IBBusiness&Management

Unit4.2MarketingPlanning
Lesson1:TheMarketingMixpp.455464

1.Thinkaboutit...
You generally hear that what a man
doesnt know doesnt hurt him, but in
business what a man doesnt know does
hurt - E. St. Elmo Lewis (1872-1948)
What does this quote mean to you?

2.FocusQuestions
1.

What is marketing planning?

2.

What is the marketing mix?

3.

Are there any ethics in marketing? Should there be? Why or Why not?

4.

What is a marketing audit? What do they examine? ...

3a.MarketingPlanning
What is marketing planning?
It is a process whereby devising marketing objectives, while using appropriate
marketing strategies to achieve these goals.
Requires the collection & analysis of information (market research) on existing and
potential customers.
So, how does one achieve a marketing objective? Can you name some marketing
objectives?
Sales growth? How would you achieve this objective?
This is the role of the marketing planning :) The Marketing Department...you
are not the manager of...what are you doing to do to meet this objective?
How would you go about this?...in groups come up with a mini-plan.

3b.MarketingPlanning
Here is a typical marketing planning process:
1.

Marketing Audit - conduct market research. Why?

2.

Marketing objectives - what is your goal or target? The audit will tell you.

3.

Marketing strategies - this is the plan and use of the marketing mix (4Ps) & ethics
to achieve the objectives.

4.

Monitoring & review - continual process of checking and assessing. Did the plan
work? Why or why not? How can we improve?

5.

Evaluation - examine the extent to which the firm had succeeded in achieve these
objectives. ...

4a.TheMarketingMix

What is the marketing mix?

It is the heart of marketing planning.

used to review and develop marketing strategy.

Also know as the FOUR Ps

Product: the good or service being marketed to meet the NEEDS and WANTS of a
customer.

Price: how much the customer is charged.

Place: where the product is sold.

Promotion: process of informing, reminding, and persuading customers to BUY

your product.

4b.TheMarketingMixProduct

1. A product can be a physical good or an intangible service.

What is the one purpose products serve?

to fulfil the NEEDS or WANTS of the customer.

What differentiates one product from another?

Can you name some examples?

the customer benefits of purchasing that product.

Why do you go to Wendys to purchase a Baconator?

What are the benefits for you to go to Wendys and eat a meal there?

Why do you buy Nike Air? (brand image? packaging? functions, after-sales service?)

Several kinds of products; two major kinds are:

Producer products: raw materials, machinery, and components.

Consumer products: sold to end-user...thats you :)

4c.TheMarketingMixPrice

2. Pricing is one of the hardest decisions in the marketing mix. Why?

What if the product is over-priced? (customer feels ripped off)

What if the product is under-priced? (customer thinks product is of poor quality)

Is there a balance? Yes, economists define this as equilibrium price.

This is where buyers and sellers agree on a price for the product.

Buys want a price to reflect value for money and sellers want a price that exceeds their cost of
production to earn what?

PROFITS!!!

Pricing decisions depend on many factors:

Demand: the higher the demand, the higher the price will be.
Supply: the lower the supply, the higher the price will be.
Business objectives: charities / non-profits vs. profit seeking firms.
Competition: high competition, similar pricing.
Costs of production: higher the costs, higher the price tends to be.
Corporate image: Lamborghini vs Ford cars :)

4d.TheMarketingMixPlace

3. Place is used to describe the distributing products to customers.

also
refer to
of distribution, retail stores or other intermediaries used to get a
Can
firms
product
to channels
the customer.

Factory

Wholesalers

The channels start at the factory, who sells to the wholesalers.

The wholesalers buy in bulk and sold to the retailers.

The retailers sell the product to the customers.

Obviously the fewer intermediaries, the lower the price.

Retailers

Consumer
s

4e.TheMarketingMixPromotion

4. Promotion refers to the strategies used to attract customers to a firms products.

Can be above the line or below the line. What does this mean, you ask? :)

Above the line: promotional activities that use TV, newspaper, and radio.

Below the line: uses packaging, sponsorship, and direct mail.

All business will use a combination of above and below the line when promoting their products.

Think of some examples of where you have seen your favourite product being advertised.

Marketing of Services - Extra 3 Ps:

1. People (CRM-Customer Relations Management):
highly motivated and competent staff is likely to deliver good customer service.
2. Process:
methods and procedures used to give clients the best customer service.
3. Physical evidence:
the image portrayed by a business.
Looks do count when marketing a product.

4f.TheMarketingMixPackaging

Packaging: refers to the ways a product is presented to the customer.

another part of product differentiation.
How are you going to make your product look unique? Desirable?
Peoples moods are affected by things such as:
colour
texture
appearances
Wrapping services anyone?

What
are:)the various functions that packaging can have on the marketing mix? Excellent test
question

Has an impact on customer perceptions of a product or brand.

acts as a form of differentiation - free gift wrapping anyone?
protects against damage during transportation.
labelling informs your customer of the contents.
makes distribution easier.
can encourage impulse buying.
used to advertise the brand or the business.
One major drawback to packaging is the COST.

4g.TheMarketingMix8Ps?

Product
Packagin
g

Price

Marketin
g
Mix

Process

People

Promotio
n

Place
Physical
evidence

5a.EthicsofMarketing

Moral principles that guide business behaviour.

Unethical marketing behaviour exists when moral codes of practice are not adhered to.
What are bait-and-switch marketing techniques?
are techniques which are considered unethical.
they are used to entice customers by advertising deals that are too good to be true.
Once
customers
areto
hooked
on the
deal (the
they
discover (the
that switch).
it is no longer
offered
and change
purchase
another
morebait),
pricey
alternative

So who uses these tactics?

Airlines companies
Mobile phone companies
Real Estate companies
Other dubious marketing tactics:
Health fraud
Get rich quick schemes
Travel fraud
Product misrepresentation
fear tactics - limited stock only
unsubstantiated claims - 4/5 prefer our products
Pester power - using children to pester parents into buying products.
Confusion marketing - swamping customers with excessive price information.

6.MarketingAudit

Is a review of the strengths and weaknesses of a firm.

Helps to identify the marketing opportunities and threats facing a business.
What internal and external issues will the audit examine?
the businesss marketing objective and strategies
existing products and brands sold by the business.
the effectiveness of the firms recent marketing activities.
firms market share
competitor analysis
update on the demographic profile
Gives an overview of your current marketing situation.
Can also assist in creating a SWOT and a PEST Analysis.

IBBusiness&Management
Unit4.2MarketingPlanning
Lesson2:MarketingObjectivespp.468476

7a.MarketingObjectives

These are the targets that the marketing department wants to achieve.

These objectives should be in-line with the firms overall objectives.

Marketing guru Philip Kotler states, the objective of marketing is to create customer satisfaction in
a profitable way.

These targets can:

provide a sense of purpose.

allow progress to be monitored.
assist in the planning and development of market strategies.

7b.MarketingObjectives
high
market
standing

product
innovation

increase
market
share
market
leadership

Marketing
Objectives
Include

product
positioning

new
product
development
consumer
satisfaction
market
development

diversification

7c.MarketingObjectivesConstraints
finance
legal
environment

political
environment

costsof
production

Marketing
Objectives
Constraints

sizeand
statusof
thefirm

stateofthe
economy

socialissues
competitors
timelags

8a.TheRoleofMarketResearch

Market research is used to gather the opinions, beliefs, and feelings of potential customers.
It serves to identify the NEEDS and WANTS of customers.
There are two major categories of market research:
Ad hoc market research: focuses on specific marketing problems or issues.
Continuous research: takes place on a regular ongoing basis.
The Role of Market Research:
gives business up-to-date information
see if current products meet the needs of the customers
to improve a firms marketing
assesses potential customer reactions
provides information about the competition
gives an idea of the future; future trends
Market research is usually carried out when a firm launches a new product.
Effective market research helps reduce risks of failure.
Drawbacks of market research:
in, garbage out (GIGO): unreliable or inaccurate data generates poor quality
Garbage
information.

Biased information can be unreliable.

Costs of good market research is very high.

8b.PrimaryResearch

Primary research is new data gathered from first-hand sources.

What are the several methods of conducting primary research?

Also know as field research, information directly collected from customers to identify their buying
patterns and changes in behaviour.

Questionnaires:
Self-completed questionnaires
Personal questionnaires
Postal questionnaires
Telephone questionnaires
questions.
Good questionnaires avoid bias, avoid jargon, include closed and open-ended

Observations: watching how people behave and respond to different situations.

Experimentation: introduces marketing activities to a group of people to measure their

responses and reactions.

Online surveys: using email or software programs

8c.Advantages&DisadvantagesofPrimaryResearch

Advantages

Disadvantages

uptodate

timeconsuming

relevance

costly

confidentialandunique

validity

objectivity

8d.SecondaryResearch

Secondary research is also known as desk research, which involves collecting second hand data and
information.

This means that the data has been gathered by others.

Tends to be cheaper and faster to collect.

Advantages

Disadvantages

cheaper&fastertocollect

maybeoutofdate

hugerangeofsources

infomaybeinappropriate

providesinsightintotrends

widelyavailabletothe
competition

8e.QualitativeResearch

Market research can also be classified as qualitative or quantitative.

Qualitative
respondents.market research involves getting non-numerical answers and opinions from

Used mostly in primary research.

main purpose is to understand the behaviour, attitudes, and perceptions of customers.

Two main types of qualitative research: focus groups and in-depth interviews.

Focus groups:

involve small discussion groups who share similar customer profile.

main goal is to get everyone to generate insightful information.
a drawback may be that only extroverts tend to take part in these groups.
another limitation is that participants want to get paid, so it can be costly.
another variation is called consumer panel.

small group within a businesss target market and are specialists rather than
random people.

8f.QualitativeResearch

The second type of qualitative market research is in-depth interviews.

an interviewer
a customer
having a one-on-one interview to find out more about
involve
the customers
personaland
situation
and opinions.

can be conducted face-to-face or over the phone.

these interviews can also include a range of non-quantifiable information, which prove to be
difficult to analyze.

Advantages

Disadvantages

betterexploringthemotivatorsand
thedemotivatorsofcustomers

informationuseddoesnot
representthewholepopulation

canberichindepth

canbetimeconsuming

canbeinexpensive

needinterviewexpertise

respondentsnotunderanypressure

interviewercanbebias

8g.QuantitativeResearch

This research relies on a much larger sampling base.

It requires the gathering of factual and measurable data rather than peoples opinions.
Will involve the use of surveys and questionnaires to gather such data.

Closed question - allow respondents to choose from a given list of options.

Ranking or sliding scales - rank your favourite soft drink; strongly agree to strongly disagree.

Can also supply data such as market share, sales figures, and changes in consumer income.
Advantages for using this research is it is easier to analyze, but this method is not as flexible as
using qualitative methods, as questions are all fixed.

IBBusiness&Management
Unit4.2MarketingPlanning
Lesson3:MarketSegmentationpp.481497

9a.MarketSegmentation

Can be defined as the process of splitting a market into distinct groups of buyers in order to better
meet their needs.

A segment refers to a group of customers with similar characteristics.

For example: Can you name the different markets that exist to meet YOUR needs and wants?

Such as age, gender, similar wants and needs.

Targeting means that each distinctive market segment can have its own marketing mix.
Consumer profile:

are the characteristics of customers and consumers in different market such as:

age
gender
income
purchasing habits
Main methods of market segmentation are based on:
demographic factors
geographic factors
psychographic factors

9b.SegmentationbyDemographics
Income
Socio
econ.
Languag
e

Age
grouping
s

Segment
by
demograph
ics

Religion
Marital
status

Gender

Race
and
Ethnicity

9c.SegmentationbyGeographic&PsychographicFactors

They come in two broad categories:

1. Location: different areas and regions of a country may have different cultures and attitudes.
2. Climate: the weather in an area can have a large impact on business activities.

Segmentation by Psychographic Factors:

are considered to be the emotions and lifestyle of customers, such as habits, hobbies, interests, and values.

Advantages of Segmentation:

Status
Values
Culture
Hobbies and interests

better understanding of customers

increase sales
growth opportunities
gives support to product differentiation

How to ensure successful segmentation? Use DAMAS:

Differential: must be unique

Actionable: suitable products to cater to each segment
Measurable: size and purchasing power of each segment must be quantifiable
Accessible: reach customers in a cost effective way
Substantial: each segment must be large enough to generate profits

10a.Targeting

Once markets have been segments, the next stage is targeting.

Targeting refers to:

the market segment that a business wishes to sell to.

there are three main targeting strategies that a business can use:

1. niche marketing

2. Mass marketing (undifferentiated marketing)

3. Mass marketing (differentiated marketing)

Niche Marketing:

Also know as concentrated marketing.

targets a very specific and well-defined market segment.

Can you name some of these well-defined market segments?

10b.Targeting
AdvantagesofNicheMarketing

DisadvantageofNicheMarketing

bettermarketingfocus

verysmallmarkets

lesscompetition

smallmarketsize=noeconomiesofscale

becomehighlyspecialized

highlysuccessfulmarkets
mayattractnewcompetition

10c.Targeting

Undifferentiated Marketing:

also know as mass marketing or market aggregation.

this strategy ignores targeting individual market segments.
a large number of different market segments are targeted to maximize sales volume.

Advantages

Disadvantages

hugeeconomiesofscales

highentrybarriers

notailedmarketingmixes

fiercecompetition

caterstolargermarkets=largerprofits

lackoffocus
massmarketingcanbewasteful

10d.Targeting

Differentiated Marketing:

also know as selective marketing or multi-segment marketing.

this strategy tailors a marketing mix to each market segment.
will use positioning maps (p. 488) to identify how customers think and feel.

Advantages

Disadvantages

customersenjoyasatisfying
experience

itiscostly

risksarespreadout

cannotexploiteconomiesofscale

candrainafirmsresourcesandconfusecustomers

11a.Positioning

Marketing positioning:

is a tool that ranks different products, services, or firms in relation to others in the market.
Three stages of positioning:

2. Decide - which aspects of these strengths should be marketed.

3. Implement - desired positioning by using the right marketing mix.

Corporate Image:

1. Identify - the competitive advantages of the product.

plays a vital part in the success of a business.

Can improve corporate image through CSR (Unit 1.3)
Seek a unique selling point (USP) or a unique selling proposition, how your product stands
out from those of your competitors.

Three competitive strategies:

1. Cost leadership - aim to excel as low cost suppliers of products.

2. Differentiation - produce distinct products by rival firms.

3. Focus - pay close attention to a specific market segment.

11b.Positioning

Position (perception) Maps:

is a visual tool that shows the customers perception of a product or brand in relation to others.

Customers perceptions using price and quality:

Premium brands - high quality products, high priced; BMW...

Economy brands - low quality, reasonably priced; Ford...

Bargain brands - high quality, reasonably priced...
Cowboy brands - poor quality, highly priced...

Low High

Price

High

Low

Premiumbrands

Cowboybrands

Bargainbrands

Economybrands

Use of position maps:

used to identify gaps in a firms product portfolio.

used for targeting strategies.
can inform a business of a need for reposition their products.

12a.DevelopmentofMarketingStrategies&Tactics

So what are all these tactics and strategies?

Marketing tactics are short term plans and strategies are medium to long-term plans.

Marketing tactics include:

Promotional tactics
High-pressure sales tactics
Dubious marketing tactics
Bargain brands
Short-term price reductions
Marketing tactics are used to achieve the marketing strategies:
Market research
Product planning
Implementation

In developing a marketing strategy, marketing managers may choose from the following:
Perception mapping (Unit 4.2)
Porters five forces analysis (Unit 4.2)
Porters generic strategies (Unit 4.2)
Ansoff matrix (Unit 1.7)
Boston matrix (Unit 4.3)
SWOT analysis and Force field analysis (Unit 1.8)

12b.DevelopmentofMarketingStrategies&Tactics

Remember a market strategy is carried out through an appropriate marketing mix.

Some
argue that the marketing mix (the 4 Ps) should be examined through the eyes of the
consumer.

Called the 4 Cs of marketing :)

Customer solution (PRODUCT)

Cost to the customer (PRICE)

Communication (PROMOTION)

Convenience (PLACE)

Execution of the marketing strategy should be done in a cost-effective way without overspending
your budget.

TheEnd