IBBusinessDPBusiness ManagementSLRevision Notes4. Marketing 4.2 Marketing PlanningThe Role of Marketing Planning

The Role of Marketing Planning (DP IB Business Management)

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Lisa Eades

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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

The four elements of a marketing plan include the marketing objectives, the market research, the resources required, and the marketing mix
A marketing plan usually contains four key elements 

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

Examples of demographic, geographic and psychographic forms of market segmentation
 Examples of demographic, geographic and psychographic forms of market segmentation

  • 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

Advantages

Disadvantages

  • Recognizes that consumers are not all identical - consumer groups do not all share the same tastes and preferences

  • Not everyone within a segment will behave in the same way

  • Products and marketing activities can be altered to meet different needs of different groups of consumers and targeted more precisely

  • May be difficult to identify a segment and consumers can belong to multiple segments at the same time

  • Less expensive and wasteful than marketing products at wide market segments

  • Segmentation requires more detailed  market research which can prove costly (but beneficial) to the business

  • May increase loyalty if the consumer feels that their needs are being met which can lead to repeat purchases 

  • A segment may be identified but it may be too small and unprofitable to cater for

Exam Tip

It is important that you understand that businesses tend to use several criteria in identifying a market segment at which to target products and services.

For example, Coca Cola's product range is segmented according to gender, health interests and how the product is used (for example, two-litre bottles tend to be consumed at home, whilst cans and 500ml bottles are 'on-the-go products).

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

M&M has positioned itself as low price and low quality in this example of a market map  
M&M has positioned itself as low price and low quality in this example of a market map  

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

Usefulness

Limitations

  • Market gaps can be identified which may enable a business to come up with ideas for new products

  • Comparisons can be made between a business’ products and those of its rivals - where are the business’ products positioned about its rivals? 

  • Market maps are simple to construct and offer a visual illustration of the position of a product in the market

  • A gap in the market may exist because it is not profitable to fill

  • Mapping a market may require primary research which can be expensive

  • Only two criteria can be chosen which may prove too simplistic

  • Markets are often dynamic and a market map only provides insight at a specific point in time

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Lisa Eades

Author: Lisa Eades

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.