MARKETING STRATEGY O C FERRELL MICHAEL D HARTLINE

MARKETING STRATEGY O. C. FERRELL • MICHAEL D. HARTLINE 3 Situation Analysis Collecting and Analyzing Marketing Information

Issues to be Considered in a Situation Analysis Exhibit 3. 1 2

Conducting a Situation Analysis (1 of 2) • Analysis Alone is Not the Solution • Data and Information are Not the Same – Data: A collection of numbers or facts that have the potential to inform – Information: Data that has been transformed or combined with other data in a manner that makes it useful to decision makers 3

Conducting a Situation Analysis (2 of 2) • The Benefits of Analysis Must Outweigh the Costs • Conducting a Situation Analysis is a Challenging Exercise – One of the most difficult parts of the marketing plan – Should provide a complete picture of three key environments: (1) Internal, (2) Customer, and (3) External 4

The Relationships Among Environments in a Situation Analysis Internal Environment Exhibit 3. 2 5

Discussion Question • Of the three major environments in a situation analysis (internal, customer, external), which do you think is the most important in a general sense? Why? What are some situations that would make one environment more important than others? 6

The Internal Environment (1 of 2) • Review of Current Objectives, Strategy and Performance – An important input to later stages in the planning process – Poor or declining performance must be the result of: • (1) Goals or objectives that are inconsistent with customer or external environments • (2) Flawed marketing strategy • (3) Poor implementation • (4) Changes in the customer or external environment beyond the control of the firm 7

The Internal Environment (2 of 2) • Availability of Resources – Includes review of financial, human and experience resources as well as resources from key relationships – Financial resources tend to get most attention – Labor shortages are expected to be a major problem in the coming years • Organizational Culture and Structure – Problems can arise when marketing does not hold a prominent position in the political hierarchy – Culture and structure are relatively stable but can be affected by mergers 8

Mergers Affect Corporate Culture 9

The Customer Environment • • • Who are our Current and Potential Customers? What do our Customers do with our Products? Where do Customers Purchase our Products? When do Customers Purchase our Products? Why (and How) do Customers Select our Products? • Why do Potential Customers not Purchase our Products? 10

The External Environment (1 of 2) • Competition – (1) Brand competitors – (2) Product competitors – (3) Generic competitors – (4) Total budget competitors 11

Major Types of Competition Exhibit 3. 6 12

Discussion Question • Do you think brand competitors are always the most important type of competition? How would economic conditions affect the importance of brand competitors? In bad economic times, would total budget competitors become more important? Why or why not? 13

Stages of Competitive Analysis • (1) Identify all current and potential competitors. • (2) Assess each key competitor. • (3) Assess each key competitor’s strengths and weaknesses. • (4) Focus the analysis on each key competitor’s marketing capabilities. • (5) Estimate each key competitor’s most likely strategies and responses under different environmental situations. 14

The External Environment (2 of 2) • • • Economic Growth and Stability Political Trends Legal and Regulatory Issues Technological Advancements Sociocultural Trends – Demographic Trends – Lifestyle Trends – Trends in Cultural Values 15

Examples of Trends in the Sociocultural Environment • Demographic Trends – Aging of the American population – Increasing population diversity – Population growth in the Sun Belt states • Lifestyle Trends – Clothing has become more casual, especially at work – Growing focus on health and nutrition – Time spent watching television has declined • Trends in Cultural Values – Less focus on “me-oriented” values – Increasing importance of family and children – Greater focus on ethics and social responsibility From Exhibit 3. 7 16

Marketing Strategy in Action • This 1977 ad for a Technics turntable discusses its advanced technology. In less than a decade the compact disc would render devices for playing vinyl records obsolete. • How does this illustrate the importance of being aware of the technological environment? How can companies like Panasonic prepare for the possible obsolescence of products that are currently state-of-the-art? 17

Collecting Environmental Data and Information (1 of 2) • Secondary Information Sources – Internal Data Sources – Government Sources – Periodicals/Book Sources – Commercial (Fee-Based) Sources 18

Government Sources of Secondary Data 19

Collecting Environmental Data and Information (2 of 2) • Primary Data Collection – Direct Observation – Focus Groups – Surveys – Experiments • Overcoming Problems in Data Collection 20

Discussion Question • Do you think the Internet has made it easier or more difficult to collect data and information? Why? How might the major data collection issues of today compare to the issues that occurred in the pre-Internet era? 21