Lesson 3: Sections of the Business Plan

(Chapter 2: Marketing Plan)

Marketing Plan Types of Market Segmentation
➢ A marketing plan is the advertising strategy that 1. Geographic Segmentation (the where)
a business will implement to sell its product or
service. ➢ Geography is a science that deals with the
➢ The marketing plan will help determine who the description, distribution, and interaction of
target market is, how best to reach them, at the diverse physical, biological, and cultural
what price point the product or service should features of the earth’s surface.
be sold, and how the company will measure its ➢ Geographic segmentation is the process of
efforts. grouping customers based on where they live
and where they shop. People who live in the
same city, state or zip code typically have
Content of Chapter 1: Introduction Content of similar needs, mindsets, and cultural
Chapter 2: Marketing Plan preferences.
❑ Climate
❑ Market Segmentation
❑ Culture
❑ Market Targeting ❑ Language
❑ Population density – (urban vs rural)
❑ Market Positioning

❑ Marketing Mix
2. Demographic Segmentation (the who)
➢ Demography is the statistical study of human
Market Identification populations especially with reference to size
and density, distribution, and vital statistics.
➢ A strategic marketing approach and process that
➢ Demographic Segmentation is one of the
is intended to define the specific customer of
simplest yet effective kinds of segmentation.
the product.
You can use this type of segmentation to
➢ It is the process of identifying the specific group
split your audience and create customer
of consumers who are the best potential
personas based on objective information.
customers for your product or service.
❑ Age
❑ Gender
❑ Income
Market Segmentation
❑ Education
➢ It is a technique you can use to divide your ❑ Religion
customer base into subgroups based on shared ❑ Family size
characteristics, such as age, income, hobbies, ❑ Occupation/profession/role in a company
and location.
➢ divide the market into small segments with
distinct needs, characteristics, or behavior.
3. Psychographic Segmentation (the why) Market targeting procedure consists of two steps:
➢ Psychography is the description of an 1. Evaluating Market Segments
individual's mental characteristics and their ➢ Calls for measuring suitability of
development. segments. The segments are evaluated
➢ Psychographic segmentation is the process with certain relevant criteria to
of grouping people together based on determine their feasibility.
similar personal values, political opinions, ➢ To determine overall
aspirations, and psychological attractiveness/suitability of the segment,
characteristics. two factors are used:

❑ Personality i. Attractiveness of Segment

❑ Hobbies ii. Objectives and Resources of Company
❑ Social status 2. Selecting Market Segments
❑ Opinions ➢ When the evaluation of segments is
❑ Life goals over, the company must decide in which
❑ Values and beliefs market segments to enter, and the
❑ Lifestyle company decides on which and how
many segments to enter.

4. Behavioral Segmentation (the how)

Alternative Strategies (Methods) for Market
➢ Behavioral - relating to or concerned with the Targeting:
social, psychological, and emotional factors
that affect financial decisions and behavior. 1. Single Segment Concentration – The company
➢ Behavioral segmentation is the process of selects only a single segment as target market and
grouping customers based on common offers a single product. single product for one
behaviors they exhibit when they interact segment.
with your brand. 2. Selective Specialization – A company selects several
❑ Spending habits segments and sells different products to each of
❑ Purchasing habits the segments. different products for each selected
segment.
❑ Browsing habits
3. Product Specialization – In this alternative, a
❑ Interactions with your brand
company makes a specific product, which can be
❑ Loyalty to your brand
sold to several segments. Here, product is one, but
❑ Product feedback segments are many. single product for many
segments.
4. Market Specialization – This strategy consists of
Market Targeting serving many needs of a particular segment. Here,
products are many, but the segment is one. many
➢ Is a sage in market identification process that products for one segment.
aims to determine the buyers with common 5. Full Market Coverage – In this strategy, a company
needs and characteristics. attempts to serve all the customer groups with all
➢ A process of selecting the target market from the the products they need. Here, all the needs of all
entire market. the segments are served. all needed products for
➢ To focus your marketing money and brand all segments.
message on a specific market that is more likely
to buy from you than other markets.
Market Positioning Marketing Mix
➢ is a strategic practice used to establish the image ➢ This is a very crucial structure which you can
of a brand or product in a consumer’s mind. utilize for the purpose of marketing your product
and services.
There are several types of positioning strategies:
➢ To position the product in the target market
1. Product attributes and benefits: Associating your segment to deliver it efficiently and effectively to
brand/product with certain characteristics or the consumers and to convince them about the
with certain beneficial value. benefits that they will derive from buying the
2. Product price: Associating your brand/product product.
with competitive pricing.
3. Product quality: Associating your brand/product
with high quality. 7Ps of Marketing Mix
4. Product use and application: Associating your
brand/product with a specific use. 1. Product
5. Competitors: Making consumers think that your ➢ The tangible good or intangible service offered
brand/product is better than that of your by the business to the target consumer.
competitors ➢ Information about consumers' tastes,
preferences, perceptions, and priorities has a
➢ A perceptual map is used to show consumer significant contribution to the design of the
perception of certain brands. This will allow you product.
to identify how competitors are positioned
relative to you and to identify opportunities in Product and service attribute -These are specific qualities
the marketplace. that make up a product.

1. Quality – This refers to the durability of the

product, conformance to requirements, and
performance at an acceptable price.
2. Features – These are the physical characteristics of
a product and the benefit it offers.
3. Design – It is a combination of how a product looks
and how it performs.
4. Packaging – This includes the activities for
designing and producing the container or wrapper
for a product.
5. Labeling – A product label can serve three (3)
purposes:
i. To identify the product or brand.
ii. To describe the product – who made it,
where it was made, when it was made, its
contents, how it can be used safely.
iii. To promote the product, support its
positioning, and connect it with customers.
6. Product Support Services –These are important
parts of the customer’s overall brand experience.
2. Price 3. Place
➢ The perspective of the entrepreneur who ➢ In other words, it is how your product is bought
produces the product and the opposing and where it is bought.
perspective of the consumers who ultimately ➢ This movement could be through a combination
buy the product. of intermediaries such as distributors,
wholesalers, and retailers.
Some variables that highly influence the setting of prices
of goods or services:

➢ Availability of the competing products Channel Design and Management

➢ Cost of making the product (Distributing consumer goods)
➢ Type of product (Industrial and Consumer
1. Producer to the consumer – the shortest and
products/services)
simplest method of distribution channel for
➢ Presence of substitute products
consumer goods. No middlemen involved.
➢ Stages of the product in the market
2. Producer to the distributor then consumer – Many
(introduction, growth, maturity, and decline)
wholesale distributors buy directly from the
➢ Demographic profile of the target consumers
producer and handle marketing activities directly to
the consumers. Manufacturers who buy shelf space
Pricing Strategies in big supermarkets.
3. Producer to distributor to retailer then consumer –
1. Price Skimming Approach – The new product is
A manufacturer who sells his product to
highly-priced when introduced in the market but is
supermarkets, who in turn would sell their
gradually reduced as competitors increase.
products to owners of small businesses like sari-sari
2. Price Penetration Approach – In order to build a
stores. This way, the product eventually gets to the
well-founded consumer base, the product is
consumers.
introduced at a low price.
4. Producer to agent distributor to retailer and
3. Cost-Based Model – The price is simply equal to
eventually the consumers – Some producers
the cost operating expense plus the desired profit
employ agent middlemen to reach out to the retail
margin.
market. Some manufacturers of bags employ
4. Promotional Pricing – The products are sold at a
agents who also recruit agents for personal selling.
lower price in a limited temporary period like
midnight sale, Christmas sale, or anniversary sale.
5. Odd or Even Pricing – The products sold at prices
Channel Design and Management
that end in odd number 5 or 9 like P99.95,
(Distributing industrial goods)
'P'199.95, or 'P399.99 appear cheaper compared
to products with prices that end in even number 0 1. Producer to the user – This is the most common
like ‘P100, 200, or 400. strategy in business buying. The producer will send
6. Prestige Pricing – The products are purposely sold equipment such as plant installations, higher
at a higher price to create a high or superior image. capacity generators, and manufacturing machines.
7. Discount Pricing – It recreates interest in the 2. Producer to an industrial distributor then users –
product and gets rid of the old stock. These are used by producers of operating supplies
and accessory equipment for small industrial firms.
3. Producer to an agent then user – There are some
producers who consider it more economical if they
hire a third party to handle all their marketing
efforts.
4. Producer to an agent to industrial distributor to
retailer and the users – The producer assigns
agents on a commission and allowance basis to
 contact and sell the product to industrial 5. People
distributors, who in turn sell to the direct
consumers at a reasonable profit. ➢ This consist of each person who is involved in
the product or service whether directly or
indirectly.
➢ Your team, the staff that makes it happen for
Channel Design and Management
you, your audience, and your advertisers are the
(Distributing service goods)
people in marketing.
1. Producer to the consumer – Due to the intangibility ➢ People are the ultimate marketing strategy. They
of services, the sales activity often requires sell and push the product.
personal contact between the producer of the
To ensure that people are making the right impact on
service and the consumers. Direct distribution is
your customers:
typical for many professional services.
2. Producer to an agent then the consumers – Some 1. Training is essential – From the very first day
big insurance companies need the services of that employees start, you need to help them
agents to penetrate the market. Travel agencies know what they need to learn and let them be
hire agents to promote their services to clients. The regularized when they have already proven
agent frequently assists the service provider to themselves.
maximize profit by getting more customers. 2. Proper customer service – You must keep in
mind that you must please your customers and
make sure that they’re getting their money’s
4. Promotion worth.
3. On selling – People must help sell and promote
➢ It is the mode of conveying the presence and your products.
attributes of the product to the target 4. Keep the best – Keep the right people with you,
consumers. and your business will be on the right track.
➢ Through promotions, the business
communicates to the target consumers the
pertinent information about the product
6. Physical Evidence
including its benefits, price, and position in the
market. ➢ Physical evidence is everything your customers
see when interacting with your business.
Most Appropriate Promotional Tools to Reach the
➢ This includes the environment where you
Consumer
provide your product or service (either physical
1. Personal Selling – When an individual salesperson or online).
sells a product, service, or solution to a client. ➢ Physical evidence comprises elements
2. Advertising – Any paid and public presentation of incorporated into a service to make it tangible
products, services, or ideas by an identified and somewhat measurable.
sponsor through a medium.
Components of Physical Evidence
3. Sales Promotion – To boost the sales of a product
or service in the short term. 1. Physical Environment – It refers to the place and
4. Public Relations – This involves creating and immediate surroundings where the customer uses
maintaining the goodwill of an organization’s or experiences the service or product.
various publics through publicity and other 2. Spatial Layout – It refers to the arrangement of
nonpaid forms of communication. physical elements like furniture and equipment
5. Publicity – These are communication written and that work in conjunction with the physical
produced by public relations professionals environment.
intended to create a favorable public image for a 3. Ambiance – It refers to the overall atmosphere of a
client. place or service setting which creates the
emotional experience for customers.
 4. Corporate Branding – It refer to the visual elements
used in a service setting or place to identify it with
its company which creates the connection between
the customer and the product or service.
5. Consistency – It means that all areas of the product
or service should be consistent with each other,
from the customer’s point of view.

7. Process
➢ It refers to the processes involved in delivering
your product or service to customers.
➢ This includes aspects like your sales funnel, your
payment systems, your distribution approach,
and the way you manage customer relationships.

Types of Processes

1. Technological Processes – The process of

creating tangible products that the objectives is
to ensure that the customers feel the product to
be theirs.
2. Electronic Processes – Use of receipts or
barcodes or forms or other methods of
information about a particular product of a
company that manufactures them.
3. Direct Activities – It is about the reactions of the
customers regarding the process which occurred
and recorded in present time.
4. Indirect Activities – When the interaction does
not take place in person, and it happens before
or after the product has been bought.

- aira cute