- Marketing mix
- Combination of key decisions that must be taken in the marketing of a product
- Consists of the 4 or 7 Ps (product, price, place, promotions, etc.)
- Not all of the P’s have the same degree of significance in all cases
- P’s must be coherent in an interrelated marketing plan
- Marketers must be careful not to confuse consumers with conflicting messages about the goods or services being sold
- (The Ps will be discussed in units 4.5 and 4.6)
- Marketing plan
- Formal written document that outlines how a business intends to achieve its marketing objective
- Contains detailed action programs, budgets, sales forecasts and strategies
- Effective marketing planning relies on a clear awareness of market trends, competitor’s actions and consumer wants
- Marketing plan usually begins with a marketing audit which is a review of a business’ current marketing situation
- SWOT and the 4P’s employed
- Current PEST
- Review of current marketing strategies
- Elements
- Key marketing objectives
- Market research (target market, competition, market size, trends etc.)
- Marketing strategies for the marketing mix and specific activities
- Marketing budget
- Likely problems and backup plans
- Monitoring and review process (to be modified along the way)
- Market segmentation
- Process of dividing the market into subgroups based on defined attributes
- Each segment has distinct identity, specific needs, and preferences
- Attributes provide each segment with a clear customer profiles allowing business to target a segment with the appropriate marketing mix
- Successful segmentation requires a business to have a clear picture of the consumer in the target market it is aiming to sell in
- Marketing mix has to be appropriate for the target market and positioning of the business
- Profile segmentation by
- Demographics
- Age, group, gender, marital status, income group, social class, education, profession, religion, language
- Psychographics
- Status, values, cultures, interests, politics, causes, beliefs, buying habits, decision factors
- Geographic
- Location: urban, rural, cosmopolitan or closed, multicultural, island, low/uplands
- Climate: desert, tropical, four season, seasonal rain, humidity
- Advantages
- Define the market more precisely
- Identifies gaps in the market for exploitation
- Minimize selling to consumers who have no intention of buying
- Small firms can specialize in one or two target markets
- Allows for price discrimination to maximize revenue and profits
- Disadvantages
- May need product variations to satisfy different segments:
- High cost for R&D, varied promotions, and production and inventory
- Excessive specialization is dangerous if your segment changes your attitudes or behavior
- Using DAMAS for segmentation
- Differentiated
- Each segment must be unique in response to different elements of marketing mix
- Actionable
- Business must be able to address the needs of each segment
- Measurable
- Size and purchasing power must be quantifiable
- Accessible
- Customer in the segment must be reached in a cost-efficient way
- Substantial
- Sufficiently large in order to generate profits
- Target marketing
- Part of market research, comes after market segmentation
- Targeting refers to the market segment that a business wishes to sell to
- Appropriate marketing strategies are then developed for these target markets
- Niche/concentrated
- Targets a specific, well-designed segment that requires very specialized product or high luxury item
- Undifferentiated/mass market
- Ignores segments but targets wide market to maximize volume
- Differentiated/selective
- Uses different marketing mix for each segment to address differences in perceptions and lifestyles
- Market positioning
- Basically consumer perception
- An analysis that looks at how consumers “perceive” brands (how they are ranked or classified in the eyes of the consumer)
- Stages of positioning
- Identify the competitive advantage of the product (brand or USP)
- Decide on which strengths should be marketed to the segment
- Implement the desired positioning by using the appropriate marketing mix
- Brand VS. USP (Unique Selling Proposition)
- Corporate image is the consumer perception behind a brand
- USP is the differentiating factor that makes a company product unique and thus motivates consumers to buy
- Product position/perception map
- Shows the general market’s or consumers’ perceptions of a product’s or brand’s key aspects in relation to other competitors in the particular market
- Mainly uses two variables, such as price and quality, convenience and environment, taste and healthiness, etc.
- Uses
- Allows businesses to identify any gaps in its product portfolio or in the market, which it can fill with new or existing products
- Can be used for targeting strategies
- Allows businesses to determine how to place their products more competitively
- Can inform businesses if the need to reposition their products arises
- Businesses may try to reposition its products according to market/consumer tastes in order to further capitalize on consumer demand without developing entirely new products
- Involves modifying the product’s image, features or target market
- Limitations
- Filling gaps in the market however shouldn’t always be a priority as gaps could exist for reasons, such as generally low demand or low profitability, high barriers of entry, etc.
- Firms also have to asses whether they have the capacity or ability to fill the gaps in the market, and whether going into such gaps correspond to the business’ image