Market Analysis and Strategy MKT 750 Dr. West

Agenda Pop quiz Marketing Analysis & Strategic Planning Form teams Essential Elements Application: Work on a strategic plan for 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 Value: the difference between what consumers give up (pay with resources) and the benefits they receive in return

Perceived Value Value = Cost Benefits What are benefits? Costs? How can customers perception of each be influenced?

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

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

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

Situation Analysis The process of analyzing: Consumer characteristics & trends Resources of the Company Current and potential Competitors Current and potential Collaborators Technological, Legal, Political and Economic Environments

Situation Analysis SWOT: Core strengths? Current weaknesses? What opportunities exist? What threats do we face?

Situation 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?                                      

Situation Analysis Company What are ‘s Strengths? Weaknesses? Resources: Finances, Employees, Production, Development and Design, Research,Facilities, Marketing/Advertising What are ‘s Strengths? Weaknesses?

Situation Analysis Competitors Assess ‘s competition: Who are they? What are their advantages/disadvantages? How will competitors react? Assess ‘s competition:

Situation 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?

Situation 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.

Government Regulations Situation Analysis Government Regulations State of the Economy Market Environment Physical Conditions Technology

Environmental Factors 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

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

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

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 Towns & Gowns:  College Town Singles This cluster is composed of thousands of penniless 18-24 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

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?

Food for thought Who 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?

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

Assignment Read Chapter 7 & “Marketing to Muggles” Memo 1: Conduct your “Customer Depth Interview” before next Monday Write-up your results for next Wednesday