4.

2 Marketing Planning
Tags Unit 4 Marketing

Date of Lesson @January 4, 2023 → January 19, 2023

Marketing
Marketing Audit
Marketing Audit: A review of an existing firm's marketing positions in
terms of its strengths and weaknesses

This relates to existing businesses where they examine the intensity of

competition, market share of others, types of market, successes to date
and overall effectiveness.

Marketing Planning
Marketing Planning: Systematic process of arriving at marketing
objectives and strategies

Elements of Marketing Planning

4.2 Marketing Planning 1

 Benefits & Limitations of Market Planning
Benefits

You would have a clear objective of what you want to promote or

show/you know what to do

Formulate more effective marketing strategies

Better sense of direction

Increase motivation and labour activity

Identify potential problems

Aligns marketing plans and marketing strategies with the rest of the
organisation

Improve financial decision-making

Cost-effective

Limitations

Might not be realistic

Time-consuming

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 It takes a while

It's expensive

You would probably need to hire a professional marketer which

could cost expensive

It is only used as a guide

Businesses cannot follow it religiously

The plan could be outdated as there could be unforeseen events that

could happen

E.g. Pandemic, Economic crisis

Market Segmentation
Market segments are the individual sub-groups of a larger market,
consisting of customers who share common or similar characteristics.

Market segmentation describes the process of dividing a market for a

product into smaller or distinct groups of customers to meet their specific
desired needs and wants.

Examples of Market Segment Sub-Groups:

Age

Cultural background

Education attainment

Ethnicity

Family Size

Gender

Geographic Location

Income Lifestyle

Occupation (Profession)

Religion

Social Status

A market can be segmented into 4 broad ways:

4.2 Marketing Planning 3

 Demographic Segmentation

Demographic segmentation involves splitting consumers

according to statistical characteristics of the population such as
age, gender, family size, religion, ethnicity and income. This
makes it easier to understand consumers’ wants and needs to
cover them.

Geographic Segmentation

This splits consumers according to their different locations. This

includes the population density, climate, and locations.

E.g. Consumers from different locations might have different

needs in clothing, transportation, etc.

Geographical segmentation enables marketers to localise their

products to better suit customers in different areas or regions of
the world.

Globalisation allows customers of different areas to have access

and needs to different products and services.

Six factors that pertain to geographic segmentation

Location

Timeszone

climate and season

cultural preferences

language

population

Psychographic Segmentation

Psychographic segmentation splits the market according to

people’s lifestyle choices and personal values:

Lifestyle Choices – Personal interests (hobbies)

Personal Values – Moral beliefs held by particular market

segments. E.g. Vegan, environmental activists, against animal
testing, etc.

Socio-Economic Segmentation

4.2 Marketing Planning 4

 The classification of people into groups of many socio-economic
statuses.

This splits the market according to the consumer or household

income levels. Often linked to types of professions or levels of
educational attainment.

Businesses then focus on marketing mixes, targeted at each

market segment based on their income level of social status.

E.g. Airline tickets (economy class, premium-economy, business

and first-class air travel)

Limitations of Market Segmentation

It often creates a limited number of customer groupings, which could
contain bias, generalisation and stereotypes.

Limited marketing budgets may not enable all identified market

segments to be specifically targeted.

Time Consuming

Costly

Promoting unhealthy stereotyping

Niche Products/services is left out

Not all competitors are considered

Unpredictable/Uncertain/Unrealistic

Target Market
An identifiable group of customers that an organisation focuses its marketing
efforts on.

Targeting is the systematic process of marketing to a specific target segment.

As marketing activities can be expensive, it is important for businesses to

create a clear and focused marketing mix for different market segments.
Once identified, marketers will be able to achieve it’s objectives.

4.2 Marketing Planning 5

 Position Map
Also known as a perception map is a graphical illustration of customer
perception of a business, its products or its brands in comparison to other
firms in the industry.

Position mapping can help a business to identify potential gaps in the market.
For example, both Mercedes Benz and BMW traditionally produce cars in the
‘premium products’ quadrant of a position map. This meant it was not
catering for customers who preferred ‘economy products’, which led both
manufacturers to produce smaller cars, such as the Mercedes A class and
BMW 1 Series, to cater for a different target market.

Perception mapping enables marketing managers to improve their product

portfolio management.

This helps a business to adjust its marketing mix and improve its marketing
strategies leading to increased sales revenues and profits.

The following terms can be identified from a typical position map as the axes
labels:

Premium products

Cowboy products

Bargain products

Economy brands

Markets
Niche Market
A specific marketing approach which focuses on identifying and meeting
the needs and wants of a small market segment.

Businesses operating in niche markets supply highly specialised products

to cater for a small and select target market.

Target market is an identifiable group of customers who have unique

needs, tastes and preferences.

Businesses can modify according to the market segment. Which would

avoid wasting time and money on marketing activities.

4.2 Marketing Planning 6

 Specialised product

Small Market

Examples:

Shoes for vegan women

Gluten free, egg free, sugar free cake

Military trained body guard/driver

Advantages:

Lower competition - Specific Group

Disadvantages:

Specific skills required

Economies of scale

Expensive

Time Consuming

Mass Market
Mass market businesses supply goods or services to cater for large and
undifferentiated target markets.

It is a marketing strategy aimed at all customers in a market without any

segmentation.
Examples of mass-market products: toothpaste, tissue paper, soft drinks,
confectionery.

Production of goods are standardised using mass production techniques.

Businesses can enjoy economies of scale but the profit margin of each
unit of output is relatively low.

Mass marketing can lead to very high quantities of sales for a business.
Due to their large size and global presence, large firms operating in mass
markets companies are likely to use above-the-line promotion such as
television advertising.

Above-the-line marketing – Type of advertising which is for the large

audiences in the community.

4.2 Marketing Planning 7

 Generalised product

Larger market

Examples:

Stationary

Phones

Vegetables

Shampoo

Clothes

Toothpaste

Advantages:

Economies of scale

Buying in bulk

enjoy the lower prices

Disadvantages:

Higher Competition

Unique Selling Point (USPs)

Refers to any exclusive feature or aspect of a business, its products or
brands that make it distinct from others in the same industry.

Product differentiation is the ultimate purpose.

Product differentiation refers to the process by which firms attempt to make

their goods and services different from those provided by other firms in the
market to increase their own sales revenue.

Examples: product quality, branding, physical appearance, colours,

packaging, and after-sales service.

Basic Components

4.2 Marketing Planning 8

 Benefits - what attracts customers to the organisation, its products, or its
brands

Emotive - what attracts people to the organisation, its products, or its

brands on an emotional level

Key selling point(s) - what makes the organisation, its products, or its
brands better than others

Key difference(s) from competitors - what makes the products or brand

stand out from the competition

Competitive advantage - what makes the organisation attractive to

customers, such as its reputation or area of expertise in a particular
market.

How important is USP to a Business?

Makes the product/brand stand out from the competition in the market

Attracts customers with the same interest

This can lead to greater customer loyalty as customers identify it to be a

distinctive and superior the product over rival ones.

Helps entrepreneurs to determine if a new project or idea is likely to

succeed.

How do organisations differentiate themselves

from competitors?
Differentiation is the process of distinguishing an organisation’s products
from those of other firms in the same industry.

Branding enables customers to easily identify and distinguish a product

from its rivals. This helps improve a business’s chances of success.

Benefits
Less Competition

Reputation & Customer’s Wants

Brand Image

Brand/Customer Loyalty

4.2 Marketing Planning 9

 Limitations
Risk of not attracting customers

Money invested → Loss

Time-Consuming to identify differentiation

Disadvantages of Differentiation
The ability to create a USP can be highly expensive

Competitors/rivals can easily copy strategies

Cheaper in mass production rather than specialised (differentiated)

niche markets. (cost savings

Create unnecessary competition (excessive packaging and marketing

clutter - spam advertising)

The business can dominate the prices of the products due to

differentiation. This limits customers to the other choices of prices

4.2 Marketing Planning 10