Flashcards in 4.2 - Marketing planning Deck (26)
What is marketing planning?
The process of formulating appropriate strategies and preparing marketing activities to meet marketing objectives.
What are the elements of a marketing plan?
- Details of SMART marketing objectives
- Sales forecasts
- Marketing budget
- Marketing strategies to be adopted
- Detailed action plans: show marketing tactics used to implement strategies
What are the limitations of marketing planning?
- plans can become outdated if they are not revised
- Plans are insufficient on their own and must be constantly reviewed
- an up to date assessment of the market and consumer profiles must exist for the planning to be appropriate
What is the marketing mix?
The key decisions that must be taken in the effective marketing of a product. There are seven interrelated decisions (the seven P's).
What are the 4 P's?
Product, price, place and promotion.
What is a market segment?
A subgroup of a market made up of consumers with similar characteristics, tastes and preferences
What is a target market?
The market segment that a particular product is aimed at.
Business look at market segments and then decide on target markets for their products. Each target market then requires its own marketing strategy and promotion mix.
What is market segmentation?
Identifying different segments within a market and targeting different products or services to them. This is sometimes called differentiated marketing and is a form of niche marketing. Firms research and analyse the market and identify specific consumer goods or segments existing in it.
What is a consumer profile?
A quantified picture of consumers of a firm’s products, showing proportions of age groups, income levels, location, gender and social class. Successful segmentation is when a business has a clear idea of consumers in the target market they are selling to.
What are the main characteristics of consumers in a profile?
Name and explain the 3 commonly used bases for segmentation.
- consumer tastes vary based on geographical locations
- for example: northern Europe needs warmer clothing
- Age, sex, family size, ethnic background
- Individuals social class → great impact on expenditure patterns
- Differences between peoples lifestyle, personalities, values and attitudes
- Lifestyle = broad term: activities undertaken, interests and opinions (not personality)
Name 3 marketing acronyms for demographic customer groups.
DINKY - double income no kids yet
NILK - no income lots of kids
WOOF - well - off older folk
What are the advantages of market segmentation?
- increased sales: businesses can define their target market and design goods specifically aimed at these groups
- helps identify the gaps in the market that can be successfully exploited
- differentiated marketing strategies means company's avoid wasting money advertising to groups that wont buy their product
- small firms that can't compete in the whole market can specialise in 1 or 2 market segments
- price discrimination can be used to increase revenue and profits
What are the disadvantages of market segmentation?
- R and D as well as production costs may be high
- promotional costs may be high
- cannot exploit marketing economies of scale fully
- production and stock holding costs may be higher
- danger of excessive specialisation if consumers change their purchasing habits significantly
Define niche market and niche marketing
niche market: a small and specific part of a larger market
niche marketing: identifying and exploiting a small segment of a larger market by developing products to suit it
Define mass market and mass marketing.
mass market: a market for products that are often standardised and sold in large quantities
mass marketing: selling the same products to the whole market with no attempt to target groups within it
What are the advantages of niche marketing?
- small firms able to survive and thrive
- chance to sell at high prices and high profit margins if the market is unexploited by competitors
- consumers pay more for an exclusive product
- niche market products can be used by large firms to create status and image as mass market products lack these qualities.
What are the advantages of mass marketing?
- able to use economies of scale (lower average costs of production)
- fewer risks than niche marketing strategies
What is a product positioning map and how does it help a business?
A graph that analyses consumer perceptions of each of a group of competing products in respect of two product characteristics. Used to:
Identify gaps in the market
Manager aware of key features of a product that should most heavily be marketed (based on gap in market)
Firms can see if repositioning of a product/brand is needed (eg. new advertising, campaign, restyled packaging instead of newly launched product)
Define what a unique selling point (USP) is.
A factor that differentiates a product from its competitors, such as the lowest cost, the highest quality or the first ever product of its kind; a USP could be thought of as ‘what you have that competitors don’t’
Name 5 different forms of differentiation.
What are the benefits and limitations of low prices?
Benefits: customers have limited spending power and will be attracted to low prices
- total profit might fall if profit margin is reduced to very low levels
- do the low prices integrate into the marketing mix
- the consumers could perceive the brand or product to be of low quality
What are the benefits and limitations of trust?
benefits: consumers will buy from company's they trust often
- trust is very difficult to establish
- trust can be damaged easily (especially with social media) and it is difficult to regain trust
What are the benefits and limitations of ethical stance?
benefits: in some communities ethics are very important and although ethical stance may lead to higher costs and prices, many customers are willing to spend more for a good cause.
- in some markets ethical stance is less important than low prices (aka rich people care, poor people don't)
- lack of genuine ethical position can lead to loss of trust if consumers realise the company is only window dressing
What are the benefits and limitations of convenience?
benefits: effective differentiation as consumers usually have little time
- these methods are so widespread that it is difficult to gain true differentiation