Transcript the marketing mix - Issaquah Connect

IB Business
Management
4.2 Marketing Planning
(Including introduction to the four P’s)
Learning Outcomes
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The elements of a marketing plan
The role of marketing planning
The four Ps of the marketing mix
An appropriate marketing mix for a particular product or business
The effectiveness of a marketing mix in achieving marketing objectives
The difference between target markets and market segments
Possible target markets and market segments in a given situation
The difference between niche market and mass market
How organizations target and segment their market and create consumer
profiles
A product position map/perception map
The importance of having a unique selling point/proposition (USP)
How organizations can differentiate themselves and their products from
competitors
The Role of Market Planning
“The process of formulating marketing objectives
and devising appropriate marketing strategies to
meet these 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
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Marketing objectives should not be set in isolation
They should be compatible with the firm’s mission statement
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 to support the mission/vision
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
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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
• Student examples from company research?
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 years
Marketing Strategy
Marketing Strategy is the plan for how the Marketing
Objectives are going to be achieved
What marketing strategies might be used
to help achieve the following types of
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
How might a business’ marketing mix differ when trying to
implement these strategies?
Reasons why marketing objectives
are not achieved
Internal Constraints
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Financial
Personnel
Unrealistic objectives
External Constraints
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Competition
The economy
Tastes and fashions
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Student examples?
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 – light bulbs vs LED’s
• Features – determined using product or market oriented
techniques?
• Design – consumer vs industrial use?
• Quality – surgeon or cafeteria knife?
• Branding – local, regional or national?
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?
Pair and share
Pricing Decisions depend on:
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Demand and Supply
Consumer perceptions (Rolex vs Timex)
Business objectives (market share vs profits)
Competition (Barriers to entry e.g. Boeing)
Costs of production
Corporate image (Luxury vs value)
• Student examples from their company
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
• Location
• Logistics
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Starbucks vertical integration + CSR with small farmers.
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?
An Appropriate Marketing
Mix Will:
• Ensure consumers needs and wants are met
• “Right product, at the right price, available at the
right place and communicated through the right
promotion channels (media)”
Do the companies
we have chosen
have an appropriate
marketing mix?
TARGET MARKETS
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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
European 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
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Semi skilled e.g. assembly line workers, cleaners
E
Unskilled, pensioners and unemployed
Geographic Factors
• Geographic factors can have a huge influence on
demographic factors such as race, religion,
language. Geographical factors include:
• Location
• Climate
• Example: Varying dialects of language based on
geographic location in Spain.
Psychographic factors
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Emotions and Lifestyle
Values
Status
Culture
Hobbies and Interests
• Go Pro, Organic food, Starbucks, ethnic food,
various
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 growth
strategies (Ansoff’s Matrix)
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 of shampoo differ in the…
– Benefits they want from the product
– Amount they are able to or willing to pay
– The media they see
– Quantities they buy (industrial e.g. hotel vs
consumer)
– Time and place that they buy
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:
“ A narrow, smaller or more specific market segment
within a larger market”
Mass 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
analyze 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
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Example market map – female clothes
retailers
High Price
Burberry
Karen
Millen
French
Connection
classic
fashion
Top Shop
New
Look
H&M
Low Price
Primark
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
Task
• As a class we are going to construct a market map
of restaurants.
1. Brainstorm a list of restaurants in your local area
2. Copy the axis on the next slide into your notes
3. Position the competitors on the map
Market Map for Restaurants
High Price
Special
Occasion
Everyday
Low Price
What could these pictures be
referring to?
Unique Selling Point (U.S.P.)
“A product’s feature(s) that differentiate it from
other competing products”
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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
What is the USP of your business?
Developing a USP
Businesses can use the marketing mix as a way to
create USP’s. For example:
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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,
In pairs share
• In pairs discuss at least one example of how your
business has developed a USP.
• Also consider:
– Has it worked?
– Why did the business choose to differentiate in
this way?
– Do you think it could be better – how and why?
Company Research
For your business, analyse how they differentiate
themselves and their products from competitors?
Is it the best
strategy in
your opinion?