Market Analysis and Strategy

MKT 750Dr. West

Agenda

Pop quizMarketing Analysis & Strategic Planning

Essential Elements

Discuss Shopping Insights DiaryForm 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

What is perceived value?

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 & trends Resources of the Company Current and potential Competitors Current and potential Collaborators

PEST Analysis

Market Environment

Market Environment

Economic Factors

Economic Factors

Political Factors

Political Factors

Technological

Developments

Technological

Developments

Societal Trends

Societal Trends

Situation Analysis

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

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 Useful for identifying “prospects”

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

New Beginnings: Filled with young, single adults, New Beginnings is a magnet for adults in transition. Many of its residents are twenty-something singles and couples just starting out on their career paths -or starting over after recent divorces or company transfers. Ethnically diverse -with nearly half its residents Hispanic, Asian or African-American- New Beginnings households tend to have the modest living standards typical of transient apartment dwellers.

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?

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

Shopping Insights Diary

Introspective Approach vs Depth-Interview

Think through the purchase process involved in three recent purchases. You will need to provide a description of how and why you decided to purchase the product, as well as offer insights to other consumers like yourself, and marketers.

Consumer Decision Making

ChoiceAlternativeEvaluation

SearchNeed

RecognitionPost-Purchase

Evaluation

Consumer-side

Buying A New Car

Dream Car:

Need Recognition:

Subaru Legacy had 198,500 miles on it One night the rear window stopped working (when it was partially open) I suggested it was time…

Search:

Determinant attributes: Holds 6 passengers, a cello, and a double bass Not an SUV

Our “consideration set”?

Our consideration set

Toyota Sienna -- CR “Best Buy”

Volvo XC70 --Turbo and AWD Subaru Outback

Search:

Visit to Edmunds to determine price and read consumer ratings

Toyota Sienna rating 8.4 out of 10, price $30K

Volvo Cross Country rating 9.6 out of 10, price $40K

Subaru Outback (L.L. Bean) rating 8.9 out of 10, price $32K

Search:

Called local dealers to check on availability

Found a 1999 Volvo Cross Country forest green, leather seats, sunroof, climate control… brought it home for hubby to test drive

Evaluation:

Called the dealer back to get their best offer Went “shopping” with the kids

Test drove a 2000 Volvo Cross Country

Went to the Toyota dealer, but didn’t even test drive the Sienna Went to the Subaru dealer and test drove a new L.L. Bean Outback

Post-purchase evaluation :

I check out the latest classifieds on Sunday morning to see if we paid too much

After getting the window fixed a few days later my husband felt a bit disloyal to his Subaru I suggested we keep the Subaru as a back-up car

Consumer Decision Making

ChoiceAlternativeEvaluation

SearchNeed

RecognitionPost-Purchase

Evaluation

Consumer-side

Marketer-side

Action Desire Interest Awareness

Here we go again…

Need Recognition

Our daughter got her driving permit in FebruaryNext year she will be able to drive herself to school, music lessons, orchestra rehearsals, musical rehearsals, gigs …That means I won’t have a car!!

Search:

Determinant attributes: Needs to hold a double bass Can’t be any bigger than the Volvo 240

Our “consideration set”?

Search:

Volvo S40Rating 8.8 out of 10

Subaru ForesterRating 9.2 out of 10

Volkswagen PassatRating 9.2 out of 10

Search:

Many visits to Edmunds Invoice prices

Went to the Auto Show Looking to see if we were missing something

Visited Volvo & Subaru dealershipsTest drove the S40 & Forester

Evaluation:

I like them both! The Forester was better suited for transporting a bassWe got a call from a Volvo sales person who had just the thing we were looking for ... when we got there it had been soldWe stopped at the Subaru dealership and the sales person found us exactly what we were looking for so we bought it!

Post purchase evaluation:

I’m happy to have a car that fits the bass, or garage, and looks great!My husband is happy to have a Subaru back in the familyMy daughter is thrilled that she will have a car to drive next fall

Assignment

Read Chapters 3 & 4 Memo 1: Shopping Insights Diary due on Tuesday