4.2 Marketing Planning Flashcards
marketing plan
document that outlines a company’s entire marketing process
what does a marketing plan include
- marketing objective
- marketing budget
- segmentation and the target market
- market research
- marketing strategies
- control tools
marketing objective
provides direction for marketing function
helps business achieve its overall business objectives
marketing budget (how it is set)
- objective based: estimate of budget needed to achieve marketing objective
- sales based: fixed percentage of company’s sales revenues is allocated to marketing
- incremental based: previous year’s marketing budget used as a guide
segmentation and target market
allows business yo analyse tje most profitable market segments to serve with its products
(businesses can develop marketing strategies to fulfill those needs)
market segmentation
breaking customers into groups that have similar characteristics and needs
market research
gathering info about consumers’ needs, tastes, habits and preferences to aid marketing decisions
marketing strategies
long-term actions that aim to achieve the marketing objective
control tools
allows managers to assess whether marketing strategies have neen successful
qualitative and quantitative data to see if objectives have been met
segmentation
splitting population into groups of people with similar needs or characteristics
target market
consumer segment as which a business aims its marketing messages
main methods of segmentation
- geographic
- demographic
- psychographic
geographic segmentation
dividing potential customers based on their geographic location
region and continent
or
country
or state or country region
or
urban and rural settings
demographic segmentation
dividing customers according to characteristics such as age, gender, and occupation (or socio-economic group)
psychographic segmentation
divides the population according to lifestyle and personal interests
advantages of segmentation
- identify gaps and opportunities in markets
- design suitable products for specific groups in order to increase sales and profits
- reduce the waste of resources
- diversify and spread risks targeting different consumer segments
targeting
selecting the most appropriate segment for a marketing campaign
mass market
market for goods produced in a very large quantity
niche market
small part of a large market where customers have very specialised needs
product positioning
distinguishing a brand from its competitors
product positioning maps
visual representations of how various competitors might attempt to position their brands in the eyes of the consumer
(a grid;
left x-axis: low price
right x-axis: high price
top y-axis: high quality
bottom y-axis: low quality)
what is a product positioning map useful for
- identifying market segments whose needs and wants aren’t fulfilled
- establishing gaps and opportunities in the market for launching new products
- helping a business understand who and what their biggest competitors and threats are, and use this to target the market correctly
niche market and price
- never high quantity of sales
- lack of competition = customer loyalty = can charge higher prices
- below the line promotional techniques
mass markets and price
- economies of scale = products sold in mass/ bulk = less expensive
- same marketing mix to target all customers
- these markets are very attractive and large, so their competition is intense, leading to price competition and low profit margins
- above the line promotional techniques
advantages of mass marketing
- large market: large target market, so potentially higher revenues
- low per unit production and marketing costs: economies of scale & single marketing mix
disadvantages of mass marketing
- high cost: businesses need to use expensive above the line promotion to reach a larger number of customers, requiring a higher upfront investment
- more competition: a mass market product is more difficult to differentiate, so more competition
advantages of niche marketing
- less competition: low competition = high profit margins
- suitable for small businesses: attractive to small or new companies that don’t have resources to compete in mass markets
disadvantages of niche marketing
- high per unit cost: no economies of scale
- less reach: smaller batches of goods, so less goods sold. moderate profit margins, so smaller profits.
- little growth potential: speecialised market so less growth potential
different types of USPs
- product USP
- price USP
- promotion USP
- place USP
- people USP
- phsyical evidence USP
- process USP
differentiation by product USPs
- different and unique product
- first-mover advantge
differentiation by price USPs
- companies with lowest operating costs can afford lowest prices to custtomers
– economies of scale - competitors also have to lower their prices to take away advantage
- some set a higher price, especially in goods that it is difficult to differentiate the quality
– higher price = higher quality and exclusivity
differentiation by promotion USPs
- promote effectively = customer loyalty
– gives customers reason to select a brand over its rrivals
– long-term positive brand image = adds value to customer = sets prouct apart from its competition
differentiation by place USPs
- product distribution
- ie. store in convenient location o global distribution network
differentiation by people USPs
- positive interactions with business employees = repeat business
differentiation by physical evidence USPs
- physical evidence = physical environment of business
- ie customers can compare brands easily, without going from counter to counter
differentiation by process USPs
- good customer service and speed of service = repeat business
- bad customer service = lose customers
