4.2 Marketing Planning

Marketing Plan - Document outlining a firm’s marketing objectives and the marketing strategies to be used to achieve these objectives. A marketing plan is usually preceded by a marketing audit - a review of the current position of a firm’s marketing mix, analysing its strengths, weaknesses, opportunities and threats.

Elements of a marketing plan:

• Marketing objectives.
• Suggested methods of market research to identify target markets.
• An assessment of the strengths and weaknesses of competitors in the market.
• Outline of the marketing mix.
• Details of the marketing budget.
• Outline of anticipated difficulties and strategies to deal with them.

Market Segment - A distinct group of customers with similar characteristics, wants or needs. Segmenting a market of potential customers according to their demographics or preferences makes it easier to personalise marketing campaigns to an individual, making marketing efforts more efficient.

Target Market - A specific market segment that the business prioritises in the design of its marketing mix towards. Aiming marketing efforts at specific market segments provides a focus to all marketing decisions and activities, and will make the promotion, pricing and distribution of the product easier and more cost effective.

Niche Marketing - A very concentrated form of marketing. Instead of marketing towards a broad range of potential customers, niche marketing involves targeting a specific and well-defined segment of the market.

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Advantages

Effective Marketing - Marketing mix can be highly specified towards the needs, wants and culture of the market. Products may become highly specialised and esoteric to give the brand a unique selling point over competitors who target more of the mass market, and market research and promotional efforts can be concentrated on a specific group of the population.

Less Competition - The small market will have less competition, offering the business security and greater market influence. The greater security of the business will allow it to take risks such as heavily investing into research and development, or undertaking product development or diversification strategies.

Brand Loyalty - A small market segment would mean a greater opportunity to develop intimate, valuable relationships with customers. By valuing customer feedback and providing quality service and support, a business will build a strong following of loyal customers.

Disadvantages

Market Size - There is little opportunity for growth in niche markets, limiting the potential for an increase in sales revenues. This means that the business will have to limit the growth of its operational scale, denying opportunities for cutting costs through economies of scale. It also means the business will have to use riskier growth strategies, such as product development or diversification, in order to increase its scale of operations.

Low Barrier to Entry - The more successful a niche market becomes, the more competitors enter the market. The threat of larger multinational companies or conglomerates entering the market may endanger the survival of niche businesses.

Mass Marketing - Undifferentiated marketing that ignores the unique characteristics of different market segments. Businesses rely on increasing general brand awareness to increase sales, rather than immersing itself into specific market segments.

Advantages

Market Size - The large market size offers the business endless opportunities for growth. The business can profit from a larger customer base to increase its scale of operations and reduce costs.

Reduced Cost - Not having to modify and adapt marketing strategies to every market segment will reduce time and money spent on the market planning phase, such as conducting market research on every segment.

Disadvantages

Diluted Market - A large market will equate to more competition for the business, who will struggle to gain or even maintain market share and market power. Businesses will also have to compete with niche businesses operating within subsets of the mass market.

Product Position Map - A visual tool that reveals customer perceptions of a product or brand in relation to others in the market. Maps inform management about market opportunities and threats based on the position of the products and where the business desires its products to be.

Premium Products - High quality and high price.

Economy Products - Low quality but appropriate price.

Bargain Products - High quality but low price. The strategy is not sustainable but used as a short-term tactic to boost sales and penetrate the market.‍

Cowboy Products - Low quality but high price. Often scams that have little to no repeat purchases, limiting the lifespan of its products.

Unique Selling Point - Any aspect of a business, product or brand that distinguishes itself from competitors in the market. A strong USP offers a unique benefit that competitors cannot offer, which can be a major competitive advantage for businesses to attract customers and gain market share.

Differentiation - The act of distinguishing a business or its products from rivals in the industry. Differentiation is an opportunity for a business to gain a competitive advantage with value-added features to boost brand recognition, profitability, and ultimately market share.

Using the 7Ps in Differentiation

Product - Distinctive features of a product, such as design, functions, build quality or performance.

Price - A unique pricing strategy, such as a discount or higher prices to increase the luxury image of the brand.

Promotion - Using creative ATL or BTL promotional campaigns, or a logo or slogan that stands out and makes the brand memorable.

Place - Using different sales channels, such as offering same-day delivery for e-commerce platforms.

People - The quality of customer service, after-sales care and support.

Processes - The efficiency and convenience of the service that a business provides.

Physical Environment - A difference in observable aesthetics and tangible appearance of physical stores or e-commerce platforms.