Market Analysis and Strategy

MKT 750Dr. West

Agenda

vs Free Association Task Reactions to merger

Marketing Analysis & Strategic Planning Essential Elements (5Cs, STP, 4Ps) Situation Analysis / Strategy / Marketing Mix

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

Context

STPSegmentation

TargetingPositioning

Implementationin Marketplace

Marketing Mix Product, Price, Place,

Promotion, Brand

Situation AnalysisConsumerCompany

CompetitorsCollaborators

Context

STPSegmentation

TargetingPositioning

Situation Analysis

The process of analyzing: Consumer characteristics & trends Resources of the Company Current and potential Competitors Current and potential Collaborators The Context or environmental factors

PEST Analysis

Context(Environmen

t)

Context(Environmen

t)

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?

Situation Analysis

Consider the situation and are 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 context (environmental factors and trends)?

                 

Situation Analysis

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

What are &

Strengths?

Weaknesses?

Situation Analysis

Competitors

Who are they?

What are their advantages/disadvantages?

How will competitors react?

Situation Analysis

Consumers

Who are our current and potential customers?

What do we know about these individuals?

How do they compare to those who shop at the competitor stores?

Situation Analysis

Collaborators

Whose strengths best complement ours?

How will each partner benefit from a strategic alliance?

Risks & rewards of collaboration?

SWOT AnalysisStrengths:

Weaknesses:

Opportunities:

Threats:

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

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

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

Demographics: Age, Gender, Income, etc…

Consumer Characteristics

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

Why?

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

Psychographics

Lifestyle 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.

& Customer Profile

Age, Education, Income (SES) Occupation, HobbiesMedia Habits Prizm ClustersMusical Taste, Preferred CarsAspirational Role Models

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?

Summary

A firm needs to: Analyze the market

5 C’s (Company, Competitors, Collaborators, Customers, and Context) Develop a strategic plan beginning with Segmentation, Targeting, and Positioning

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

Implementation issues

DDB Needham Dataset

Familiarize yourself with the dataHeavy Users/Owners/Viewers versus AIO/Personality

Table 1 and 1a: Household CharacteristicsTable 2 and 2a: Female Employment & MotivationTable 3 and 3a: Income & EducationTable 4 and 4a: OccupationTable 5 and 5a: Age & Ethnic SubcultureTable 6 and 6a: Gender & Geographic RegionTable 7 and 7a: Personality

Assignment

Read Chapter 12 (pp 422 - 426, 429 - 445)Topic: Self-Concept & LifestyleAssignment:

Visit www.sric-bi.com/VALS and www.yankelovich.com and complete the VALS and Monitor surveys.  Bring your results to class.DDB Needham Exercise: p. 447 # 2