Core Concepts of Marketing

28 CHAPTER 2 UNDERSTANDINGANDAFPROACHINGTHEMARKET

andoveragainfroma newvisitor.Instead, mediabuyershavehadtorelyonmoreprimi-

tivetools,likereportsaboutwhatcompetitorsarespendingandwhere.

Sources:AIUrbansky."EscapeToTheNet,"Promo,February2000.pp.21-22;HeatherGreen, "GellingToo Personal."Busi·

nessWeeke.biz,February7,2000.p.EBI4;"You'vegotSpam:'.'\mericanDemographics,September1999.p.22;Christine

LeBeau,"Cracking theNiche,"AmericanDemographics,June 2000 ,pp.38-39.

Introduction

Knowingyourmarketaccuratelyandcompletelyisa prerequisiteforsuccessfulmarket-

ing.ThistaskismadeevenmoredifficultforcompaniestryingtoadvertiseontheWeb.

Yet,asnotedearlier,thistrendtowardusingtheInternetwillcontinue.Threeimportantcon-

ceptsrelatedtothetopicofmarkets arepresentedinthis chapter:definingthenatureof

markets,identifyingthetypesofmarkets,anda discuss ionofproductdifferentiationand

marketsegmentation.

DefiningtheMarket

Themarketcanbeviewedfrommanydifferentperspectivesand,consequently,isimpos-

si bletodefineprecisely.In ordertoprovidesomeclarity,weprovidea basicdefinitionof

a market:A groupofpotentialbuyerswithneedsandwantsandthepurchasingpowerto

satisfythem.Ratherthanattemptingtocutthroughthemanyspecializedusesoftheterm,

itismoremeaningfultodescribeseveralbroadcharacteristicsandusethissomewhatambigu-

ousframeworkasthefoundationfora generaldefinition.

TheMarketIsPeople

Sinceexchangeinvolvestwoormorepeople, itisnaturaltothinkofthemarketaspeople,

individuals,orgroups.Clearly,withouttheexistenceofpeopletobuyandconsumegoods,

services,andideas,therewouldbelittlereasonformarketing.Yetthisperspectivemustbe

refinedfurtherifitisto beuseful.

Peopleconstitutemarketsonlyif theyhaveovertorlatentwantsandneeds.Thatis ,

individualsmustcurrentlyrecognizetheirneedordesireforanexistingorfutureproduct,

orhaveapotentialneedordesireforanexistingorfutureproduct.Whiletheformercon-

ditionisquitestraightforward,thelattersituationisa bitmoreconfusing,inthatit forces

themarketertodevelopnewproductsthatsatisfyunmetneeds.Potentialfuturecustomers

mustbeidentifiedandunderstood.

Whenspeakingofmarketsaspeople,wearenotconcernedexclusivelywithindi-

vidualultimateconsumers.Althoughindividualsandmembersofhouseholdsdocons~itute

themostimportantandlargestcategoryofmarkets,businessestablishmentsandotherorgan-

izedbehaviorsystemsalsorepresentvalidmarkets.People, individuallyoringroups,busi-

nesses,andi.nstihltionscreatemarkets.

However,peopleororganizationsmustmeetcertainbasiccriteriainordertorepre-

senta validmarket:

1. Theremustbeatrue:lcedand/orwantfortheproduct,service,oridea;thisneed
   mayberecognized unrecognized,orlatent.


2. Theperson/organizationmusthavetheabilitytopayfortheproductviameans
   acceptabletothemarketer.