Indicator 1.02 Employ marketing information to develop a marketing plan

MarketingPart IIIndicator 1.04 Employ marketing information to develop a marketing planTHE MARKETING MIX REVIEWIncludes four basic strategies called the 4 Ps or elements of marketing. For each strategy, decisions have to be made for each product the business offers to best reach their target market. P?P?P?P?

WHY ARE MARKETING STRATEGIES IMPORTANT IN THE MARKETING MIX?Marketing plan is created with marketing strategies for the marketing mix. Marketing strategies are important because they are the framework of conducting business. They guide the allocation of a businesss resources. It unites the marketing activities throughout the business and everyone is on the same page. Eliminates chaos and confusion.

What is a Market?A market are those who have:A need or desire, andThe ability to pay, andThe willingness to buy (soon)

MASS MARKETINGMass Market is when the group is considered as a whole with all the marketing activities; using a single marketing plan.Ex. Chewing gum & light bulbs

MASS MARKETINGAdvantagesDont have to pay for the production of similar productsCan price and distribute one type of product more easily than many Can send one promotional message to everyoneEasier to manage, cost effectivePredictable response ratesEasy to set up.

Disadvantages:Diversity of the audienceUnable to track return, low response rates NonpersonalBeliefs that everyone is the sameLow profit marginsHigh competition

WHAT IS A TARGET MARKET?Identified segments of the market that a business wants to have as their customers. For example, teenagers, mothers-to-be, single mothers, American Family, men .vs. women, or college freshman. Each example has wants and needs that can be targeted and utilized to develop effective strategies to reach existing and/or potential customers.

TARGET MARKETA target market are those who:Are grouped within a market by what they have in commonAre the customers the business seeks to attract

IMPORTANCE OF TARGET MARKETSA target market represents the people most likely to buy what you sell. These people have something in common that solidifies their desire for your product or service. And that something distinguishes them from the market at large.

Importance of Target MarketsEvery customer belongs to a number of marketsCustomers are targeted in the consumer market, and businesses are targeted in the industrial marketThe same customer or business can be included in more than one target marketMarkets usually change over time

SEGMENTATIONMarket Segmentation is the process of dividing a larger market into smaller parts.

Market segment is a subgroup of a larger market that share one or more characteristics.

MARKET SEGMENTATIONAdvantages:Providing the products customers wantEffective communicationHigher response rate, Repeat and loyal customersPersonal

Disadvantages: More expensive, more difficult to produceExpensive to set upRequires more marketing research

WHY IS MARKET SEGMENTATION BEING USED MORE?Better matching of customers needsBetter profits & opportunities for growthRepeat customersTarget market communicationMore businesses operating globally creates more competition & greater market share via market segments It is more efficient in the long run.

4 TYPES OF MARKET SEGMENTATIONDemographicPsychographicGeographicBehavioral

DEMOGRAPHIC SEGMENTATIONStatistics that describe a population by personal characteristics such as age, gender, income, marital status, ethnicity, education, & occupation.

DEMOGRAPHIC Example:Gender: indicates purchase preferences (female)Origin or heritage: race, ethnicity, nationality (Caucasian)Religion (Christian)Social or economic status: education level, occupation, income (Middle-Class)Life stage: age, generation, marital status, family life cycle, family size. (Teens)

PSYCHOGRAPHIC SEGMENTATIONDefined: Markets divided by social and psychological characteristics. (Lifestyles, morals, values, & interests)Characteristics reflect consumer buying behaviors. The characteristics are Interests, Habits, Activities, Lifestyles, Opinions, & Hobbies. These reflect who your customers are. Businesses that use Marketing principles to guide their decision making must evaluate and reevaluate their customers wants and needs continuously to stay ahead in the game.

PSYCHOGRAPHIC Example:It gives a clearer picture of customers needs and wants based on personality and lifestyle.Snowboarder: LOVES cold and outdoors, free-spirited, not into authority, fun-loving, has lots of friends

GEOGRAPHIC SEGMENTATIONMarkets divided by where the customer lives.

It is valuable information because businesses can tailor their product mix based on location. Characteristics are nations, states, regions, counties, cities, or neighborhoods.

GEOGRAPHIC Example:Determine customers purchase preferences according to climate, political boundaries, or population densityMarketers discover:Where their markets are locatedWho their competitors areWhich media will reach their customersBusinesses can market to customers based on location

BEHAVORIAL SEGMENTATIONSegmenting a market base on the way customers use a product or behave toward a product. (How a consumer responsds to a product.)

Types of behavioral segmentation:Product BenefitsUsageLoyaltyOccasions

BEHAVORIAL Example:Customer questions in behavioral marketing:How will the product benefit me?Am I ready to buy it?When will I use the product/On what occasions?How often?Am I in a comfortable buying pattern?Do I feel loyal to a particular brand?

ACTIVITYChoose a partner!Cut out ads from magazines for 3 products of your choice.Create a small poster with the products listing the target market the product and ad are designed to attract. For EACH product you need to identify the following market segmentation for that product:DemographicsGeographicsPsychographicsBehavioral You may use the internet to research product information