Core Marketing Concepts [MAC 226]

Core Marketing Concepts – Target Markets, Positioning and Segmentation

To understand the marketing function, we need to understand the following core set of concepts.

Needs, Wants, and Demands

 

Needs are the basic human requirements such as for air, food, water, clothing, and shelter. Human beings also have strong needs for recreation, education, and entertainment.

 

These needs become wants when they are directed to specific objects that might satisfy the need. A consumer in a city like Lagos needs food but may want a fried rice, shawarma, or pizza. Wants are shaped by our perceptions, attitude, social class; peer group, etc. in our society.

 

Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes; only a few are able to buy one. Companies must measure not only how many people want their product, but also how many are willing and able to buy it.

 

To gain an edge, marketing companies must help customers learn what they want.

 

Target Markets, Positioning, and Segmentation

 

Not everyone likes the same product brands, restaurant, college, or movie. Therefore, marketers start by dividing the market into segments. They identify and profile distinct groups of buyers who might prefer or require varying product and service mixes by examining age, gender as well as lifestyle, social class, and behavioral differences among buyers.

 

After identifying market segments, the marketer decides which present the greatest opportunity— which is called its target market. For each target market, the company develops a market offering that it positions in the minds of the target buyers as delivering some unique benefits.

 

Marketing companies address customer needs by putting forth a set of benefits that satisfy those needs. This is referred to as value proposition.

 

The intangible value proposition is made physical by a market offering, which can be a combination of products, services, information, and experiences.

 

A brand is an offering from a known source. A brand name such as Coca Cola carries many associations in people’s minds that make up its image i.e. Coke is it!

 

All companies strive to build a brand image with as many strong, favorable, and unique brand associations as possible.

 

 

The buyer chooses the offerings he or she perceives to deliver the most value, the sum of the tangible and intangible benefits and costs to her.

 

Value, a central marketing concept, is primarily a combination of quality, service, and price (qsp).  People’s perceptions of value, increase with quality and service and perhaps with price.  

 

We can think of marketing as the identification, creation, communication, delivery, and monitoring of customer value.

 

Satisfaction reflects a person’s judgment of a product’s perceived performance in relationship to expectations. If the performance falls short of expectations, the customer is disappointed. If it matches expectations, the customer is satisfied. If it exceeds them, the customer is delighted.