The Role of Marketing Planning (DP IB Business Management)

Marketing Planning

• 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:

Diagram: components of a marketing plan

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

• 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

Diagram: ways to segment the market

• 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

Evaluation of Market Segmentation

Market Positioning & Market Mapping

• 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

Diagram: a market map for chocolate brands

Market map analysis

• If there are 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