Market Planning

Market planning

Market planning is concerned with the establishing objectives and goals, allocating the resources that are needed to meet these and setting out a plan of action. It also includes setting out ways of evaluating performance against market targets.



Market planning involves

- PESTEL

- SWOT analysis

-SMART objectives

- determine strategy and tactics

- implementing strategy and tactics

- evaluating effectiveness of market analyses



Marketing planning process model

Businesses have to analyse its external environment. An example of analysing the externals environment is by grouping forces into six areas. This is called pestel analysis, pestel stands for political, economic, social, technological, legal and environmental influences.



Political- Political factors that affect a business are genially beyond the control of the organisation. A business needs to anticipate the changes that could occur. And identify the action they need to take. Tesco’s financial segment during the resection considered how the government scrutiny over the business and how customers would react to this.



Economic- Economic factors can affect performance of a business; this can be national or international economy. Tesco would have been watching for economic forecasts for them to prepare for the recession. A period of time were demand falls, leading to lower income and employment. Tesco responded to this by lowering the costs in food because it is an essential to everyone. Tesco was one of the only businesses to grow during the 2008 recession. This is due to the price of food they gained competitors customer’s (such as Waitrose and Sainsbury) because they couldn’t afford premium food. This meat they didn’t need to make any redundancies.



Social- Social factors can relate to the values and beliefs of society. This is made up of the population’s demographics. (Size, gender, ethnicity, income, occupation and education). This helps Tesco with the targeting of their business services and products. Tesco has a broad spectrum of services so it allows good information to them.



Technological- developments with technology can affects businesses in a different ways positively and negatively. For example the internet and consumer habits have changed towards the e-world this has affected Tesco negatively because there has been as decrease in sales in there book section, this is because e-commerce took business away. On the other hand the launch of online shopping has made Tesco expand dramatically it has all their products in one place that is easy to navigate. It targets busy people, disabled people. It allows Tesco to gain customers they never would have had before.



Legal- developments within the law affect businesses in a majority of ways. The changes made to the data protection act would have affected Tesco. It means that Tesco are more cautious with their data and make sure it’s in a safe place and kept up to date. Tesco makes sure it keeps to all legislation to prevent them from going to court.



Environment- Environmental factors can relate to the social, political and legal factors affecting a business. Tesco for example uses plastic to protect a majority of their items. Tesco has decided to package there food products in in recyclable packaging. This makes the consumers of the products happier because there are views of the amount of waste businesses produce. On the other hand the government may put pressure on Tesco to make all there packaging is thrown out there product ranges recyclable.



Product lifecylce

Businesses manage their products carefully over time to make sure t they deliver products that continue to meet what customers want. The stages through which individual products develop over time is called known as the product life cycle. The classic product life cycle has four stages introduction, growth, maturity and decline.

Products enter the lifecycle as they enter their market. Profits begin to grow as purchasers get to know the product. Competitors require businesses to invest in brand image. When sales have saturated sales decline. The length of each stage varies enormously. The decisions of marketers can change the stage, for example from maturity to decline by price-cutting. Not all products go through each stage. Some go from introduction to decline. It is not easy to tell which stage the product is in

Tesco has many products within their business i have chosen to and put them, were i believe they are in the product lifecycle. Tesco’s finest Grated cheese would be in the growth stage because prices are lower at this stage. With the trend of Tesco’s shoppers people will be buying grated cheese because they don’t have the time to grate cheese and its an easier option. On the other hand Tesco’s lard is in decline this is because it is unhealthier and there are now cheaper and more healthier options.


This is what happens at each stage :

Introduction- The need for immediate profit is not a pressure. The product is promoted to create awareness. Limited numbers of product are available in few channels of distribution.


Growth- Competitors are attracted into the market with very similar. Products become more profitable and companies advertising spend is high and focuses upon building brand. Market share tends to stabilise.


Maturity- products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate products and brands are key to this. intense competition occur. At this point the market reaches saturation. Promotion becomes more widespread and uses a greater variety of media.


Decline- Downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting.


BCG

The Boston matrix is another marketing tool, a business would place the products under each stage. Each part of the matrix has its own role

Dogs- These are products that have a low share of a low growth market. They do not generate cash for the business. An example of this would be Tesco’s lard.


Question marks- These are products that have a low share of a high growth market. They consume recourses and generate little in return. They use more money as a business attempts to increase market share. An example of this would be Tesco mobile.


Cash Cows- These are products with a high share of a low growth market. Cash cows generate more and more than is invested in them. An example of one would be own brand food.


Stars- Stars are products that are high in growth markets with a high share. Stars generate high income. An example would be Tesco’s Finest range.


Tesco has a balance in its portfolio, this is important because funds created by cash cows, is used to make turn question marks into stars, which may become a cash cow. Some question marks will become dogs instead.



ANsoff MAtrix





The Ansoff Growth matrix is a tool that helps businesses decides their product and market growth strategy. Ansoff’sproduct/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.



Market penetrations man objectives are t Maintain or increase the market share of current products, Secure dominance of growth markets and Restructure a mature market by driving out competitors and Increase usage by existing customers. Tesco maintains and increases its market share by having a competitive pricing strategy , huge add campaigns showing this and sales promotions an example of this s when Tesco’s how the prices compared t Sainsbury's on TV adds.


Market development is when a business seeks to sell its existing products into new markets. Tesco has done this by using New geographical markets; for example they have exported there product s to new country such as planned.


Product developments when a business develops a new product to sell in an existing market Tesco uses this strategy an example of how it’s done is when Tesco sells a new products and they offer a conditional offer at a discounted price

Diversification can take place in two different ways when a business produces a new product in an area that they have an understanding about , or a completely new one. Tesco’s is a very good example of this as they operate a banking and financial service that they had an understanding of.



SWOT Analysis


SWOT stands for strengths, weaknesses, opportunities and threats. It’s a useful way for a business to examine the relationships between a business and its marketing environment.

Doing a SWOT analysis involves research into a business current and future position. The main aim is to match a business weaknesses and strengths internal with the external of opportunities and threats. SWOT draws together all the analytical techniques used. It’s the best way of producing a summary; this then allows a business a basis for developing marketing objectives.

Strengths- This refers to the internal environment of the business, which provide the business with a competitive edge. For example Tesco’s In store setup is highly effective.


Weaknesses- These are also internal aspects of an organisation. These are were a business is not working as well in comparison to other businesses. For example in some Tesco stores staff aren’t trained well on the till system.


Opportunities- These focus on events and development external to an organisation. In the case of Tesco it could include the new territories for a product or service. Or a new segment of a market.


Threats- Threats are external to a business, which could damage performance overall. In Tesco’s case a threat could come from a change in governmental policy, such as a rise in tax.


When a business has identified the main points they are made into the marketing objectives.


Smart Objectives


All businesses no matter what shape and size set objectives. The objectives can be at a variety of levels, from small individual target (to increase people served per hour) to a company one (TO grow the UK core). TO be effective and measurable objectives should be smart.


Specific- The objective should clearly state and be focused


Measurable- So the business can see how it is preforming. BY using a percentage or amount within the objective.


Achievable- For an objective to be useful, it needs to be something that the business can do.


Realistic- It’s important that realism is used because it can affect shareholders if the business isn’t achieving the goals set because they are not realistic.


Time-related- objectives must relate to a time scale, this to motivate every one as there is a deadline to meet.


An example of an objective for Tesco could be “To sell 20% more dairy products per week in the next year"


Determination of strategy and tactics- implementing changes and evaluation


Marketing strategy involves analysing and selecting ta target market/s. and creating and maintain a marketing mix. The seven ps. Product, Price, Place, Promotion, People, process and physical evidence. These need to satisfy the customers’ needs as well as the business its self. A marketing plan needs to articulate a plan that is going to work best for the business. The business needs to think about recourses and tactics to meet its objective. A marketing plan will include executive summary, situation analysis (swot), company recourses and marketing objectives.


The marketing strategies will include :

-       Identification of the market

-       Development of the marketing mix to reach target market

-       Making finatiol projections (what they want from plan)

-       Putting in place control systems and evaluating criteria (these consist of establishing performance and standards and evaluating the actual performance against what was planned original).

Marketing plans involve the implementing of change. This could affect any of the marketing mix elements and in some cases a few or all. These have to be carefully planned, accurate and planned in good time. They also need to be executed to the best of of the businesses ability. IF anything has developed from the plan it is important that it is putt in place.