Market Analysis and Strategy
MKT 750
Dr. West
Agenda
Pop quiz
Marketing Analysis & Strategic Planning
Essential Elements
Discuss Shopping Insights Diary
Form 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
Situation Analysis
Consumer
Company
Competitors
Collaborators
Environmental Factors
Implementation
in Marketplace
Marketing Mix
Product, Price, Place,
Promotion, Brand
STP
Segmentation
Targeting
Positioning
Situation Analysis
Consumer
Company
Competitors
Collaborators
Environmental Factors
Implementation
in Marketplace
Marketing Mix
Product, Price, Place,
Promotion, Brand
STP
Segmentation
Targeting
Positioning
Situation Analysis
The process of analyzing:
Consumer characteristics & trends
Resources of the Company
Current and potential Competitors
Current and potential Collaborators
PEST Analysis
Economic
Factors
Political
Factors
Market
Environment
Technological
Developments
Societal
Trends
Situation Analysis
SWOT:
Core strengths?
Current weaknesses?
What opportunities exist?
What threats do we face?
Situation Analysis
Consumer
Company
Competitors
Collaborators
Environmental Factors
Implementation
in Marketplace
Marketing Mix
Product, Price, Place,
Promotion, Brand
STP
Segmentation
Targeting
Positioning
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
(top 50%)
Light Half
(bottom 50%)
Bourbon
95%
5%
(20%)
Canned Ham
86%
14%
(32%)
Colas
90%
10%
(88%)
Hair Tonic
87%
13%
(48%)
Toilet Tissue
71%
29%
(95%)
Heavy Users: Efficiency/profit
Caution: Majority Fallacy
Identifying Market Segments
Consumer
Characteristics
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
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.
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
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 DepthInterview
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
Consumer-side
Need
Recognition
Search
Alternative
Evaluation
Choice
Post-Purchase
Evaluation
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
Consumer-side
Need
Recognition
Alternative
Evaluation
Search
Choice
Post-Purchase
Evaluation
Marketer-side
Awareness
Interest
Desire
Action
Here we go again…
Need Recognition
Our daughter got her driving permit in
February
Next 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 S40
Rating 8.8 out of 10
Subaru Forester
Rating 9.2 out of 10
Volkswagen Passat
Rating 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 dealerships
Test drove the S40 & Forester
Evaluation:
I like them both! The Forester was better
suited for transporting a bass
We got a call from a Volvo sales person who
had just the thing we were looking for ...
when we got there it had been sold
We 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 family
My 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