Elements of a Marketing Plan

A marketing plan is a document outlining an organization’s marketing

objectives and the marketing strategies to be used to achieve these
objectives.
Successful marketers advocate planning marketing objectives & strategies,
rather than adopting an ad hoc and uncoordinated approach.
A marketing plan is usually preceded by a marketing audit – a review of
the current position of an organization’s marketing mix in terms of its
strength, weaknesses, opportunities and threats.
 The review may address questions & issues such as the intensity of
competition in the market, the firm’s product portfolio & an assessment of
the effectiveness of its marketing.
From the marketing audit, managers can then produce a marketing
plan that is likely to include details of the following elements:
1) Marketing objectives that are SMART.
2) Methods of market research to be used to identify target markets.
3) An assessment of the strengths & weaknesses of competitors in
the market.
4) Outline of the marketing mix.
5) Details of the marketing budget.
6) Outline of the anticipated difficulties & strategies to deal with
these anticipated problems.
It is also common to include SWOT & STEEPLE analyses in a
marketing plan. These help the organization to assess the internal &
external factors affecting the business and its marketing objectives.
Marketing planning is the systemic process of devising marketing
objectives & appropriate marketing strategies to achieve these
goals.
It requires the collection & analysis of information about a
particular market, such as market research data on existing and
potential customers.
The typical marketing planning process involves:
1) Marketing audit. Market research is integral to this investigation.
2) Marketing objectives. The marketing audit enables the business to
set marketing goals & targets.
3) Marketing strategies.
4) Monitoring & review. A continual process of checking &
monitoring that targets are being met.
5) Evaluation. An examination of the extent to which the business
has succeeded in achieving its marketing objectives. This aids
decision-making & subsequent rounds of marketing planning.
The main advantage of marketing planning is that it improves an
organization’s chances of success.
The various functional areas of a business will also have a clearer
idea of the organization’s objectives & the constraints in which they
are to operate.
Thus, a key role of marketing planning is to allow marketing
managers to have better control of the organization.
However, marketing planning has its limitations;
Many small businesses do not have the time, resources or expertise
to plan their marketing in such a systematic way.
Small businesses react to (rather than anticipate) changes in the
market place.
Even for large organizations, managers need to devote appropriate
resources (time, people & money) to marketing planning.
Marketing plans can be inflexible & become outdated quite quickly
as they do not allow for sudden changes in market conditions. This is
especially the case in high-tech & fast-paced industries.
The 4 Ps of the Marketing Mix
The marketing mix is the combination of various elements needed
to successfully market a product.
It is used to review & develop marketing strategies & is at the heart
of marketing planning.
The traditional marketing mix is known as the four Ps.
1) Product. The good or service being marketed to meet the needs &
wants of customers.
2) Price. How much customers have to pay to buy the product.
3) Promotion. Methods of informing, reminding & persuading
customers to buy the product.
4) Place. The distribution channels used to get the product to
customers.
 Marketing plans cannot work effectively without all four elements
of the marketing mix. This is because the four Ps are
interdependent.
Product
A product is a physical good or an intangible service.
In the eyes of customers, products serve one purpose-to fulfill their
needs or wants.
What differentiates one product from another is the collective &
relative customer benefits of that product, such as the brand image,
functions, packaging, value for money & after-sale care.
The marketing strategy used by a business will depend on the type
of product in question (producer products- consumer products).
1) Producer Products. Industrial products sold to other businesses to
further the production process, such as raw materials,
components & machinery.
2) Consumer Products. Sold to the end user, i.e. private individuals.
 These products can be further classified as;
a. Convenience products (fast moving consumer goods). Ex. Food products.
b. Consumer durables (long lasting). Ex. Furniture
c. Specialty products (highly expensive items). Ex. Diamonds
Some products, such as laptops are sold to both industrial and
private customers.
The purpose of the purchase determines whether the product is
classified as a producer or consumer product, i.e whether it is used
for commercial or private use.
To increase its customer base and to maximize profits, a business
tends to sell a range of related products.
Price
Price refers to the amount that customers pay for a particular good
or service.
Pricing can be one of the most difficult decisions to make in the
marketing mix.
Customers want a price to reflect value for money & businesses
want a price that exceeds their costs to earn sufficient profit.
The pricing decision depends on a DRASTIC number of factors.
1) Demand. The greater the ability & willingness for customers to
pay, the higher the price can be.
2) Rivalry. The higher the degree of competition, the more price
competitive firms tend to be.
3) Aims. Charities & non-profit organizations will price differently
from firms seeking to maximize profit due to their dissimilar
business objectives.
4) Supply. The lower the supply of a certain product, the higher its
price tends to be.
5) Time. The price of some products such as electronics tend to
decrease by time as newer versions are made, other products such
as precious antiques rise over time due to scarcity.
6) Image. Businesses with a prestigious & exclusive image can charge
higher prices for their products (BMW).
7) Costs or production. The higher the costs of production, the higher
the price tends to be.
Place (Distribution)
Place describes the methods of distributing
products to customers.
Each intermediary in the distribution chain adds a profit margin to
the costs paid to its supplier.
The changing demands of customers, such as the need for prompt
deliveries, mean that the traditional channels of distribution are less
popular today (e-commerce).
The fewer the intermediaries there are in a transaction, the lower
the price tends to be.
Promotion
Promotion refers to the strategies used to attract customers to buy a
firm’s products.
Branding, for example, helps to differentiate a product from its rivals.
Promotion is usually classified as being either above the line (ATL), or
below the line (BTL).
ATL promotion uses paid-for mass media (television, radio, newspaper).
BTL promotion refers to all other promotion (packaging, sponsorship, viral
marketing).
Examples of promotional activities include:
1) Advertising. ATL advertising tends to be the most expensive form
of promotion.
2) Sales promotion. Temporary methods of boosting sales (price
reductions, gift vouchers, free gifts).
3) Sponsorship. Financial gifts, donations or payments in support of
an event or business venture in return for a prominent display of
the sponsor’s name.
4) Publicity. This is the marketing process of getting good press
(media) coverage, including the use of famous celebrities to
endorse a firm’s products.
The Marketing Mix & Marketing Objectives
Marketing objectives are the targets that the marketing department
wishes to achieve.
These objectives should be compatible with the organization’s
overall objectives.
As with all organizational objectives, marketing objectives should be
SMART (specific, measurable, agreed, realistic and time bound).
Setting marketing objectives is important because the targets can:
1) Provide a sense of purpose, direction & motivation for the
marketing department.
2) Allow progress to be monitored & success to be measured.
3) Help in the planning & development of an appropriate marketing
mix & marketing strategies.
Marketing objectives include the following:
1) Market share. Can be achieved through marketing penetration
strategies.
2) Market leadership.
3) Product positioning. The business attempts to improve the
corporate image & perception held by customers.
4) Customer satisfaction.
5) High market standing. Market standing refers to the extent to
which a business has a presence in the marketplace. It is largely
based on organization’s image & reputation, which can be
maintained or enhanced by effective marketing strategies.
Aspects of the marketing mix form the marketing strategies used to
achieve the firm’s marketing objectives. Examples include:
1) Market development. Can be done through international
marketing & e-commerce
2) Product development. Common for businesses operating in high-
tech industries.
3) Diversification. This high risk strategy only tends to be used by
financially stable businesses pursuing growth & evolution.
4) Product innovation. Refers to the objective of launching an original
or new product onto the market. It can help a firm to gain a first
mover advantage in establishing itself in the market.
For the marketing of services, three additional Ps are required in the
marketing mix
1) People. The personnel used in the provision of services.
2) Physical environment. The tangible aspects of the service.
3) Process. Refers to the way in which a service is provided or
delivered.
 The effectiveness of any marketing strategy is constrained by
numerous constraints (limitations) faced by organizations trying to
achieve their marketing objectives. These include both internal &
external constraints.
Examples of these constraints include:
1) Finance.
2) Costs of production.
3) The size and status of the firm.
4) Social factors.
5) Time lags.
6) Actions & reactions of competitors.
7) The state of the economy.
8) The political & legal environment.
Target Markets & Market Segments
A market for a particular good or service consists of different types
of customers, subdivided into market segments (distinct sub groups).
A market segment refers to a distinct group of customers with
similar characteristics (such as age or gender) & similar wants or
needs.
By dividing the market into different segments, it is easier for a
business to analyze which groups of customers buy the product &
then to target these customers more distinctively.
Targeting refers to each distinctive market segment having its own
specific marketing mix.
Consumer profiles are the demographic and psychographic
characteristics of consumers in different markets (age, gender,
income level, etc…)
Knowledge of consumer profiles helps a business to identify the
needs and wants of its customers and to identify any segments that
might be overlooked.
Targeting, Segmentation & Consumer
Profiles
Organizations segment their market in order to create distinct
consumer profiles in several ways based on demographic,
geographic and/or psychographic factors.
Businesses segment their markets for several reasons:
1) Better understanding of customers. A clearer marketing strategy
reduces the chances of wasting resources on marketing products
in the wrong places and to the wrong people.
2) Higher sales. Being able to cater for a wider range of customers
can help a business sell more products, & hence earn more profit.
3) Growth opportunities. Effective market segmentation can help
businesses identify new opportunities at home & abroad.
4) Support for product differentiation. Having a better understanding
of different market segments allows a business to effectively
differentiate its products and spread its risks.
1. Segmentation by Demographics
Demography is the study of the characteristics of the human population
within a certain area, country or region. It looks at a range of variables
including:
1) Age.
2) Gender.
3) Race & Ethnicity. Due to globalization there have been many
opportunities for businesses to sell cultural exports to reach a wider
customer base.
4) Marital Status.
5) Religion.
6) Language.
7) Income & Socio-economic Class. The level of income for different
consumer groups can affect the pricing policy of a business.
 In reality, different combinations of these demographic factors are
used for marketing purposes.
2. Segmentation by Geographic Factors
The geographic location of customers can have implications for
segmentation because demographic factors can be largely
influenced by geographic issues.
Geographical factors affecting market segmentation fall into two
broad categories:
1) Location.
2) Climate.
3. Segmentation by Psychographic Factors
Psychographic factors are those that consider the emotions & lifestyle
of customers, such as their hobbies, interests & values.
1) Hobbies & Interests.
2) Values.
3) Religion.
4) Status. A feeling of status can come about by the feel-good factor of
owning certain assets, such as designer outfits, luxury jewellary or
sports cars.
5) Culture.
It might not always be possible for a business to effectively carry out
market segmentation. Marketers often use the acronym DAMAS as a
set of criteria for assessing successful marketing segmentation;
a) Differential. Segments must be unique and respond to different marketing
mixes.
b) Actionable. Businesses must be able to provide suitable products to cater
for each market segment.
c) Measurable. The size and purchasing power of each market segment must
be quantifiable.
d) Accessible. The business and/or its products must be able to reach
customers in a cost-effective way.
e) Substantial. Each market segment must be large enough to generate
profits.
Once a market has been segmented, targeting becomes the next
stage in marketing planning.
Targeting refers to the market segment(s) that a business wishes to
sell to.
Appropriate marketing strategies are then developed for these
target markets.
There are two broad targeting strategies that a business can use:
niche marketing or mass marketing.
Niche and Mass Markets
Niche marketing targets a specific and well-defined market
segment.
An example is businesses that provide high-end specialty goods
in niche markets, catering for consumers interested in exclusive
luxury goods, another example is vegan baking.
Mass marketing refers undifferentiated marketing. i.e a strategy that
ignores targeting individual market segments. Instead different
market segments are targeted to maximize sales volumes.
Governments also use this strategy as a form of social marketing to
communicate public announcements, such as keep the environment
clean campaigns.
In reality, many businesses have operating that use various targeting
strategies. (example, the same company that owns Gucci owns
puma and the largest consumer electronics retailer in Europe, a form
of spreading risks)
Position (Perception) maps
A product position map (or perception map) is a visual tool that
reveals customer perceptions of a product or brand in relation to
others in the market.
The two-dimensional diagram
plots customer perceptions using
variables (or criteria) such as
price and quality.
Premium products are of high quality & high price (Mercedes cars).
Economy products are of low quality but at appropriate prices.
Bargain products are of high quality but with low prices. (this
strategy is not sustainable & the approach is only used as a short-
term tactic to boost sales.
Cow boy products are of poor quality yet highly priced. These
products are positioned to deceive customers and are therefore only
used as a short-term tactic to gain revenue.
Position maps allow a business to identify any gaps in its product
portfolio.
Information in a perception map can also help businesses to refine
their marketing strategies. For example, if customers perceive a
particular brand to be of high price & high quality, then appropriate
market segments can be targeted.
A major advantage of perception mapping is its simplicity in
presenting potentially complex market research findings.
Perception affects the corporate image of a business. Corporate
image plays a vital part in the success of a business.
The maps are quick & easy to interpret. They can inform
management about market opportunities and threats. Example, if
undesired perceptions exist, the business will need to reposition its
products.
There are three stages to positioning:
1. Identify the competitive advantages of the product in question.
2. Decide on which aspects of these strengths should be marketed.
3. Implement the desired positioning by using an appropriate
marketing mix.
Michael Porter proposed three generic (or basic) competitive
strategies for businesses to achieve market positioning success:
1. Cost leadership. Aiming to excel as low-cost suppliers of particular
economy products.
2. Differentiation. Producing distinct products to differentiate
products from those supplied by competitors. Having a distinctive
selling point can give the organization competitive advantages.
3. Focus. Paying close attention to a particular market segment, such
as high-end premium products or specific niche markets.
Porter argued that it is unrealistic for a business to be good at
everything in all market segments.
Unique Selling Point (USP)
A unique selling point, or unique selling proposition, is any aspect of a
business, product or brand that makes it stand out from those offered
by competitors.
Businesses might seek to market their USP.
The USP explains why customers buy the product over rival ones, such
as its distinctive features or appealing packaging.
Products with a USP are often promoted by word of mouth & social
media, which also saves the business on its marketing budget.
A USP can be a major source of competitive advantage & therefore
businesses want to emphasize their USP to attract customers.
Generic examples of USP include:
1. Being the only firm in a local area to supply a certain good or
service.
2. Being the firm business to provide a certain product (known as
first mover advantage).
3. Having a reputation for being the best in the market (Apple).
4. Having a reputation for being the lowest cost provider (Walmart).
5. Having a highly popular business slogan (Just Do It).
Although having a USP can be advantageous, it can be extremely
difficult to find a USP, in reality once a firm establishes a USP, others
enter the market to compete.
Differentiation
Differentiation is the act of distinguishing a business or its products
from rivals in the industry.
Product differentiation tries to create the perception among
customers that the organization’s product is different (unique or
special), so adds value compared with the substitute products from
rival businesses.
By having a unique or distinctive element to the products, it could
help the business to withstand competition.
Common methods of differentiation revolve around the 8Ps in the
marketing mix:
1. Product. Distinctive features of a product could be its design,
functions, build quality or performance.
Businesses can differentiate the quality of their products by using
better quality raw materials & components or by achieving
international quality accreditation.
This gives the business a competitive advantage & enables the
organization to charge premium prices for its products.
2. Price. Different pricing strategies enables a business to sell a range
of products, from economy brands to luxury versions.
Businesses can also offer discounts for multiple (bulk) purchases.
In the service sector, many businesses charge different fees for
different levels of services, e.g business & first class air travel.
3. Promotion. Businesses can differentiate themselves or their
products for others through various promotional methods such as
logos, slogans & branding.
Successful differentiation requires marketing support to promote a
business & its products.
4. Place. Differentiated marketing enables retailers, distributors &
wholesalers to reach a wider range of customers.
The internet, for example continues to grow as a sales channel for
many businesses around the world.
Having an online presence is a form of differentiation.
5. People. Businesses can differentiate themselves by the quality of
their customer service, especially when customers need a high
degree of support, advice & after-sales care.
The quality of people in an organization can help to develop a
reputation that rivals find hard to match. Unique or special skills &
expertise can make the business a more attractive choice.
6. Processes. The ways things are done & how efficiently these things
are done can also be a differentiator for service providers.
Providing convenience, such as free home delivery or online
payment facilities, can set a business apart from its competitors.
In the digital age where people always seem to be in a hurry,
convenience is a vital source of competitiveness.
7. Physical environment. For many businesses, the observable
aesthetics & tangible appearance of the business can be an
important differentiator.
The physical location can also make it easier (convenient) for
customers, giving the business competitive benefits.
8. Packaging. Businesses use packaging in a variety of ways to
differentiate their products, such as the use of colours & different
packaging materials.
Some businesses, such as jewelers, use packaging as an added-value
service whilst others use it as a form of promotion
The possibilities for differentiation are almost endless; creativity and
imagination are the only obstacles.
Marketing Planning & the CUEGIS Concepts
Change is an important concept for marketing planning.
Competition can mean that businesses continually strive to
differentiate themselves & their products from their rivals.
Changes occur for many reasons beyond the control of an
organization, such as changes in technology, fashion & economic
conditions. Hence, all aspects of marketing planning are exposed to
the forces of change.
Marketing planning ensures that managers monitor & respond to
these changes. It also helps to reduce risks as marketing planning can
help managers to make more informed decisions.
Ethical marketing is a growing part of strategic marketing planning.
It refers to the social & moral responsibilities of marketers.
Ethical marketing can present a moral dilemma for businesses
(Example: children products).
Marketers would argue that advertising can be informative, not just
persuasive or pressuring.
Marketing can also help customers to make better & more informed
decisions.
Using inappropriate & unethical marketing strategies can damage
an organization’s brand image, so ethics shouldn’t be an issue.
Technological advances have made market research more
innovative & cost-effective. Example, online surveys can help to
capture a large sample, with software being able to compute the
results from the survey.
Strategically, the use of marketing research, customer profiles &
perception maps can help to reveal the reasons why customers buy
certain brands or are loyal to certain businesses.
Strategic marketing planning involves segmentation, targeting &
positioning. However, it is unlikely that smaller businesses will have
the financial & human resources to target all segments.
In developing a business strategy, marketing managers can choose
from an array of tools, such as:
1. Perception mapping. Product positioning & repositioning
strategies.
2. Ansoff’s matrix.
3. Boston matrix.
4. SWOT analysis.
5. STEEPLE analysis.
6. Force field analysis.
Professor Robert Lauterborn argues that successful marketing
strategy requires an examination of the marketing mix from the
perspective of consumers. He called this the 4 Cs of marketing:
Customer solution (product), Cost to the customer (price),
Communication (promotion), & convenience (place).
The marketing strategy should be executed in a cost effective way
without the organization having to overspend on its budget.