Situation Analysis

Collecting and Analyzing

Marketing Information
External Analysis & Customer Analysis

MBA 2K15
Applied Marketing Strategy
Lecture 3
 HBR Articles

5 Competitive Forces that Shape Strategy

Rediscovering Marketing Segmentation

Case
TiVo Segmentation Analytics
 Lecture Agenda
Situation Analysis Considerations

The Relationships Among Environments in a

Situation Analysis

The Role of External Analysis

The Customer Environment

 Conducting a Situation Analysis

Analysis Alone is Not the Solution

Data and Information are Not the Same

Data: A collection of numbers or facts that have the

potential to inform

Information: Data that has been transformed or

combined with other data in a manner that makes it
useful to decision makers
 Conducting a Situation Analysis

The Benefits of Analysis Must Outweigh the

Costs

Conducting a Situation Analysis is a Challenging

Exercise

One of the most difficult parts of the marketing plan

Should provide a complete picture of three key

environments: (1) Internal, (2) Customer, and
(3) External
Situation Analysis Overview
 The Relationships Among
Environments in a Situation Analysis
 The Role of External Analysis

External analysis should influence strategy by

identifying opportunities, threats, trends, and
strategic uncertainties.
The ultimate goal is to improve strategic
choices decisions as to where and how to
compete.
 The Role of External Analysis

Strategic Decisions
Where to compete
How to compete
External
Analysis

Identification
Trends/future events Analysis
Threats/opportunities Information-need areas
Strategic uncertainties Scenario analysis

Figure 3.1
 Strategic Uncertainties
Strategic Uncertainties Strategic Decisions
Will a major firm enter the Investment in a product market
market?
Investment in a tofu-based product
Will a tofu-based dessert product
be accepted? Investment in a technology
Will a technology be replaced? Commitment to off-shore
manufacturing
Will the Euro strengthen against
other currencies? Investment in a new system
Will computer-based operations A strategy of maintaining price parity
be feasible with current
technology?

How sensitive is the market to

price?
 Strategic Uncertainties

Performance improvements?

What will the Competitive technological

developments?
future demand?
Financial capacity of health care
industry?
 You cant just ask customers what they want and
then try to give that to them. By the time you get it
built, theyll want something new.

Steve Jobs
 The External Environment (1of 2)

Competition
(1) Brand competitors
(2) Product competitors
(3) Generic competitors
(4) Total budget competitors

Share of Wallet Concept

Major Types of Competition
 Stages of Competitive Analysis
(1) Identify all current and potential competitors.

(2) Assess each key competitor.

(3) Assess each key competitors strengths and

weaknesses.

(4) Focus the analysis on each key competitors

marketing capabilities.

(5) Estimate each key competitors most likely

strategies and responses under different
environmental situations.
 The External Environment (2 of 2)
Economic Growth and Stability

Political Trends

Legal and Regulatory Issues

Technological Advancements

Sociocultural Trends
Demographic Trends
Lifestyle Trends
Trends in Cultural Values
 Examples of Trends in the
Sociocultural Environment
Demographic Trends
Aging European population (Comfort Plus)
Increasing population diversity
Population growth in the Sun Belt states
Lifestyle Trends
Clothing has become more casual, especially at work
Growing focus on health and nutrition
Time spent watching television has declined
Trends in Cultural Values
Less focus on me-oriented values
Increasing importance of family and children
Greater focus on ethics and social responsibility
Example
This 1977 ad for a Technics
turntable discusses its
advanced technology. In less
than a decade the compact
disc would render devices for
playing vinyl records obsolete.
How does this illustrate the
importance of being aware of
the technological
environment? How can
companies like Panasonic
prepare for the possible
obsolescence of products that
are currently state-of-the-art?
 The Customer Environment
Who are our Current and Potential Customers?

What do our Customers do with our Products?

Where do Customers Purchase our Products?

When do Customers Purchase our Products?

Why (and How) do Customers Select our Products?

Why do Potential Customers not Purchase our Products?

 Customer Analysis
Segmentation
Segmentation (identifying customer groups that can support
different competitive strategies) can be based on a variety of
customer characteristics, such as benefits sought, customer
loyalty, and applications.
Customer Motivations
Customer motivation analysis can provide insights into what
assets and competencies are needed to compete, as well as
indicate possible SCAs.
Unmet Needs
Unmet needs that represent opportunities (or threats) can be
identified by projecting technologies, by accessing lead users,
by ethnographic research, and by interacting with customers.
 Customer Analysis
Segmentation

Who are the biggest customers? The most

profitable? The most attractive potential
customers? Do the customers fall into any
logical groups based on needs, motivations,
or characteristics?

How could the market be segmented into

groups that would require a unique business
strategy?
Figure 3.2
 Segmentation
How should segments be defined?

Benefit Segmentation

Price Sensitivity

Loyalty

Applications

Multiple Segments versus Focus Strategy

 Examples of Approaches to Defining
Segments
Customer Characteristics Product-Related Approaches

Geographic User type

Type of organization Usage
Size of firm Benefits sought
Lifestyle Price sensitivity
Gender Competitor
Age Application
Occupation Brand loyalty
 The Loyalty Matrix: Priorities

Low Moderate Loyal

Loyalty Loyalty

Customer Medium High Highest

Low
Non-customer High Zero
to
Medium

Figure 3.4
 Customer Analysis
Customer Motivations

What elements of the product/service do customers

value most?

What are the customers objectives? What are they

really buying?

How do segments differ in their motivation priorities?

What changes are occurring in customer motivation? In

customer priorities?
Figure 3.2
 Customer Motivation Analysis

Identify
Motivations

Group and
Structure
Motivations

Assess
Motivation
Importance

Assign Strategic
Roles to Motivations

Figure 3.6
 Customer Analysis
Unmet Needs
Why are some customers dissatisfied? Why are some
changing brands or suppliers?

What are the severity and incidence of consumer

problems?

What are the unmet needs that customers can

identify? Are there some of which consumers are
unaware?

Do these unmet needs represent leverage points for

competitors?
Figure 3.2