2Agenda Pop quiz Marketing Analysis & Strategic Planning Form teams Essential ElementsApplication: Work on a strategic plan forForm teams
3Marketing StrategyInvolves the allocation of resources to develop and sell products or services that consumers will perceive to provide more value than competitive goodsValue: the difference between what consumers give up (pay with resources) and the benefits they receive in return
4Perceived Value Value = Cost Benefits What are benefits? Costs? How can customers perception of each be influenced?
5Foundations of Strategy A thorough understanding of:Domestic and global market trendsModels to predict purchase and consumptionCommunication methods to reach target markets most effectively
8Situation Analysis The process of analyzing: Consumer characteristics & trendsResources of the CompanyCurrent and potential CompetitorsCurrent and potential CollaboratorsTechnological, Legal, Political and Economic Environments
9Situation Analysis SWOT: Core strengths? Current weaknesses? What opportunities exist?What threats do we face?
10Situation 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?
11Situation Analysis Company What are ‘s Strengths? Weaknesses? Resources: Finances, Employees, Production, Development and Design, Research,Facilities, Marketing/AdvertisingWhat are ‘sStrengths?Weaknesses?
12Situation Analysis Competitors Assess ‘s competition: Who are they? What are their advantages/disadvantages?How will competitors react?Assess ‘s competition:
13Situation 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?
14Situation 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.
15Government Regulations Situation AnalysisGovernment RegulationsState of the EconomyMarket EnvironmentPhysical ConditionsTechnology
17Strategy 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
21Consumer Characteristics Demographics: Age, Gender, Income, etc…These are widely available but limited in usefulnessThey tell us who buys, or doesn’t buy our product, but not why
22Consumer Characteristics GeodemographicsExamine regional differences in demographicsUseful for store location decisions and targeting direct mailingsWhy?Because “birds of a feather flock together”
23Prizm byTowns & Gowns: College Town Singles This cluster is composed of thousands of penniless 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
25Psychographics Lifestyle segmentation VALS is based on primary motivation and resources
26Segment ProfilesOnce a basis for segmentation has been determined, segments should be profiled by describing them on as many levels as possible.
27StrategyTargetingSelect segments of the market to offer products and servicesWho can we most efficiently and effectively establish a relationship with better than our competitors?What criteria should be used to select a target market?
28StrategyPositioningHow your product/company is perceived in the hearts and minds of your customers?Price leader/Innovator/Fashion leader/ Quality/ServiceWhat associations come to mind?
29Food for thoughtWho 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?
30Summary A firm needs to: Analyze the market 4 C’s (Company, Competitors, Collaborators, Customers), and environmental factorsDevelop a strategic plan beginning withSegmentation, Targeting, and PositioningFollowed by tactical decisionsProduct (Brand), Price, Promotion, and PlaceImplementation issues
31Assignment Read Chapter 7 & “Marketing to Muggles” Memo 1: Conduct your “Customer Depth Interview” before next MondayWrite-up your results for next Wednesday