Market Analysis and Strategy

MKT 750Dr. West

Agenda

Pop quizMarketing Analysis & Strategic Planning

Essential ElementsApplication: Work on a strategic plan for

Form teams

Marketing Strategy

Involves the allocation of resources to develop and sell products or services that consumers will perceive to provide more value than competitive goods

Value: the difference between what consumers give up (pay with resources) and the benefits they receive in return

Perceived Value

Benefits

Value =

Cost

What are benefits? Costs?

How can customers perception of each be influenced?

Foundations of Strategy

A thorough understanding of: Domestic and global market trends

Models to predict purchase and consumption

Communication methods to reach target markets most effectively

Implementationin Marketplace

Marketing Mix Product, Price, Place,

Promotion, Brand

Situation AnalysisConsumerCompany

CompetitorsCollaborators

Environmental Factors

STPSegmentation

TargetingPositioning

Implementationin Marketplace

Marketing Mix Product, Price, Place,

Promotion, Brand

Situation AnalysisConsumerCompany

CompetitorsCollaborators

Environmental Factors

STPSegmentation

TargetingPositioning

Situation Analysis

The process of analyzing:Consumer characteristics & trendsResources of the Company Current and potential CompetitorsCurrent and potential CollaboratorsTechnological, Legal, Political and Economic Environments

Situation Analysis

SWOT: Core strengths? Current weaknesses? What opportunities exist? What threats do we face?

Situation Analysis

Consider the situation is currently facing.

What do we know about the company? What do we know about its competitors? Who does the company collaborate with? What do we know about consumers? What about environmental factors and trends?

                                     

Situation Analysis

Company Resources: Finances, Employees, Production, Development and Design, Research,Facilities, Marketing/Advertising

What are ‘s

Strengths?

Weaknesses?

Situation Analysis

Competitors

Who are they?

What are their advantages/disadvantages?

How will competitors react?

Assess ‘s competition:

Situation Analysis

CollaboratorsWhose strengths best complement ours?

How will each partner benefit from a strategic alliance?

Risks & rewards of collaboration?

Who are ‘s current and potential collaborators?

Situation Analysis

Consumer Insights: An understanding of consumers’ expressed and unspoken needs and realities that affect how they make life, brand, and product choices.

Includes: demographic trends, personal and social influences, motivation, attitudes, knowledge, lifestyle, and consumption patterns.

Situation Analysis

Market Environment

Market Environment

Government

Regulations

Government

Regulations

State of the

Economy

State of the

Economy

Physical Conditio

ns

Physical Conditio

ns

Technology

Technology

Implementationin Marketplace

Marketing Mix Product, Price, Place,

Promotion, Brand

Situation AnalysisConsumerCompany

CompetitorsCollaborators

Environmental Factors

STPSegmentation

TargetingPositioning

Strategy

Segmentation:

Process of identifying a group of people similar in one or more ways, based on a variety of characteristics and behaviors.

Goal: minimize variance within groups and maximize variance between groups

Identifying Market Segments

Behavioral

Behavioral Segmentation:

“Heavy versus Light” Users – “80/20 rule” Heavy Half Light Half

(top 50%) (bottom 50%)

5%95%

86%

90%

87%

71%

14%

10%

13%

29%Toilet Tissue

Hair Tonic

Colas

Canned Ham

Bourbon

Heavy Users: Efficiency/profit Caution: Majority Fallacy

(20%)

(32%)

(88%)

(48%)

(95%)

Identifying Market Segments

ConsumerCharacteristics

Consumer Characteristics

Demographics: Age, Gender, Income, etc…

These are widely available but limited in usefulness They tell us who buys, or doesn’t buy our product, but not why

Consumer Characteristics

Geodemographics Examine regional differences in demographics Useful for store location decisions and targeting direct mailings

Why? Because “birds of a feather flock together”

Prizm by

Towns & Gowns:  College Town SinglesThis cluster is composed of thousands of penniless 18-24 year olds and highly educated professionals, all with a penchant for prestige products that are beyond their evident means. Age Groups: Under 24 Dominant Race:  White, High Asian

Identifying Market Segments

Psychographics/

Benefits

PsychographicsLifestyle segmentationVALS is based on primary motivation and resources

Segment Profiles

Once a basis for segmentation has been determined, segments should be profiled by describing them on as many levels as possible.

Strategy

TargetingSelect segments of the market to offer products and services Who can we most efficiently and effectively establish a relationship with better than our competitors?

What criteria should be used to select a target market?

Strategy

Positioning How your product/company is perceived in the hearts and minds of your customers?

Price leader/Innovator/Fashion leader/ Quality/Service What associations come to mind?

Food for thought

Who are ‘s current and potential customers? (age, income, lifestyle)Why do they prefer to its competitors?How well is positioned relative to its competitors?How can leverage its brand?

SummaryA firm needs to:

Analyze the market 4 C’s (Company, Competitors, Collaborators, Customers), and environmental factors

Develop a strategic plan beginning with Segmentation, Targeting, and Positioning

Followed by tactical decisions Product (Brand), Price, Promotion, and Place

Implementation issues

Assignment

Read Chapter 7 & “Marketing to Muggles”Memo 1:

Conduct your “Customer Depth Interview” before next MondayWrite-up your results for next Wednesday