Learning Objectives Chapter 5 Analyzing Marketing Opportunities 1

Learning Objectives Chapter 5: Analyzing Marketing Opportunities 1. Define the terms situation, market, and feasibility analysis. 2. Explain the relationship and differences between situation, market, and feasibility analysis. 3. Explain the five benefits of doing a situation analysis. 4. List in order and describe the steps in a situation analysis.

Learning Objectives Chapter 5: Analyzing Marketing Opportunities 5. List in order and describe the six major steps in a market analysis. 6. List and describe the four additional steps in a feasibility analysis.

Situation Analysis A study of the marketing strengths, weaknesses, and opportunities of an existing business or other type of organization.

Market Analysis and Feasibility Analysis n Market Analysis A study of the potential demand for a new hospitality or travel business. It determines if market demand is large enough. n Feasibility Analysis A study of the potential demand economic feasibility of a business; it includes a market analysis and a few additional steps.

Relationship of Situation, Market and Feasibility Analyses n The relationship among these three techniques is chronological (time). n The situation analysis should build upon the findings of the market or feasibility analysis. n Each situation analysis should build upon the previous year’s situation analysis.

Three Analysis Techniques are Related over Time Situation Analysis #3 Situation Analysis #2 Situation Analysis #1 Market or Feasibility Analysis Time

Difference between a Situation, and a Market or Feasibility Analysis n A situation analysis determines the strengths and weaknesses of an existing organization or business. n A market or feasibility analysis investigates a proposed new business and its market potential and economic feasibility.

Difference between a Situation, and a Market or Feasibility Analysis n Situation and market analysis have same steps, but in a different order. n Market and feasibility analysis have the same first six steps, but the feasibility analysis involves four additional steps.

Benefits of Doing a Situation Analysis n Focuses attention on strengths and weaknesses. n Assists with long-term planning. n Helps in the development of marketing plans. n Puts a priority on marketing research. n Has spin-off benefits.

Steps in a Situation Analysis 1. 2. 3. 4. 5. 6. Marketing environment analysis Location and community analysis Primary competitor analysis Market potential analysis Services analysis Marketing position and plan analysis

Steps in a Market Analysis 1. 2. 3. 4. 5. 6. Marketing environment analysis Market potential analysis Primary competitor analysis Location and community analysis Services analysis Marketing position and plan analysis

Difference between Situation and Market Analysis SITUATION ANALYSIS n n n Marketing environment Location and community Primary competitor Market potential Services Marketing position/plan MARKET ANALYSIS n n n Marketing environment Market potential Primary competitor Location and community Services Marketing position/plan

Four Additional Steps in a Feasibility Analysis The six steps in a market analysis plus: q Pricing analysis q Income and expense analysis q Development cost analysis q Analysis of return on investment and economic feasibility