Chapter 3 Marketing Plan Segmentation End of Q3

PRINCIPLES of
MARKETING
CHAPTER 3: Market Opportunity Analysis
LC9
and Consumer Analysis
SUBJECT DESCRIPTION:
The course deals with the principles and practices in
marketing goods and services. It also focuses on the
development of integrated marketing programs that will
help grow the business
LEARNING COMPETENCIES
Distinguish between strategic and marketing planning
LC9
• Strategic Plan
• Marketing Plan
LC9
STRATEGIC PLANNING
Marketing Guru, Philip Kotler(2003), defined
strategic planning as a process of developing and
maintaining a strategic fit between the organization’s
goals and capabilities and its changing marketing
opportunities.
LC9
STRATEGIC PLANNING
Strategic planning starts from the moment
the top management at the corporate level forms
the company’s mission statement. A mission
statement stipulates what the firm values and its
reason for existence, this is cascaded down to all
the employees and will serve as their guide in the
performance of their tasks.
LC9
PROCESS OF STRATEGIC PLANNING
1. Drafting the Company’s Mission

2. Setting of Company’s Objectives
3. Designing the Company’s Business Portfolio
LC9
Four strategies for SBUs
A. Build its share.
B. Hold its share.
C. Harvest.
D. Divest.
LC9
Four strategies for SBUs
A. Build its share. More investment is needed by the companies to achieve
this.
B. Hold its share. Companies may invest just enough to maintain or hold
their share at the current level.
C. Harvest. Milking the company’s short-term cash flow regardless of the
long-term effect.
D. Divest. Company may sell the SBU or phase out the product and use the
resources elsewhere.
LC9
MARKETING PLAN
A marketing plan is a business document written for the

purpose of describing the current market position of a
business and its marketing strategy for the period covered
by the marketing plan. Marketing plans usually cover a
period of one to five years.
LC9
Parts of Marketing Plan
1.Executive Summary – presents the highlight of the plan.

It is the overview of the proposed plan.
2.Current Marketing Situation - provides data on the
present product, its market, and how products are
distributed and promoted.
LC9
3. Environment Analysis - discusses the various external

factors that affect the marketability of the product. This
defines the product’s strength and weaknesses, as well as
the various threats and opportunities facing the product.
LC9
4. Objectives - consist of marketing goals in the area of
sales, target market, positioning, market share, and
profit.
5. Marketing Strategies - consist of the company’s game
plan, indicating how objectives will be achieved.
LC9
6. Action Programs - indicate the steps that the company
would undertake to ensure that marketing strategies
would achieved. It include identifying the persons
involved, the timeframe, and the budget.
LC9
PARTS OF MARKETING PLAN
7. Budget – is an important component that puts into details
the cost of implementing the marketing plan.
8. Controls – indicate how progress will be monitored and
reviewed by the management.
LC10
SUBJECT DESCRIPTION:
The course deals with the principles and practices in marketing
goods and services. It also focuses on the development of
integrated marketing programs that will help grow the business
Analyze the elements of macro- and micro-environment
and their influence to marketing planning
LC10
MARKET ENVIRONMENT
The forces that directly and indirectly influences and
organizations capability to undertake its business
LC10
WHAT IS A MARKET
The word market is used in many ways. There is the job

market, the baby market ,the retail and wholesale
market for health and fitness clothes and accessories,
and the skin care market. Are we talking about going to
the market, or are we planning to market a product?
LC10
WHAT IS A MARKET
A market in business term is more than just a place

where buyers and sellers meet. A market is people with
needs. and wants to be satisfied, who can afford and
are willing to spend.
-Kotler (2003)
LC10
COMPONENTS OF MARKETING ENVIRONMENT
1. Internal Environment
2. External Environment
a. Macro Environment
b. Micro Environment
LC10
LC10
Internal Environment – forces and actions inside the
firm that affect the marketing operation composed of
internal stakeholders and the other functional areas
within the business organization.
LC10
External Environment
A. Macro Environment – factors in the immediate
environment
B. Micro Environment – broad forces which shape the
character of opportunities and threats
LC10
Macroenvironment
1. Demographics-customers welfare, problems,etc
2. Economic-purchasing and spending power
3. Natural-natural resources, raw materials
4. Technological
5. Political-laws,etc.
6. Cultural
LC10
Microenvironment
1. The company
2. Suppliers
3. Marketing Intermediaries
4. Customers
5. Competitor
6. Publics-groups with actual interest
LC10
Company’s Microenvironment
1. Top management is responsible for setting the

company’s mission, objectives, broad strategies, and
policies.
2. Marketing managers must make decisions within the
parameters established by top management.
LC10
3. Marketing manager must also work closely with other

company departments. Areas such as finance, R,D.
purchasing manufacturing, and accounting all
produce better results when aligned by common
objectives and goals.
LC10
4) All departments must “think consumer” if the firm is

to be successful.
LC10
5. Systematic environmental scanning helps marketers

to revise and adapt marketing strategies to meet
new challenges and opportunities in the
marketplace.
LC10
SUPPLIERS
Suppliers are firms and individual that provide the

resources needed by the company and its competitors to
produce goods and services. They are in important link
in the company’s overall customer “value delivery
system”
LC10
SUPPLIERS
1. One consideration is to watch supply availability

(such as supply shortages).
2. Another point of concern is the monitoring of price
trends of key inputs
LC10
MARKETING INTERMEDIARIES
• Marketing intermediaries are firm that helps the

company promote, sell and distribute its goods to
final buyers.
LC10
CUSTOMER
• The company must study its customer markets closely

since each market hat its own special characteristics
LC10
COMPETITORS
• Every Company faces a wide range of competitors. A

company must secure a strategic advantage over
competitors to be successful in the marketplace. No
competitive strategy is the best for all companies
LC10
COMPANY’S MACROENVIRONMENT
The company and all of the other actors operate in a

larger macroenvironment of forces that shape
opportunities and pose threats to the company. Major
forces in the company’s macroenvironment include:
LC10
DEMOGRAPHIC ENVIROMENT
-Demography is the study of human populations in terms
of size, density, locations, age, sex , race, occupation,
and other statistics. It is a major interest to marketers
because it involves people, and people make up
markets.
LC10
Natural Environment
-The natural environment involves natural resources
that are needed as inputs by marketers or that are
affected by marketing activities.
LC10
Technological Environment
-The technological Environment includes forces that
create new technologies, as well as new product and
market opportunities.
LC10
Political Environment
-The political environment Includes laws,
government agencies, and pressure groups that
influence and limit various organization and individuals
in a given society.
LC10
Cultural environment
-The cultural environment is made up of institutions
and other forces that affect society’s basic values
perceptions and behaviours.
.
LC10
RESPONDING TO THE MARKETING ENVIRONMENT
Many companies view is the marketing environment as an
“uncontrollable” element to which they must adapt. Today,
many companies are taking an environment management
perspective, whereby a firm takes aggressive (rather than
passive) actions to affect the publics and forces in the
marketing environment. Whenever possible, smart managers
will take a proactive rather than a reactive approach to the
marketing environment.
LC11
.SUBJECT DESCRIPTION:
The course deals with the principles and practices in marketing
goods and services. It also focuses on the development of
integrated marketing programs that will help grow the business
Define marketing research, its importance to a business
enterprise and identify the steps in marketing research
LC11
.
MARKETING RESEARCH
- is the process of planning, collecting and analyzing data
relevant to a marketing decision
- It is a systematic, objective and exhaustive gathering,
recording, analyzing of data relevant to a specific marketing
situation or problem in order to facilitate decision making
LC11
.MARKETING RESEARCH
• It is scientific because scientific process is needed to attain
data
• It is objective because logical reasoning used, not biased
and prejudiced to obtain data
• It is exhaustive because it is only through comprehensive
study and effort that success can be attained.
LC11
.USES OF MARKETING RESEARCH
1. To assist management in making sound decision
2. To conceive and develop new product
3. To discover new uses of products already in the market
4. To improve the operation for existing products in order to
cut down “economic waste and cost”
LC11
.Four Areas of Marketing Research
1. Market studies are used to obtain qualitative data on
potential demand.
2. Studies on influence of controllable
3. Studies on the competitive situation
4. Studies on influences of uncontrollable such as level of
business credit, business plans, age and income distribution
trends and consumer-buying motives.
LC11
.Another way of studying the scope of marketing research is
by investigating five areas.
1. The market
2. The consumer
3. The product
4. Sales policies
5. Functions of advertising and sales promotions
LC11
5 KEY STEPS IN MARKETING

1. Define the Problem
2. Collect the Data
3. Analyse and interpret the data
4. Reach a conclusion
5. Implement your research
LC11
.
SCOPE OF MARKETING
Steps in Marketing Research
1. Define the problem
2. Determine research design
3. Identify data types and sources
4. Design data collection forms and questionnaires
5. Determine sample plan and size

6. Collect the data
7. Analyze and interpret the data
LC11
DEFINE THE PROBLEM

• In this stage you need to identify the actual
problems that are relating to the apparent
symptoms.
• What information is needed in order to solve the
problem?
LC11
DATA COLLECTION
1. Primary research - involves collecting information from
sources directly by conducting interviews and surveys, and
by talking to customers and established businesses.
2. Secondary research - involves collecting information from
sources where the primary research has already been
conducted. Such information includes industry statistics,
market research reports, news paper articles, etc.
LC11
• Qualitative research is where you seek an understanding
of why things are a certain way.
• Quantitative research refers to measuring market
phenomena in a numerical sense, such as when a bank
asks consumers to rate their service on a scale of one to
ten.
LC11
ANALYZE AND INTERPRET THE DATA
• You must attach meaning to the data you have collected
during your market research to make sense of it and to
develop alternative solutions that could potentially solve
your business problem.
• You should determine how the knowledge you have gained
through researching your market can be applied and used
to develop effective business strategies.
LC11
REACH THE CONCLUSION
With the alternatives you have developed to solve your
problem in mind, perform a cost-benefit analysis of each
alternative keeping in mind the potentially limited resources
available to your business.
CHAPTER 3: Market Opportunity Analysis LC12
and Consumer Analysis LC13
CONSUMER AND BUSINESS MARKETS
This part explores the dynamic of consumer and business

buying behavior as well as the consumer and business
markets-and those which they serve-have to be understood
before marketing strategies can be developed.
CONSUMER MARKETS
The consumer market buys goods and services for personal

consumption
BUSINESS MARKETS
The business market contains organizations that buy goods

and services for use in the production of other product and
services that are sold, rented, or supplied to others (for
example, retailing and wholesaling.
Characteristics Affecting Consumer Behavior
- Consumer purchases are strongly influenced by cultural,

social, personal, and psychological characteristics.
Cultural factors exert the broadest and deepest influence
on consumer behavior. The marketer needs to understand
the role played by the buyer’s culture, subculture, and
social class.
Examples
. of Filipino culture are:
The cellular phone craze was led by Filipino youth,
who turned texting from a fad into a national obsession
during the people Power EDSA 2.
In the Philippines, people are passionate about
three things-religion, politics and eating. In fact, food is
so important that the first thing you are likely to hear on
entering a Filipino home is, “Kumain ka na ba”? (Have
you eaten yet?)
Culture
. is the most basic cause of a person’s wants and
behavior
Human behavior is largely learned.
A Filipino child learns or is exposed to the following
values:
Achieving and success, activity and involvement, efficiency and
practicality,
Progress, material comfort, individual comfort, freedom, humanitarianism,
youthfulness, fitness and health
.
REFERENCE GROUP
- A Reference group is two or more people who interact to

accomplish individual or mutual goals. Groups that have
a direct influence and to which a person are called
membership groups.
.
Family
- Family members can strongly influence buyer behavior.

The family is the most important consumer buying
organization in society, and it has been researched
extensively. Marketers are interested in the roles and
influence of the husband, wife, and children on the
purchase of different product
.
Personal Factors
A buyer’s decision can be also influenced by the personal

characteristics such the buyer’s age and life-cycle stage.
Occupation, economic situation, lifestyle, and personality
and self-concept.
.Psychological Factors
A buyer’s choices are influenced by several major

psychological factors as well as:
- A motive (drive) is a need that is sufficiently pressing to
direct the person to seek satisfaction of the need. A person
has many needs at any given time and these can be biological
or psychological.
The Buyer Decision Process
The buyer decision process examines how consumers make

buying decisions. There are five stages within the process
need recognition, information search, and evaluation of
alternatives, purchase decision, and post-purchase behaviour
.
THE BUYERS DECISION PROCESS FOR NEW PRODUCTS.
The new product is a good, service, or idea that is

perceived by some potential customers as new.
1. Awareness
2. Interest
3. Evaluation
4. Trial
5. Adoption
THE
. BUYERS DECISION PROCESS FOR NEW PRODUCTS.
People differ in their innovativeness if readiness to
try new products. Five different adoption categories can
be identifies as:
.
1. Innovators are venturesome and they try new ideas at
some risk (2.5 percent).
2. Early adopters are guided by respect. They are opinion
leaders in their communities and adopt new idea early
about carefully (13.5 percent)
3. The early majority are deliberate. Although rarely
leaders, they adopt new ideas before the average person
(34 percent).
4. The late majority are sceptical. They adopt an innovation
only after a majority of people have tried it (34 percent).
5. Laggards are tradition bound. They are suspicious of
changes and adopt the innovation only when it has
become something of a tradition itself (16 percent)
THE
. BUYERS DECISION PROCESS FOR NEW PRODUCTS.
-The new product characteristics will also influence
the rate of adoptions, five characteristics that are
especially important to consider are:
.
1. The innovation’s relative advantage or the degree to
which it appears superior to existing products
2. The innovation’s compatibly or degree to which it fits the
values and experiences of potential customers.
3. The innovation’s complexity or the degree to which it is
difficult to understand or use.
.
4. The innovations’ divisibility or the degree to which it may
be tried on a limited basis.
5. The innovation’s communicability or the degree to which
the results can be observed or described to others.
.
BUSINESS MARKETS AND BUSINESS BUYER BEHAVIOUR
- The business buyer behaviour refers to the buying
behaviour of all the organizations that but goods and
services to use in the production of other products and
services that are sold, rented, or supplied to others.
BUSINESS MARKET
Business markets also have their own characteristics. In
some ways, they are similar to consumer markets, but in other
ways they are very different. The main differences include:
1. Market structure and demand
2. Nature of the buying unit.
3. Types of decisions and the decision process
BUSINESS BUYER BEHAVIOUR
At the most basic level, marketers want to know how
business buyers will respond to various marketing stimuli.
BUSINESS BUYER BEHAVIOUR
Marketing stimuli center around the four Ps-
product, price, place, and promotions.
Other stimuli include major forces in the environment,
economy, technology, politics, culture, and competition.
.
PARTICIPANTS IN THE BUSINESS BUYING PROCESS
The major challenge of the buying center concept for

the marketer is to find out:
Who is part of the decision?
What decisions they influence?
Their relative degree of influence?
What evaluation criteria each decision participant uses?
.MAJOR INFLUENCE ON BUSINESS BUYERS
Influences (factors) can be grouped as:

1. Environmental
2. Organizational.
3. Interpersonal.
4. Personal
.
THE BUSINESS BUYING PROCESS
1. The buying process begins with problem recognition. In this
stage, the company recognizes a problem or need that can
be met by acquiring a good or service.
2. The next stage is general need description, where the
company describes the general characteristics and quantity
of a needed item.
.
THE BUSINESS BUYING PROCESS
3. Product specification is the stage where the buying
organization decides on and specifies the best technical
product characteristics for a needed item.
4. Next, a supplier search is conducted to help the buyer find
the best venders.
5. In proposal solicitation, the buyer invites qualified suppliers
to submit proposals.
the supplier selection process is important because this
is where the buyer reviews proposals and selects a
supplier or suppliers factors that influence this process
are:
a.quality products and services f. repair and servicing capabilities
b. on-time delivery g. technical aid and advice
c. ethical corporate behaviour h. geographic location
d. honest communication i. performance history
e. competitive prices j. reputation
6. The next stage is called the order routine specification.
Here, the buyer writes the final order with the chosen
suppliers, list the technical specifications quantity needed,
expected time of delivery, return polices, warranties, and so
on.
7. The final stage is performance review. The buyer rates his
or her satisfaction with supplier, deciding whether to
continue, modify or drop them.
.
Business Buying on the Internet
During the pas few years advances in information

technology have changed the face of the business to
business marketing process
.
Business Buying on the Internet
1. e-Procurement is now common.
2. New connections with buyers are being formed with two
way flow of information.
3. Most purchases steer toward MRO (maintenance, repair,
and operations) materials.
4. Some firms buy all of their general operating and
industrial supplies online.
5. Many benefits have accrued.
.INTRODUCTION
Companies today recognize that they cannot appeal to all

buyers in the marketplace, or at least not to all buyers in
the same way.
Because buyers have unique needs and wants, each buyer is
potentially a separate market.
.What is Segmentation?
-Market segmentation is the process that companies
use to divide large heterogeneous markets into small markets
that can be reached more efficiently and effectively with
products and services that match their unique needs
Segmentation:
-grouping consumers by some criteria.
.
LEVELS MARKET SEGMENTATION
Market segmentation can be carried out any different level.
1. Companies can practice no segmentation (mass
marketing)
2. Complete segmentation (micromarketing),
3. Something in between (segment marketing or niche
marketing).
.
SEGMENTING CONSUMER MARKETS
There are four bases of segmenting the consumer
markets:
1. Geographic
2. Demographics
3. Psychographic
4. Behavioural variables.
.
GEOGRAPHIC SEGMENTATION
Calls for dividing the market into different geographical

units such as nations, states, region, countries, cities, or
neighbourhoods.
.
DEMOGRAPHIC SEGMENTATION
Calls for dividing the market into groups based on variables

life age, gender, family size, family life cycle, income,
occupation, education, religion, face and nationality.
AGE AND LIFE-CYCLE SEGMENTATION
Segmentation consists of offering different products or using
different marketing approaches for different age and life-
cycle groups.
INCOME SEGMENTATION
Consists of dividing a market into different income groups.
.
GENDER SEGMENTATION
- calls for dividing a market into different groups based
on gender
.
PSYCHOGRAPHIC SEGMENTATION
Calls for dividing a marketing into different groups based

on social class, lifestyle, or personality characteristics.
Marketers will give their products personalities that
correspond to consumer personalities
.
BEHAVIOURAL SEGMENTATION
Involves dividing a market into groups based on consumer

knowledge, attitudes, uses, or responses to a product.
Occasion segmentation consist of dividing the market into

groups according to occasions when buyers get idea to buy,
actually make their purchase, or use the purchased item.
.
BEHAVIOURAL SEGMENTATION
Benefit segmentation involves dividing the market into

groups according to the different benefits the consumers
seek from the product.
.
SEGMENTING BUSINESS MARKETS
• Consumers and business marketers use many of the same
variables to segment their markets.
• Business buyers can be segment geographically or by
benefits sought, user status, usage rate, or loyalty status.
• Additional variables unique to this market would be
business customer demographics(industry, company size),
operating characteristics purchasing approaches,
situational factors, and personal characteristics.
.
SEGMENTING INTERNATIONAL MARKETS
Companies can segment international markets using one or more of a

combination of variables. The chief factors that can be used are:
1. Geographic location
2. Economic factors
3. Political and legal factors
4. Cultural factors

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Chapter 3 Marketing Plan Segmentation End of Q3

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PRINCIPLES of

1. Drafting the Company’s Mission

A marketing plan is a business document written for the

1.Executive Summary – presents the highlight of the plan.

3. Environment Analysis - discusses the various external

The word market is used in many ways. There is the job

A market in business term is more than just a place

1. Top management is responsible for setting the

3. Marketing manager must also work closely with other

4) All departments must “think consumer” if the firm is

5. Systematic environmental scanning helps marketers

Suppliers are firms and individual that provide the

1. One consideration is to watch supply availability

• Marketing intermediaries are firm that helps the

• The company must study its customer markets closely

• Every Company faces a wide range of competitors. A

The company and all of the other actors operate in a

5 KEY STEPS IN MARKETING

5. Determine sample plan and size

DEFINE THE PROBLEM

CONSUMER AND BUSINESS MARKETS

This part explores the dynamic of consumer and business

The consumer market buys goods and services for personal

The business market contains organizations that buy goods

- Consumer purchases are strongly influenced by cultural,

- A Reference group is two or more people who interact to

- Family members can strongly influence buyer behavior.

A buyer’s decision can be also influenced by the personal

A buyer’s choices are influenced by several major

The buyer decision process examines how consumers make

The new product is a good, service, or idea that is

The major challenge of the buying center concept for

Influences (factors) can be grouped as:

During the pas few years advances in information

Companies today recognize that they cannot appeal to all

Calls for dividing the market into different geographical

Calls for dividing the market into groups based on variables

Calls for dividing a marketing into different groups based

Involves dividing a market into groups based on consumer

Occasion segmentation consist of dividing the market into

Benefit segmentation involves dividing the market into

Companies can segment international markets using one or more of a

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