4.2 Marketing Planning

a) The role of marketing planning AO2

b) Segmentation, targeting (target market) and positioning (position maps) AO2, AO$

c) The difference between niche market and mass market AO2

d) The importance of having a unique selling point/proposition (USP) AO2

e) How organizations can differentiate themselves and their products from competitors AO3

Bargain products

Goods or services that are those perceived by customers to be of high quality but sold at a low price.

Consumer profiles

The demographic and psychographic characteristics of consumers in different market segments.

Cowboy products

Goods or services that are perceived by customers to be of low quality but high price.

Demographic segmentation

The process of splitting consumers according to statistical characteristics of the population, such as age, gender, family size, religion, and ethnicity.

Differentiation

The process of distinguishing an organization’s products from those of other firms in the same industry.

Economy brands

Goods or services that are perceived by customers to be of low quality and sold at a low price.

Geographic segmentation

The marketing process that involves characterising consumers according to their different geographical locations.

Market

A market is the collective term for the buyers and sellers of a particular good or service.

Market segment

A distinct group of customers with similar characteristics, tastes, and preferences.

Market segmentation

The process of dividing a market for a product into smaller or distinct groups of customers in an effort to meet their specific desired needs and wants.

Marketing mix

The key elements of a marketing strategy to ensure its success in meeting the needs and wants of the organization’s customers and the firm’s marketing objectives.

Marketing objectives

These are the goals or targets that help to give marketing teams (or marketing departments) a sense of purpose and direction.

Marketing plan

A document that shows the marketing objectives and marketing strategy of a particular business.

Marketing planning

The structured process of formulating marketing objectives and appropriate marketing strategies to achieve these goals.

Marketing strategies

The different long-term actions used by an organization to achieve its marketing goals.

Mass markets

A marketing approach that focuses on supplying to wide-ranging groups of customers in a market, without having split them into separate market segments, such as the markets for bottled water or breakfast cereal.

Niche markets

Marketing approach that focuses on supplying highly specialised products to cater for a small and select target market.

Objective

An objective is a target or goal a business organization strives to achieve.

Premium products

Goods or services that are perceived by customers to be of high quality and high price.

Product differentiation

Refers to the process by which firms attempt to make their goods and services different from those provided by other firms in the market in order to increase their own sales revenue.

Product position map

Also known as a perception map, this is a graphical illustration of customer perceptions of a business, its products, and/or brands in comparison to other firms in the industry.

Psychographic segmentation

Segmentation that involves characterising consumers according to people’s lifestyle choices and personal values.

Socio-economic segmentation

The process of splitting the market according to consumer or household income levels. This is often linked to their type of profession and/or their level of educational attainment.

Target market

The group of customers that an organization focuses on selling its products to.

Targeting

Targeting is the marketing practice of creating and using an appropriate marketing mix and marketing strategies to cater for different market segments.

Unique selling point (USP)

An exclusive feature or aspect of a business, its products or brands that makes it distinct from others in the same industry.

Evaluate how restaurants can differentiate themselves and their products from competitors.

Product differentiation refers to the process of distinguishing a product or service from others in the market through unique features or attributes. In the case of Hot Tamales, their product differentiation lies in the subtle blend of fiery spices into most of their signature dishes. This unique flavor profile sets them apart from other restaurants in Wellington, offering customers a distinct culinary experience.

A Unique Selling Proposition is a marketing concept that highlights what makes a product or service unique and why customers should choose it over competitors. Hot Tamales' USP revolves around their blend of fiery spices, which appeals to customers seeking bold and flavorful cuisine. Additionally, their target niche of corporate luncheons and fine evening dining further differentiates them from more casual dining options in the area.

Pros

Competitive Advantage: By offering a unique product or experience, restaurants can gain a competitive edge and attract customers who are seeking something different.

Brand Loyalty: Unique offerings can foster customer loyalty as patrons develop a preference for the restaurant's distinct flavors or ambiance.

Pricing Power: Differentiated products often command higher prices, allowing restaurants to potentially achieve higher profit margins.

Cons

Costly Development: Creating and maintaining unique menu items or experiences can require significant investment in research, development, and sourcing of ingredients.

Market Segmentation: Narrowing the focus to a specific niche market may limit the restaurant's appeal to a broader customer base.

Imitation by Competitors: Successful differentiation strategies may be imitated by competitors, diminishing the restaurant's uniqueness over time.

Product differentiation is recommended as a strategy for Hot Tamales.Hot Tamales effectively differentiated itself from competitors by offering a distinctive culinary experience centered around their fiery spice blend. This differentiation, coupled with a strategic focus on target niche markets and exceptional quality in all aspects of the dining experience, contributed to their success. However, maintaining their unique selling proposition and staying ahead of competitors will require ongoing innovation and attention to customer preferences.