Unit 4: Marketing — 4.2 Marketing Planning
What is Marketing Planning?
Marketing Planning is the process whereby organizations determine marketing objectives, develop strategies, and formulate actions to achieve desired outcomes. It provides a road map for positioning products effectively in the marketplace.
A marketing plan typically involves analyzing the market, setting objectives, designing strategies, budgeting, implementing actions, and reviewing outcomes.
Segmentation
Segmentation is splitting the total market into smaller, distinct groups of consumers with similar characteristics or needs.
- Demographic: Age, gender, income, education
- Geographic: Location, region, climate
- Psychographic: Lifestyle, values, personality
- Behavioral: Purchasing behavior, brand loyalty
Market Segmentation Formula:
Segment\ Size = \frac{Total\ Market\ Size \times Segment\ Percentage}{100}
Segment\ Size = \frac{Total\ Market\ Size \times Segment\ Percentage}{100}
Targeting
Targeting is selecting the segments that a business will focus on and designing marketing efforts to serve those segments effectively.
- Undifferentiated (Mass): Same product to all segments
- Differentiated: Different products for different segments
- Concentrated (Niche): Focused on one segment
Target Market Share Formula:
Target\ Market\ Share = \frac{Firm's\ Sales\ in\ Target\ Segment}{Total\ Target\ Segment\ Sales} \times 100\%
Target\ Market\ Share = \frac{Firm's\ Sales\ in\ Target\ Segment}{Total\ Target\ Segment\ Sales} \times 100\%
Positioning
Positioning is how a product is perceived in the minds of target customers relative to competitors. It involves creating a unique image, identity, and value proposition.
Positioning Map Example:
Businesses use positioning maps to compare brands across attributes (e.g. price vs. quality).
Businesses use positioning maps to compare brands across attributes (e.g. price vs. quality).
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Perceptual Mapping Formula:
Position = (Attribute_{1},\ Attribute_{2})
Niche Market vs. Mass Market
| Niche Market | Mass Market | |
|---|---|---|
| Definition | Targets a small, specialized segment | Targets the whole market |
| Advantages | Less competition, loyal customers, focused marketing | Higher sales, economies of scale, broad reach |
| Disadvantages | Limited growth, higher costs per customer | More competition, diluted marketing focus |
| Examples | Luxury watches, vegan beauty products | Coca-Cola, Nike sportswear |
Unique Selling Point (USP)
A Unique Selling Point (USP) is what sets a product apart from competitors and motivates customers to choose it.
It's the core benefit or advantage that is unique to the company.
- Quality: Superior ingredients, craftsmanship
- Service: Fast delivery, excellent support
- Features: Innovative technology, special design
- Price: Best value, exclusive offer
USP Formula:
USP = Unique\ Benefit_{Product} - Benefits_{Competitors}
USP = Unique\ Benefit_{Product} - Benefits_{Competitors}
Marketing Planning Process Overview
- Set marketing objectives
- Analyze market & customer segments
- Decide targeting strategy
- Position product with USP
- Develop relevant marketing mix
- Implement & monitor plan
Conclusion
Effective marketing planning relies on understanding how to segment a market, select target audiences, position products, and create a compelling USP. Recognizing the distinctions between niche and mass markets helps guide strategy and enhances the likelihood of business success.