Situation Analysis

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MARKETING STRATEGYO.C. FERRELL MICHAEL D.
HARTLINE
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Situation Analysis Collecting and
Analyzing Marketing Information
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Issues to be Consideredin a Situation Analysis
Exhibit 3.1
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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

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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

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The Relationships AmongEnvironments in a
Situation Analysis
Exhibit 3.2
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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

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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

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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?

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The External Environment (1 of 2)

• Competition
• (1) Brand competitors
• (2) Product competitors
• (3) Generic competitors
• (4) Total budget competitors

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Major Types of Competition
Exhibit 3.6
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Stages of Competitive Analysis

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

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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

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Examples of Trends in theSociocultural
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
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Collecting Environmental Dataand Information (1
of 2)

• Secondary Information Sources
• Internal Data Sources
• Government Sources
• Periodicals/Book Sources
• Commercial (Fee-Based) Sources

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Collecting Environmental Dataand Information (2
of 2)

• Primary Data Collection
• Direct Observation
• Focus Groups
• Surveys
• Experiments
• Overcoming Problems in Data Collection