Marketing

Chapter 5
 Market Concept

 The marketing concept rests on the

philosophy that all marketing activities
must satisfy customer needs and wants,
and at the same time achieve the
targeted profits.
 The focus, which is customer satisfaction
first and then profit, is considered a long-
term view to doing business.
 Market Concept

 In order to fulfill customer needs and wants,

the business needs to offer product or services
that are easily available to the targeted
customer at the right place and time and at an
attractive price.
 A lack of understanding of the marketing
concept can result in a poorly developed
product that fails to meet the customer’s needs
and wants.
 Marketing Definition

 “Marketing is defined as the activities that

are carried out systematically to
encourage and increase sales of
products/services as long as the activities
are in line with religious and ethical
practices”.
 Marketing Definition

 The above definition highlights several

basic elements. These are:

1. Systematic (activities) Effort

2. Encourage and Increase Sales
3. Religious and Ethical Considerations.
 Defining the Market

 What is a Market?

“A market is a physical place where buyers and

sellers exchange goods and services”.

“ Any entity that has the purchasing power to

acquire goods and services to fulfill its needs
and wants”.
 Market Categories
Category Profiles

Human being Geographic, Demographic,

Psychographic
Government Local Gov., state Gov. and
Federal Gov.
NGOs Environment, Social, Cultural

Business Entities Manufacturer, Wholesaler,

Agent/Dealer, retailer.
 Target Market
 “The group of customers with needs and
wants that can be satisfied by the
business through the supply of goods
and/ or services”.
Importance of Identifying
the Target Market
1. It is impractical and almost impossible
for a business to offer a product that
can satisfy the needs and wants of the
entire population.
2. Most of the business have limited
resources in term of time, money and
manpower.
 Step in Identifying the
Target Market
1. Identify the product / service to be
offered.
2. Focus the marketing effort.
i. Identify the market area and business
location.
ii. Collect information and data of
customer.
iii. Segmenting the market.
Step in Identifying the Target Market

Segmentation Variables/Bases
Geographic District, residency, division,
state, country, climate.
Demographic Age, occupation, gender,
education, income, social class,
family, race.
Psychographic Personal taste, status,
preferences, ego, hobbies,
political attitude, sensitivity to
price, motives of purchase,
loyalty to product.
 Step in Identifying the
Target Market
3. Determine target market from the
market segments identified.
 Sales Forecast

 “The sales forecast is the expected sales

potential from the selected target
market”.
 The sales forecast is quoted in units of
sales or in US$ for a period of time e.g.
one month or one year.
 Sales forecast will help the business
estimate business income and its
resource requirements for that year.
Four main steps in preparing
a Sales Forecast
1. Determine Market Size
“market size is the total potential
purchase that is expected from the
target market”.

2. Identify the Competitors

Four main steps in preparing
a Sales Forecast
3. Estimate Market Share
“ Market share refers to the portion of the market
that the business can control after taking into
consideration market size and the competitors’
position in the same market”.

4. Forecast Sales
i. Customer awareness of the existence of the
business
ii. Seasonal factors
iii. Pre-sales period
Preparing the Market Plan
1. Define the product concept
2. Identify the target market
3. Determine market size
4. Identify competitors
5. Determine market share
6. Develop sales forecast
7. Develop marketing strategies
8. Prepare a marketing budget
Managing Marketing and
sales activities
 Managing by Objective
i. A marketing plan needs to be implemented
effectively to produce set targets or objective.
ii. Businesses must provided directions and
monitor marketing activities to ensure that
these activities are carried out as planned and
within the accorded time.
iii. Managing marketing activities by objective is
an excellent way to monitor sales performance
and can be linked to staff remuneration and
promotion.
 The Gantt Chart
 After formulating an achievable sales
objective, a company has to mobilizes its
personnel and other resources to
execute the whole marketing plan.
 The company must prepare a schedule
to facilitate the process of control and
monitoring.
 One excellent tool to plan and monitor
marketing activities is the Gantt Chart.
 The marketing Budget

 Marketing cost money.

 Entrepreneurs will have to allocate
money for marketing activities.
 The marketing budget summarizes all
marketing expenses planned and is
useful for financial planning.