situational analysis(4210)

MARK4210, 2014 Spring, L1/L2

[Class #4]

Situational Analysis

MARK4210: Strategic Marketing

2014 Spring, Section L1/L2

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Overview

Effective marketing strategies are based on solid understanding of internal and marketing environments

Frameworks to collect & analyze information: • 5 C’s Analysis

• Porter’s Five Forces Analysis

• Other Analysis Tools

Information organized, prioritized and synthesized via SWOT Analysis

Source: Marketing Analysis Toolkit: Situation Analysis, Steenburgh & Avery, Harvard Business School, February 4, 2010.


5 C’s Analysis

Allows managers to understand themselves,

customers, external players and forces that affect

business

• Customers

• Company

• Competitors

• Context (Climate)

• Collaborators/Complementers



5 C’s: Customers – Needs Analysis

Understanding the physical, functional, symbolic, emotional and social needs the products fulfills for consumers • Includes both rational and irrational needs

• As well as subconscious or unconscious needs

Analyze direct and indirect product benefits to assess which attributes are important to consumers

Distribution of consumer needs/preferences provides important input into segmentation and targeting decisions



5 C’s: Customers – Types of

Customer Benefits/Values

Economic

• Concerns financial aspects such as price and credit terms

• Price is often primary purchase driver, but, prices can be higher

by providing more functional benefits that lower overall costs

Functional

• Products and services that provide benefits and values that meet

basic expectations and serve specific functions; utility

• Physical and tangible

Psychological

• Typically satisfy status, affiliation, reassurance, risk and security

needs – both individually and socially

• Generally transcends functional benefits and appear higher in

the benefit/value ladder Source: Capon’s Marketing Framework, Capon, Wessex Publishing, 2009


5 C’s: Company

Business Model – how the company makes money

• Components/structures

• Product/service offerings

• Costs/expenses

• Prices/revenues/margins

Competitive Strategy (e.g., Porter’s ‘generic strategies’)

• Low cost (cost leadership)

• Unique differentiation

• Niche (focus)

Competitive Advantage

Core Competency



5 C’s: Company – Core

Competency Company

Traits

Operational

Excellence

Product

Leadership

Customer

Intimacy

Core business

processes that

Sharpen distribution

system and provide no

hassle service

Nurture ideas,

translate them into

products; market them

skillfully

Provide solutions and

help customers run

their businesses

Structure that Has strong, central

authority and a finite

level of empowerment

Acts in an organic,

loosely knit and ever-

changing way

Pushes empowerment

close to customer

contact

Management

systems that

Maintain standard

operating procedures

Reward individuals'

innovative capacity

and new product

success

Measure the cost of

providing services and

of maintaining

customer loyalty

Culture that Acts predictably &

believes “one-size-

fits-all”

Experiments and

thinks "out-of-the-

box"

Is flexible and thinks

"have it your way"


5 C’s: Competitors

Firms that deliver similar products or alternative

solutions

Analysis of their business models, competitive

strategies, competitive advantages, marketing

strategies



5 C’s: Competitors – Identifying

Competition

Source: Product Planning Essentials, Kahn, M.E. Sharpe, 2011

Types Description

Brand (aka

product form,

direct)

Products or companies in the same product

type/category, going after same segment, with same

product features

Product Category

(aka indirect)

Broader view of competition to include products in

different categories with similar features and provide

the same basic function

Generic Refers to existing substitutable product categories;

products that fulfill same need

Competency Companies & products with core capabilities that can

be leveraged to meet the basic customer need

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5 C’s: Competitors – Illustration of

Types of Competition

Competency

Generic

Category/indirect

Market: Affordable,

independent transpo.

Brand/direct

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=6sTqbLKhgJQznM&tbnid=DpKmp5VjssSOkM:&ved=0CAgQjRwwAA&url=http://www.carinsurancecomparison.com/car-insurance-costs-for-a-honda-civic/&ei=v_8eUdTuFOqWmQXaioDYBw&psig=AFQjCNF20FH13WuBtsrUot3FdHfHoVkeUQ&ust=1361072447395993

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5 C’s: Context (Climate)

External factors & environment impacting business model

Six external environments

• Demographic (e.g., age, family structure, race, ethnicity, social

class, gender, education, geography)

• Economic (macroeconomic and microeconomic; e.g., consumer

confidence, inflation, unemployment)

• Socio-cultural (e.g., prevailing worldviews, political/social

ideologies, values, traditions, fashion)

• Political/Legal (e.g., laws, consumer advocacy, safety groups)

• Technological

• Natural


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5 C’s: Collaborators &

Complementers

Collaborators help the firm market products; include

suppliers, distributors, retailers, key influencers

Complementers benefit from firms selling products;

includes complementary product firms


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Porter’s Five Forces Framework

Analyzes industry

dynamics

Five forces that determine

long run attractiveness of

an industry

Highlights profitability

potential for the industry

and competing firms


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Other Analysis Tools

Scenario Planning

Market Structure Analysis

Timeline Cause & Effect Analysis

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Other Analysis Tools: Scenario

Planning – Decision Trees

Reduce Price

Reduce Price

Maintain Price $

$

Maintain Price

Reduce Price

Maintain Price $

$

Company

Action

Competitive

Response

Outcome (Financial,

Qualitative, etc.)

Source: Strategic Marketing Problems – Cases & Comments, 13e, Kerin & Peterson, 2013

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Other Analysis Tools: Scenario

Planning – Payoff Table

Uncertainties

Competitors Maintain

Price (Probability?)

Competitors Reduce

Price (Probability?)

Alternatives

Reduce

Price $ $

Maintain

Price $ $

Source: Strategic Marketing Problems – Cases & Comments, 13e, Kerin & Peterson, 2013

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Other Analysis Tools: Market Structure

Analysis

Total Market (size, market share)

Sub-market (size, market share)



Sub-layer (size, market share)

Sub-layer (size, market share)

X% Y% Z% = 100%

X1% X2% = X%

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Other Analysis Tools: Timeline Cause &

Effect Analysis

Timeline

Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 …

Metrics (e.g.,

Sales,

Trends)

Events/actions/activities

Company

Customers

Competitors

Context

…

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Synthesis – SWOT Analysis

Framework to analyze and interpret information from

5 C’s Analysis, Porter’s Five Forces Analysis, and

other analyses

Extracts the strategic implications for the business

Should identify critical factors affecting the firm –

goal is not simply to list, but to prioritize and pinpoint


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SWOT Analysis Model

Strengths

• Unique resources,

competencies, capabilities

superior to competition AND

relevant to consumers

• NOT a long list, but the most

customer-relevant and

competitively distinct

Weaknesses

• Resources, capabilities,

competencies, inferior to

competition

• Based on understanding

customer needs/

requirements and

distinctive competencies

Opportunities

• Summarizes favorable trends

or developments that lead to

higher sales, profits or new

business opportunities

• Describe external situation,

not desired action/strategy

Threats

• Summarizes unfavorable

trends or developments

that threaten sales, profits

or limits new business

opportunities

• Recognize threats to

avoid or limit impact

Internal

Focus

External

Focus


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Strengths & Weaknesses Matrix –

Prioritization Tools

Source: Adapted from Marketing Management, Kotler & Keller, Pearson, 2012

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Opportunity & Threat Matrix –

Prioritization Tools

Source: Adapted from Marketing Management, Kotler & Keller, Pearson, 2012

MARK4210, 2014 Spring, L1/L2

In-class Case Study

IN-CLASS DISCUSSION ONLY, NOT FOR CIRCULATION, TAKE NOTES AS NECESSARY

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What customer benefits does

McDonald’s provide? Why?

Customer Benefits


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What is the business model of

McDonald’s corporation?

Product Offering

• Fast food

• Consistent quality

• Affordable

• Accessible locations

• Clean (safe)

Components/structures

• Franchisees

• Suppliers

• Management

• Training

• Quality Control

• R&D

Revenues

• Franchise fees (% of sales)

• Marketing fees (% of sales)

• Rental fees (from franchisee

locations, McDonald’s owns/leased

the location; usually % of sales)

Costs

• No direct purchase of food/materials,

but organizes supply of

food/materials to restaurants via

approved third parties

• Structural costs


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What are the competitive advantages of

McDonald’s? Why?


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Who are the competitors of McDonald’s,

Why?

Businesses 1. Brand 1. Product

Category

3. Generic 4. Compe-

tency


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What are the SWOT for McDonald’s

Strengths

•

Weaknesses

•

Opportunities

•

Threats

•


situational analysis(4210)

Marketing

situation analysis

marketing analysis toolkit

forces analysis

situational analysis

cs analysis porters

swot analysis source

analysis tools information

harvard business school