1. Basic Information Required for Marketing Decisions2. Purpose of Each Information Foundation Component3. Steps in Conducting a Situation AnalysisKey Terms:1. Elements of a Competitive Analysis2. Role of Porter’s Five Forces3. Elements of a S.W.O.T. AnalysisCustomer BehaviorSocial Influences on Consumer BehaviorConsumer InvolvementLow Involvement purchase1. Issues Required to Understand Buyer BehaviorSocial Influences on Consumer BehaviorPsychological Influences on Consumer Behavior1. Distinct Aspects of Organizational Buyers2. Nature of Organizational Demand1. Concept of “Segmentation”2. Steps in Segmentation AnalysisMarket Segmentation Market Segments1. Select variables to divide the market into homogeneous groups called Segments.1. Mass Marketing vs. SegmentationUndifferentiation DifferentiationMicromarketingBenefits {Attributes}Price or Quality Country of OriginMKT 327 1st EditionExam # 2 Study Guide Lectures: 7 - 13Lecture 7 (February 4)Situation analysis1) Role of information continueda) Survival: the ultimate goalb) Adaptability: the key to survivalc) Marketing strategy: guides adaptabilityi) Has 3 core competencies(1) Positioning- on code? Looking behind the behavior of consumer. Code is consistent with those things that are motivating consumers(2) Competitive advantages- can compete? - Unique selling point, outperform the competitors(3) Adaptability – on course? - Everything remains on track and in the right direction2) Marketing planning process a) Situation and competitor analysisb) S.W.O.T analysis (this and situation answer the question to are we on course?) (this and competitor analysis answer can we compete?)c) Target market analysis (answers are we on code?3) Components of situation analysisa) Enables manager to see future first i) Manager must either see opportunities FIRST; or exploit opportunities through PREMPTIVE CAPACITY BUILDINGii) FUTURE found at intersection of environmental changes; and customer UNSPOKEN wantb) Situation analysisi) An analysis process that acquires information on organization’s environment and competitors in order to identify trends that may have a positive or negative impact on the organization in time enough to adjust them(1) 2 separate analyses(a) Environmental scanning(b) Competitor 4) Marketing environmenta) All factor that affect a businessi) Global macro environment- environmental scanning, gaining insightii) Micro environment- competitor analysis- look at distribution channel, supply chain, and our competitorsiii) Customer demand- looks at the customers- target market analysisb) Environmental scanningi) Collecting and analyzing information about the MARKETING ENVIRONMENT(1) In order to detect important changes or trends that can affect a company’s strategy(2) Requires LARGE time commitment: research suggests most spend <3% of time ---should be 20% or more 5) Steps in environmental scanninga) Define industryi) Use similar technologyii) What data and information do you need to complete this step?iii) Address similar needs and wantsiv) Customer uses as substitutes(1) Industry description(a) Size and growth(b) Competitive intensity(c) Demand characteristics(i) Life cycle(ii) Cycle and seasonality(iii) Financial characteristics(iv) Success requirements b) Analyze macro environmenti) Technological environment(1) Banks are too big to fail! Are they?(2) What might be greatest threat to banking profits? ii) Economic environmentiii) Demographic environmentiv) Cultural environmentv) Legal/regulatory environmentvi) Ethical environmentc) Analyze micro environmenti) Stakeholders(1) Owners(2) Employees (3) Suppliers(4) Intermediaries(5) Action groupsii) Competitive intensity (direct correlation with profitability)(1) # Of competitors(2) Rivalry (3) Substitute producers(4) Bargaining power of buyers and suppliersd) Project future trendse) Distinctioni) Competitive analysis(1) Is part of the macro environment portion of an environmental scan. It looks at the overall level of competition in the industry and is typically based on key indices and in part on porter’s five competitive forcesii) Competitor analysis(1) Examines specific strengths and weaknesses and strategies of each relevant competitor. When addition to competitors, the organization examines itself usingthe same criteria it is called a vision analysis.6) Competitive analysisa) Attractiveness- strength grid (relation between market attractiveness and competitive stature)b) Summary measure of the fit of the company resources and capabilities to market environmentLecture 8 (February 6)1) Situation analysisa) Situation and competitor analysisi) (Situation analysis and S.W.O.T- are we on course?) (Competitor analysis w/ S.W.O.T- can we compete?)b) S.W.O.T analysisc) Target Market analysis i) Are we on code?2) Steps in environmental scanninga) Define industryb) Analyze macro-environmentc) Analyze micro-environmentd) Project future trends3) Measure elements of the micro-environmenta) Stakeholdersi) Ownersii) Employeesiii) Suppliersiv) Intermediariesv) Action groupsb) Competitive intensityi) Competitors ii) Rivalryiii) Substitute producersiv) Bargaining power of buyers and suppliers 4) Attractiveness – strengtha) Attractiveness strength grid (on last lecture)b) Its harder to be profitable in a more competitive industry as in opposition to a monopolyc) Summary measure of the fit of company resources and capabilities to market environment5) Market attractiveness componentsa) Sizei) Breakeven= small shareb) Growthi) 10% and abovec) Competitive pressuresi) Impact on price and costsd) Price marginsi) Pay for marketing/ R&De) Regulatory environmenti) Minimalf) Stability of trendsi) >Planning horizon6) Competitor analysisa) An assessment of the strengths and weaknesses of current and potential competitors that provides both an offensive and defensive strategic context and direction.i) Objectives(1) To identify opportunities to penetrate market or secure position (2) To determine likely response to strategic actionsii) Rationale(1) Firms having advanced systems to monitor competitors’ activities exhibit greater profitabilityb) Components of competitor analysisi) Competitive analysis- general assessment of the overall level of competition in the marketii) Porter’s five forces of competition(1) Identify 5 most important factors that impact profitability in the industryiii) Competitive profile(1) On each competitor(2) Competitors objectives- their mission statement(3) Net income