On February 1, 2015, a notable event occurred in the history of television: 114.5 million Americans watched a football game on TV, making it the most watched television program in U.S. history. Are there really 114.5 million football fans in the United States? Probably not. Why did so many people watch? Answer: the commercials!
Advertisers paid $4.5 million for 30 seconds of commercial airtime during this event. That works out to $150,000 per second. What were those companies doing when they made the decision to spend so much money? Marketing!
This is of course an extreme example of marketing in action, but if you begin to look closely at the world around you, you’ll find that companies’ marketing efforts are everywhere. Why do you shop where you shop? Are you a Coke or a Pepsi drinker? Do you only purchase items when they are on sale? Is your keychain (real or virtual) full of customer-loyalty cards? Marketing efforts are at work practically every time a customer perceives the value of a product or service and decides to swap some hard-earned money for it. Such marketing triumphs are just not the happy result of arbitrary circumstances, though—they’re the product of strategic planning and research. Understanding how marketing efforts are created and conducted can help you be a better-informed consumer of products, goods, services, and information.
This chapter covered the marketing function and its contributions to business success. Below is a summary of the topics covered in this chapter.
Role of Customers
All marketing centers on creating, delivering, and communicating value to the customer. A value proposition is a clear and succinct statement to the customer of the value being offered by a company’s products or services.
Segmentation and Targeting
One of the first steps in effective marketing is identifying and reaching the right customers. Marketers use segmentation and targeting to do this. Market segmentation is the process of splitting buyers into distinct, measurable groups that share similar wants and needs. Common segmentation approaches include geographic, demographic, psychographic, and behavioral criteria. Once different segments are identified, marketers determine which target segments to focus on to support corporate strategy and growth.
Marketing Mix Introduction
There are multiple factors that can influence someone’s thinking and decision about what to buy—a mix of factors. Taken together, these factors are all part of the “marketing mix.” The marketing mix, also known as the four Ps, is represented by the four main factors below:
- Product: the goods and services offered
- Promotion: communication and information
- Place: distribution or delivery
- Price: ensuring fair value in the transaction
A major part of marketing is getting the marketing mix right for the target customer.