Marketing Planning

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Marketing Planning

• IB Business and Management

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Marketing Planning

• Marketing Mix
• Ethics of marketing
• Marketing Audit
• Porters Five Forces
• Marketing Objectives
• Market Research
• Sampling
• Segmentation
• Targeting
• Positioning
• Marketing strategies and tactics
• Sales Forecasting

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Marketing Mix

• Product
• Price
• Promotion
• Place
• Process
• People
• Physical

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Marketing Mix Activity

• Select any product/service you or your family has
  purchased in the past year and
• Describe the marketing mix
• Comment on the effectiveness of the mix
• Suggest any changes to the mix
• Share with the class

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Ethics of Marketing

• Ethics
• The study of principles relating to right and
  wrong
• Morality
• The standards that govern the conduct of a
  person, especially a member of a profession
• Business Ethics
• Provide moral guidelines for the conduct of
  business affairs
• Ethical decisions consider more than calculating
  costs, benefits and profit.
• Ethical Code of Practice
• Is a document setting out the way a business
  believes its employees should respond to
  situations that challenge their integrity or
  social responsibility

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Ethic Values from the AMA

• Honesty
• to be truthful and forthright in our dealings
  with customers and stakeholders
• Responsibility
• to accept the consequences of our marketing
  decisions and strategies
• Fairness
• to try to balance justly the needs of the buyer
  with the interests of the seller
• Respect
• to acknowledge the basic human dignity of all
  stakeholders.
• Openness
• to create transparency in our marketing
  operations.
• Citizenship
• to fulfill the economic, legal, philanthropic and
  societal responsibilities that serve stakeholders
  in a strategic manner.

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Ethics in Marketing

• To what extent should firms create demand for
  products and services, rather than just
  satisfying established needs and wants?

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Ethics in Marketing

• To what extent should marketing create
  unrealistic aspirations and focus on individual
  concerns and fears through advertising?

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Ethics in Marketing

• To what extent should firms market products and
  services that are dangerous, immoral or a risk to
  health, even though the sale of the products
  themselves are legal?

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Ethics in Marketing

• Cultural Differences
• Religious Differences
• Political Differences

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Activity

• In groups of 2 or 3
• Select one of the multinationals listed
• McDonalds
• Wal-Mart
• British American Tobacco
• Philip Morris
• Electronic Arts
• Monsanto
• Eli Lilly
• Microsoft
• Disney
• Or any other company approved by Mr. Zawada

1. Find evidence to support BOTH ethical and
   unethical marketing practices.
2. Comment on the companys motivation for ethical
   marketing practices
3. Present your findings to the class

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Porters Five Forces

• Michael Porter's famous Five Forces of
  Competitive Position model.
• Provides a simple perspective for assessing and
  analyzing the competitive strength and position.
• New Entrants
• Threat of Substitutes
• Buyer Power
• Supplier Power
• Competitive Rivalry

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Example
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Marketing Plan

• Outline the firms marketing objectives and the
  strategies to achieve
• Must align with corporate objectives
• Marketing Mix
• Marketing Budget
• Preceded by Marketing Audit (review of current
  position)
• Marketing Mix
• SWOT (internal external)

Objectives
Strategies
Current Position
Budget
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Marketing Audit

• SWOT
• Internal
• Strengths
• Weaknesses
• External
• Opportunities
• Threats

• Internal
• Marketing Mix
• People
• Finance
• Production Process
• External
• Political
• Economic
• Social
• Technological
• Legal
• Environmental

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Summary
Force Analysis Competitive Example
Threat of New Entry High More Competitive e.g. low barriers
Threat of Substitute High More Competitive e.g. low loyalty, low cost of switching
Buyer Power High More Competitive e.g. few buyers
Supplier Power High More Competitive e.g. few suppliers
Intensity of Rivalry High More Competitive e.g. price competition
The more forces that are HIGH, the more
competitive the industry
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Aims, Objectives Strategies
Aims
States what the company wants (a statement of
purpose)
States what the company needs to achieve to meet
the aim
Objectives
Objectives
Objectives
States the course of action to meet the objective
Strategies
Strategies
Strategies
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Marketing Objectives

• Must be aligned with corporate aims and
  objectives
• Must be realistic within the market, therefore
  based on market research
• Must have sufficient marketing budget

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Marketing Objectives

• Growth
• Higher targets are set for sales or market share
• May motivate if targets are realistic
• Need to ensure other aspects do not suffer
  quality, customer service, etc.
• Ansoff
• Market Penetration
• Product Development
• Market Development
• Diversification

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Marketing Objectives

• Continuity
• Ensure the brands survive the long term
• Ensure strategies do not damage the image of the
  brand. Price cuts may increase sales, but damage
  image of brand.

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Marketing Objectives - Types

• Increase Product Differentiation
• Ensure products remain distinctive
• Looking for alternative distribution channels
• Displaying products in a distinctive way
• Promoting the image of the products more

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Marketing Objectives

• Innovation
• Developing new ideas
• Key in fashion industry and technology industry
• Get it right and Get in first

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Marketing Objectives - Constraints

• Internal
• Financial
• Costs of Production
• Personnel
• Market positions
• Size of Firm
• External
• Competition
• The economy
• Tastes fashions
• Political Legal

• Activity
• Chose a company you are familiar with and
• Propose what 1 of their marketing objectives
  might be.
• Consider what constraints they might face when
  developing strategies to achieve the objective.

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How does a company

• find out the size of their market?
• find out their market share?
• what type of customer will buy their product?
• what price customers will pay?
• how often customer buy the product?
• what customers like and dislike about the
  product?

MARKETRESEARCH
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Market Research

• Market Research
• Is the process of collecting, analyzing, and
  presenting information about a given product and
  market
• Information about product, consumers,
  competitors, distributors
• Primary Research
• Data that is collected from a new source
• Secondary Research
• Data that has already been collected by someone
  else

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Market Research
vs.

• Quantitative
• Statistical information about customers and
  markets
• Internal
• The companys own records
• Desk Research
• Secondary data

• Qualitative
• Information about the reasons for customer
  behavior
• External
• Purchased
• Public
• Field Research
• Primary data

vs.
vs.
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Primary Research
Experimentation
On-line Survey
Observation
Questionnaires
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Market Research - Questionnaires

• Types
• Self Completed
• In Person
• Postal
• Telephone
• Online

• Avoid bias
• Avoid jargon
• Both open closed questions
• Only relevant questions
• Ensure enough data is collected to achieve
  objective

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Primary Research

• Advantages
• Current
• Relevant
• Confidential
• Unique
• Objectivity

• Disadvantages
• Time consuming
• Costly
• Validity

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Secondary Research

• Advantages
• Cheaper
• Faster
• More accessible
• Bigger picture

• Disadvantages
• Out of date
• Not relevant or appropriate
• Incomplete
• Widely available

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Assignment

• Hoang, page 477
• Question 4.2.5
• All parts (a,b)

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Sampling

• Sampling is the selecting of a small group from
  the total population of a market
• Sampling Methods
• Quota
• Random
• Stratified
• Cluster
• Snowballing

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Sampling
Description Advantages Disadvantages
Quota Based on market segmentation, a certain number from each segment is selected Representative sample can be obtained, cheaply and easily Method for choosing the quota may not be representative
Random Everyone in population equal chance of being in sample, assumes everyone in population is similar Minimize bias, easy method. Indiscriminate, select people not part of the target group, large sample sizes required
Stratified Similar to Quota, but population is further segmented (strata), chose number of each strata based on of total population Representative of a market segment, random within a segment which provides more relevant data Expensive to obtain population data and difficult to select relevant strata
Cluster Select clusters of population, and randomly select. Used when too difficult and costly to sample entire population Easier and cheaper, when population is wide spread geographically Assumes cluster is representative of entire population, contains bias and sampling error
Snowballing When interviewee suggests other people to include in the sample Cheap and easy to obtain sample details Sample can be very biased
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Sampling

• The larger the sample the more statistically
  reliable the results
• Sample design can also reducing sampling errors
• Sampling Errors
• Size is too small
• Not representative of population
• Bias in the research collection
• Confidence Level
• Allow for margin of error
• 95 confidence (1 in 20 is invalid)

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Market Research - Limitations

• Accuracy of data
• Method of collection
• Sample
• Source bias
• Timeliness of data
• Cost of research

Garbage In
Garbage Out
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Activity

• Create on-line survey on a topic related to
  school
• Zoomerang or Survey Monkey
• Minimum 5 questions
• Maximum 10 questions
• Send survey to everyone in class (and Mr Zawada)
• Review survey results and student feedback
• Send reflection to Mr Zawada

• Complete all surveys sent to you
• Analyze 2 surveys that have been sent to you
• Mr Zawada will assign
• Strengths
• Areas for improvement
• Send feedback via e-mail (c.c. Mr Zawada)

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Segmentation

• Market Segment
• Distinct group of customers with similar
  characteristics
• Market Segmentation
• The process of splitting the market into groups
  based on
• Demographic factors
• Age, Gender, Race and Ethnicity, Marital status,
  Religion, Socio-Economic, and Language
• Geographic factors
• Location, climate
• Psychographic factors
• Status, Values, Culture, Hobbies and interests

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Segmentation
Assignment BizEdVirtual Factory Cameron
Balloons Worksheet 2 - Splitting the market

• Effective Segmentation
• Differential
• Actionable
• Measurable
• Accessible
• Substantial
• Advantages
• Better understanding of customers
• Increase sales
• Growth opportunities
• New product opportunities

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Consumer Profile

• Characteristics of a typical customer within a
  given market segment, such as
• Age
• Income
• Gender
• Buying habits
• Etc.
• The more information about the customer the
  better chance of a successful marketing mix

AGE
INCOME
GENDER
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Targeting

• refers to the market segments the business plans
  to sell into.
• A strategy is developed for each of the target
  markets
• Targeting strategies
• Niche
• Mass
• Differentiated

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Niche Marketing

• Targets a small and well-defined segment
• Usually new or under-served segment
• Highly Specialized product/service
• Smaller sales volume, therefore higher prices per
  unit
• Can be both large and small companies
• Must know their customer

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Niche Marketing

• Advantages
• Product/Service will meet the needs of customer
• Specialized product/service should encourage
  customer loyalty
• Higher profit margins

• Disadvantages
• Smaller number of customers
• Little opportunity for economies of scale
• Risk of competitors

How has the internet impacted Niche Marketing?
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Mass Market

• Also known as undifferentiated marketing or
  market aggregation
• Large number of different market segments with
  the same product/service
• Maximize sales volume
• Henry Ford was the first exploit, any color, so
  long as its black
• Requires mass production, to lower costs

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Mass Marketing

• Advantages
• Economies of scale, reduces costs
• Fewer marketing mixes, reduces costs
• Larger customer base, increased revenue

• Disadvantages
• High barriers to entry
• Very competitive
• Marketing campaigns can be very expensive and
  inefficient

Which type of marketing strategy has more risk,
Niche or Mass?
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Differentiated Marketing
First Class

• a.k.a. selective marketing or multi-segment
  marketing
• More than one segment is targeted for a given
  product/service
• A marketing mix is created for each segment,
  which could include new products

Business Class
Economy Class
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Differentiated Marketing

• Advantages
• Better chance of satisfying customer needs
• Marketing campaigns more successful
• Reduces risk

• Disadvantages
• More expensive
• Economies of scale not fully exploited
• Customer confusion
• Brand dilution

What is the difference between Niche and
Differentiated marketing?
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Target Market Activity

• For each of the target market strategies
• Niche
• Mass
• Differentiated
• identify an Hong Kong company that employs the
  strategy
• For niche marketing, describe the segment
• For differentiated, describe how the marketing
  mixes differ

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Positioning

• All product/services within a market segment have
  a perceived rank or position by the general
  public.
• Most common ranking attributes are price and
  quality
• Corporate Image can have a significant impact on
  a product/service position

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Unique Selling Point (USP)

• A USP is any aspect of a product/service that is
  different from the competition
• Usually a key competitive advantage is emphasized
  in the marketing mix
• a.k.a Unique Selling Proposition

For any product you are familiar with, list 2
USPs?
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Position Maps
Quality
Low
High
PremiumBrands
CowboyBrands
High
Price
BargainBrands
EconomyBrands
Low
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Position Map
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High
Low
High
Low
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Position Maps

• Develop strategies based on position
• Identify gaps in the market
• Identify need to reposition
• a.k.a. Perception maps

What are some other possible attributes used on a
position map for an automobile?
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Position Map Assignment

• For any product you can purchase in Hong Kong
• Prepare a position map based on price and any
  other attribute (e.g. quality, after sales
  service, etc.)
• Use PowerPoint and the logos of the company/brand

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Sales Forecasting

• Quantitative technique to estimate sales over a
  period of time
• Essential for planning purposes
• Identify problems opportunities

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Techniques

• Extrapolation
• Delphi technique
• Market Research
• Time Series Analysis
• Trends
• Erratic fluctuations
• Seasonal fluctuations
• Cyclical factors
• Responses to events

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Factors affecting choice

• Accuracy
• Time frame
• Data availability
• Costs
• Stage of life cycle
• The market/industry

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Benefits

• Cash flow
• Stock control
• Operational productivity
• Access to finance

Is forecasting more important for a NEW or
EXISTING company?
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Limitations

• Assumes future will mirror the past
• Trend line is based on averages
• Quantitative
• Time lag
• Dependent on stage of product life cycle

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Statistical Analysis Techniques

• Mean
• Median
• Modal
• Range
• Standard Deviation

Jan Feb Mar Apr May
100 300 600 100 250
Mean
Median
Modal
Range
Std Dev
270
Is it easier to forecast when the Std Dev is
small or large?
250
What is the forecast for June?
100
500
205
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Moving Averages

• Used to identify trends
• Smooth the data to remove fluctuations

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Assignment

• Hoang, page 493
• Question 4.2.10
• All parts (a,b,c)
• Hoang, page 494
• Question 4.2.11
• All parts (a,b,c,d)

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Summary

• Marketing Mix
• Ethics of marketing
• Marketing Audit
• Porters Five Forces
• Marketing Objectives
• Market Research
• Sampling
• Segmentation
• Targeting
• Positioning
• Marketing strategies and tactics
• Sales Forecasting

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Learning Outcomes

• Apply the elements of the marketing mix to given
  situations.
• Discuss the effectiveness of a selected marketing
  mix in achieving marketing objectives.
• Construct an appropriate marketing mix for a
  particular product or firm.
• Discuss the effectiveness of a selected marketing
  mix in achieving strategic objectives.

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Learning Outcomes

• Discuss the ethical issues of what is marketed
  and how it is marketed nationally,
  internationally and across cultures.
• Explain the value of a marketing audit as a
  business tool.
• Apply Porters five forces model to classify and
  analyse competitive pressures in the marketplace
• Examine how appropriate the marketing objectives
  are in achieving the goals of an organization.

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Learning Outcomes

• Analyse the role of market research.
• Evaluate different methods of market research.
• Evaluate different methods of sampling, for
  example, quota, random, stratified, cluster and
  snowballing.
• Analyse the usefulness of market segmentation and
  consumer profiles.

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Learning Outcomes

• Identify possible target markets.
• Apply an appropriate marketing mix to the target
  market(s).
• Construct a position map from given information.
• Discuss how organizations can differentiate
  themselves and their products from competitors.
• Develop and evaluate strategies designed to
  change customer perceptions.

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Learning Outcomes

• Design or evaluate marketing strategies for given
  situations. Apply an appropriate marketing mix to
  the strategy.
• Analyse sales trends and forecasts from given
  data, and evaluate the significance for marketing
  and resource planning.