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

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

Implementation in Marketplace Marketing Mix Product, Price, Place, Promotion, Brand Situation Analysis Consumer Company Competitors Collaborators Environmental Factors 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 Market Environment Economic Factors Political Factors Political Factors Technological Developments Societal Trends Societal Trends

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

Implementation in Marketplace Marketing Mix Product, Price, Place, Promotion, Brand Situation Analysis Consumer Company Competitors Collaborators Environmental Factors 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 Users: Efficiency/profitCaution: Majority Fallacy (20%) (32%) (88%) (48%) (95%)

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 Depth- Interview 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 Choice Alternative Evaluation Search Need Recognition Post-Purchase Evaluation Consumer-side

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 Choice Alternative Evaluation Search Need Recognition Post-Purchase Evaluation Consumer-side Marketer-side Action Desire Interest Awareness

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