The Role of Marketing Planning (SL IB Business Management)

• Marketing planning is the process of formulating marketing strategies and tactics that will help a business achieve its marketing objectives
• Three tools of marketing planning include
  • Market segmentation
  • Market mapping
  • Market positioning
     
• A marketing plan commonly includes the following elements

A marketing plan usually contains four key elements
 

1. Marketing objectives

• These are specific SMART (specific, measurable, achievable, relevant, and time-bound) goals and may include
  • Increasing market share
  • Maximising sales revenue in a particular region or for a certain product
  • Achieving distribution targets
  • Improving brand awareness
    
    

2. Resources

• Planning which resources are required and where they will come from
  • This may include finance, staff time and expertise, as well as the capital expenditure required to achieve the marketing objectives
    
    

3. Research

• Marketing research identifies the factors expected to impact upon the marketing plan, such as
  • Market size and growth
  • Market segments
  • Competitor positioning
  • Customer tastes, preferences and views
  • The nature of distribution channels
    
    

4. The marketing mix

• This involves planning the medium- and short-term marketing activities the business intends to undertake and who is responsible for them, including
  • Pricing strategies and tactics
  • Promotional activity
  • Distribution and logistical plans
  • Product specifications, features and packaging
  • Physical evidence such as branding
  • How people and process are developed to support delivery of the rest of the marketing mix

• Market segmentation is the process in which a single market is divided into sub markets or 'segments'
  • Each segment represents a slightly different set of consumer characteristics
  • Firms often segment their markets according to factors such as social status, geographical location, religion, gender, or lifestyle
  • A target market is one or more market segments at which a product or service is primarily aimed

 Examples of demographic, geographic and psychographic forms of market segmentation
 

• A market for a good such as crisps is not simply seen as one market e.g. the crisp market is divided up into many market segments such as
  
  • Dinner party snacks (Walkers Sensations, Pringles, Burts) are targeted at middle to upper earners/professionals with a premium price
  • Health conscious crisps (Walker's lite, Walkers baked, Revita lite) are targeted at the health conscious market
  • Lunch box value snacks (multipacks, hoola hoops, etc) are targeted at families and the mass market
    
    

The Advantages & Disadvantages of Market Segmentation

• Market positioning refers to the process a business goes through when launching a new product or service
  • The business decides where they want to position the product in the market with regard to price, quality, branding, and customer perception
     
• Market mapping is a tool for identifying the position of a product within a market
  • A market map refers to a two-dimensional diagram that shows the attributes or characteristics of a product in comparison to rivals’ products
  • Market maps are sometimes called perception maps
  • Only two criteria can be chosen e.g. price and quality, age and income, etc.

M&M has positioned itself as low price and low quality in this example of a market map
  

Market Map Analysis

• If there were no spaces left on the market map, it indicates that the market is saturated
  • This means that there are no opportunities to exploit a market niche in the market
  • Competition is likely to be high and profits low
     
• However, the existence of a space on the market map may indicate the existence of a market niche
  • This needs to be researched carefully before the business commits e.g. it looks like there is a gap in the market in high price / low quality area in the map above
  • This gap does not represent a worthwhile market as the business would find it impossible to build and maintain a loyal customer base

The  Usefulness & Limitations of Market Mapping