Chapter 2

The Marketing Plan

Section 2.1
Marketing Planning

Section 2.2
Market Segmentation
 Section 2.1
Marketing Planning

CONNECT Suppose you had to market yourself

as a student. What are your strengths?
 Section 2.1
Marketing Planning

• 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.

 Section 2.1
Marketing Planning

A company looks at itself and the world

around it to create a marketing plan for
reaching goals.
 Section 2.1
Marketing Planning

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

Marketing Plan
Section 2.1
Marketing Planning

Marketing Plan
 Section 2.1
Marketing Planning

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.
 Section 2.1
Marketing Planning

SWOT Analysis
 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

The three C’s of

internal analysis

C ompany
Strengths and weaknesses

C
are internal factors that affect
ustomers a business’s operation.

C ompetition
 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

Company Staff

Company
Production Analysis Financial
Capabilities Situation
 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

.
 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

.
 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

.
 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

Who are the customers?

How do groups of customers differ

What do customer from one another?
surveys and What, when, where, and how much
customer interviews do they buy?
reveal? How do customers rate the company
on quality, service, and value?

Is your customer base increasing or

decreasing? Why?
 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

What is the company’s market share?

Questions that help a What advantages does the company

company analyze its have over its competitors?

internal competitive
What core competencies does the
position: company possess?

Are competitors taking business

away? Why?
 Section 2.1
Marketing Planning

Internal Strengths and Weaknesses

 Section 2.1
Marketing Planning

PEST Analysis

Political

Economic
Four Factors
of a
PEST Analysis
Socio-Cultural

PEST analysis Technological

Scanning of outside influences
on an organization.
 Section 2.1
Marketing Planning

PEST Analysis

Political Government affects business operations

Issues

Economic • Recession • Import Pricing

• Unemployment • Trade Restrictions
Issues
• Currency Rates

Socio-Cultural Changes in attitudes, lifestyles, and

Factors opinions provide opportunities and threats

Technology Companies must embrace technology and

innovate to stay competitive
 Section 2.1
Marketing Planning

PEST Analysis

Economic Factors
 Section 2.1
Marketing Planning

PEST Analysis

Economic Factors
 Section 2.1
Marketing Planning

Writing a Marketing Plan

Marketers create a marketing plan to

communicate aspects such as:

Analysis and Research

marketing Plan
Goals A formal written document that
directs a company’s activities for
a specific period of time.

Objectives

Strategies
 Section 2.1
Marketing Planning

Writing a Marketing Plan

Executive
Summary executive summary
A brief overview of the
entire marketing plan.
Situation
Analysis

Elements situation analysis

Objectives
The study of the internal and
of a external factors that affect
Marketing Plan marketing strategies
Marketing
Strategies

Implementation marketing strategies

Strategy that identifies
target markets and sets
Evaluation marketing mix choices that
and Control focus on those markets
 Section 2.1
Marketing Planning

Writing a Marketing Plan

Single-Minded Specific

Useful Objectives

Measurable Time Framed

 Section 2.1
Marketing Planning

Writing a Marketing Plan

Marketing Plan Objectives

 Section 2.1
Marketing Planning

Writing a Marketing Plan

Marketing Plan Objectives

 Section 2.1
Marketing Planning

Writing a Marketing Plan

The quality of A superior

the product distribution
system
Key Point
Differences

A more
A more creative
competitive pricing
ad campaign
structure
 Section 2.1
Marketing Planning

Writing a Marketing Plan

Implementation

Schedule of activities

Job assignments
sales forecasts
The projection of probable,
Sales forecasts future sales in units or
dollars.

Budgets

Details of each activity

Who is responsible for each activity

 Section 2.1
Marketing Planning

Writing a Marketing Plan

Performance standards
help assess

Marketing Objectives

performance standard
An expectation for performance that
Financial Objectives reflects the plan’s objectives.

Marketing Mix Strategies

 Section 2.1
Marketing Planning

Writing a Marketing Plan

 Section 2.1
Marketing Planning

Writing a Marketing Plan

 Section 2.1
Marketing Planning

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.
 Section 2.1
Marketing Planning

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.
 Section 2.1
Marketing Planning

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.
 Section 2.2
Market Segmentation

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.
 Section 2.2
Market Segmentation

• Explain the concept of market segmentation.

• Analyze a target market.

• Differentiate between mass marketing and market segmentation.

 Section 2.2
Market Segmentation

The key to marketing is to know your customer

or target market. Market segmentation helps
identify the target market.
 Section 2.2
Market Segmentation

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

Identifying and Analyzing Markets

Age Price

market segmentation
Market Segmentation
The process of classifying people who
form a given market into even smaller
groups.

Desired
Features
 Section 2.2
Market Segmentation

Identifying and Analyzing Markets

Government Private Trade Company

Data Research Associations Research

A company gathers data

from multiple sources.
 Section 2.2
Market Segmentation

Types of Segmentation

Demographic Geographic Psychographic Behavioral

Shopping
Age Local Attitudes
Patterns
Gender State Opinions
Decision-
Income Regional Interests making process

Marital status National Activities

Ethnic background Global Personality

Values

demographic psychographic

Statistics that describe a population in Grouping people with similar attitudes,

terms of personal characteristics such as interests, and opinions, as well as
lifestyles and shared values.
age, gender, income, marital status, and
ethnic background.
 Section 2.2
Market Segmentation

Types of Segmentation

Labels Used to Segment by Generation

Baby Boom
Generation X Generation Y
Generation
 Section 2.2
Market Segmentation

Types of Segmentation

Income

Disposable Discretionary
Income Income

disposable Income discretionary income

Money left after taking Money left after paying for basic living
out taxes. necessities such as food, shelter, and
clothing.
 Section 2.2
Market Segmentation

Types of Segmentation

Demographics + Psychographics + Geographics = Comprehensive

Customer Profile

geographics
Segmentation of the market
based on where people live.
 Section 2.2
Market Segmentation

Types of Segmentation
 Section 2.2
Market Segmentation

Types of Segmentation
 Section 2.2
Market Segmentation

Types of Segmentation

Changing Times + Personal = Attitudes and

Experiences Opinions
 Section 2.2
Market Segmentation

Types of Segmentation

80 percent of a are generated by 20 percent

company’s sales... of its loyal customers
 Section 2.2
Market Segmentation

Mass Marketing Vs. Segmentation

Mass Marketing

Advantages Disadvantage

• Economics of scale • Competitors can identify

• Simplified marketing plan unmet needs and wants
and then steal customers

mass marketing
Using a single marketing strategy to reach
all customers.
 Section 2.2
Market Segmentation

Mass Marketing Vs. Segmentation

Niche Marketing

Advantages Disadvantage

• Extremely precise • Cost

• Increased chance for – Research
– Production
success
– Packaging
– Advertising
 Section 2.2
Market Segmentation

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.
 Section 2.2
Market Segmentation

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.
 Section 2.2
Market Segmentation

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.
End of

Chapter 2
the marketing plan

Section 2.1
Marketing Planning

Section 2.2
Market Segmentation