Market Analysis and Strategy

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

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

Situation Analysis • The process of analyzing: • Consumercharacteristics & trends • Resources of the Company • Current and potential Competitors • Current and potential Collaborators • The Context or environmental factors

PEST Analysis Economic Factors Political Factors Context (Environment) 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

Situation Analysis Consumer Company Competitors Collaborators Environmental Factors Implementation in Marketplace 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” (20%) (32%) (88%) (48%) (95%) Heavy Users: Efficiency/profit Caution: Majority Fallacy

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: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 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 effectivelyestablish 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 planbeginning 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

Market Analysis and Strategy