4.2

Marketing plan

document outlining an organization's marketing objectives and strategies to achieve those objectives

What must be done before the marketing plan

Preceded by a marketing audit which reviews the current position of an organization's marketing mix (strengths, weaknesses, opportunities and threats facing the organization)

Audit addresses issues/ questions about their competition, product portfolio and assessment of the effectiveness of their marketing

Components Of Marketing Plan:

Marketing objectives that are SMART

Assessment of the strengths and weaknesses of competitors

Methods of market research to be used to identify target markets

Outline of the marketing mix

Details of the marketing budget, including planned revenues and expenditures.

An outline of the anticipated difficulties and the strategies to deal with these foreseeable problems.

May also include SWOT and STEEPLE analysis

Marketing Planning:

Process of planning marketing objectives and appropriate marketing strategies to achieve those goals

5 stages of marketing planning

Marketing Audit (examination of current climate business operates in)

Marketing objectives ( set marketing goals and targets to increase competitivity and market share)

Marketing Strategies

Monitoring and review (continual progress of monitoring progress ensuring objectives are met, adjust accordingly)

Evaluation (examine if the business as achieved its marketing objectives, helped to aid decision making and subsequent rounds of market planning)

Advantages Of Market Planning:

Improves an organization's chances of success

Identify and deal with anticipated problems, better control of their operations

Other functional areas of the business will also have clearer idea of their objectives and constraints in which they operate

Limitations Of Market Planning:

Many small businesses do not have time or resources to plan their marketing in this systematic way

Time consuming

Can be inflexible and outdated quickly

Do not allow for sudden changes in marketing conditions

STP - Segmentation, targeting and positioning

Strategic approach by positioning product line to meet each distinct group of customer's wants and needs

Helps identify customer groups that might be overlooked, so they can market products to them specifically

3 steps for STP

Segmenting the market

Targeting the most commercially valued groups of these customers

Positioning the firms offering in the market

Market Segment:

refers to a distinct group of customers with similar characteristics that share similar wants and needs

Targeting:

refers to each market segment having its own specific marketing mix

Consumer Profiles

demographic and psychographic characteristics of consumers in different markets

Why do businesses segment their markets?

For better understanding of customer groups

To avoid wasting resources on marketing products in the wrong places and to the wrong people.

Higher sales revenue by being able to cater to a wider range of customers

help businesses to identify new opportunities in local, regional and international markets.

allows a business to differentiate its products and spread its risks by devising more appropriate marketing plans and marketing mixes for different segments

Methods to create distinct customer profiles:

i) Segmentation by demographics

Similar people have similar wants and needs

ii) Segmentation by geographic factors

demographic factors can be influenced by geographic factors

Location: different regions have different cultures

Climate: products sold depending on the weather of countries

ii) Segmentation by psychographic factors

Consider the emotions and lifestyle of customers

Product position map

visual tool that reveals customer perception of a product or brand in relation to other in a market

Product position map why

Help business to refine their marketing strategies

Simplistic to present complex market research findings

Can inform marketing managers about market opportunities and threats, allowing for repositioning of their products

Repostioning:

Marketing strategy that involves changing the market's perception of a firm's product or brand in comparison to rival businesses

3 stages to positioning:

Identifying the competitive advantages of the product

Deciding on which aspects of these strengths should be marketed.

Implementing the desired positioning by using an appropriate marketing mix.

Competitive strategies to achieve market position success:

Cost leadership: Becoming the lowest-cost supplier for a product

Differentiation - Offering unique or distinct products t

Focus - Concentrating on a specific market segment or niche

Unrealistic for a business to be good at everything in all market segments and if they tried not good in any in particular

Niche marketing:

Targets a specific and well-defined market segment

Advantages of niche marketing

Better focus as a specific market segment is targeted

Less competition, businesses can charge higher prices for their unique/ exclusive products meaning higher profit margins

Can become highly specialized in meeting the needs and wants of their niche target market. Encourages fast-rate customer service and encourages customer loyalty

Disadvantages of niche marketing

Niche markets are small, limits number of potential markets in the market

Limited market sizes means few opportunities to exploit economies of scales so average cost of product is higher

Profitable niches may attract new entrants or larger firms, threatening small businesses' survival as they may offer lower prices

Mass marketing

Undifferentiated marketing

Targets a broad range of market segments to maximize sales.

Advantages of mass marketing

Gain economies of scale to raise profit margins because need to produce lots of products

No need to modify marketing strategies for different market segments, saving time and resources

Can establish a larger customer base

Disadvantages of mass marketing

High barrier to entry due to need to be able to mass produce and high set up costs

Businesses must persuade customers to choose their products over competitors, often requiring large marketing budgets.

Lack of focus, mass marketing can be wasteful as no specific group to target

USP:

Aspect of a business, product or brand that makes it stand out from those offered by competitors

Differentiation:

Act of distinguishing a business or its products from competitors in the market

Differentiation in marketing mix

Product: could include its design, functions, build quality and/or performance

Price: different fees for different levels of service, each with different perception

Promotion: branding, logos and slogans

Place: Differentiated marketing enables retailers, distributors and wholesalers to reach a wider range of customers

People: quality of their customer service

Processes: how efficiency and method things are done

Physical environment: observable aesthetics and appearance of the business

Packaging: use of colours and different packaging materials

Advantages of differentiation

Price advantages: can charge higher prices due to added value

Brand recognition and loyalty: more opportunities for products to be sold, customers feel more comfortable buying (familiarity and trust)

Distribution advantage: retail space is limited, vendors choose only best-selling brands

Disadvantages of differentiation

expensive to differentiate their goods and be able to target a larger number of customers

Economics of scale: producing varied products prevents full cost savings from mass production

Cause Too much choice - Over-differentiation can confuse customers and waste company resources

Competitive advantage con

Competitive advantages are only in short term as competitors will respond accordingly

Competition will mean that businesses have to continually strive to differentiate themselves from their rivals