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Chapter 2 Marketing Basics
to save. One product no longer appeals to
everyone. Only the smaller group of class-
mates with similar needs and wants will be
interested in the same products.
The smaller group is a target market.
A target market is the specific group of
customers whose needs a company will focus
on satisfying. There are many kinds of target
markets. Think of the potential customers
for clothing. There are many groups of
customers with different clothing needs.
For example, teens need different kinds of
clothing from business people working in
offices. Babies need different clothing
from adults.
Build Relationships
Everyone lives in a world of now. Right
now, customers have access to more informa-
tion in one day than the generation before
them had in one week. Instant information
and the ability to shop the world means that
companies must focus on building relation-
ships to get and keep customers.
Marketing is based on the relationship
between the buyer and the seller. A long-term
relationship leads to customers who are more
satisfied and loyal to the business. Research
has shown that it is less costly to keep a
current customer than to get a new one.
Developing and maintaining relationships
with customers is not only cost efficient, it is
good business practice.
Some marketers use purchase incen-
tives as a way to attract customers to the
business. Purchase incentives are items
that help persuade a customer to make a
purchase, such as rewarding loyal customers
with discounts or free products. Programs
that offer such rewards include airlines’
frequent flier programs. Many bookstores,
coffee shops, and sandwich cafes also offer
free products after a certain number are
purchased. Companies might send birthday
greetings and notices of sales of items that
are of special interest to each customer. For
example, Amazon customers can sign up
for personalized recommendations based
on their interests and preferences. Through
these programs, the marketers hope to
establish long-term customer relationships
and loyalty.
AMA Tips
The American Marketing Association was
started in 1937 when the National Association of
Marketing Teachers and the American Market-
ing Society merged. Currently, the AMA has
both professional business chapters and college
chapters throughout the United States.
www.marketingpower.com
Marketing Is the Four Ps
Many people think of marketing as
merely advertising. Marketing is much more,
however. It includes product, price, place,
and promotion—also called the four Ps of
marketing, as shown in Figure 2-1. When
marketing meets the customers’ needs and
wants in these areas, businesses are generally
more successful. Later chapters will focus on
each of the four Ps in more detail.
Product
A product is anything that can be bought
or sold. Product may be the most important
of the four Ps because without it, there are
no sales. Price, place, and promotion relate
directly to the product.
Products include goods, services, and
ideas. A good is a physical item that can be
touched. Examples of goods include jeans,
food items, and cell phones. A service is
an action that is done for you, usually for a
fee. Examples of services include a haircut,