Lecture 5 – Marketing Fundementals

Marketers cannot appeal to
1) all buyers in these markets
2) not all buyers in the same way
Why?
* Buyers are too numerous, too widely scattered and too varied in their needs and buying practices. * Different companies vary widely in their abilities to serve different segments of the market. * Rather than trying to compete in an entire market, sometimes against superior competitors, each company must identify the parts of the market that it can serve best.
Marketing boils down to 2 basic qns:
1) Which customers will we serve? (Segmentation and targeting)
2) How are we going to serve them? (Differentiation and positioning)
Stages in Market Orientation I * Mass Marketing – the seller mass produces, mass distributes and mass promotes one product to all buyers * Product-variety marketing – the seller produces two or more products with different features, styles, quality, sizes and so on. * Target Marketing – identifies market segments -> selects one or more of them -> develops products and marketing mixes unique to each -> tailor their marketing programs to the needs and wants of narrowly defined segments.

What is segmenting? It is the process of dividing the total market for a good or service into several smaller groups such that the members of each group are similar with respect to the factors that influence demand.
Segmentation is necessary because customers in a market have : 1. differences in buying habits 2. differences in the way the good or service is used 3. differences in motives for buying