Market Analysis and Strategy

1. Market Analysis and Strategy MKT 750 Dr. West

2. Agenda • Pop quiz • Marketing Analysis & Strategic Planning • Essential Elements • Application: Work on a strategic plan for • Form teams

3. 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 • Value: the difference between what consumers give up (pay with resources) and the benefits they receive in return

4. Perceived Value Benefits Value = Cost • What are benefits? Costs? • How can customers perception of each be influenced?

5. 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

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

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

8. Situation Analysis • The process of analyzing: • Consumer characteristics & trends • Resources of the Company • Current and potential Competitors • Current and potential Collaborators • Technological, Legal, Political and Economic Environments

9. Situation Analysis • SWOT: • Core strengths? • Current weaknesses? • What opportunities exist? • What threats do we face?

10. Situation Analysis • Consider the situation is 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 environmental factors and trends?

11. Situation Analysis • Company • Resources: Finances, Employees, Production, Development and Design, Research,Facilities, Marketing/Advertising • What are ‘s • Strengths? • Weaknesses?

12. Situation Analysis • Competitors • Who are they? • What are their advantages/disadvantages? • How will competitors react? • Assess ‘s competition:

13. Situation Analysis • Collaborators • Whose strengths best complement ours? • How will each partner benefit from a strategic alliance? • Risks & rewards of collaboration? • Who are ‘s current and potential collaborators?

14. Situation Analysis • Consumer Insights: • An understanding of consumers’ expressed and unspoken needs and realities that affect how they make life, brand, and product choices. • Includes: demographic trends, personal and social influences, motivation, attitudes, knowledge, lifestyle, and consumption patterns.

15. Situation Analysis Government Regulations State of the Economy Market Environment Physical Conditions Technology

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

17. 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

18. Identifying Market Segments Behavioral

19. Behavioral Segmentation: • “Heavy versus Light” Users – “80/20 rule” (20%) (32%) (88%) (48%) (95%) Heavy Users: Efficiency/profit Caution: Majority Fallacy

20. Identifying Market Segments Consumer Characteristics

21. 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

22. 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”

23. Prizm by • Towns & Gowns:  College Town SinglesThis cluster is composed of thousands of penniless 18-24 year olds and highly educated professionals, all with a penchant for prestige products that are beyond their evident means. Age Groups: Under 24 Dominant Race:  White, High Asian

24. Identifying Market Segments Psychographics/ Benefits

25. Psychographics • Lifestyle segmentation • VALS is based on primary motivation and resources

26. Segment Profiles • Once a basis for segmentation has been determined, segments should be profiled by describing them on as many levels as possible.

27. Strategy • Targeting • Select segments of the market to offer products and services • Who can we most efficiently and effectivelyestablish a relationship with better than our competitors? • What criteria should be used to select a target market?

28. 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?

29. Food for thought • Who are ‘s current and potential customers? (age, income, lifestyle) • Why do they prefer to its competitors? • How well is positioned relative to its competitors? • How can leverage its brand?

30. Summary • A firm needs to: • Analyze the market • 4 C’s (Company, Competitors, Collaborators, Customers), and environmental factors • Develop a strategic planbeginning with • Segmentation, Targeting, and Positioning • Followed by tactical decisions • Product (Brand), Price, Promotion, and Place • Implementation issues

31. Assignment • Read Chapter 7 & “Marketing to Muggles” • Memo 1: • Conduct your “Customer Depth Interview” before next Monday • Write-up your results for next Wednesday