L3 - Internal and External Analysis- Customer and Climate

8/13/2019 L3 - Internal and External Analysis- Customer and Climate

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Internal and External Analysis

Prasanna Salvi


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External Analysis

CUSTOMER

CLIMATE (Environment)

COMPETENCIES


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Internal Analysis

WHAT DOES CUSTOMER in EACH SEGMENT

LIKE = Strength

WHAT A CUSTOMER will not VALUE or Dislikes

= Weakness


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External Analysis


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Focus on Customer

Is there only one Segment ?

Can customer be segmented into various

segments with homogenous needs?


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Flow to define segment

1. Customer Need identification

2. Market Emergence

3. Market Boundary Definition4. Served Market

5. Customer Segmentation


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Customer Need

Case Analysis : ENO

What is the Generic Need?

ACIDITY RELIEF on 6 seconds (when you havea glass and potable {drinkable} water)

Expectedproduct

BasicProduct

GenericNeed

Causes ofthe Needto arise


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2. Market Emergence




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Market Emergence

Market Potential : Market Size

Market Growth

Profitability (Contribution ) Type of Buying decision

Customer Market Structure


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Defining Market Boundaries

Three dimensions

Technology

Customer Function (Uses)

Customer Group

Forth, Level of Production or distribution


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How broad or narrow should be my

focus?

Coke/ PEPSI

Other Colas

Other carbonated beverages Other cold drinks

Hot beverages

Water Anything that goes down the throat


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Aaker : Future competition

1. Market Expansion

2. Product expansion

3. Backward integration4. Forward integration

5. Export of assets or competencies

6. Retaliating or defensive strategies


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2. Market Emergence




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Served Market Alternatives

1. Product/ Market Concentration

2. Product Specialization

3. Market Specialization4. Selective Specialization

5. Full coverage


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Brand Need / Occasion Segment Play

Special Needs include for New Mothers, Expectant Mothers, Aged and Handicapped persons etc.

Need

Occasion

SegmentVacation

/Leisure

travel

Busines

s Travel

Sport /

Fitness

Travel\

Adventure

Travel

Casual /

College

Travel

Insitutio

nal /

Customi

sed

Accesso

ries

Special

Needs

Premium

Delsey Y Y

VIP Y Y Y Y Y

Carlton - ?

Footloose - Y Y Y Y

ValueAristocrat Y Y Y Y

Alfa Y Y


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Customer Segmentation

Criterion for Consumer Markets

1. Demographic Age, Sex, Income etc

2. Sociographic SEC

3. Geographic4. Psychographic (social class, lifestage)

5. Consumption patterns (light, mid, heavy)

6. Perceptual patterns (benefit seg, perceptualmapping)

7. Brand Loyalty


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Customer Segmentation

Criterion for Industrial Markets

1. End use segments

2. Product segment (based on tech diff or

production economies)

3. Geographic segments

4. Common buying factor segments

5. Customer Size segments


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Is there a right way to segment?

CUSTOMER NEED

Simple Statistical techniques

Multivariate Statistical techniques


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Scanning the Environment

CLIMATE


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Thoughts deserving attention

1. It is recognized that all products and

processes have performance limits and the

more closer one comes to these limits the

more expensive it becomes to squeeze outthe next generation of performance

improvements.


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Example :

Communication technology was the first one

to make the most sensitive microphones, not

consumer electronics.

Internet changed the way Computers were

used.

Mobiles could pose a threat to the usefulness

of Watches as a product.


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2. Take all competitors seriously. Not

necessarily the ones with largest resources.


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Examples

BPL did not take its competition LG seriously

due to 3 large and long failed attempts at

launching in India. LG had tried by the name

GOLDSTAR and was largely unsuccessful as a

slow, non-technology brand. One DIWALI

when BPL was without stocks , LG took over.


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3. If environment suggests positive advantage,

then one must attack to win & attack even to

play the game.


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4. The attack should begin early. The process of

substitution of one product or process of

another progresses rather slowly at first but

later explodes with certainty so the attackmust not be delayed.


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Example

Attack of Cable TV operators to the new

regulations of internet viewing by allowing

cables to carry internet signals. Today many

city owners have switched to In-cable lines forinternet.


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5. A close tie is needed between CEO and the

operating managers.


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Scan at all levels

Corporate

SBU

Product /Market

PESTEL

Study &incorporate

PESTEL Study &

incorporate

PESTEL

Study &incorporate


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The PESTEL Study


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PESTEL : Political

Economic Interests

Political Stability

Terrorism Political system and groupings

Trade agreements

Independance


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PESTEL : Economic

Per Capita Consumption of product

Inequalities of income distribution

Socialism vs Free Market Economy

OIL Cartels Trade Agreements

Globalisation

Rise of Asian tigers

Collapse of economies

Currency fluctuations


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PESTEL : Social

1. Orientation towards Time

2. Quality

3. Health

4. Environment

5. Home

6. Personal Finance7. Divergence of lifestyles


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PESTEL : Technological

Technology Study

Type ofTechnology

Depends oninterest

Process

InventionCreation of new

product orprocess

InnovationIntroduction

into use

Diffusion

Impetus for itsdevelopment

Use in warfareUse in social

welfare

Commercial use


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Develop the Technology Management

MatrixD

Product

Position

Same Technology Older Different

Technology

Newer Different

Technology

Behind

Competitors

Take traditional

strategic decisions

- assess mktg strategyand Tgt Mkt

- Enhance Product

features

- Improve operational

efficiency

Evaluate viability if

your technology

-Implement newertechnology

-Divest products

based on older

technology

Evaluate availability of

resources to sustain

technology development& full mkt acceptance

-Continue to define new

applications & product

enhancements

-Scale back operations

Ahead of

competition

Define new

applications for the

technology 7 enhance

products accordingly

Take advantage of all

possible profit

Define new applications

for technology & enhance

products accordingly

TECHNOLOGY POSITION


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PESTEL : Legal

Sarbines Oxley

Corporate Governance

Disclosure

Excise Laws

MRTP laws

Consumer Protection act

Advertising Claims related


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Procedure suggested

1. Keep tab on PESTEL

2. Determine relevance of Economic Trend

i. Senior Person

ii. 100 relevant publications

iii. Scanning manager

iv. Reviews all sources

v. Codificationvi. Scanning Committee

vii. Summary


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Procedure suggested

3. Study impact of environmental trend on a

product market

Senior manager or Ad hoc committee

4. Forecast direction of an environmental trend

into future

5. Analyze momentum of the product/market

in the face of the direction of trend (if no

action)


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Procedure suggested

6. Study opportunities that an environment

trend appears to provide

7. Relate outcome of environmental trend on

corporate strategy


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Scenario Building

1. Take figures based on environmental effects

on figures and market of future 3-5 years.

2. Plot probabilities of each happening.

3. Decide course of action or plan for midway

changes.

Documents

L3 - Internal and External Analysis- Customer and Climate