Marketing Management: What is Market, Key customer markets, and Core Marketing Concepts

Market

 Traditionally, a “market” was a physical place where buyers and sellers gathered to buy and sell goods.Economists describe a market as a collection of buyers and sellers who transact over a particular product or product class.

Manufacturers go to resource markets (raw material markets, labor markets, money markets), buy resources and turn them into goods and services, and sell finished products to intermediaries, who sell them to consumers. Consumers sell their labor and receive money with which they pay for goods and services. The government collects tax revenues to buy goods from resource,manufacturer,and intermediary markets and uses these goods and services to provide public services. Each nation’s economy, and the global economy,consists of interacting sets of markets linked through exchange processes.

  

Marketers use the term 'Market' to  cover various grouping of customers. They view sellers as constituting the industry and buyers.

EX: Product Market, Need Markets, Demographic Markets and Geographic Markets or ot is extended to cover labour, donor, voter market.

 KEY CUSTOMER MARKETS 

Consumer Markets:  Companies selling mass consumer goods and services such as juices, cosmetics, athletic shoes, and air travel spend a great deal of time establishing a strong brand image by developing a superior product and packaging, ensuring its availability, and backing it with engaging communications and reliable service. 

Business Markets:  Companies selling business goods and services often face well-informed professional buyers skilled at evaluating competitive offerings. Business buyers buy goods to make or resell a product to others at a profit.

Business marketers must demonstrate how their products will help achieve higher revenue or lower costs. Advertising can play a role, but the sales force, the price, and the company’s reputation may play a greater one. 

Global Markets:  Companies in the global marketplace must decide which countries to enter; how to enter each (as an exporter, licenser, joint venture partner, contract manufacturer, or solo manufacturer); how to adapt product and service features to each country; how to price products in different countries; and how to design communications for different cultures.They face different requirements for buying and disposing of property; cultural, language, legal and political differences; and currency fluctuations. Yet, the payoff can be huge.

 Non-profit and Governmental Markets:  Companies selling to nonprofit organizations with limited purchasing power such as churches, universities, charitable organizations, and government agencies need to price carefully. Lower selling prices affect the features and quality the seller can build into the offering. Much government purchasing calls for bids, and buyers often focus on practical solutions and favor the lowest bid in the absence of extenuating factors.

Core Marketing Concepts

1. Needs, Wants, and Demands: Needs are the basic human requirements such as for air, food, water, clothing, and shelter. Humans 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 person in Afghanistan needs food but may want rice,lamb,and carrots. Wants are shaped by 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. 

2. Target Markets, Positioning, and Segmentation: Not everyone likes the same cereal, 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 demographic, psycho-graphic, and behavioral differences among buyers.

After identifying market segments,the marketer decides which present the greatest opportunities— which are its target markets. 

For each, the firm develops a market offering that it positions in the minds of the target buyers as delivering some central benefits.

EX: Volvo develops its cars for buyers to whom safety is a major concern,positioning its vehicles as the safest a customer can buy.

3. Offerings and Brands: Companies address customer needs by putting forth a value proposition, a set of benefits that satisfy those needs. The intangible value proposition is made physical by an 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 McDonald’s carries many associations in people’s minds that make up its image: hamburgers,cleanliness,convenience,courteous service,and golden arches.All companies strive to build a brand image with as many strong, favorable,and unique brand associations as possible.

4. Value and Satisfaction: 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.

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.

5. Marketing Channels: To reach a target market, the marketer uses three kinds of marketing channels.

 Communication channels deliver and receive messages from target buyers and include newspapers, magazines, radio, television, mail, telephone, billboards, posters, fliers, CDs, audiotapes, and the Internet. 

 Distribution channels are used to display, sell, or deliver the physical product or services to the buyer or user.These channels may be direct via the Internet, mail, or mobile phone or telephone, or indirect with distributors, wholesalers, retailers, and agents as intermediaries.

Service channels that include warehouses, transportation companies, banks, and insurance companies. Marketers clearly face a design challenge in choosing the best mix of communication, distribution, and service channels for their offerings.

 6. Supply Chain: The supply chain is a longer channel stretching from raw materials to components to finished products carried to final buyers.

7. Competition: Competition includes all the actual and potential rival offerings and substitutes a buyer might consider. An automobile manufacturer can buy steel from U.S. Steel in the United States, from a foreign firm in Japan or Korea, or from a minimill such as Nucor at a cost savings, or it can buy aluminum for certain parts from Alcoa to reduce the car’s weight.

8. Marketing Environment: The marketing environment consists of the task environment and the broad environment. The task environment includes the actors engaged in producing, distributing, and promoting the offering. These are the company, suppliers, distributors, dealers, and target customers.