4.2. Marketing Planning

  • Marketing mix
    • Combination of key decisions that must be taken in the marketing of a product
    • Consists of the 4 or 7 Ps (product, price, place, promotions, etc.)
      • Not all of the P’s have the same degree of significance in all cases
      • P’s must be coherent in an interrelated marketing plan
      • Marketers must be careful not to confuse consumers with conflicting messages about the goods or services being sold
      • (The Ps will be discussed in units 4.5 and 4.6)
  • Marketing plan
    • Formal written document that outlines how a business intends to achieve its marketing objective
    • Contains detailed action programs, budgets, sales forecasts and strategies
    • Effective marketing planning relies on a clear awareness of market trends, competitor’s actions and consumer wants
    • Marketing plan usually begins with a marketing audit which is a review of a business’ current marketing situation
      • SWOT and the 4P’s employed
      • Current PEST
      • Review of current marketing strategies
    • Elements
      • Key marketing objectives
      • Market research (target market, competition, market size, trends etc.)
      • Marketing strategies for the marketing mix and specific activities
      • Marketing budget
      • Likely problems and backup plans
      • Monitoring and review process (to be modified along the way)
  • Market segmentation
    • Process of dividing the market into subgroups based on defined attributes
    • Each segment has distinct identity, specific needs, and preferences
    • Attributes provide each segment with a clear customer profiles allowing business to target a segment with the appropriate marketing mix
    • Successful segmentation requires a business to have a clear picture of the consumer in the target market it is aiming to sell in
    • Marketing mix has to be appropriate for the target market and positioning of the business
    • Profile segmentation by
      • Demographics
        • Age, group, gender, marital status, income group, social class, education, profession, religion, language
      • Psychographics
        • Status, values, cultures, interests, politics, causes, beliefs, buying habits, decision factors
      • Geographic
        • Location: urban, rural, cosmopolitan or closed, multicultural, island, low/uplands
        • Climate: desert, tropical, four season, seasonal rain, humidity
    • Advantages
      • Define the market more precisely
      • Identifies gaps in the market for exploitation
      • Minimize selling to consumers who have no intention of buying
      • Small firms can specialize in one or two target markets
      • Allows for price discrimination to maximize revenue and profits
    • Disadvantages
      • May need product variations to satisfy different segments:
      • High cost for R&D, varied promotions, and production and inventory
      • Excessive specialization is dangerous if your segment changes your attitudes or behavior
    • Using DAMAS for segmentation
      • Differentiated
        • Each segment must be unique in response to different elements of marketing mix
      • Actionable
        • Business must be able to address the needs of each segment
      • Measurable
        • Size and purchasing power must be quantifiable
      • Accessible
        • Customer in the segment must be reached in a cost-efficient way
      • Substantial
        • Sufficiently large in order to generate profits
  • Target marketing
    • Part of market research, comes after market segmentation
    • Targeting refers to the market segment that a business wishes to sell to
    • Appropriate marketing strategies are then developed for these target markets
      • Niche/concentrated
        • Targets a specific, well-designed segment that requires very specialized product or high luxury item
      • Undifferentiated/mass market
        • Ignores segments but targets wide market to maximize volume
      • Differentiated/selective
        • Uses different marketing mix for each segment to address differences in perceptions and lifestyles
  • Market positioning
    • Basically consumer perception
    • An analysis that looks at how consumers “perceive” brands (how they are ranked or classified in the eyes of the consumer)
    • Stages of positioning
      • Identify the competitive advantage of the product (brand or USP)
      • Decide on which strengths should be marketed to the segment
      • Implement the desired positioning by using the appropriate marketing mix
    • Brand VS. USP (Unique Selling Proposition)
      • Corporate image is the consumer perception behind a brand
      • USP is the differentiating factor that makes a company product unique and thus motivates consumers to buy
  • Product position/perception map
    • Shows the general market’s or consumers’ perceptions of a product’s or brand’s key aspects in relation to other competitors in the particular market
    • Mainly uses two variables, such as price and quality, convenience and environment, taste and healthiness, etc.
    • Uses
      • Allows businesses to identify any gaps in its product portfolio or in the market, which it can fill with new or existing products
        • Can be used for targeting strategies
        • Allows businesses to determine how to place their products more competitively
        • Can inform businesses if the need to reposition their products arises
        • Businesses may try to reposition its products according to market/consumer tastes in order to further capitalize on consumer demand without developing entirely new products
          • Involves modifying the product’s image, features or target market
    • Limitations
      • Filling gaps in the market however shouldn’t always be a priority as gaps could exist for reasons, such as generally low demand or low profitability, high barriers of entry, etc.
      • Firms also have to asses whether they have the capacity or ability to fill the gaps in the market, and whether going into such gaps correspond to the business’ image

 

Kim De Leon4.2. Marketing Planning

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