Market Analysis and Strategy

MKT 750 Dr. 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

Implementation in Marketplace Situation Analysis Consumer Company Competitors Collaborators Context STP Segmentation Targeting Positioning Marketing Mix Product, Price, Place, Promotion, Brand

Implementation in Marketplace Situation Analysis Consumer Company Competitors Collaborators Context STP Segmentation Targeting Positioning Marketing Mix Product, Price, Place, Promotion, Brand

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

Political Factors Context (Environment) Economic Factors Technological Developments 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 Analysis

Strengths: Weaknesses: Opportunities: Threats:

Implementation in Marketplace Situation Analysis Consumer Company Competitors Collaborators Environmental Factors STP Segmentation Targeting Positioning Marketing Mix Product, Price, Place, Promotion, Brand

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%)

Bourbon Canned Ham Colas

95% 86% 90% 5%

(20%)

14%

(32%)

10%

(88%) Hair Tonic

87% 13%

(48%) Toilet Tissue

Heavy Users: Efficiency/profit 71% 29% Caution: Majority Fallacy

(95%)

Identifying Market Segments

Consumer Characteristics

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:

apartment dwellers.

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

Identifying Market Segments

Psychographics/ Benefits

Psychographics

Lifestyle segmentation VALS 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, Hobbies Media Habits Prizm Clusters Musical Taste, Preferred Cars Aspirational Role Models

Strategy

Targeting Select 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 data Heavy Users/Owners/Viewers versus AIO/Personality Table 1 and 1a: Household Characteristics Table 2 and 2a: Female Employment & Motivation Table 3 and 3a: Income & Education Table 4 and 4a: Occupation Table 5 and 5a: Age & Ethnic Subculture Table 6 and 6a: Gender & Geographic Region Table 7 and 7a: Personality

Assignment

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