1. Chapter 2 the marketing plan Section 2.1 Marketing Planning
Market Segmentation

2. Marketing Planning
Section 2.1
CONNECT Suppose you had to market yourself as a student. What are your strengths?

3. Marketing Planning Learn how to conduct a SWOT analysis.
Section 2.1
Learn how to conduct a SWOT analysis.
List the three key areas of an internal company analysis.
Identify the factors in a PEST analysis.
Explain the basic elements of a marketing plan.

4. Marketing Planning
Section 2.1
A company looks at itself and the world around it to create a marketing plan for reaching goals.

5. What is Marketing? Marketing Planning
Section 2.1
What is Marketing?
is the process of communicating the value of a product or service to customers (
is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (
is the social process by which individuals and organizations obtain what they need and want through creating and exchanging value with others (Kotler and Armstrong (2010)
sometimes be interpreted as the art of selling products, but selling is only a small fraction of marketing

6. Figure 1 Three Levels of Business Planning
Corporate management typically includes the chief executive officers (CEOs), president, chief financial officers (CFOs), and other top level planners. Planning done at the strategic level is long range (3–5 years). The mission, objectives, business portfolio, and growth strategy decisions set at this level “set the stage” and FLOW THROUGH to the functional and operational planning levels; both functional and operational plans need to be consistent with the corporate strategic plan, and further the mission and goals of the organization following the growth strategies set forth in the corporate plan. Functional level is performed by either Vice Presidents or top level functional area managers (VP Sales for many industrial or business-to-business firms; VP of Marketing for many consumer goods firms). Operational planning flows from the marketing plan, and is further developed by supervisory managers who might be product or brand managers, advertising managers, sales managers for particular products, divisions, or geographic territories, publicists, specialists in marketing research, etc.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

7. Marketing Planning: Step 1
Perform a situation analysis
Builds on SWOT; identifies how environmental trends affect the marketing plan
What trends impact the marketing plan for Netflix?
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

8. Marketing Planning: Step 2
Set marketing objectives
Specific to the firm’s brands and other marketing mix-related elements
States what the marketing function must accomplish if firm is to achieve its overall business objectives
The objective of the California almond growers is to increase consumption of almonds.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

9. Marketing Planning: Step 3
Develop marketing strategies to achieve marketing objectives
Select target market(s) where the firm’s offerings are best suited
Develop marketing mix strategies:
Marketing mix strategies: how marketing will accomplish its objectives in the firm’s target market by using product, price, promotion, and place (distribution)
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

10. Marketing Mix Strategies
Product strategies:
Include product design, packaging, branding, support services, and product variations and features
Pricing strategies:
Include setting prices for final consumers, wholesalers, and retailers based on costs, demand, or competitors’ prices
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

11. Marketing Mix Strategies
Promotion strategies:
Advertising, sales promotion, public relations, direct marketing, personal selling
Distribution (place) strategies:
How, when, and where the product is available to targeted customers
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

12. Step 4: Implement and Control the Marketing Plan
Measuring actual performance, comparing performance to the objectives, making adjustments
Marketing metrics:
Return on marketing investment (ROMI)
Action plans:
Support plans that guide implementation and control of marketing strategies
Examples of metrics: cost of a prospect, customer acquisition cost, click through rate, response rate, (coupon) redemption rate, sales calls per day, customer retention rate, etc.
Some metrics are based on survey data that requires systematic, ongoing marketing research (customer satisfaction, perceived product quality, perceived service quality, company/product reputation).
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

13. Primary Marketing tools

14. Marketing Planning SWOT analysis PEST analysis marketing plan
Section 2.1
SWOT analysis
PEST analysis
marketing plan
executive summary
situation analysis
marketing strategy
sales forecasts
performance standard

15. Marketing Planning
Section 2.1
Marketing Plan

16. Marketing Planning
Section 2.1
Marketing Plan

17. SWOT Analysis Marketing Planning SWOT Analysis
Section 2.1
SWOT Analysis
prepares a company for competition or a changing marketplace
SWOT
Analysis
provides guidance and direction for future marketing strategies
SWOT analysis
An assessment of a company’s strengths and weaknesses and the opportunities and threats that surround it; SWOT: strengths, weaknesses, opportunities, threats.

18. Marketing Planning
Section 2.1
SWOT Analysis

19. C C C ompany ustomers ompetition Marketing Planning
Section 2.1
Internal Strengths and Weaknesses
The three C’s of internal analysis C
ompany
Strengths and weaknesses are internal factors that affect a business’s operation. C
ustomers C
ompetition

20. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses
Company Staff
Company Analysis
Production Capabilities
Financial Situation

21. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses

22. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses

23. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses

24. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses

25. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses .

26. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses .

27. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses

28. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses .

29. Planning or Marketing Process People/Prospects (Target Market) Product
The Marketing Mix: 9P’s
Planning or Marketing Process
People/Prospects (Target Market)
Product
Price/Pricing
Place/Distribution
Promotion
Partners/Strategic Alliances
Presentation
Passion
(Larry Steven, 2012)

30. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses
Who are the customers?
How do groups of customers differ from one another?
What do customer surveys and customer interviews reveal?
What, when, where, and how much do they buy?
How do customers rate the company on quality, service, and value?
Is your customer base increasing or decreasing? Why?

31. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses
What is the company’s market share?
Questions that help a company analyze its internal competitive position:
What advantages does the company have over its competitors?
What core competencies does the company possess?
Are competitors taking business away? Why?

32. Internal Strengths and Weaknesses
Marketing Planning
Section 2.1
Internal Strengths and Weaknesses

33. Four Factors of a PEST Analysis
Marketing Planning
Section 2.1
PEST Analysis
Political
Economic
Four Factors of a PEST Analysis
Socio-Cultural
Technological
PEST analysis
Scanning of outside influences on an organization.

34. Socio-Cultural Factors
Marketing Planning
Section 2.1
PEST Analysis
Political Issues
Government affects business operations
Recession
Unemployment
Currency Rates
Import Pricing
Trade Restrictions
Economic Issues
Socio-Cultural Factors
Changes in attitudes, lifestyles, and opinions provide opportunities and threats
Technology
Companies must embrace technology and innovate to stay competitive

35. Marketing Planning
Section 2.1
PEST Analysis
Economic Factors

36. Marketing Planning
Section 2.1
PEST Analysis
Economic Factors

37. Writing a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan
Marketers create a marketing plan to communicate aspects such as:
Analysis and Research
marketing Plan
A formal written document that directs a company’s activities for a specific period of time.
Goals
Objectives
Strategies

38. Elements of a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan
Executive Summary
executive summary
A brief overview of the entire marketing plan.
Situation Analysis
Elements of a Marketing Plan
situation analysis
The study of the internal and external factors that affect marketing strategies
Objectives
Marketing Strategies
Implementation
marketing strategies
Strategy that identifies target markets and sets marketing mix choices that focus on those markets
Evaluation and Control

39. Writing a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan
Single-Minded
Specific
Useful Objectives
Measurable
Time Framed

40. Writing a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan
Marketing Plan Objectives

41. Writing a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan
Marketing Plan Objectives

42. The quality of the product
Marketing Planning
Section 2.1
Writing a Marketing Plan
A superior distribution system
The quality of the product
Key Point Differences
A more competitive pricing structure
A more creative ad campaign

43. Writing a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan
Implementation
Schedule of activities
Job assignments
sales forecasts
The projection of probable, future sales in units or dollars.
Sales forecasts
Budgets
Details of each activity
Who is responsible for each activity

44. Writing a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan
Performance standards help assess
Marketing Objectives
performance standard
An expectation for performance that reflects the plan’s objectives.
Financial Objectives
Marketing Mix Strategies

45. Writing a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan

46. Writing a Marketing Plan
Marketing Planning
Section 2.1
Writing a Marketing Plan

47. Marketing Planning
Section 2.1
Section 2.1 1.
Explain the four aspects of a SWOT analysis and tell how it fits into a marketing plan.
Four aspects of a SWOT analysis:
internal strengths
weaknesses
external opportunities
threats
The results of a SWOT analysis are reported in the situational analysis of a marketing plan.

48. Marketing Planning
Section 2.1
Section 2.1 2.
List the four areas that are investigated in PEST analysis and explain why the knowledge gained can be valuable to a company.
External threats and opportunities include
competition
environmental scan of political issues
economic factors
socio-cultural factors
technological changes
An accurate analysis of those factors helps a company prepare for threats such as competition or a changing marketplace.

49. Marketing Planning
Section 2.1
Section 2.1 3.
Describe how the marketing mix relates to the implementation of a marketing plan.
The marketing process keeps going through three phases:
planning
implementation
control
The marketing audit at the end of the process evaluates a company’s marketing objectives, strategies, budgets, organization, and performance. It identifies problem areas in marketing operations.
A marketing audit is done on a formal basis once a year and on an informal basis continuously.

50. Market Segmentation
Section 2.2
CONNECT Think of all the ways a marketer might describe you as a consumer. Begin with your age and gender, then get more specific about your shopping and requirements.

51. Market Segmentation Explain the concept of market segmentation.
Section 2.2
Explain the concept of market segmentation.
Analyze a target market.
Differentiate between mass marketing and market segmentation.

52. Market Segmentation
Section 2.2
The key to marketing is to know your customer or target market. Market segmentation helps identify the target market.

53. Market Segmentation market segmentation demographics disposable income
Section 2.2
market segmentation
demographics
disposable income
discretionary income
geographics
psychographics
mass marketing

54. Market Segmentation
Section 2.2

55. Market Segmentation
Section 2.2

56. Identifying and Analyzing Markets
Market Segmentation
Section 2.2
Identifying and Analyzing Markets
Age
Price
market segmentation
The process of classifying people who form a given market into even smaller groups.
Market Segmentation
Desired Features

57. A company gathers data from multiple sources.
Market Segmentation
Section 2.2
Identifying and Analyzing Markets
Government Data
Private Research
Trade Associations
Company Research
A company gathers data from multiple sources.

58. Market Segmentation Types of Segmentation Demographic Geographic
Section 2.2
Types of Segmentation
Demographic
Geographic
Psychographic
Behavioral
Age
Gender
Income
Marital status
Ethnic background
Local
State
Regional
National
Global
Attitudes
Opinions
Interests
Activities
Personality
Values
Shopping Patterns
Decision- making process
demographic
Statistics that describe a population in terms of personal characteristics such as age, gender, income, marital status, and ethnic background.
psychographic
Grouping people with similar attitudes, interests, and opinions, as well as lifestyles and shared values.

59. Labels Used to Segment by Generation
Market Segmentation
Section 2.2
Types of Segmentation
Labels Used to Segment by Generation
Baby Boom Generation
Generation X
Generation Y
Born: after World War II
until early 1960s
Born: early 1960s until
early 1980s
Born: early 1980s until
early 2000s

60. Market Segmentation Types of Segmentation Income Disposable Income
Section 2.2
Types of Segmentation
Income
Disposable Income
Discretionary Income
disposable Income
Money left after taking out taxes.
discretionary income
Money left after paying for basic living necessities such as food, shelter, and clothing.

61. Comprehensive Customer Profile
Market Segmentation
Section 2.2
Types of Segmentation
Demographics +
Psychographics +
Geographics =
Comprehensive Customer Profile
geographics
Segmentation of the market based on where people live.

62. Market Segmentation
Section 2.2
Types of Segmentation

63. Market Segmentation
Section 2.2
Types of Segmentation

64. Attitudes and Opinions
Market Segmentation
Section 2.2
Types of Segmentation +
Personal Experiences =
Attitudes and Opinions
Changing Times

65. Market Segmentation Types of Segmentation
Section 2.2
Types of Segmentation
80 percent of a company’s sales...
are generated by 20 percent of its loyal customers

66. Mass Marketing Vs. Segmentation
Market Segmentation
Section 2.2
Mass Marketing Vs. Segmentation
Mass Marketing
Advantages
Disadvantage
Economics of scale
Simplified marketing plan
Competitors can identify unmet needs and wants and then steal customers
mass marketing
Using a single marketing strategy to reach all customers.

67. Mass Marketing Vs. Segmentation
Market Segmentation
Section 2.2
Mass Marketing Vs. Segmentation
Niche Marketing
Advantages
Disadvantage
Extremely precise
Increased chance for success
Cost
Research
Production
Packaging
Advertising

68. Market Segmentation
Section 2.2
Section 2.2 1.
Explain how much segmentation can help a company increase its market share.
Market segmentation allows a company to more accurately target potential customers, thereby taking customers away from competitors who may not have done as good a job of meeting the needs of the targeted market segment.

69. Market Segmentation
Section 2.2
Section 2.2 2.
Define the four factors that are used to describe a target market.
Four factors used to describe a target market are demographics, geographics, psychographics, and behavioral characteristics.

70. Market Segmentation
Section 2.2
Section 2.2 3.
List the advantages and disadvantages of niche marketing.
An advantage of niche marketing is that it narrows and defines a market with extreme precision, thereby increasing the chances of success. A disadvantage is that niche marketing is expensive. Because the market is relatively small, niche marketing does not result in the economies of scale that can be obtained in mass marketing. Research is required to identify target markets and develop different marketing strategies.

71. Chapter 2 the marketing plan Section 2.1 Marketing Planning
End of
Chapter 2
the marketing plan
Section 2.1
Marketing Planning
Section 2.2
Market Segmentation