Business 4.2 Flashcards
what is marketing planning
refers to the structured process of formulating marketing objectives and appropriate marketing strategies to achieve these goals.
What is marketing plan
- ## business goals → marketing objectives → marketing budget → market research and determine target market → marketing strategies → control tools → this should be looped to have space for improvement to provide basis for the next set of objectives.Use: so that the business is on track. provided accountability for managers and marketing department
What are the elements of a marketing plan
- business goals → marketing objectives → marketing budget → market research and determine target market → marketing strategies → control tools → this should be looped to have space for improvement to provide basis for the next set of objectives.
Marketing objective: Provide direction for the marketing function.
Marketing budget: Set by the finance team. Budget can be based on
- Objective: Most flexible, where an estimate is made of the budget needed to achieve the marketing objective
- Sales: Where a fixed percentage of the company’s sales revenue is allocated to marketing
- Incremental: where the previous year’s marketing budget is used as a guide, with a percentage increase to cover inflation.
Segmentation and the target market: Market segmentation discovers which market segments is most profitable for the business’s product. An identified market allow the business to fulfil consumer needs.
Market research: Gather consumer likes and dislikes to aid marketing decision. Crucial for market-orientated companies. Effective market research also allows companies to identify new opportunities, which can lead to increased sales.
Marketing strategies: Aim to achieve the marketing objective, with the elements of the marketing mix (7 P’s).
Control tools: Allow manager to assess the effectiveness of marketing strategies, done with both quantitative and qualitative.
Advantages of marketing plans
- Reflection and improvement. Help managers to formulate more effective marketing strategies to meet consumers’ needs. Also, identify potential problems to increase chances of success for the next launch.
- Provide direction and purpose. Which will improve employee motivation and labour productivity.
- Overall organisation alignment. Improve organisation and communication with other departments
- Reduce waste of resources.
- Inform financial decision-making.Marketing budgets can be more appropriately set to ensure that resources are used in the most cost-effective way.
Disadvantages of marketing plans
- Becomes quickly outdated.
- Time and resource intensive. Energy spent on planning rather than on marketing itself.
- **May create unrealistic expectations. Thus, hurting employee motivation.
What is segmentation
dividing a market into groups to meet their wants and needs more easily.
What is a market segment
is a group of consumers with similar characteristics with clear identifiable wants and needs that has been broken down from a larger group.
Types of segmentation
- Demographic segmentation. Do not change quickly and often. Considers varying characteristics: age, gender, religion, family characteristics and ethnic grouping.
- Geographic segmentation. Divided by regional (rural vs urban needs), national (climate and cultural preferences) and global (important for multinational companies).
- Psychographic segmentation. Divided by people’s lifestyle or personality characteristics. Such as: economic status (e.g. airline carriers of different price range), social markers (e.g. education level or profession), values (ethics, sustainable).
Limitations of segmentation
- Customer groupings contain bias and stereotypes. Thus, they may not fit neatly into the market segments.
- Limited marketing budgets may not enable all identified market segments to be specifically targeted.
Uses of segmentation (benefits)
Marketing mix requires business to meet objectives by meeting the needs and wants of target markets. Thus, it is important to identify the market and be customer-focused which will enable effective marketing and increase in sales, market share and profitability.
Hence, segmentation is more likely to create cost-effective targeting strategies and marketing campaigns. Alternatively, the lack of market segmentation and targeting results in a marketing mix that is likely to be inappropriate or ineffective for the organization’s potential customers.
What is a target market
is a clearly identifiable group of customers that an organisation focuses its marketing efforts on.
- Measurable, accessible and profitable. An existing market that the business could attract and satisfy, allowing profitability.
What is targeting
is the systematic process of marketing to a specific target segment.
Market segmentation is a prerequisite to targeting.
Target market → Suitable marketing mix → Marketing strategies → Marketing objectives
What are the 2 types of markets
- Mass markets: the market for goods that are produced in large quantities. Targets the whole market. Uses marketing techniques that reaches a lot of people. Uses high volumes of production. Products do not need to be adapted to suit user needs. Many mass markets started to suit niche markets
- Niche markets: a small, specialized market for a particular product or service.Easy and cost-effective for start-ups. High price due to unique nature of products. Not perceived as a threat by large businesses. Risky because low number of customers.
What is a positioning map/perception map
graphical illustration of customer perception of a business, its products or brands in comparison to other firms in the industry.
- Main idea is just customer perception.
- Business differentiate themselves by meeting needs and wants of their different target markets.
Uses/benefits of product position map
- Help business identify potential gaps in markets.
- Improve product portfolio management. Because they will help a manger have a better idea of the organisation’s portfolio to adjust its marketing mix and improve its marketing strategies in order to increase sales revenues and profits.
