IB BUSINESS AND
MANAGEMENT
4.2 Marketing Planning
(Including introduction to the four P’s)
Learning Outcomes
◦ To understand the elements of a marketing plan (A01) and the role of
market planning (A02)
◦ To understand (A02) and apply the 4P’s of the marketing mix to given
situations (A04)
◦ Discuss the effectiveness of a selected marketing mix in achieving
marketing objectives (A03)
◦ To understand the difference between target markets and market
segments in a given situation (A02)
◦ Discuss possible target markets and market segments in a given situation
(A04)
◦ To understand the difference between niche market and mass market
(A02)
◦ How organisations target and segment their market and create consumer
profiles (A02)
◦ To create (A02) and analyse a product position/perception map (A04)
◦ The importance of having a unique selling point (USP) (A02)
◦ How organisations can differentiate themselves and their products from
their competitors (A03)
Essential Discussion Questions
To what extent
is developing a
successful
marketing plan
scientific?
Do you think it is a case of using
appropriate tools that will inform
you of the best approach or is it
more subjective and ‘hunch’
based?
To what extent
do you think a
clear, well
researched
marketing plan
guarantees
success?
MARKETING
PLANNING
The Role of Market Planning
“The process of formulating marketing objectives
and devising appropriate marketing strategies to
meet the objectives”
THE PLANNING PROCESS:
1.Marketing Audit – Where are we now?
2.Marketing objectives – Where do we want to be?
3.Marketing strategies – How will we get there?
4.Monitoring & review – Are we on track?
5.Evaluation – Did we succeed?
Marketing Objectives
 Marketing objectives should not be set in
isolation
 They should be compatible with the firm’s
Corporate Objectives
 Often set by directors of the company
 They will also need to consult other business
functions (finance and production for
example)
CORPORATE
OBJECTIVES
What the firm as a whole is trying to
achieve
MARKETING
OBJECTIVES
What the marketing function needs to
do to fulfil the corporate objective
MARKETING
STRATEGY
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 pecific
M easurable
A greed
R ealistic
T imed
E.g. To increase market share by 5% in the
next 2 years
Marketing Strategy
Marketing Strategy is the plan for how the Marketing Objectives are
going to be achieved
Reasons why marketing
objectives are not achieved
Internal Constraints
◦
Financial
◦
Personnel
◦
Unrealistic objectives
External Constraints
◦
Competition
◦
The economy
◦
Tastes and fashions
Benefits & Limitations of
Market Planning
BENEFITS
Helps identify potential problems
and how to solve them
SMART objectives will improve
chance of success
A clear plan shared across business
functions improves coordination
Helps plan appropriate budget to
maximize use of resources
A clear plan and direction could
improve employee motivation and
inspire confidence
LIMITATIONS
Plans can become outdated if not
quick enough to react to market
conditions
The process consumes valuable
resources: Time, Capital, Expertise
Unclear objectives could lead to an
ineffective and unclear marketing
plan
So…How to make a Marketing
Plan Successful?
◦ Must be reflective process
◦ Continually reviewed and evaluated
◦ Should be flexible and adaptable according to changing external
factors and market conditions
THE MARKETING MIX (THE FOUR P’S)
The Marketing Mix?
“The key elements of a marketing strategy that
ensure the successful marketing of a product”
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 can include:
• Function
• Features
• Design
• Quality
• Branding
The Marketing Mix- Price
Pricing is one of the hardest decisions
in the marketing mix. Why?
• What if the product is overpriced?
• What if the product is underpriced?
What information might businesses
need to know when setting their
prices?
Pricing Decisions depend on:
• Demand and Supply
• Consumer perceptions
• Business objectives
• Competition
• Costs of production.
• 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
• Location
• Logistics
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?
TARGET MARKETS
&
MARKET SEGMENTATION
Market Segmentation
◦ Most businesses can’t sell their products to
everyone
◦ Instead they break the market down into
smaller pieces and then try and sell to these
smaller groups
◦ The smaller groups are called market
segments
◦ They consist of customers who buy similar
products
◦ These consumers are known as the target
market for a product
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:
◦ Age
◦ Gender
◦ Race and Ethnicity
◦ Marital status
◦ Religion
◦ Language
◦ Income and Socioeconomic class
Socio-Economic Groupings
Group
Description
A
Higher managerial, administrative or professional e.g.
surgeon or company director
B
Intermediate managerial, administrative or
professional e.g.
teachers, solicitors
C1
Skilled non-manual e.g. sales assistants, shop floor
supervisors
C2
Skilled manual e.g. electrician, plumber
D
Semi skilled e.g. assembly line workers, cleaners
E
Unskilled, pensioners and unemployed
Marketing terms
The marketing industry enjoys producing acronyms or nicknames for
behavioural groupings:
❑ Yuppies - Young Urban Professional
❑ Yummies - Young upwardly mobile
❑ Dinkies - Dual income, no kids
❑ Geeks - A person who is single-minded or accomplished in scientific
or technical pursuits but is felt to be socially inept
❑ Tweenagers - A child between middle childhood and adolescence,
usually between 8 and 12 years old, technically not a teenager
(being less than thirteen years old), but starting to act like one
❑ Boy racers - people, usually males in their late teens or early twenties,
who "cruise" around in vehicles modified with loud exhausts and
stereos, and/or modified body kits
❑ Dimwit - Dual income mortgage we're in trouble
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
Developing a 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
Task
◦ 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
Example – Kelloggs:
By providing a range of
products Kellogg's can
meet a wide variety of
different customer
needs and wants and
potentially appeal to the
whole market!
SALES
MARKET
SHARE
LOYALTY /
REPUTATION
PROFITS
ECONOMIES
OF SCALE
Example - McDonalds
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
segments
◦ Also allows promotional spending to be targeted more effectively
◦ E.g. adverts not put in the wrong kind of newspaper or magazine
◦ Sales promotions (e.g. price discounts) not offered to customers who
don’t respond to them
Difference Between A Niche
and Mass Market Strategy
Niche Market:
Mass Market:
“ A narrow, smaller or more
specific market segment
within a larger market”
“A large or broad market
that ignores
specific market segments”
MARKET
POSITIONING
Look at this perceptual map
Sweet
Strong
Taste
Mild Taste
Savoury
Task
◦ Copy the market map from the previous slide onto a piece of
paper.
◦ Look at the different foods on the next slide and see if you can put
them in the correct place on the axis according to whether they
are sweet or savoury and whether they are mild or strong tasting
Milk Chocolate
Bread
Salted Crisps
Big Mac
Blue Cheese
Raw Onion
Vanilla Ice Cream
Honey
Pasta
Apple
Coffee
Tea
Mango Juice
Tuna
Walnut
How does this relate to
business???
Perception maps can be used by businesses to analyse competition
within an industry
◦ This is known as market mapping or perceptual mapping
◦ It is used to help with market positioning
What is a market map
◦ A market map is a tool used by businesses when they are
considering entering a new market or launching a new product
◦ A market map allows the business to examine the existing
competitors/products in a market
◦ They can see which areas of the market are overcrowded or spot
potential gaps
◦ In order to construct a market map the company decides on 2
key factors of the market
Example market map – female clothes
retailers
High Price
Burberry
Karen
Millen
French
Connectio
n
classic
Top
Shop
New
Look
H&M
Low Price
Primark
fashion
Choosing the right factors
Each market will have different key features.
◦ Examples could be:
◦ High Price/Low Price
◦ Youthful/Older
◦ Modern/Traditional
◦ Masculine/Feminine
◦ Fashion/Classic
◦ Aesthetic/Functional
◦ Luxury/Everyday
Unique Selling Point (U.S.P.)
“A product’s feature(s) that differentiate it from
other competing products”
Importance of having a USP:
◦ Creates a competitive advantage
◦ Can attract more customers → higher sales
◦ Promotes customer loyalty → increased sales
◦ Can create barriers to entry to deter potential competitors
Developing a USP
Businesses can use the marketing mix as a way to create USP’s. For
example:
◦ Product – features, quality, design, (Apple products)
◦ Price – Low to undercut or high for superior product
◦ Place – distribution channels, locations, outlets
◦ Promotion – slogans, advertising, sponsorship, endorsements,
brand image,
Task – individual
◦ Choose a company (the real one), MUST BE DIFFERENT FROM
OTHER STUDENTS.
◦ Analyze the 4Ps and other marketing planning form this sub unit.
◦ Make max 3 slide of ppt and present in class discussion.