The Two C’s of MarketingThe Two C’s of Marketing

In order to adequately put together the In order to adequately put together the four P’s of marketing, businesses must four P’s of marketing, businesses must also consider two major external factors:also consider two major external factors:

1.1. The CompetitionThe Competition

2.2. The Consumer (The target market)The Consumer (The target market)

The Competitive MarketThe Competitive Market

The competitive market consists of the total dollars in The competitive market consists of the total dollars in sales spent on a particular type of product.sales spent on a particular type of product.

Example:Example: The US soft drink industry is worth $68 billion dollars.The US soft drink industry is worth $68 billion dollars.

The portion of that $68 billion that was Coca ColaThe portion of that $68 billion that was Coca Cola sales or any other company’s sales is called market sales or any other company’s sales is called market share. share.

Market share is expressed in terms of %’s.Market share is expressed in terms of %’s.

2007 Estimated U.S Market Share for Major Soft 2007 Estimated U.S Market Share for Major Soft Drink Brands ($68 billion)Drink Brands ($68 billion)

BRAND % Market Share

Coca-Cola Classic 16.5

Pepsi 12.3

Diet Coke 10.2

Mountain Dew 6.5

Diet Pepsi 5.9

Sprite 5.8

Dr. Pepper 5.7

Total 62.9%

Note: That leaves 37.1% of the market for the other 200 brands of soft drinks available in the market.

Market SegmentMarket Segment

Market SegmentMarket Segment Market segment is a part of the overall market Market segment is a part of the overall market

that has similar characteristics.that has similar characteristics.

Example:Example: Within the soft drink market, you have:Within the soft drink market, you have: 1. The flavoured segment, such as Root Beer,1. The flavoured segment, such as Root Beer,

Orange Crush, etc; Orange Crush, etc; 2. The diet segment such as Diet Coke, Diet2. The diet segment such as Diet Coke, Diet

Pepsi; and Pepsi; and 3. The energy drink segment such as Red Bull.3. The energy drink segment such as Red Bull.

Increasing a Company’s Market ShareIncreasing a Company’s Market Share

There are two ways in which a company can There are two ways in which a company can increase its market share.increase its market share.

1. Creating a new segment of the market1. Creating a new segment of the market Example: Bottled water in the 1990’s.Example: Bottled water in the 1990’s. Energy drinks in 2000’s.Energy drinks in 2000’s.

2. Taking sales away from your competition2. Taking sales away from your competition

Types of CompetitionTypes of Competition

Direct CompetitionDirect Competition Companies who sell similar Companies who sell similar

products to ours.products to ours.

Examples:Examples: Coke vs. pepsiCoke vs. pepsi One brand of sunscreen One brand of sunscreen

versus another brandversus another brand Loblaws versus MetroLoblaws versus Metro

Companies compete through Companies compete through quality, price, design, features, quality, price, design, features, benefits and simply image benefits and simply image preference.preference.

Indirect CompetitionIndirect Competition Products and/or companies Products and/or companies

that don’t necessarily sell that don’t necessarily sell similar or related products.similar or related products.

Examples:Examples: Will you go to the movies or go Will you go to the movies or go

bowling instead?bowling instead? Will you fly or will you take the Will you fly or will you take the

train?train? Will you go out to dinner or Will you go out to dinner or

spend it on a new outfit spend it on a new outfit instead?instead?

The Consumer MarketThe Consumer Market

Companies also compete with each other by studying Companies also compete with each other by studying the types of consumers who buy their products. the types of consumers who buy their products.

The store clerk is not asking for your postal code The store clerk is not asking for your postal code because s/he has a personal interest in you – but the because s/he has a personal interest in you – but the company s/he works for does.company s/he works for does.

The better a company knows their The better a company knows their customers, customers, they better equipped they are to they better equipped they are to know what to know what to do to target similar do to target similar consumers and increase consumers and increase their sales.their sales.

The Consumer MarketThe Consumer Market

Consumers can be identified or targeted in at Consumers can be identified or targeted in at least two ways:least two ways:

1.1. Through demographicsThrough demographics2.2. Through lifestyle characteristicsThrough lifestyle characteristics

Understanding the categories under which Understanding the categories under which consumers fit, helps marketers when making consumers fit, helps marketers when making pricing, advertising, product development and pricing, advertising, product development and distribution decisions.distribution decisions.

1. Demographics1. Demographics

DemographicsDemographics Organizing individuals into categories such as:Organizing individuals into categories such as:

1. Age1. Age

2. Gender2. Gender

3. Family Life Cycle3. Family Life Cycle

4. Income Level4. Income Level

5. Education Level5. Education Level

6. Ethnicity and Culture6. Ethnicity and Culture

Age DemographicsAge Demographics

Age often defines our tastes, needs, and Age often defines our tastes, needs, and our wants.our wants.

Examples:Examples: Teenagers want…..Teenagers want….. Adults are interested in….Adults are interested in…. Seniors are interested in ….Seniors are interested in ….

Age DemographicsAge Demographics

GatekeepersGatekeepers The person making the purchasing decision, but may not The person making the purchasing decision, but may not

be the consumerbe the consumer

Example:Example: Parents may decide upon the cereal to purchase for their Parents may decide upon the cereal to purchase for their

child to consume, thus affecting what features may be child to consume, thus affecting what features may be advertised for parents (low in sugar).advertised for parents (low in sugar).

Saturday morning cartoons may still feature a cereal Saturday morning cartoons may still feature a cereal commercial with a cartoon character for the child to commercial with a cartoon character for the child to identify with.identify with.

Gender DemographicsGender Demographics Times have changed and products whose Times have changed and products whose

advertising use to target a particular gender is advertising use to target a particular gender is now changing to target the other or/and both.now changing to target the other or/and both.

Examples:Examples: More women are making the purchasing More women are making the purchasing

decision when it comes to buying a car, tools, decision when it comes to buying a car, tools, and sporting equipment.and sporting equipment.

Hotel rooms added hair dryers and ironing Hotel rooms added hair dryers and ironing boards as more women entered the workplace boards as more women entered the workplace and business industry.and business industry.

Family Life Cycle DemographicsFamily Life Cycle Demographics

Needs, wants, and interests Needs, wants, and interests typically typically vary depending on what vary depending on what stage in life stage in life one is in.one is in.

Examples:Examples:

1.1. Newly married couples are interested in…Newly married couples are interested in…

2.2. Parents with a new baby are interested in..Parents with a new baby are interested in..

3.3. A couple with 3 teenagers are interested in…A couple with 3 teenagers are interested in…

4.4. Retired seniors are interested in….Retired seniors are interested in….

Income Level Demographics Income Level Demographics

Business selling luxury goods and services are Business selling luxury goods and services are interested in learning about wealthy consumers.interested in learning about wealthy consumers.

Most businesses target average incomes and compete Most businesses target average incomes and compete for the discretionary income of consumers.for the discretionary income of consumers.

ExamplesExamples Postal codes indicate the area in which someone lives. Postal codes indicate the area in which someone lives.

Income levels can be estimated based on the type of Income levels can be estimated based on the type of homes found in most areas.homes found in most areas.

A company selling a luxury yaught is not going to A company selling a luxury yaught is not going to advertise in the Penny Saver, but rather a luxury travel advertise in the Penny Saver, but rather a luxury travel magazine.magazine.

Discretionary IncomeDiscretionary Income

Discretionary IncomeDiscretionary Income Income/money that is not committed to Income/money that is not committed to

pay for basic necessities such as food, pay for basic necessities such as food, clothing, and shelter.clothing, and shelter.

Teenagers generally have the Teenagers generally have the

highest amount of discretionaryhighest amount of discretionary

income from their part-time income from their part-time

jobs. Why?jobs. Why?

Ethnicity and Culture DemographicsEthnicity and Culture Demographics

Canada’s diverse population brings with it Canada’s diverse population brings with it diverse interests, wants and needs.diverse interests, wants and needs.

Examples:Examples: Restaurants targeting variousRestaurants targeting various

cultural food tastes cultural food tastes

Newspapers and magazines areNewspapers and magazines are available in over 100 languagesavailable in over 100 languages in Canada. in Canada.

2. Lifestyle or Psychographics 2. Lifestyle or Psychographics CharacteristicsCharacteristics

Characteristics including the way people live, - Characteristics including the way people live, - their values, beliefs, and motivations.their values, beliefs, and motivations.

Examples:Examples:

1.1. Environmentally conscious person may Environmentally conscious person may purchase….purchase….

2.2. An extreme sports enthusiast may be An extreme sports enthusiast may be interested in….interested in….

3.3. A tech savy enthusiast may be interested in…A tech savy enthusiast may be interested in…

SourcesSources

Wilson, Jack et al. Wilson, Jack et al. The World of Business.The World of Business., 5 , 5 Ed., Nelson Education Ltd., Canada, 2007Ed., Nelson Education Ltd., Canada, 2007