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Required information Skip to question Outline: Introduction: Understanding the Importance of the Marketing Process Practice Activities: 1. Identifying Market Segments A Closer Look: VoluntripTraveling for a Cause 2. Identifying a Target Market. 3. Identifying Price, Place of Distribution, and Promotional Strategy INTRODUCTION: Understanding the Importance of the Marketing Process The marketing process is the process a business follows to formulate a clear direction and a unified goal for all its marketing efforts, which include communicating, delivering, and exchanging offerings that have value for buyers, sellers, and society at large. It comprises three general phases: strategic planning, marketing implementation, and market evaluation. During the strategic planning phase, a business determines the marketing activities that align and support the market entry and success of a product or a service. During the marketing implementation phase, a business identifies its action steps, who will execute those steps, and how long it will take to complete each step. During the market evaluation phase, the business assesses its goals and objectives against actual market data (size, growth, profits, etc.) as a way to determine effectiveness and market fit. The marketing process is the point at which a business considers the 4 Ps of marketing: product, price, place, and promotions. Product tangible (product) and intangible (service) offerings that a business markets and sells to consumers. Price the monetary amount that is exchanged for goods and services. Price has a direct correlation to demand and the cost of goods sold. Place the retail location where consumers expect to find the product or service. Promotions marketing tools and techniques (advertising, social media, publicity, personal selling) used to influence consumer purchasing behavior. This marketing process culminates in the development of a marketing plan. The marketing plan is a comprehensive blueprint that outlines a companys marketing efforts to ensure that it successfully and favorably positions its product or service, and itself, in the marketplace. It will include a promotional strategy, also referred to as an integrated marketing communications strategy. Because there are more than 7 million consumers worldwide, marketers must break the larger market into market segments, a process known as market segmentation. A market segment is a smaller unit of consumers that have common and shared meaningful characteristics. Marketers use several methods to identify their market segments, including demographic (e.g., age, gender, income, education, occupation), psychographic (e.g., personality values, lifestyle preferences), benefit (e.g., comfort, durability, safety), geographic (e.g., rural, urban, suburban), and volume (e.g., heavy users, light users). Market segmentation, an integral part of a businesss marketing strategy, helps it to identify the unfulfilled needs of consumers. Once a company has identified its market segment, marketers must go one step further to identify the target markets within those segments. A target market is the group of customers toward which an organization has decided to direct its marketing efforts. To determine the target market, marketers carefully evaluate each market segment to determine which one presents the most attractive opportunity to maximize product or service sales. WHY THIS MATTERS: The decision to enter into a business with a product offering requires marketing research, strategic planning, and the formulation of a SWOT analysis. This research and planning allows companies to make sound and rational decisions, internally and externally, that will impact the businesss success in the marketplace. The marketing implementation phase can be especially challenging because it requires the coordination of all activities necessary for market entry and ongoing market existence. All the information the company gathers flows into a companys marketing plan, which also gets incorporated into the business plan. For this exercise, you will not be asked to craft a marketing plan, but know that the plan must support the projected goals and objectives of the business and that much work happens before that marketing plan can be written. YOUR TASK: The following activities walk you through three of the most important steps a company must complete as part of the marketing process: identifying its market segment, identifying the target markets within that segment, and establishing the 4Ps. Complete each activity to ensure you fully understand these steps in the process. 2. PRACTICE: Identifying a target market. INSTRUCTIONS: Read again the history of Voluntrip and what makes it such a unique business. To the best of your ability, help Voluntrip identify a potential target market using the guiding questions on how to identify a target market to help you. A Closer Look: Voluntrip VoluntripTraveling for a Cause In 2016 a group of three well-traveled individuals came together with an idea to start a business: Ari, an English teacher in the Sapa region of Vietnam; Luiz, a tour guide for a tourism outfit based in the United States; and Sarita an irrigation specialist in Central America. The three met while on holiday in Hoi An, a preserved ancient town on the central coast of Vietnam. They got to talking about what led each of them to this part of the world and discovered that they shared one thing in common: a love for travel to places where their tourism dollars could make a difference. After parting ways, Ari, Luiz, and Sarita stayed in touch, and all three felt that with their combined knowledge and experiences, they could start a business that focuses on sustainable, affordable travel. Although the specifics of their target market are currently unknown, they envision a business that will appeal to clients who enjoy travelling to experience different lifestyles, cultures, and languages. They are seeking to launch their idea within the next six months domestically, and hope to expand their business globally within the next 12 to 24 months. The company seeks to start their tours in the Appalachia region of the United States, as well as Southeast Asia and Central America, given their collective experiences in these areas. Eventually, they hope to expand their business beyond these regions. To start their business, they will utilize their personal knowledge and experience, but they know that in order to achieve a farther global reach, they will need to consider hiring additional staff to assist in the sales, marketing, and day-to-day operations of the business. While the capital needs of the business are unknown at this time, theyve each agreed to invest $5,000 from their personal finances to start it up. The preliminary business focus of the company is to promote traveling with a conscience to areas that have sustainability needs. The three decided to name their business Voluntrip. Ari, Luiz, and Sarita have conducted preliminary research for their company and have determined that Voluntrip operates in the Transportation and Public Utilities industry, under ISIC category 4724 Travel and Tourism Agencies, which is described as establishments primarily engaged in furnishing travel information and acting as agents in arranging tours, transportation, rental of cars, and lodging for travelers (SICcode.com, 2017). The Travel & Tourism Industry is segmented into more than 50 sub-categories; however, after careful scrutiny of the categories, the owners could not successfully identify one that exactly matches the services they hope to offer. Since Voluntrips core business is to provide travel services (planning and touring), they decide to categorize its business as a Travel Agency that provides custom travel arrangements. From the information gathered, the owners are able to ascertain that almost 20,000 businesses exist in the Travel & Tourism industry and that it employs more than 240,000 people. The industry has a market worth of more than $7 trillion, which accounts for all domestic and global travel. Key players in the industry have evolved from traditional brick-and-mortar locations to wholly online services. The major online competitors are Priceline and Expedia, while AAA and smaller travel planners occupy the local market. Despite the competition, the owners of Voluntrip believe their company will provide a unique service and fill a market gap, serving segments that are not currently being served today. The owners plan to conduct further research to identify their exact target market, market value, and potential market growth. As you work on identifying your target market, consider these guiding questions: TARGET MARKET IDENTIFICATION What type of consumer would likely purchase Voluntrips product? What do you know about these consumers? Where are these consumers located? Do these consumers have specific interests or needs? TARGET MARKET IDENTIFICATION

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