4.2 Market Planning

Marketing planning

The process of setting marketing objectives and deciding how to achieve them

Marketing plan

A document outlining a business’s marketing objectives, strategies, budget, and control tools

Marketing audit

An analysis of a business’s current marketing position and desired future position

Marketing objective

A specific goal that guides marketing activities and supports overall business objectives

Marketing mix

The combination of marketing tools used to meet customer needs

Marketing budget

The amount of money allocated to marketing activities

Objective-based budget

Budget set based on the cost of achieving marketing objectives

Sales-based budget

Budget set as a fixed percentage of sales revenue

Incremental budget

Budget based on the previous year’s budget plus inflation

Market segmentation

Dividing a population into groups with similar needs or characteristics

Target market

The specific segment a business aims its marketing at

Geographic segmentation

Dividing consumers based on location

Demographic segmentation

Dividing consumers based on age, gender, income, or education

Psychographic segmentation

Dividing consumers based on lifestyle, interests, and values

Market research

Gathering information about consumer needs, tastes, habits, and preferences

Purpose of market research

To reduce risk and improve marketing decision-making

Marketing strategies

Long-term actions designed to achieve marketing objectives

Control tools

Methods used to assess whether marketing objectives have been met

Product positioning

How a product is perceived relative to competitors

Product positioning map

A visual tool comparing brands using two attributes

Niche market

A small segment of a larger market with specialised needs

Mass market

A large market with undifferentiated products

Advantage of niche marketing

Less competition and higher customer loyalty

Disadvantage of niche marketing

Limited sales volume and growth potential

Advantage of mass marketing

High sales volumes and economies of scale

Disadvantage of mass marketing

Intense competition and low profit margins

Differentiation

Making a product or service distinct from competitors

Unique selling point (USP)

A feature that makes a product stand out from rivals

Product differentiation

Differentiation through features, quality, or innovation

Price differentiation

Differentiation through low prices or premium pricing

Promotion differentiation

Differentiation through branding and advertising

Place differentiation

Differentiation through distribution and availability

People differentiation

Differentiation through customer service and staff quality

Process differentiation

Differentiation through efficient or superior service delivery

Physical evidence differentiation

Differentiation through the physical environment

Competitive advantage

The ability to offer better or lower-cost products than competitors

Economic sustainability

The ability of a business to earn profits in the long term

Cost leadership

Being the lowest-cost producer in a broad market

Differentiation strategy

Offering a unique product in a broad market

Cost focus

Being the lowest-cost producer in a niche market

Differentiation focus

Offering a specialised product to a niche market

Stuck in the middle

When a business lacks both low cost and effective differentiation