Download 4.2 Marketing Planning

4.2 Marketing Planning
Systematic approach involving
development of marketing
objectives and appropriate
strategies to achieve them.
Marketing objectives may
include:
• Increasing market share
• Becoming market dominant-market
leader
• Positioning the product favorably in
terms of positive brand and corporate
image
• Customer satisfaction
Marketing strategies
Refer to the methods by which to achieve the
marketing objectives:
• Market development-selling existing products in
new markets.
• Product development-Selling new products in
existing markets.
• Diversification-Selling a new product in a new
market.
• Product innovation-selling a new product in a
new market first giving a business first-mover
advantage.
Constraints to market strategies
•
•
•
•
Availability of finance
Rising costs of production
The size and legal type of the business
Time lags between the implementation of
strategy and its success
• PEST factors
What does a marketing plan include?
•
•
•
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SWOT/PESTLE analysis
Marketing objectives
Market research methods
Assessment of competitive strengths and
weaknesses
• The marketing mix
• Marketing budget
• Anticipated difficulties
The planning process
•
•
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•
•
Marketing audit
Setting marketing objectives
Determining which market strategies to use
Monitoring and reviewing
Evaluating the degree of success and whether
modification is required
Marketing audit
• A systematic review of the firm’s strengths and
weaknesses as well as threats and opportunities.
I.E. it is an internal audit of the firm’s internal
environment and an external audit of the firm’s
external environment with special emphasis on
the degree of competition facing the business in
its industry.
Ethics of marketing
• Marketing ethics refer to the morals
and values followed in marketing
tactics.
• An example of ethical marketing
behavior would be realistic
advertizing.
Examples of unethical marketing
• Bait-and-switch techniques: a controversial
technique where the customer is attracted through
advertized deals which are ‘too good to be true’
and once the customer is ‘caught’, the product isn’t
available and he/she is told the alternative is
available, which, incidentally, is much more
‘pricy’!!!!
Examples of bait-and -switch
• Airline ads for cheap seats as low as $10/seat
when only a few seats are available at that
price.
• Displaying a new product with LIMITED
SUPPLY!!
• Businesses displaying a sale that goes UP TO
70%, when most items are on sale for a lot
less or not on sale altogether.
Misleading advertising
More examples of unethical marketing
• Misrepresentation of product features
• Excessive packaging
• Large packages designed to show larger
contents
• Exaggerated benefits claimed
• Pester power-driving individuals to nag for
the purchase of a product. E.g. children
• Etc.
Market segmentation
• The process of dividing a market into groups of
consumers of common characteristics.
• Usually, businesses will segment to find their
target market-the group they aim to satisfy
with their marketing mix.
• This segment will be thoroughly examined to
find its likes and dislikes, trends and tendencies
to enable success. The business now develops its
consumer profile.
Segmentation might be done by:
Demographics
• age and gender grouping
• Ethnicity and race
• Marital status
• Religion
• Language
• Income or socio-economic class
Geographic
• Location
• Climate
Psychographic
• Refers to lifestyles of the target market.
This can be done according to:
Status
Values
Culture
Hobbies and interests
YUPPies
• A yuppie (/ˈjʌpi/; short for "young urban
professional" or "young upwardly-mobile
professional") is defined by one source as
being "a young college-educated adult who
has a job that pays a lot of money and who
lives and works in or near a large city". This
acronym first came into use in the early 1980s.
YUPPY
• Here is one!!
DINKIES
• Dual/double Income No Kids
Criteria for segmentation
Marketers may use DAMAS in order
to successfully segment a
market:
• D-Differential: sufficient differences amongst groups of
consumers to set them apart
• A-Actionable: the ability to produce suitable products
that cater to these groups of consumers
• M-Measurable: the ability to measure the market size,
frequency of purchase and purchasing power of the
segment
• A-Accessible: The ability to distribute these products t
the consumer in a cost-effective fashion.
• S-Substantial: The size of segment must be sufficient to
exploit economies of scale and/or make profits.
Advantages of segmentation
• Deeper understanding of the customer
enabling a better marketing mix,
each element of which is carefully
catered to the target market
• Increased sales
• Growth opportunities and entering
new markets
• Finding market gaps-markets uncatered for presently
• Product differentiation
Disadvantages of segmentation
• Business may become too focused on a
certain segment ignoring profitable ones
• Costly to carry out focused market research
• It is not always possible to segment a market
Consumer profile
• Once the business has collected information
and segmented its market, they can develop the
consumer profile they aim to sell to, target
customer.
• The demographic and psychographic
characteristics of a ‘typical’ consumer in a
particular market such as their age, gender,
occupation, income level, religion, social status,
purchasing habits, concerns, etc.
Targeting
• Following segmentation, a business
now determines the target market(s) it
wishes to aim to sell to.
• Appropriate strategies are developed
accordingly
Targeting strategies
Three broad targeting strategies exist:
• Niche marketing
• Undifferentiated marketing/mass
marketing
• Differentiated marketing
Niche marketing
• It is also known as concentration marketing.
• Involves targeting a specific, well defined,
often small market.
• An example might be the high-end luxury car
market where Lamborghini sells its cars.
Advantages and disadvantages of niche
marketing
• Highly focused marketing
• Niche markets tend
and as such often highly
to be too small to
successful
gain economies of
• Tends to be a market with
scale.
less competition as most
• Risky if the business
businesses may not be
doesn’t have other
interested in such a small
market
markets it operates
• Firms exploiting such small
in to spread the risk
markets tend to specialize
• High success in such
and gain customer loyalty
markets may attract
new entrants
rendering
competition intense
Undifferentiated marketing
• It is also known as mass marketing
or market aggregation.
• It is a strategy that ignores
targeting particular segments, but
aims at several or all segments
combined.
• Companies such as Coca-Cola use
this strategy.
Mass marketing
• This is also often exploited by
governments or NGO’s to spread
a certain message such as antismoking campaigns.
• Social marketing may use mass
marketing.
Advantages and disadvantages of mass marketing
• Extensive economies of
scale are possible
• Easier to produce
standardized products
instead of customizing
• Larger customer base
and hence less risky
• Businesses entering such
markets are likely to be
faced with high barriers to
entry
• Consumers often find it
easy to substitute similar
standardized productsdifferentiation is minimal if
any
• Lack of focus as customers
are not directly targeted
Differentiated marketing
• Also known as selective or multi segment marketing.
• Involves tailoring a marketing mix to the particular
requirements of each segment.
• A product may be produced in multi versions to cater to
each.
• Car manufacturers tend to use this strategy.
Advantages and disadvantages of
differentiated marketing
• Customer
satisfaction is
more likely
guaranteed
• Economies of
scale especially
risk bearing.
• Costly
• Marketing
economies of
scale are difficult
unless the
business is large
enough to market
for each segment
Targeting
• All elements of the marketing mix must be
carefully engineered toward the target
market.
Market positioning
• An analytical visual technique that ranks different
products or firms relative to competition products or
brands.
• Having determined which segments it wants to sell
to, a business now needs to determine which position
it wants to be in within the market it is operating in
or wants to enter.
• This is done relative to its rivals and the image a
business wants to achieve for itself during the
objective setting stage of marketing planning.
• Major criteria includes price (quantitative) and
quality, style, prestige, etc. (qualitative).
The three steps in positioning
• Identifying the competitive
advantages of the product
• Deciding which of the aspects are
strengths to be marketed heavily
• Implementing the desired
positioning by using the
appropriate marketing mix
3
QUALITY
HIGH
LOW
PREMIUM
BRANDS
COWBOY
BRANDS
LOW
BARGAIN
BRANDS
ECONOMY
BRANDS
PRICE
HIGH
Market positioning
Benefits
Limitations
• Helps identify market gaps
• Gives a comprehensive view
of all rivals in the market
• Helps managers interpret the
market situation and identify
possible opportunities and
threats within it.
• Business can reposition
themselves at a later date by
analyzing the map
• Producing a map on its own
is insufficient for success as
it must be interpreted
accurately as well
• If the marketing mix isn’t
successful or poorly
combined, the map isn’t
useful
Porter’s generic strategies
• Michael Porter suggested three strategies by which a business
may gain a USP.
• He proposed three generic (basic) strategies to achieve
positioning success:
1. Cost leadership-a business developing a reputation as a low
or lowest cost seller.
2. Differentiation-a business developing itself as an innovator
producing distinct products.
3. Focus-a business aiming at a particular
segment in which it has a cost or differentiation emphasis.
Porter’s generic strategies
Porter’s logic
• Porter argued that businesses cannot
be leaders in all aspects or good at all
they do in an industry.
• For instance it is difficult if not
impossible for a business to provide the
best quality and maintain low costs
simultaneously.
• Hence, they need a generic (basic)
strategy.
Business image
• Clearly customer perception of a product whether it
is a premium, cowboy, bargain, or economy brand
reflects on the business image as a whole.
• Hence, the best ingredient in a trusted brand name is
customer trust.
• This builds the brand value known as brand equity.
• Toyota remains the highest brand equity in car
manufacturing.
Differentiation
• The process of distinguishing a business or its
products from competitors.
• One of the most common methods of differentiation
is through the marketing mix:
1. Product: features of a product or used materials
often receiving international recognition such as the
ISO-International Standards Organization.
Guess
which
one I
am??
I’m the
one with
blue
eyes!!
Differentiation INDEED!!!
2. Price
• Using different pricing strategies
3. Promotion
• Using outrageous promotion or
distinct logos/slogans, etc.
4. Place
• Businesses who use online
shopping often use that as a
differentiation feature over
those who don’t use e-commerce.
5. People
• Customer services and the quality of
employees in an organization can significantly
increase customer satisfaction.
• Would you want to be dealt with by this
attitude??
OR…
• This attitude??
6. Process
• Speed and ease with which services are
conducted can differentiate businesses.
7. Physical evidence-aesthetics
8. Packaging
• The shape, color, design, etc. of a package
may distinguish it as well.
Another creative package..
And another…
Corporate image
• This refers to the way the community
including all stakeholders perceive the
business.
• It may be vital to success.
• It is often developed or destroyed through
media.
• Developing a positive corporate image is
costly, time consuming, requires a decision
about which image the business aims to
project, and then going forward.
Corporate image
There are a number of ways by which a business may
improve corporate image:
• CSR
• Media
• Sponsorship of worthy causes
• Environmentally friendly initiatives
• Well designed logos
• Carefully articulated slogans.
Universities and colleges are likely to project a
carefully engineered image to reflect a responsible
respectful corporate image .
Branding
• This can also be used to differentiate and will
be studied in much more detail later in 4.5.
Unique selling point (USP)
• It is an alternative to building a corporate
image.
• It refers to a feature or aspect of a product
that its substitutes don’t have.
• This may reduce the substitutability and gain
customer loyalty.
• Successful in achieving product
differentiation
Advantages and disadvantages of
differentiation
• Possible to demand
higher prices
• High brand
recognition and
loyalty
• Wholesalers are more
likely to buy bulk of
great brands and
retailers are more
likely to allocate shelf
space to them
• Can be quite costly
and generally large
businesses engage in
significant
differentiation
• Lack of economies of
scale in highly
differentiated
products
• Opportunity cost of
differentiating could
be put to better use
Your turn now..
• What is the distinguishing feature (s) your
adopted business uses??
1. Market
research
5. Market
segmentation
7. Positioning
2.
Marketing
objectives
3. Marketing
plan(s)
Strategic
Marketing
Planning
8. Measuring
success
4.
Marketing
ethics
6. Targeting
9. Modifying
marketing mix if
necessary
Which of the
6
course concepts
apply??
CUEGIS-Links to course concepts??
•
•
•
•
•
•
Change?
Culture?
Ethics?
Globalization?
Innovation?
Strategy?
All course concepts
are relevant to
marketing!!