Situation Analysis

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APPLIED MARKETING MANAGEMENT
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Situation Analysis Collecting and
Analyzing Marketing Information
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Issues to be Consideredin a Situation Analysis

• Internal Environment
• Mission, Goals, Resources, Competencies, History
• External Environment
• Market Users/Potential Users Needs and Wants,
  Satisfaction with current solutions
• Industry Competitors/Potential Competitors
  Mission, Goals, Resources, Competencies, History,
  Current Initiatives, Expected Responses
• General Macro-level trends related to Culture,
  Economy, Demographics, Laws and Technology

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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 the
  Internal, Customer and External environments

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The Relationships AmongEnvironments in a
Situation Analysis
Exhibit 3.2
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Discussion Question

• Of the major environments in a situation analysis
  (internal, customerand 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?

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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 can be traced to
• (1) Goals or objectives that are inconsistent
  with
• customer or external environments
• (2) Flawed marketing strategy
• (3) Poor implementation of the marketing strategy
• (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
• Shortages of skilled labor 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 firms political
  hierarchy
• Culture and structure are relatively stable but
  can be affected by major changes (e.g., mergers)

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Mergers Impact on Corporate Culture
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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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Discussion Question

• When are brand competitors the most important
  type of competition?
• How about product, generic and total budget
  competitors?

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Elements of a Competitive Analysis

• Become very familiar with the industry of
  interest including its history (e.g., what and
  who brought it into being / popularity), growth
  rates, and prognosis for the future.
• Identify all current and potential competitors in
  an industry and conduct a high level analysis on
  each.
• For the more concerning competitors, conduct
  in-depth analyses of their histories (e.g.,
  parent company, growth patterns, strengths and
  weaknesses).
• Assess their strategic orientations, along with
  their marketing and technical capabilities.
• Finally, estimate each key competitors most
  likely response to an aggressive market action by
  your firm 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
• Change from me-oriented to we-oriented values
• Increasing importance of family and children
• Greater focus on ethics and social responsibility

From Exhibit 3.7
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Marketing 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 all but obsolete.
• How can companies like Panasonic prepare for the
  possible obsolescence of products that are
  currently state-of-the-art?

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Collecting Environmental Dataand Information

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

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Government Sources of Secondary Data
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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?