UNIT 4.2.

MARKETING
RESEARCH
Elements of marketing
planning

• Marketing objectives that are SMART

• Key strategic plan

• Detailed marketing actions

• The marketing budget

 ROLE OF MARKETING PLANNING

Advantages
• Identifying a potential problems
• Improves chances of success
• Interdepartmental coordination
• Optimal use of resources Limitations
• Motivated employees • May become outdated if not used on
time
• Requires resources
• Failure in prioritizing can cause
problems
Marketing Mix

◦ Product

◦ Price

◦ Place

◦ Promotion
Market
Segmentation
◦ The process of dividing the market into smaller or
distinct groups of consumers in an effort specifically to
meet their desired needs and wants.
◦ Segment: a sub-group of consumers with similar
characteristics
◦ Segmentation based on:
◦ Demography
◦ Geographic
◦ psychographic
Targeting
◦ A target market consists of a group of consumers with
common needs or wants that a business decides to
serve or sell to.
◦ Undifferentiated marketing: Samsung, Nokia, LG,
Dell, HP, and Coca Cola
◦ Differentiated marketing: Toyota designs cars or the
different socio-economic status o people in the world
◦ Niche marketing: Apple’s iTunes and Rolls-Royce cars
 CONSUMER PROFILES

• Information provided about the characteristics of consumers of a particular product in

different markets.
• Gender, age, social status, income levels, spending patterns, etc.
• Enables companies to target their products more effectively.
• The consumer profile for Suzuki motor bikes might be males aged between 20- 45 years.
Advantages

◦ Better understanding of customers

◦ Higher sales

◦ Growth opportunities

◦ Support for product differentiation

 DEMOGRAPHICS

• Age
• Gender
• Race and ethnicity
• Marital status
• Religion
• Language
• Income and socio-economic class
GEOGRAPHIC
◦ Location: different cultures and social attitudes
◦ Climate: The typical weather in a geographical area
can have a large impact on business activity
PSYCHOGRAPHIC

◦ Hobbies and interests

◦ Values

◦ Religion

◦ Status

◦ Culture
 DAMAS

• Differential - unique and respond to different marketing mixes

• Actionable - suitable products to cater for each market segment

• Measurable - size and purchasing power of each market segment must be quantifiable

• Accessible - must be able to reach customers in a cost-effective way

• Substantial - segment must be large enough to generate profits

 NICHE AND MASS MARKETING

• Niche marketing targets a specific and well-defined market segment.

• Catering for consumers interested in exclusive luxury goods

• Mass marketing refers to undifferentiated marketing, i.e. a strategy that ignores targeting

individual market segments.

 NICHE MARKETING
Advantages
There is better marketing focus as a specific market
segment is targeted. By contrast, mass marketing has little
focus and targets products to the 'average' customer.
As there Is less competition, businesses can charge higher
prices for their unique or exclusive products. This helps
the business to gain higher profit margins on its products.
Firms become highly specialized In meeting the needs
and wants of their niche target market. This can help
to deliver first rate customer service and encourages
customer loyalty.
Disadvantages
Niche markets are small which limits the number of
potential customers in the market. By contrast, mass
markets cater for a much wider customer base.
Due to the limited market size, businesses operating in
niche markets have few opportunities to exploit
economies of scale. Thus, average costs tend to be higher.
Successful and profitable niche markets attract new
entrants into the industry. The threat of larger firms
entering the market might endanger the survival of
businesses operating in niche markets.
 MASS MARKETING
Advantages Disadvantages
Businesses can gain from huge potential economies of Mass marketing is not suitable for all businesses as there
scale by supplying products in mass markets. are high entry barriers for mass production.

There Is no need to modify marketing strategies for Competition can become quite fierce as customers must
different segments as the whole market can be targeted be persuaded to buy the firm's products rather than to buy
with a single marketing campaign. This saves time and from a rival business. Thus marketing budgets must be
resources. substantial to remain competitive.

Catering for larger (mass) markets means that the Successful and profitable niche markets attract new
business can establish a bigger customer base, thereby entrants into the industry. The threat of larger firms
earning more profits. entering the market might endanger the survival of
businesses operating in niche markets.
 PRODUCT/PERCEPTION MAP

• A visual tool that reveals customer

perceptions of a product or brand in

relation to others in the market.

• Allows a business to identify any gaps

in its product portfolio.

3 stages of
Positioning
◦ Identify the competitive advantages of the product in
question.
◦ Decide on which aspects of these strengths should be
marketed.
◦ Implement the desired positioning by using an
appropriate marketing mix.
Positioning Strategies
Cost leadership - aiming to Differentiation - producing
excel as low-cost suppliers of distinct products to
particular economy products. differentiate products from
those supplied by competitors.
Having a distinctive selling
point can give the firm
competitive advantages.
Focus - paying close attention
to a particular market segment,
such as high-end premium
products or specific niche
markets.
Unique selling point (USP)

◦ Any aspect of a business, product or brand that makes it stand out from those

offered by competitors.

◦ USP are often promoted by word of mouth and social media, which also

saves the business on its marketing budget.

◦ A major source of competitive advantage and therefore businesses want to

emphasize their USP to attract customers.

Unique selling point (USP)
◦ Think of your favorite clothing brand. What do you think is its USP?

◦ Being the only firm in a local area to supply a certain good or service

◦ Being the first business to provide a certain product (known as a first mover advantage)

◦ Having a reputation for being the 'best' in the market, e.g., Apple, Samsung and Toyota are market leaders

◦ Having a reputation for being the lowest cost provider, e.g., Walmart's claim of ’Always Low Prices' or Tata Motor's
$2000 Nano - the world's cheapest car

◦ Having a highly popular business slogan, such as 'Just Do It', 'Happy Meal' or 'Because You're Worth It'.
Disaster?

◦ Not all unique selling points are good ideas. For example, McDonald's

launched a 'Buy One, Get One Free’ offer on its best-selling burger in the

USA - the Big Mac. The popularity of the campaign caused many customers

to be upset as McDonald's could not supply enough Big Macs to meet the

demand. In 2003, Blockbuster, the market leader in video rentals at the time,

launched a 'No Late Fees' policy, which turned out to be a disaster as

customers wanted the latest movies available but didn't face any penalties for

not returning their DVDs!

Differentiation
◦ 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 firm's product is different
(unique or special), so adds value compared with the
substitute products from rival businesses.
◦ It involves making a product stand out from others.
8 Ps
◦ Product

◦ Price

◦ Place

◦ Promotion

◦ Processes

◦ Physical evidence

◦ Packaging

◦ People
 DIFFERENTIATION
Advantages
Price advantages Firms can only charge a relatively low price
for standardized products as customers have other substitute
suppliers to choose from. By contrast, differentiation can add
value to a firm's goods and services, thus allows it to charge
higher prices.
Brand recognition and loyalty These can be a source of
competitive advantage. High brand awareness creates more
opportunities for products to be sold, perhaps due to customer
loyalty or simply because customers feel more comfortable
buying a familiar product.
Distribution advantages Retail space is limited so vendors
such as supermarkets only stock the best-selling brands.
Therefore, successful product differentiation improves
placement (distribution) of a firm's products.
Disadvantages
Differentiation This can be very expensive, e.g., special sales
promotions cost the business money. Only large companies
have the financial resources to differentiate their products and
services in order to target a larger number of customers in
different market segments.
Economies of scale Savings cannot be fully exploited
compared with mass production of a single, standardized
product. Differentiation requires additional marketing costs,
especially if the business caters for different customers in
different markets.
Excessive differentiation This can drain a firm's resources
and confuse customers. Consider, as examples, the pricing
packages used by mobile phone service providers or
different levels of coverage provided by insurance firms
Tools for business
strategy
◦ Perception mapping

◦ Ansoff’s matrix

◦ Boston matrix

◦ SWOT Analysis

◦ STEEPLE analysis

◦ Force field analysis

CUEGIS

Change
Globalisation
Innovation
Strategy
Culture
Ethics