Chapter 2: Analyzing the Current Situation The Marketing Plan Handbook Fourth Edition Marian Burk...

Chapter 2: Analyzing the Current Situation

The Marketing Plan Handbook Fourth Edition

Marian Burk Wood

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Environmental Scanning and Analysis

Involves the analysis of both: Internal Factors, and External Factors.

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The Macro- and Micro-environments To formulate a flexible and practical marketing

plan, one needs to properly track and differentiate between macro-environmental and micro-environmental factors:

Macro-environmental factors are broad forces

that impact overall marketing strategy and

performance.

Micro-environmental factors more directly

influence marketing strategies and activities.

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The Macro- and Micro-environments Macro-environmental factors:

Demographic. Economic. Ecological. Technological. Political-legal. Social-cultural forces.

Micro-environmental factors: Customers. Competitors. Channel members, partners, suppliers and employees.

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SWOT Analysis Strengths

Weaknesses

Opportunities

Threats

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Internal Factors Mission. Resources. Offerings. Previous results. Business relationships. Keys to success and warning signs.

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External Factors

Demographics.

Economic.

Ecological.

Technology-related.

Political-Legal.

Social-Cultural.

Competitors.

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Internal Analysis: Mission

Mission: States the firm’s fundamental purpose. Indicates how the firm will add value.

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Internal Analysis: Resources

Human.

Financial.

Informational.

Supply.

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Internal Analysis: Offerings

Examining what the firm is currently offering in the way of goods and services:

Fit with mission and resources. Affirm role of each line and item.

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Internal Analysis: Previous Results

Includes: Sales (dollars and units). Profitability. Customer acquisition and retention costs. Other financial results.

Helps separate the effective programs from the less-effective programs.

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Internal Analysis: Business RelationshipsIncludes relationships with: Suppliers. Distributors. Other business partners.

Examine: Capacity. Quality. Value provided.

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Internal Analysis: Keys to Success and Warning SignsKeys to Success:

Identify special factors most crucial to success. Maintain focus on key priorities.

Warning Signs Indicate potential problems with the plan.

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External Analysis: Demographic Trends

Examined by target market:

Consumer Demographics

Business Demographics

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External Analysis: Consumer Demographic TrendsKey consumer demographic trends include: Population growth Population composition:

Age Gender Ethnicity Religious makeup Education Occupation Household size Income

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External Analysis: Business Demographic Trends Size and growth of industries

Number of companies. Number of locations or branches. Number of employees. Sales revenues.

Trends in new business formation may signal emerging opportunities.

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External Analysis: Economic Trends Must keep an eye on global, national,

regional, and local economic trends. Some measures typically monitored:

Buying power Income Debt Credit Usage

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External Analysis: Ecological Trends

Potential impacts: Availability of raw materials.

Government regulations.

Social attitudes.

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External Analysis: Technological Trends

Key trends include: Smartphones.

Smaller computers.

Digital media.

Incorporation of electronic capabilities into a wider range

of products.

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External Analysis: Political-Legal TrendsLegal Trends: Laws includes international,

federal, state, and local. Related to: Competitive behavior. Pricing. Taxation. Promotion. Distribution. Product liability. Labeling. Product purity.

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External Analysis: Political-Legal Trends

Political Trends Global, national, or local.

Can signal a change in the legal environment.

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External Analysis: Social-Cultural Trends

Key trend: Increasing diversity in markets.

Keep tabs on popular culture. Tends to be volatile.

Core beliefs and values change more slowly over time.

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External Analysis: Competitors Identify:

Current competitors. Possible future competitors.

Learn about the unique competitive advantages of each competitor.

Track trends in market share.

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Porter’s Five Forces Model

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Three Fundamental Business Strategies

Cost Leadership Strategy

Differentiation Strategy

Focus Strategy

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