1. IB Business & Management Unit 4.2 Marketing Planning Lesson 1: The Marketing Mix pp. 455-464

2. What is the Marketing Mix? The marketing mix is the combination of elements needed to successfully market a product Businesses need to make the right decisions about these ‘elements’

3. The 4 Ps – Jerome McCarthy 1960 4P’s Price Product Place Promotion

4. Bernard Booms and Mary Bitner - 1981 Suggested that the 4Ps were not really adequate. Particularly for the provision of services, They suggested 3 more Ps…. People Processes Physical Evidence/Environment Another P has been added too since….. Packaging This makes a total of 8Ps on your syllabus

5. The Marketing Mix – 8Ps Packaging Process People Physicalevidence Place Promotion Price Product MarketingMix

6. The Marketing Mix- Product A product can be a good or a service It must meet the wants or needs of customers Product design decisions include: Function Features Design Quality Branding

7. The Marketing Mix- Price Pricing is one of the hardest decisions in the marketing mix. Why? What if the product is over-priced? (customer feels ripped off) What if the product is under-priced? (customer thinks product is of poor quality) Is there a balance? Economists define this as equilibrium price. This is where buyers and sellers agree on a price for the product. Buys want a price to reflect value for money and sellers want a price that exceeds their cost of production to earn PROFITS

8. Pricing Decisions depend on: Demand: the higher the demand, the higher the price will be. Supply: the lower the supply, the higher the price will be. Business objectives: charities / non-profits vs. profit seeking firms. Competition: high competition, similar pricing. Costs of production: higher the costs, higher the price tends to be. Corporate image

9. The Marketing Mix- Place Place is about making the product available to customers in the right place and at the right time. Place decisions: Distribution channels Opening times Location Transportation

10. The Marketing Mix - Promotion Promotion is all of the activities involved in informing customers about a product and in persuading them to buy it What could this involve?

12. The Marketing Mix - People The experience and quality of service that customers experience greatly depends on the aptitude and attitude of the staff: How can a business ensure that it gets this right? Competitive pay Rigorous recruitment and selection process Training Non financial motivation methods

13. The Marketing Mix - Processes The methods and procedures used to give customers the best possible experience. Getting this right can help to build customer loyalty. Process issues: Speed Convenience Delivery Credit Information sharing After sales service

14. The Marketing Mix – Physical Evidence/Environment This refers to the image portrayed by the business by it’ tangible and observable features. In the service industry this is particularly important, especially where high prices are charged Decisions: Prime Locations Décor Furniture Staff dress code/uniform Cleanliness/Tidiness

15. The Marketing Mix - Packaging Packaging refers to the ways in which the product is presented to the customer. Can add significant value and also help to attract customers.

16. What considerations do businesses think about when designing packaging?

27. Packaging functions: Differentiates Enhance product image Protects Provides information Helps distribution Can encourage impulse buying Can advertise However….. Can be very expensive

28. IB Business & Management Unit 4.2 Marketing Planning Lesson 2: Marketing Objectives pp. 468-476

29. Marketing Planning It is a process whereby devising marketing objectives, then using appropriate marketing strategies to achieve these goals. Requires the collection & analysis of information (market research) on existing and potential customers.

30. Marketing Planning Process 1. Marketing Audit - conduct market research. 2. Marketing objectives - what is your goal or target? 3. Marketing strategies - this is the plan and use of the marketing mix & ethics to achieve the objectives. 4. Monitoring & review - continual process of checking and assessing. Did the plan work? Why or why not? How can we improve? 5. Evaluation - examine the extent to which the firm had succeeded in achieve these objectives....

32. Marketing Audit Is a review of the strengths and weaknesses of a firm. Helps to identify the marketing opportunities and threats facing a business. What internal and external issues will the audit examine? the business’s marketing objective and strategies existing products and brands sold by the business. the effectiveness of the firm’s recent marketing activities. firm’s market share competitor analysis update on the demographic profile Gives an overview of the current marketing situation. Can also assist in creating a SWOT and a PEST Analysis.

33. Marketing Objectives Marketing objectives should not be set in isolation They should be compatible with the firm’s Corporate Objectives Often set by directors of the company They will also need to consult other departments (finance and production for example)

34. CORPORATE OBJECTIVES MARKETING OBJECTIVES MARKETING STRATEGY What the firm as a whole is trying to achieve What the marketing function needs to do to fulfil the corporate objective How will the marketing department meet these objectives

35. Types of Marketing Objectives Increasing sales (By volume, By value) Increasing market share To enhance the brand image To reposition the brands image Raising brand awareness Increasing brand loyalty Improving corporate image

36. Setting Marketing Objectives Marketing Objectives must be SMART S mart M easurable A greed R ealistic T imed E.g. To increase market share by 5% in the next 2 years

37. Marketing Strategy Marketing Strategy is the plan for how the Marketing Objectives are going to be achieved Will need to use the results of market research in order to plan strategy effectively

38. Key features of effective marketing strategy: Identifying the correct target market and using this to tailor market research and advertising Market Segmentation – producing a range of products to appeal to different customers A Market Orientated Approach The correct marketing mix (a coherent approach suitable for the brand image)

39. Reasons why marketing objectives are not achieved Internal Constraints Financial Personnel Unrealistic objectives External Constraints Competition The economy Tastes and fashions

40. IB Business & Management Unit 4.2 Marketing Planning Ethics of Marketing

41. Ethics of Marketing Moral principles that guide business behaviour. Unethical marketing behaviour exists when moral codes of practice are not adhered to. What are bait-and-switch marketing techniques? are techniques which are considered unethical. they are used to entice customers by advertising deals that are too good to be true. Once customers are hooked on the deal (the bait), they discover that it is no longer offered and change to purchase another more pricey alternative (the switch). So who uses these tactics? Airlines companies Mobile phone companies Real Estate companies Other dubious marketing tactics: Health fraud Get rich quick schemes Travel fraud Product misrepresentation fear tactics - limited stock only unsubstantiated claims - 4/5 prefer our products Pester power - using children to pester parents into buying products. Confusion marketing - swamping customers with excessive price information.

42. Bait and Switch Marketing Enticing customers by advertising a deal that is ‘too good to be true’ Once the customers are hooked (bait) then extra charges are suddenly added, or the product becomes ‘unavailable’ and a pricier alternative is offered. Often high pressure sales techniques are used

43. Examples…..

44. Get Rich Quick Schemes Schemes that offer unrealistic opportunities

45. Health Fraud When businesses make unsubstantiated claims about health cures/benefits

46. Examples

47. Travel Fraud Travellers are given misleading information. Descriptions/pictures of hotel facilities are misleading

48. Product Misrepresentation Using brand names similar to well known trade marks to benefit from their branding

49. Unsubstantiated Claims Using promotional declarations that can not be proved

50. IB Business & Management Unit 4.2 Marketing Planning Market Segmentation

51. Learning Objectives To understand what market segmentation is To be able to state reasons why firms segment the market To be able to give examples of the ways a market can be segmented To understand the difference between mass and niche markets

52. Market Segmentation Most businesses can’t sell their products to everyone Instead they break the market down into smaller pieces and then try and sell to these smaller groups The smaller groups are called market segments They consist of customers who buy similar products These consumers are known as the target market for a product

53. Market Segmentation - Definition The process of splitting a market into distinct groups of buyers to better meet their needs. It is normally based on demographic, geographic and/or psychographic factors

54. Demographic Factors Demography is the study of the characteristics of the human population. Demographic variables include: Age Gender Race and Ethnicity Marital status Religion Language Income and Socioeconomic class

55. Socio-Economic GroupingsGroupDescription A Higher managerial, administrative or professional e.g. surgeon or company director B Intermediate managerial, administrative or professional e.g. teachers, solicitors C1 Skilled non-manual e.g. sales assistants, shop floor supervisors C2 Skilled manual e.g. electrician, plumber D Semi skilled e.g. assembly line workers, cleaners E Unskilled, pensioners and unemployed

56. Marketing terms Marketers have come up with many ACRONYMs for various demographic groupings. An example is DINKY – Double Income No Kids Here are some more….. Can you guess what they are and think of what types of products that would be targeted at them?

57. No Income Lots of Kids

58. Greying Leisured, Affluent, Middle Aged

59. One Income, No Kids

60. Young Urban Professional

61. Green Yuppie

62. Young Affluent Parents

63. Single Income, two children, outrageous mortgage

64. Retired Affluent People

65. Single, Independent, Divorced

66. Single Income, No Boyfriend And Desperate

67. 7-12 year olds

68. Adults who buy kids products

69. Geographic Factors Geographic factors can have a huge influence on demographic factors such as race, religion, language. Geographical factors include: Location Climate

70. Psychographic factors Emotions and Lifestyle Values Status Culture Hobbies and Interests

71. Consumer Profile The demographic/ psychographic details of the average user of a product Businesses use this knowledge to help them to identify customers needs and identify new segments to target

72. Task Look at the products on the following slides and see if you can identify who the target market is What do you think their Consumer profile would be?

79. How Customers Differ Market segmentation is needed because customers are not all the same! They differ in their needs and wants. For example, customers differ in the… Benefits they want from a product Amount they are able to or willing to pay The media they see Quantities they buy Time and place that they buy

80. Example- Shoes Benefits they want from a product Amount they are able to or willing to pay The media they see Quantities they buy Time and place that they buy How might the following customers differ?

81. Example - Kelloggs

82. Example - McDonalds

83. Example - Saga Saga is a company that offers many different products…. All aimed at people aged over 50

84. Benefits of Segmentation Businesses are successful when they provide things that customers want Segmentation allows businesses to develop products that more closely meet customer needs A range of products can be made to appeal to different market segments Also allows promotional spending to be targeted more effectively E.g. adverts not put in the wrong kind of newspaper or magazine Sales promotions (e.g. price discounts) not offered to customers who don’t respond to them