Download IB Business & Management Unit 4.2 Marketing Planning

IB Business and
Management
4.2 Marketing Planning
(Including introduction to the four P’s)
Learning Outcomes
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To understand the elements of a marketing plan (A01) and the role of
market planning (A02)
To understand (A02) and apply the 4P’s of the marketing mix to given
situations (A04)
Discuss the effectiveness of a selected marketing mix in achieving
marketing objectives (A03)
To understand the difference between target markets and market
segments in a given situation (A02)
Discuss possible target markets and market segments in a given situation
(A04)
To understand the difference between niche market and mass market
(A02)
How organisations target and segment their market and create consumer
profiles (A02)
To create (A02) and analyse a product position/perception map (A04)
The importance of having a unique selling point (USP) (A02)
How organisations can differentiate themselves and their products from
their competitors (A03)
Essential Discussion
Questions
To what extent is
developing a
successful
marketing plan
scientific?
Do you think it is a case of using
appropriate tools that will inform you
of the best approach or is it more
subjective and ‘hunch’ based?
To what extent do
you think a clear,
well researched
marketing plan
guarantees
success?
MARKETING PLANNING
The Role of Market Planning
“The process of formulating marketing objectives
and devising appropriate marketing strategies to
meet these objectives”
THE PLANNING PROCESS:
1. Marketing Audit – Where are we now?
2. Marketing objectives – Where do we want to be?
3. Marketing strategies – How will we get there?
4. Monitoring & review – Are we on track?
5. Evaluation – Did we succeed?
Marketing Objectives
 Marketing objectives should not be set in isolation
 They should be compatible with the firm’s Corporate
Objectives
 Often set by directors of the company
 They will also need to consult other business functions
(finance and production for example)
CORPORATE
OBJECTIVES
What the firm as a whole is trying to
achieve
MARKETING
OBJECTIVES
What the marketing function needs to
do to fulfil the corporate objective
MARKETING
STRATEGY
How will the marketing department
meet these objectives
Types of Marketing Objectives
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Increasing sales (By volume, By value)
Increasing market share
To enhance the brand image
To reposition the brands image
Raising brand awareness
Increasing brand loyalty
Improving corporate image
Setting Marketing Objectives
Marketing Objectives must be SMART
S mart
M easurable
A greed
R ealistic
T imed
E.g. To increase market share by 5% in the
next 2 years
Marketing Strategy
Marketing Strategy is the plan for how the Marketing
Objectives are going to be achieved
What marketing strategies might be used
to help achieve the following types of
objectives?
• Increasing sales (By volume,
By value)
• Increasing market share
• To enhance the brand image
• To reposition the brands
image
• Raising brand awareness
• Increasing brand loyalty
• Improving corporate image
How might a business’ marketing mix differ when trying to
implement these strategies?
Reasons why marketing objectives
are not achieved
Internal Constraints
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Financial
Personnel
Unrealistic objectives
External Constraints
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Competition
The economy
Tastes and fashions
Benefits & Limitations of
Market Planning
BENEFITS
Helps identify potential problems
and how to solve them
SMART objectives will improve
chance of success
LIMITATIONS
Plans can become outdated if not
quick enough to react to market
conditions
The process consumes valuable
resources: Time, Capital, Expertise
A clear plan shared across business Unclear objectives could lead to an
functions improves coordination
ineffective and unclear marketing
plan
Helps plan appropriate budget to
maximise use of resources
A clear plan and direction could
improve employee motivation and
inspire confidence
So…How to make a
Marketing Plan Successful?
• Must be reflective process
• Continually reviewed and evaluated
• Should be flexible and adaptable according to
changing external factors and market conditions
THE MARKETING MIX
(THE FOUR P’S)
The Marketing Mix?
“The key elements of a marketing strategy that
ensure the successful marketing of a product”
The Marketing Mix- Product
A product can be a good or a service
It must meet the wants or needs of
customers
Product design decisions can include:
• Function
• Features
• Design
• Quality
• Branding
The Marketing Mix- Price
Pricing is one of the hardest decisions
in the marketing mix. Why?
• What if the product is overpriced?
• What if the product is underpriced?
What information might businesses
need to know when setting their
prices?
Pricing Decisions depend on:
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Demand and Supply
Consumer perceptions
Business objectives
Competition
Costs of production.
Corporate image
The Marketing Mix- Place
Place is about making
the product available to
customers in the right
place and at the right
time.
Place decisions:
• Distribution channels
• Opening times
• Location
• Logistics
The Marketing Mix - Promotion
• Promotion is all of the activities involved in
informing customers about a product and in
persuading them to buy it
• What could this involve?
An Appropriate Marketing
Mix Will:
• Ensure consumers needs and wants are met
• “Right product, at the right price, available at the
right place and communicated through the right
promotion channels (media)”
Do the companies
we have chosen
have an appropriate
marketing mix?
Ongoing Task – In pairs
develop an Appropriate
Marketing Mix for…
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A new water
A new cereal
A new sports drink
A new airline
A new school
A new chocolate bar
A new…..?
Mr. Owen’s CAS group – perhaps you could develop
appropriate marketing mix for your project?
TARGET MARKETS
&
MARKET SEGMENTATION
Market Segmentation
• Most businesses can’t sell their products to
everyone
• Instead they break the market down into
smaller pieces and then try and sell to these
smaller groups
• The smaller groups are called market
segments
• They consist of customers who buy similar
products
• These consumers are known as the target
market for a product
Definition
“The process of splitting a market into distinct groups
of buyers to better meet their needs. It is normally
based on demographic, geographic and/or
psychographic factors”
Demographic Factors
• Demography is the study of the characteristics of
the human population. Demographic variables
include:
• Age
• Gender
• Race and Ethnicity
• Marital status
• Religion
• Language
• Income and Socioeconomic class
Socio-Economic Groupings
Group
Description
A
Higher managerial, administrative or professional e.g.
surgeon or company director
B
Intermediate managerial, administrative or
professional e.g.
teachers, solicitors
C1
Skilled non-manual e.g. sales assistants, shop floor
supervisors
C2
Skilled manual e.g. electrician, plumber
D
Semi skilled e.g. assembly line workers, cleaners
E
Unskilled, pensioners and unemployed
Marketing terms
• Marketers have come up with many ACRONYMs for
various demographic groupings.
• An example is DINKY – Double Income No Kids
• Here are some more….. Can you guess what they
are and think of what types of products that would
be targeted at them?
NILK
No Income Lots of Kids
GLAM
Greying Leisured, Affluent, Middle Aged
OINK
One Income, No Kids
YUPPIE
Young Urban Professional
GUPPIE
Green Yuppie
YAPPIES
Young Affluent Parents
SITCOM
Single Income, two children, outrageous
mortgage
RAPPIES
Retired Affluent People
SINDI
Single, Independent, Divorced
SINBAD
Single Income, No Boyfriend And
Desperate
Tweenagers
7-12 year olds
Kidults
Adults who buy kids products
Geographic Factors
• Geographic factors can have a huge influence on
demographic factors such as race, religion,
language. Geographical factors include:
• Location
• Climate
Psychographic factors
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Emotions and Lifestyle
Values
Status
Culture
Hobbies and Interests
Developing a Consumer
Profile
• The demographic/
psychographic details of
the average user of a
product
• Businesses use this
knowledge to help them to
identify customers needs
and identify new segments
to target
For Example…What could be
the different Consumer
Profiles for Shampoo?
Task
• Look at the products on the following slides and see
if you can identify who the target market is
• What do you think their Consumer profile would be?
How Customers Differ
• Market segmentation is needed because customers
are not all the same! They differ in their needs and
wants.
• For example, customers differ in the…
– Benefits they want from a product
– Amount they are able to or willing to pay
– The media they see
– Quantities they buy
– Time and place that they buy
Example – Kelloggs:
By providing a range of
products Kellogg's can meet
a wide variety of different
customer needs and wants
and potentially appeal to the
whole market!
SALES
MARKET
SHARE
LOYALTY /
REPUTATION
PROFITS
ECONOMIES
OF SCALE
Example - McDonalds
Example - Saga
Saga is a company that offers many different products…. All aimed at
people aged over 50
Benefits of Segmentation
• Businesses are successful when they provide things
that customers want
• Segmentation allows businesses to develop
products that more closely meet customer needs
• A range of products can be made to appeal to
different market segments
• Also allows promotional spending to be targeted
more effectively
– E.g. adverts not put in the wrong kind of
newspaper or magazine
– Sales promotions (e.g. price discounts) not
offered to customers who don’t respond to them
Difference Between A Niche
and Mass Market Strategy
Niche Market:
“ A narrow, smaller or more specific market segment
within a larger market”
Mass Market:
“A large or broad market that ignores
specific market segments”
Reflection Time
• In Pairs can you discuss the benefits and limitations
of a Mass approach verses a Niche approach.
• Suggestions on a post it and placed in the
appropriate column on the board.
MARKET POSITIONING
Look at this perceptual map
Sweet
Strong
Taste
Mild Taste
Savoury
Task
• Copy the market map from the previous slide onto a
piece of paper.
• Look at the different foods on the next slide and see
if you can put them in the correct place on the axis
according to whether they are sweet or savoury and
whether they are mild or strong tasting
Milk Chocolate
Bread
Salted Crisps
Big Mac
Blue Cheese
Raw Onion
Vanilla Ice Cream
Honey
Pasta
Apple
Coffee
Tea
Mango Juice
Tuna
Walnut
How does this relate to
business???
Perception maps can be used by businesses to
analyse competition within an industry
• This is known as market mapping or perceptual
mapping
• It is used to help with market positioning
What is a market map
A market map is a tool used by businesses when
they are considering entering a new market or
launching a new product
• A market map allows the business to examine the
existing competitors/products in a market
• They can see which areas of the market are
overcrowded or spot potential gaps
• In order to construct a market map the company
decides on 2 key factors of the market
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Example market map – female clothes
retailers
High Price
Burberry
Karen
Millen
French
Connection
classic
fashion
Top Shop
New
Look
H&M
Low Price
Primark
Market Map for Bottled Water
High Price
Everyday
Luxury
Low Price
Task
1.
2.
3.
4.
Copy down the market map from the previous slide.
Add onto the map the following competitors:
Add on 2 more brands of your choice
Why do you think it would be hard for a product to
succeed in the ‘high price’ and ‘everyday’
quadrant?
5. If a new bottled water was to enter the market
where do you recommend they try to position
themselves?
6. How would you recommend that a new bottled
water tried to ‘differentiate’ it’s self from
competitors?
Choosing the right factors
Each market will have different key features.
• Examples could be:
• High Price/Low Price
• Youthful/Older
• Modern/Traditional
• Masculine/Feminine
• Fashion/Classic
• Aesthetic/Functional
• Luxury/Everyday
Question
 What factors do you think could be used in a market
map for the following markets?
1. Female clothes retailers
2. Takeaways
3. Cars
Task
• As a class we are going to construct a market map
of restaurants.
• 1. Brainstorm a list of restaurants in your local area
• 2. Copy the axis on the next slide into your notes
• 3. Position the competitors on the map
Market Map for Restaurants
High Price
Special
Occasion
Everyday
Low Price
What could these pictures be
referring to?
Unique Selling Point (U.S.P.)
“A product’s feature(s) that differentiate it from
other competing products”
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Importance of having a USP:
Creates a competitive advantage
Can attract more customers  higher sales
Promotes customer loyalty  increased sales
Can create barriers to entry to deter potential
competitors
Developing a USP
Businesses can use the marketing mix as a way to
create USP’s. For example:
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Product – features, quality, design, (Apple products)
Price – Low to undercut or high for superior product
Place – distribution channels, locations, outlets
Promotion – slogans, advertising, sponsorship,
endorsements, brand image,
Task 5 mins – In pairs
• In your pairs you need to research and provide at
least one example of how a business has developed
a USP using your assigned element of the marketing
mix (the 4 P’s)
• Feedback your findings but also consider:
– Has it worked?
– Why did the business choose to differentiate in
this way?
– Do you think it could be better – how and why?
Company Case Study Time
(A03)
For your business, analyse how they differentiate
themselves and their products from competitors?
5-10 Mins and feedback your thoughts to the class –
maybe add to our wall display?
Is it the best
strategy in
your opinion?