance

• Helps businesses to:

  • Understand customer preferences

  • Create targeted marketing strategies

  • Improve marketing efficiency and profitability

Factors Influencing Target Segments

• Consumer purchasing power

• Consumers' needs/wants

• Sufficient consumer base size

• Company and brand image considerations

• Production costs and entry barriers

Practical Application

• Evaluating consumer needs and behavior in perfume marketing campaigns.

• Identifying the target market for specific products.

Impact of Effective Marketing Strategies

• Case Study: NIKE’s "Dream Crazy" campaign

  • Notable market impact: 31% sales increase, 18% rise in stock prices, increased brand awareness, and consumer growth.