Developing a Marketing Plan Unit 6. Differentiate Market Segments Marketing Strategy —specifies the way marketing activities are planned and coordinated.

Developing a Marketing

PlanUnit 6

Differentiate Market Segments

• Marketing Strategy—specifies the way marketing activities are planned and coordinated to achieve an org.’s goalso Two step process: carefully select a target market,

develop a marketing mix for that target

• Start with a marketo Recognize differences and similarities

• Segmenting factorso Needs and Wantso Demographicso Psychographics/Lifestyleo Behavioral

Factors Used to Segment a Market

Needs and Wants

• Necessities• Convenience items• Luxuries

Demographics

• Age• Gender• Education• Occupation• Income• Geographic location

Psychographics/Lifestyle

• Interests• Hobbies• Values/beliefs• Religion• Attitudes• Leisure activities

Behavioral

• Preferences and habits

• Life cycle• Buying behavior

patterns

Select Target Markets• Four criteria:

o People in target must have common, important needs

o People outside the target should have enough differences from those in the market

o The company needs adequate information about the people in the target so they can be identified and located

o The important wants and needs of the target and their buying behavior must be understood well enough

Question…• If a company changes the product element of the

marketing mix, will it also have to change one or more of the other mix elements?

• Why or why not?

Product Mix Element• Basic product

o Most important part of this elemento First factor considered by the consumer in deciding

whether or not to purchase

• Product Featureso Makes product more competitive

• Optionso Gives customers choices on the features they want

Product Element Cont.• Associated Services

o Services that come with a product

• Brand/Imageo The brand of certain products is an

important factor in making a purchase decision

o To be effective, the image must match important needs of the consumer

• Guarantee/Warrantyo Provides insurance that the product will be repaired or

replaced if there are problems

Product Element Cont.• Packaging

o Often overlookedo Provides protection and security, information that helps

the customer make a better purchasing decisiono Attracts attention

• Useso Can be more satisfying to customers or appeal to new

markets if other uses are found

Question…• What types of features might each family

member prefer when purchasing a large-screen television for their home?

Distribution Mix Element

• Facilitates the physical exchange of products and services between businesses and their customers

• Important questions in planning distribution:o Where will the customer obtain the product?o Where will the customer use it?o Are there special requirements to transport, store, or

display the product?o When should distribution occur?o Who should be responsible for each type

of distribution activity?

Price Mix Element• The amount that a buyer pays as well as the

methods of increasing the value of the product to the customers

• Several decisions to affect the perception of value:o Does the business want to increase sales, increase

profits, or enhance the image of the product?o Should price be based on costs, what customers are

willing to pay, or what competitors are charging?o Will there be one price for all customers?o Will customers be allowed to negotiate price?o Will discounts or sales be used?o Will the price be clearly communicated?

Promotion Mix Element

• Includes the methods used and information communicated to customers to encourage purchases and increase their satisfaction

• Many decisions:o Will promotions be directed at a general market or

specific segments?o Is the specific goal of promotion to increase knowledge,

to change attitudes, or to influence behavior?o What specific information does the audience need to

make a decision?o How will promotion be most effective?o What is the total amount of money needed for effective

promotion?

Product Life-Cycle Analysis

• Product Life-Cycle: the stages a product goes through from the time it enters the market until it is no longer sold

• 4 Stages:

Product Life-Cycle Cont.

• Maturity:o Sales peak and profits

begin to declineo Competition is more

intenseo More attention to price

• Decline:o Product no longer

satisfies or they discover a new product

o Little opportunity for product improvement

o Price is reduced

• Introduction:o Customers may not be

aware of it or don’t realize how it can satisfy their needs

o No direct competitors, price will be high

• Growth:o If product is

successfully introduced, it will attract more customers

o More competitorso Calls for a change in the

marketing mix

Marketing Planning• Marketing Plan: a clear written description of

the marking strategies of a business and the way the business will operate to accomplish each strategy

• Includes: o Objectives/goalso Strategieso Budgetso How you plan to meet

objectives/goals

Developing Marketing Plans

• Marketing objectives/goals should:o Be clearo Be measurableo Have a stated time frame for achievement

• Examples:o Increase product awareness among the target market by

30% in one yearo Inform target market about features and benefits of our

product and its competitive advantage, leading to a 10% increase in sales in one year

o Decrease or remove potential customers’ resistance to buying our product, leading to a 20% increase in sales in six months or less

Analyzing the Market• Market Analysis: identifies a business’s

strengths, weaknesses, opportunities and threats (SWOT)

o Strengths: • builds on what a company does well

o Weaknesses: • improves on weaknesses that could interfere with the

strategyo Opportunities:

• uncovers opportunities for new customers and new products

o Threats: • identifies possible threats to the company posed by

competition or changes occurring in the economy, laws, and technology.

Activity• Your marketing team is advising a new fitness

center, FastFit, which offers 30-minute, high-intensity, aerobic workouts for people with busy schedules.

• Develop a marketing strategy (target market, product, distribution, price, and promotion) for the business.o Include a positioning statement

• A specific description of the unique qualities of the marketing mix that make it different from the competition and satisfying to the target market

Activity Cont.• Layout of assignment:

• Target Marketo Identifying characteristicso Unique needs, attitudes, behaviors

• Marketing Mixo Producto Distributiono Priceo Promotion

• Positioning Statement