A marketing plan is just a firm writing down four things: what it is trying to achieve, what it has to spend, what it has found out about the market, and what it is actually going to do. This page walks through all four, then shows you the two tools examiners love — segmentation and market mapping.
Marketing costs money, and money spent badly is gone. The plan exists so that every advert, price change and delivery decision is pulling in the same direction, and so the firm can check afterwards whether it worked.
Without a plan you get the classic small-business problem: a shop runs a discount one week, a competition the next, changes its logo the month after, and at the end of the year nobody can say whether any of it made a difference.
These are the targets the marketing department is chasing, and they should be SMART. Typical ones include raising market share, increasing sales revenue in one region, hitting a distribution target, or improving brand awareness.
Compare two versions of the same objective:
The second one can be measured, so at the end of the year the firm can tell whether the money worked.
Planning which resources are needed and where they will come from: the marketing budget, staff time and expertise, and any capital spending such as a new website or shop fit. Objectives that the firm cannot resource are not really objectives.
Market research identifies the things likely to affect the plan — market size and growth, the segments in the market, what competitors are doing, customer tastes, and how the product will reach buyers.
The medium- and short-term actions the firm will take, and who is responsible for each: pricing tactics, promotional activity, distribution, product features and packaging, physical evidence such as branding, and how people and process will support all of it.
Segmentation means splitting one market into smaller sub-markets, or segments, where the buyers share similar characteristics. Nobody sells to “everyone” — the crisps aisle alone contains premium sharing bags for adults, low-fat ranges for health-conscious buyers, and multipacks aimed at families.
| Type of segmentation | Splits the market by | Example of a segment |
|---|---|---|
| Demographic | Age, gender, income, family size, religion, ethnic group | Parents of children under five |
| Geographic | Country, region, city or countryside, climate | Shoppers in hot coastal tourist towns |
| Psychographic | Values, beliefs, lifestyle, social status, opinions | Buyers who will pay more for ethical sourcing |
Firms rarely use just one of these. A gym might target 25–40 year olds (demographic) living within three kilometres of the branch (geographic) who see fitness as part of their identity (psychographic). Three criteria give a much sharper picture than one.
The target market is simply the segment, or group of segments, that the product is aimed at. Everything in the marketing mix should then be built for those people.
| Advantages of segmenting | Disadvantages of segmenting |
|---|---|
| Accepts that customers are not identical, so products can be designed for real differences in taste | People inside one segment still behave differently, so the group is never as neat as the plan assumes |
| Marketing spending is aimed at people likely to buy, so less of the budget is wasted | Segments are hard to define and customers can sit in several at once |
| Meeting a specific need well tends to build loyalty and repeat purchases | Extra research is needed to find and understand each segment, which costs money |
| Small firms can compete by serving a segment the big players ignore | A segment may turn out to be too small to be profitable to serve |
Positioning is where the firm wants its product to sit in the customer’s mind — cheap and cheerful, or expensive and exclusive. A market map (sometimes called a perception map) draws that position on a two-dimensional grid so the firm can see itself next to its rivals. Only two criteria can be used at a time, most often price against quality, but age against income or traditional against modern also work.
Two things are worth spotting on any map:
Using the map above, a new owner says: “There is a clear gap at high price and low quality, so we should open there.” Explain one reason why this is poor advice. [3 marks]
| Why market mapping is useful | Where market mapping falls short |
|---|---|
| Shows gaps that could become new product ideas | A gap may exist because it is not profitable to fill |
| Makes competitor positions easy to compare at a glance | Placing rivals accurately may need primary research, which costs money |
| Simple and cheap to draw, so any size of firm can use it | Only two criteria can be shown, which is a very simple view of a market |
| Helps check that a product’s position matches the price being charged | It is a snapshot — markets move and the map goes out of date |
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