Core Marketing Concepts | Needs, Wants and Demands | Segmentation, Targeting and Positioning

Lesson Notes

Core Marketing Concepts

1. Needs, Wants and Demands

What are the Needs?

A need is the necessity of something for a human being to live a healthy life. Human needs are nothing but basic requirements that include food, clothing and shelter.

Example: Food, Education, Healthcare.

What are Wants?

The needs of human beings later become wants when directed to specific objects.

Example: A consumer needs food to survive, but she/he may want a hamburger from Wendy’s. Wants are further shaped by the society we live in.

What are Demands?

Many people want to own a Jaguar, but only a few can afford to buy one. Demand comes in to picture here. Demands are nothing but want for specific products upheld by the ability of the buyer to pay.

The Difference between Needs, wants and Demands

Needs are things that meet the basic essential requirements of people. Wants are requests made for specific type of items. Demands are requests for specific products that the buyer has the capacity to buy.

2. Segmentation, Targeting & Positioning

What is Segmentation?

A company cannot sell everything to everyone. Every consumer may not necessarily like the same kind of burger, restaurant, university, movie, a telecom company, etc. Therefore marketers segment buyers based on diverse factors such as demographic, psychographic, and behaviour.

Example

Apple iPhone 11 Pro is a Premium product vs iPhone SE, which is an Entry Level product.

What is Targeting?

The firm then determines which target segments deliver more significant opportunities in terms of potential market share, growth & profit.

Example

Johnson & Johnson’s target market is children.

What is Positioning?

Once the company decides its target market, the firm develops a market offering that positions its product in the consumer’s minds as a more attractive option in the product category.

Example

Red Bull’s positioning is to energize the world.

Paid Media

The growth of digital media gives marketers a variety of new ways to interact with customers which can be grouped into three categories; paid media, owned media, earned media. Paid media directs traffic to owned media. It serves owned media and creates earned media.

The brand pays to take leverage of a channel of communication. Often advertisers gain more publicity by paying influencers to tweet or share the links impacting the reach and recognition of the message.

Example

TV ads, print ads, radio ads, outdoor ads, sponsorships, promoted tweets, paid search (SEM), etc.

Owned Media

Owned media strategically targets the brand’s existing customers. It uses the social media platform. The effect of owned media is long-lasting and successfully caters to affluent audiences. It faces several hurdles; for example, there is no guarantee of success, it is time-consuming.

Example

Communication channels that are within the firm’s control such as website, blog, Twitter account, social media accounts and so on.

Earned Media

When the consumers, the press, or any other outsider voluntarily communicate anything about the brand through word of mouth, buzz, or viral marketing methods is called Earned Media. High ranking and good content are the biggest drivers that are also facilitated by reviews and recommendations.

Be it blog, video, press release, website or e-book, the content needs to be crisp in order to obtain the valuable earned media.

It is often the result of well-executed and coordinated owned and paid media. The rise of earned media has allowed certain companies to reduce their paid media expenditures.

Example – Tesla

Tesla has mastered the art of Earned Media and Owned Media

Tesla doesn’t spend money on traditional advertising in the form of Paid Media. The company enjoys an extensive amount of goodwill and earned media both from fans and customers.

Earned Media

Tesla has always enjoyed a favourable position due to the flamboyant Elon Musk and its innovative product launch. The positive messaging around the products and services are offered by satisfied customers on their own, without any prompting.

Tesla cars receive overwhelming reviews along with people posting Instagram photos of their Teslas.

Owned Media

Tesla holds total control over this aspect of media. Think of the red Tesla Roadster that Musk’s other company, SpaceX, put into orbit in 2018. Or, more recently, of astronauts headed for the International Space Station in a SpaceX capsule getting a ride to their rocket in a Tesla Model X.

3. Reach, Impressions and Engagement

Reach

Reach is the total number of people who see the content.

Impression

It would be the number of times the content is displayed irrespective of it was clicked or not. A viewer doesn’t necessarily have to engage with the post for it to count as an impression.

Additionally, one person could have multiple impressions for a single piece of content.

Engagement

Engagement is the number of interactions people have with the company’s content. It is the amount of a customer’s attention and active involvement with the communication of the brand.

Few online examples of engagements are the number of Facebook likes, Twitter tweets, comments on a blog or Website and sharing of video or other content.

Quick Summary

For measuring reach, ask the question “How many people saw my post?”

For measuring impressions, ask the question “How many times did my post get displayed?”

For measuring engagement, ask the question “How many times did people interact with my posts?”