MARKET ANALYSIS
Session 3
Monday, April 3 2000
SESSION OUTLINE
• Company’s micro and macro-environment
• Analysis of product demand
– static
– dynamic
• Competitive analysis
• Competitive strategy: video « Marketing
Warfare »
Macroenvironment:
external forces on the company
Natural
Technological
Economic
Political
Demographic
Cultural
Company
The Company’s
Microenvironment
• Marketing success depends on others:
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other departments in the firm
suppliers
marketing intermediaries
customers
competitors
relevant publics
Microenvironment:
company’s internal environment
R&D
Purchasing
Finance
Manufacturing
Top
management
Accounting
Marketing
DEMAND ANALYSIS
• Descriptive analysis:
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number of customers
average purchase
geographical concentration
20/80 rule
• Dynamic analysis
– Product Life Cycle
Product Life-Cycle Strategies
Sales
Profit
($)
Sales
Profits
Loss
($)
Development Introduction
Growth
Decline
Maturity
COMPETITIVE ANALYSIS FLOWS
OUT OF CUSTOMER ANALYSIS
• Understand customers needs and wants
• Identify current and potential competitors
• Perform industry analysis, identify suppliers and
common intermediaries
• Understand your competitors
• Determine competitor strategies (present and
future)
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COMPETITORS TO
CONSIDER
CURRENT
– market structure analysis
– perceptual analysis
• POTENTIAL (potential entry of new
competitors)
– remain alert to their possibility
– depends on
• barriers to entry
• expectations about competitive reactions
BARRIERS TO ENTRY OF NEW
COMPETITORS
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Economies of Scale
Lack of Product Differentiation
Capital Requirements
Access to Distribution Channels
Buyer Switching Costs
Government Policies and Regulations
HOW DO YOU COMPETE?
• Offensive Strategies
– Concentrate on the competitors’ relative
weaknesses
– 5 types
• Defense Strategies
– Goal is to counter each offensive strategy
– 6 types
OFFENSIVE STRATEGIES
1) Frontal attack
– direct confrontation
– most difficult and dangerous
2) Flanking attack
– addresses gaps in
competition’s market
coverage
3) Encirclement
– forcing competitor to spread
resources thin by probing on
many fronts at once
4) Bypass attack
– avoids confrontation
– diversification
5) Guerrilla warfare
– small, intermittent attacks
DEFENSE STRATEGIES
1) Position Defense
– fortify firm’s existing
position
2) Mobile Defense
– Market broadening
3) Preemptive Defense
– Attacking first (first strike)
4) Flank-positioning
– extend firm’s offerings into
new segments to protect
existing
5) Counter-offensive
Defense
– gathering resources and
counter-attacking when
threatened
6) Strategic Withdrawal
NEXT SESSION
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Wednesday, April 5 2000
Segmentation, targetting, positioning
Chapter 4
Articles in readings package
Read: Sally Goodman visits Hydro-Québec