4.2 Marketing Planning

IB Business & Management
Unit 4.2 Marketing Planning
Lesson 1: The Marketing Mix pp. 455-464
What is the Marketing Mix?
 The marketing mix is the combination of elements
needed to successfully market a product
 Businesses need to make the right decisions about
these ‘elements’
The 4 Ps – Jerome McCarthy
Bernard Booms and Mary Bitner 1981
 Suggested that the 4Ps were not really adequate.
Particularly for the provision of services,
 They suggested 3 more Ps….
 People
 Processes
 Physical Evidence/Environment
Another P has been added too since…..
 Packaging
This makes a total of 8Ps on your syllabus
The Marketing Mix – 8Ps
The Marketing Mix- Product
• A product can be a good or a service
• It must meet the wants or needs of customers
Product design decisions include:
The Marketing Mix- Price
Pricing is one of the hardest decisions in the marketing mix. Why?
• What if the product is over-priced? (customer feels ripped off)
• What if the product is under-priced? (customer thinks product is of
poor quality)
• Is there a balance? Economists define this as equilibrium price.
• This is where buyers and sellers agree on a price for the product.
• Buys want a price to reflect value for money and sellers want a price
that exceeds their cost of production to earn PROFITS
Pricing Decisions depend on:
• Demand: the higher the demand, the higher the price will
Supply: the lower the supply, the higher the price will be.
Business objectives: charities / non-profits vs. profit seeking
Competition: high competition, similar pricing.
Costs of production: higher the costs, higher the price tends
to be.
Corporate image
The Marketing Mix- Place
• Place is about making the product available to
customers in the right place and at the right time.
Place decisions:
Distribution channels
Opening times
The Marketing Mix - Promotion
 Promotion is all of the activities involved in informing
customers about a product and in persuading them to
buy it
 What could this involve?
The Marketing Mix - People
 The experience and quality of service that customers
experience greatly depends on the aptitude and
attitude of the staff:
How can a business ensure that it gets this right?
Competitive pay
Rigorous recruitment and selection process
Non financial motivation methods
The Marketing Mix - Processes
 The methods and procedures used to give customers
the best possible experience.
Getting this right can help to build customer loyalty.
Process issues:
Information sharing
After sales service
The Marketing Mix – Physical
 This refers to the image portrayed by the business by
it’ tangible and observable features.
In the service industry this is particularly important,
especially where high prices are charged
Prime Locations
Staff dress code/uniform
The Marketing Mix - Packaging
 Packaging refers to the ways in which the product is
presented to the customer.
 Can add significant value and also help to attract
What considerations do businesses think about when
designing packaging?
Packaging functions:
Enhance product image
Provides information
Helps distribution
Can encourage impulse buying
Can advertise
 However…..
 Can be very expensive
IB Business & Management
Unit 4.2 Marketing Planning
Lesson 2: Marketing Objectives pp. 468-476
Marketing Planning
It is a process whereby devising marketing objectives,
then using appropriate marketing strategies to
achieve these goals.
Requires the collection & analysis of information
(market research) on existing and potential
Marketing Planning Process
1. Marketing Audit - conduct market research.
2. Marketing objectives - what is your goal or target?
3. Marketing strategies - this is the plan and use of the
marketing mix & ethics to achieve the objectives.
4. Monitoring & review - continual process of checking and
assessing. Did the plan work? Why or why not? How can we
5. Evaluation - examine the extent to which the firm had
succeeded in achieve these objectives. ...
Marketing Audit
Is a review of the strengths and weaknesses of a firm.
Helps to identify the marketing opportunities and threats facing a business.
What internal and external issues will the audit examine?
the business’s marketing objective and strategies
existing products and brands sold by the business.
the effectiveness of the firm’s recent marketing activities.
firm’s market share
competitor analysis
update on the demographic profile
Gives an overview of the current marketing situation.
Can also assist in creating a SWOT and a PEST Analysis.
Marketing Objectives
 Marketing objectives should not be set in isolation
 They should be compatible with the firm’s Corporate
 Often set by directors of the company
 They will also need to consult other departments (finance
and production for example)
What the firm as a whole is trying to
What the marketing function needs to
do to fulfil the corporate objective
How will the marketing department
meet these objectives
Types of Marketing Objectives
 Increasing sales (By volume, By value)
 Increasing market share
 To enhance the brand image
 To reposition the brands image
 Raising brand awareness
 Increasing brand loyalty
 Improving corporate image
Setting Marketing Objectives
Marketing Objectives must be SMART
S mart
M easurable
A greed
R ealistic
T imed
E.g. To increase market share by 5% in the next 2
Marketing Strategy
 Marketing Strategy is the plan for how the Marketing
Objectives are going to be achieved
 Will need to use the results of market research in
order to plan strategy effectively
Key features of effective marketing
 Identifying the correct target market and using
this to tailor market research and advertising
 Market Segmentation – producing a range of
products to appeal to different customers
 A Market Orientated Approach
 The correct marketing mix (a coherent approach
suitable for the brand image)
Reasons why marketing objectives are not
 Internal Constraints
 Financial
 Personnel
 Unrealistic objectives
 External Constraints
 Competition
 The economy
 Tastes and fashions
IB Business & Management
Unit 4.2 Marketing Planning
Ethics of Marketing
Ethics of Marketing
• Moral principles that guide business behaviour.
• Unethical marketing behaviour exists when moral codes of practice are not adhered to.
• What are bait-and-switch marketing techniques?
• are techniques which are considered unethical.
• they are used to entice customers by advertising deals that are too good to be true.
• Once customers are hooked on the deal (the bait), they discover that it is no longer offered and
change to purchase another more pricey alternative (the switch).
• So who uses these tactics?
• Airlines companies
• Mobile phone companies
• Real Estate companies
Other dubious marketing tactics:
• Health fraud
• Get rich quick schemes
• Travel fraud
• Product misrepresentation
• fear tactics - limited stock only
• unsubstantiated claims - 4/5 prefer our products
• Pester power - using children to pester parents into buying products.
• Confusion marketing - swamping customers with excessive price information.
Bait and Switch Marketing
 Enticing customers by advertising a deal that is ‘too
good to be true’
 Once the customers are hooked (bait) then extra
charges are suddenly added, or the product becomes
‘unavailable’ and a pricier alternative is offered.
 Often high pressure sales techniques are used
Get Rich Quick Schemes
 Schemes that offer
unrealistic opportunities
Health Fraud
 When businesses make unsubstantiated claims about
health cures/benefits
Travel Fraud
 Travellers are given misleading information.
 Descriptions/pictures of hotel facilities are misleading
Product Misrepresentation
 Using brand names similar to well known trade marks
to benefit from their branding
Unsubstantiated Claims
 Using promotional declarations that can not be proved
IB Business & Management
Unit 4.2 Marketing Planning
Market Segmentation
Learning Objectives
 To understand what market segmentation is
 To be able to state reasons why firms segment the
 To be able to give examples of the ways a market can be
 To understand the difference between mass and niche
Market Segmentation
 Most businesses can’t sell their products to
 Instead they break the market down into smaller
pieces and then try and sell to these smaller
 The smaller groups are called market segments
 They consist of customers who buy similar
 These consumers are known as the target market
for a product
Market Segmentation - Definition
 The process of splitting a market into distinct groups
of buyers to better meet their needs. It is normally
based on demographic, geographic and/or
psychographic factors
Demographic Factors
 Demography is the study of the characteristics of the
human population. Demographic variables include:
Race and Ethnicity
Marital status
Income and Socioeconomic class
Socio-Economic Groupings
Higher managerial, administrative or professional e.g.
surgeon or company director
Intermediate managerial, administrative or
professional e.g.
teachers, solicitors
Skilled non-manual e.g. sales assistants, shop floor
Skilled manual e.g. electrician, plumber
Semi skilled e.g. assembly line workers, cleaners
Unskilled, pensioners and unemployed
Marketing terms
 Marketers have come up with many ACRONYMs for
various demographic groupings.
 An example is DINKY – Double Income No Kids
 Here are some more….. Can you guess what they are
and think of what types of products that would be
targeted at them?
No Income Lots of Kids
Greying Leisured, Affluent, Middle Aged
One Income, No Kids
Young Urban Professional
Green Yuppie
Young Affluent Parents
Single Income, two children, outrageous mortgage
Retired Affluent People
Single, Independent, Divorced
Single Income, No Boyfriend And Desperate
7-12 year olds
Adults who buy kids products
Geographic Factors
 Geographic factors can have a huge influence on
demographic factors such as race, religion, language.
Geographical factors include:
 Location
 Climate
Psychographic factors
 Emotions and Lifestyle
 Values
 Status
 Culture
 Hobbies and Interests
Consumer Profile
 The demographic/
psychographic details of the
average user of a product
 Businesses use this
knowledge to help them to
identify customers needs
and identify new segments
to target
 Look at the products on the following slides and see if
you can identify who the target market is
 What do you think their Consumer profile would be?
How Customers Differ
 Market segmentation is needed because customers are
not all the same! They differ in their needs and wants.
 For example, customers differ in the…
 Benefits they want from a product
 Amount they are able to or willing to pay
 The media they see
 Quantities they buy
 Time and place that they buy
 Benefits they want from a product
 Amount they are able to or willing to pay
 The media they see
 Quantities they buy
 Time and place that they buy
How might the following customers differ?
Example - Kelloggs
Example - McDonalds
Example - Saga
Saga is a company that offers many different products…. All aimed at
people aged over 50
Benefits of Segmentation
 Businesses are successful when they provide things that
customers want
 Segmentation allows businesses to develop products that more
closely meet customer needs
 A range of products can be made to appeal to different market
 Also allows promotional spending to be targeted more effectively
 E.g. adverts not put in the wrong kind of newspaper or
 Sales promotions (e.g. price discounts) not offered to
customers who don’t respond to them