IB BM unit 4.

2
market planning
marketing plan
The document outlines a firm's marketing objectives and strategies for a specified time
period. helps the firm assess the internal and external factors which affect the business
and marketing objectives.

what does it include?

1. SMART marketing objectives

2. methods of market research to identify target markets

3. assessment of strengths and weaknesses of competitors

4. the marketing mix (product design, channels of distribution, prices, promotion

strategies)

5. outline how to deal with these difficulties through strategies

6. includes SWOT and STEEPLE analysis

7. marketing budget

Marketing planning
it is the systematic process of devising marketing objectives and strategies to achieve
marketing goals. it requires the collection of information/data of a particular market
through market research.

what does the planning process include ?

1. marketing audit

it is an examination of the current climate in which the business operates. (market

research is integral to this investigation)

2. marketing objectives

after a marketing audit, the firm needs to set goals and targets. eg. price
competitivity

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 3. marketing strategies

firms need to figure out strategies in order to reach their objectives. the use of a
marketing mix to achieve objectives.

4. monitoring and review

a continual process of checking and monitoring is required to see if the marketing

objectives have been met or not. (strategies might need to be adjusted)

5. evaluation

an examination is needed to carry out to see to what extent has the firm has
succeeded in reaching its marketing objectives.

Advantages and Disadvantages of marketing planning

advantages disadvantages

it improves firms' chances of success
helps managers to identify and deal with
issues. other functional areas of the
business will have a clearer idea of the
firm's objectives allows marketing
managers to have better control over the
organization.
does not guarantee success small firms do not have
the resource, time, and money to carry out this
marketing planning. (they react to changes in the
marketplace) even in large firms, the managers need
to devote proper time, resources, and people to carry
out these marketing planning marketing plans can be
inflexible(quickly becomes outdated)

marketing audit
review of the current position of a firm's marketing mix in terms of strengths,
weaknesses, opportunities, and threats. it addresses questions and issues related to
competitiveness in the market, and product portfolio.

marketing mix
it is a combination of elements needed to market a product. it is used to review and
develop marketing strategies. heart of the marketing plan. the 4ps (price, product, place,
promotion). the 4 P’s are interdependent.

product price place promotion

a physical good or an intangible refers to the describes the refers to the

service in the customer's eyes amount methods of strategies used to
serves only one purpose (fulfill the customers pay distributing attract customers
needs and wants of consumers). for a particular products to to buy the firm's

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 what differentiates one product good or service. customers. there products.
from another is the collective and customers want is a distribution (branding helps
relative customer benefits of that the prices to chain from the differentiate firms
product. -producer products: reflect the value manufacturers to products from its
industrial products sold to other of their money the consumers. rivals) ATL
businesses for the further and make profits each intermediary promotion uses
production process -consumer businesses want in the distribution paid-for mass
products: are sold to the end- prices that adds a profit media(tv ads,
user(private individuals) exceed their margin to its newspaper,) BTL
convenience products (consumer costs so they suppliers. the promotion refers to
durables and specialty products. can make profits fewer all other
intermediaries promotions
there are, the (packaging, perks,
lower the price viral marketing)
tends to be.

factors that affect price

1. demand

2. rivalry(higher the degree of competition, higher the price competitiveness of

firms)

3. aims (for-profit and nonprofit organizations)

4. supply

5. time

6. image (Businesses with prestigious and exclusive images tend to charge higher
prices)

7. cost of productions

promotional activities

advertising
ATL advertising is the most expensive. carried out by television, social media, radio,
newspapers, internet

sales promotion
temporary methods of boosting sales(discounts)

sponsorship

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 refers to financial gifts, donations, and payments to events in return for the display
of sponsors’ name
publicity

marketing process of getting good press

marketing objectives and the marketing mix

market share

higher market share can be achieved using penetration strategies to increase sales
revenue.

market leadership

firms strive to have a higher market share in the industry

product positioning

businesses attempt to improve the corporate image and perception held by consumers

consumer satisfaction

this can be achieved by ensuring consumers are satisfied with the price, product quality,
and service

high market standing

refers to the extent to which the firm has a presence in the market. which is hugely
based on the firms image and consumer perception.

challenges in facing the marketing objectives

finance (the firm's marketing budget determines the marketing activities that the
firm is going to be able to do to achieve its activities)

cost of production (the firm's cost determines its capacity to compete on price to
be set and/or quality of the good/service)

size and status of the firm (if the market standing of the firm is not high, the firm
might not be able to achieve its marketing objectives, this is because they are still
unknown.)

social issues (the attitude of consumers of the society/community might determine

the effectiveness of the market strategies used to reach the marketing objectives)

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 time lags (there is a delay between the firm's marketing activities and the impact it
has on its customers. time lags cause short-term liquidity problems)

action and reaction of competitors (rival firms might come up with new
ideas/products which might hinder the fact that their marketing strategies were
succeeding which might lead to price wars among competitors.)

the state of the economy (it is harder to reach marketing objectives by firms when
the economy is going through maybe a recession, this is because consumers and
businesses are more careful with their spending. fluctuating exchange rates can
also affect international marketers.)

political and legal environment (government rules and regulations can affect the
extent to which the firms can use their marketing strategies to achieve their goal.)

marketing strategies

Market development

involves selling existing products in new markets(international marketing)

product development

involves selling new products in existing markets. (common marketing strategies in

high-tech industries)

diversification

involves selling new products in markets. (high-risk strategy used by financially stable
businesses with the aims to evolve and growth)

product innovation

refers to the launching of a completely new product into the market which is innovative.
(gives the firm a first-mover advantage and helps it to establish itself)

Market segment

market segment refers to a distinct group of customers with similar characteristics (age
and gender) and similar needs and wants.

why is market segmentation done?

dividing the market into segments is helpful to businesses because it allows

firms to analyze which group of customers are going to buy their products and

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 which groups they should target.

businesses can understand customers better so they can understand the needs
and wants of their consumers better. (a clearer marketing strategy)

higher sales because businesses are able to cater to a wider range of

customers.

growth opportunities market segmentation allows businesses to identify

opportunities

support for product differentiation (businesses can differentiate their products)

Targeting

targeting refers to each distinctive market segment having its own specific marketing
mix. eg. business class passengers are targeted in a very different way than how
economy class passengers are targeted.

consumer profiles

The demographic and psychographic characteristics of consumers in different markets.

knowledge of consumer profiles helps businesses to identify the needs and wants of
consumers and even helps them to recognize segments that have been overlooked.

Demographic segmentation geographic segmentation psychographic segmentation

psychographic factors are those

that consider the emotions and
segmenting markets by age,
the geographic location of lifestyle of customers. -hobbies
gender, income, ethnic
customers can have and interests (provides plenty of
background, and family life
implications for segmentation marketing opportunities) -
cycle. demography is the
because demographic factors values (refers to beliefs morals,
study of the characteristics of
can influence geographic principles) cruelty-free -religion
the human population.
factors. geographic factors (religious beliefs) -status(people
different combinations of these
affect segmentation in 2 conscious about their social
factors are used for marketing
ways: location and climate and economic status) -
purposes. (bday cards)
culture(increased trade in
cultural exports)

age gender race and ethnicity example: location: Singapore

(globalization allows and Malaysia cater to people
businesses to reach a wider with only 3 main cultures,
customer base) marital status Singaporean, Malay, and

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 religion language income and Chinese climates: warm
socio-economic class clothes are not going to be
(cinemas) sold in tropical climate areas

DAMAS

-a set of criteria to assess successful market segmentation

differential-segments must be unique and respond to different marketing mixes

actionable-business should be able to provide these suitable products to cater to each

market segment
measurable size and purchasing power of each market segment must be quantifiable

accessible- business and its products must be able to reach customers in a cost-
effective way

sustainable-market segments should be large enough to generate profits

Niche marketing
Niche marketing targets specific and well-defined market segments. example
businesses that provide high-end specialty goods.

disadvantages of niche marketing

niche markets are small (fewer customers in the market)

the market size is small, so businesses have less opportunities to exploit their
economies of scale so costs are also high

the profitability of niche marketing attracts larger firms, which then the larger
firms enter the industry and pose as a threat to other competitors

advantages of niche marketing

better marketing focus and specific marketing segment is targeted

there is low competition so businesses charge higher prices which means more
profits

firms become specialized in meeting the needs and want of their niche target
market(better customer service)

Mass marketing

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 refers to undifferentiated marketing. This is a strategy that ignores targeting individual
market segments. governments use this as a form of social marketing.

disadvantages of mass marketing

not suitable for all businesses(high entry barriers for mass production)

there is a lot of competition, customers can easily be persuaded to buy products

from rivals(marketing budgets should be sustainable to remain competitive)

there is lack of focus(mass marketing could be wasteful)

advantages of mass marketing

businesses gain from huge potential economies of scale by supplying products

in mass markets

is no need to modify marketing strategies for different segments(saves time and

resources)

caters from large mass markets (able to establish bigger customer base,
earning more profits)

perception maps
a perception map is a tool that reveals the perception of customers towards a product or
brand in relation to others in the market.

premium products-high quality high price

economy products- low-quality appropriate price
bargain products- high quality but a low price(short-term tactic to boost sales)

cowboy products- low quality but highly priced (short term tactic to gain revenue, used
to deceive consumers)

advantages of perception maps

allows business to see if there is gaps in product portfolio

helps refine marketing strategies

it simply presents potentially complex research findings

quick and easy to interpret

they can inform management about marketing opportunities and threats

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 Stages of perception mapping:

identify the competitive advantages of the product in question

decide which aspects of strength should be marketed

implement positioning the products by using an appropriate marketing mix

Unique selling points (USPs)

A unique selling point is any aspect of a business, product, or brand that makes it stand
out from its competitors.
this aspect explains why a customer selects to buy a good from a firm over its rival firm.

a major source of a competitive advantage that attracts customers.

difficult to find USP

other firms might enter the market to compete

examples of USPs

the only firm which supplies a certain good in a local area

being the first business to supply the certain product

having a reputation for being the best in the market

having a reputation for being the lowest-cost provider

having highly popular business slogans

differentiation

act of distinguishing a business of its products from its rivals in the industry

tries to create a perception amongst consumers that their product/service is

unique/different from their rivals

this process helps businesses and its products to stand out and withstand
competition

disadvantages of differentiation

expensive (sales promotion costs the business, only large companies can carry
these through)

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 economies of scale (it requires additional marketing costs, and savings cannot
fully be exploited)

excessive differentiation(confuses customers and drains firms’ resources)

advantages of differentiation

price advantages(firms can only charge relatively low charges as there are
competitors present in the market)

brand recognition and loyalty(customers feel comfortable buying a familiar

product, high brand awareness creates more opportunities for products to be
sold)

distribution advantages (retail space is limited so there is successful product

differentiation)

Methods of differentiation

product (features of the product, design, materials used)

price (different pricing strategies help businesses to sell a range of products, firms
provide discounts and different fees for different levels of service)

promotion (differentiate through various promotional methods logos, branding,

slogan)

place(enables retailers and wholesalers to reach a wider range of customers)

people (differentiate using quality of service, after-sales care, and quality of people
in an org.)

process (the way things are done in an efficient way. eg. free home delivery, online
payment)

physical environment (observable aesthetics and appearance of a business are

important differentiators)

packaging (logos and signature designs)

Additional 3 P’s to the marketing mix

people physical environment process

refers to the person or people refers to the tangible refers to how or the way the
who provide the service aspects of the services service is being provided

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