Market Opportunity Analysis: Consumer External Environment

Analysis  Constitutes factors and forces which are

external to the business and on which the
Strategic MARKETING marketer has little or no control.
- used to identify customer’s needs and create a  Two types: Microenvironment (task
marketing plan to achieve customer satisfaction, environment); Macroenvironment (broad
improve company performance and increase environment)
profit. It is usually a long term plan. External Environment
Tactical MARKETING  Microenvironment
- focuses on the details to achieve that goal. It is - Task environment. It comprises of external
usually short term. forces and factors that are directly related to the
Strategic MARKETING Tactical business
MARKETING - Suppliers, market intermediaries, customers,
Concept Process Taking action near partners, competitors and the public
term  Macroenvironment
Purpose To attain company’s To execute the - Broad environment. It constitutes the external
objectives strategy factors and forces which affect the industry as a
Activities Understanding the ff: Promoting and whole but don’t have a direct effect on the
Environment selling to the
business.
Industry consumers
Customers - Demographic, economic, physical,
Competition technological, political-legal, and socio-cultural
Brand environment
Key STP (Segmentation- Marketing Mix MACRO-ENVIRONMENT MICRO-ENVIRONMENT
concepts Targeting-Positioning) (7Ps)
Timetable Timeless Time-bound Elements: Elements:
Absence of Too much talking- Blind action- doing PESTLE Trends Company
the other nothing gets done without having a Industry Analysis Customers
side plan Key Factors of Success on Competition
Marketing Process SWOT Channel
Complementors
Communities
- Is a process of analyzing opportunities in the Influence to marketing Influence to marketing
market, selection of the target markets, and planning: planning:
development of the Marketing Mix and Affects profitability Analyze opportunities and
management of the marketing efforts. To understand winning threats on these affect
variables of the industry/logic operations
of the industry as basis for
THE MARKETING redesigning
Marketing Analysis IMPORTANCE of MARKETING ENVIRONMENT
- Study of the dynamism of the market
Marketing Plan - Essential for planning
- Strategic roadmap
- Understanding customers
Marketing Implementation
- Process of executing the marketing strategy - Tapping trends
Marketing Control - Threats and opportunities
- Process of monitoring the proposed plans - Understanding the competitors

MARKETING ENVIRONMENT Macro-Environment Macro Analysis Tool 1: PESTLE

- It is the combination of external and internal TRENDS
factors and forces which affect the company’s
ability to establish a relationship and serve its PESTLE ANALYSIS
customers. - It is a framework or tool used to analyze and
- It includes the forces outside of marketing, monitor the macro-environmental factors that
consisting of macro-environment (national may have a profound impact on the business
issues))and microenvironment (company performance.
issues), which can influence marketing POLITICAL FACTORS- how and to what degree do
decisions. government policies affect the economy
Internal Environment  Tax policy
 Includes all the forces and factors inside the  Labor law
organization which affect its marketing  Environmental law
operations  Trade restrictions
 Five Ms (men, money machinery, materials,  Tariffs
markets)  Political stability
  Health - Source document of Strength and Weakness
 Education (SW) analysis.
 Infrastructure - It is also known as Logic of Industry (LOI) or
ECONOMIC FACTORS- the impact of a country’s Economics of Business (EOB).
financial indicators on how businesses operate and - It is simply a blueprint composed of controllable
make decisions and uncontrollable variables critical to the
 ECONOMIC GROWTH success of a firm that must be managed well, in
 Interest rates order to attain its goals and outperform
 EXCHANGE RATE competition.
 Inflation rate SWOT
SOCIAL FACTORS- how the demand for a company’s - Is a strategic planning technique used to help a
products and how firms should operate are affected by person or organization identify strengths,
different factors weaknesses, opportunities and threats related to
business competition or project planning
 CAREERS
KEY FACTORS FOR SUCCESS (KFS)
 CULTURE
- If managed well in established markets,
 EDUCATION companies have higher chances to be
 ETHICS successful.
 HEALTH - The word “Key” connotes a limited number, so it
 SAFETY is important to include only those that have a
 HOUSING high impact to the industry and to the firm.
 Fashion and lifestyle  How to use KFS:
 Immigration - 4 – 6 KFS would be common as other factors
 diversity can likely be clustered together if they have
TECHNOLOGICAL FACTORS- how technological similar intent
aspects affect innovation, productivity, investment and - List down all variables that make the firm attain
cost their KRAs (revenues, market share, and profit
 r and d targets) in a particular segment
 automation - Assign a weight for each variable based on their
 Technology incentives relative importance with a cut-off score of 80%.
 Rate of TECHNOLOGICAL CHANGE  Factors to consider when looking at KFS
LEGAL FACTORS- how the laws of a country affect - Possible alternatives (similar products that can
how companies adopt policies as to its operation, cost provide same satisfaction) –
structure and demand - KFS by market segment –
 DISCRIMINATION LAW - KFS by product’s positioning, success factors,
 CONSUMER LAW marketing direction –
 ANTITRUST LAW - KFS in terms of lifestyle changes
 EMPLOYMENT LAW - Game-changing innovations
 HEALTH AND SAFETY LAW - Look at the Logic of Strategy (LOS)
ENVIRONMENTAL FACTORS- ecological and  Possible alternatives (similar products that
environmental aspects that can affect businesses such can provide same satisfaction)
as insurance, tourism, farming Example of KFS tackling alternatives:
 Weather Books may provide the same reading satisfaction as
magazines
 Climate and climate change
 Marketers must establish a cluster of strengths
Macro Analysis Tool 2: Industry Analysis or differentiation to avoid begin easily matched
INDUSTRY ANALYSIS by competition.
- Affects the profitability of an industry  This system or cluster of KFS must be explored
- Enable firms to identify competitive pressures as by focusing on the right target market and
well as opportunities in the marketplace offering the right product.
 Threat of New Entrants  To exploit their strengths as well as take
 Threat of Substitutes advantage of a competitor’s key weak points to
satisfy their customers better.
 Rivalry among Existing Competition
Micro-environment
 Bargaining Power of Customers
- deals with company issues.
 Bargaining Power of Suppliers - Is the environment which is in immediate
contact with the firm
Macro Analysis Tool 3: Key Factors for Success and
SWOT 6Cs of Microenvironment Analysis

KEY FACTORS FOR SUCCESS Company

a value chain within a company where one department - Local Government public
supplies another department materials, information and - General public
relationships so as a company can be both efficient and - Local public
effective in creating value to their customers. - Citizen-action public
- R and D - Employees
- Sourcing - Suppliers
- Purchasing
- Production MARKETING RESEARCH
- Warehouse
- Finance - Indispensable tool for marketers to know what
- Marketing needs to be done, albeit creativity will still be
- Operations needed in terms of how to communicate and
- Sales
execute the strategy.
- Credit
- Order processing - A process of collecting, understanding, and
- Delivery analyzing data
- Collection - Process or sets of multiple activities that link the
- Service marketing organization with its customers
through information gathering and anlaysis.
Customers - It specifies information required to address
- Consumer Markets
various issues present in the successful
- Business Markets
- Government markets marketing of product or services.
- International markets - It systematically designed to collect the needed
- Reseller markets information and is made as springboard for
careful analysis and interpretation of marketing
Competition data which will help generate conclusions in the
- Direct similar offerings from the perspective of solution of marketing problems
customers
- Indirect offering deemed as substitutes to
Types of Marketing Research
another product or service
- Can be broadly divided into qualitative and
Channel
individuals or companies who buy and resell the quantitative methods.
company’s products to final buyers. - FGD - Focus Group Discussion- conducted by
- Distributors a seasoned facilitator in a relaxed atmosphere. It
- Wholesalers is composed of 7-9 people per batch
- Retailers - IDI - In-depth Interview- done individually
- Direct sellers
- Home TV Shopping Focus Group In-Depth Interview
- Online sellers Discussions (FGDs) (IDIs)

Complementors No. of 7-9 per batch Individual

individuals or businesses who can help an organization partici
understand, promote and/or sell its products or services. pants
- Physical distribution Advan Share experiences Privacy
companies or individuals who store and tages Build from others in Not influenced by
transport the company’s products to final buyers the room opinions of others in
- Marketing agencies FGDs
companies or individuals who help understand Disadv Discussion with More time consuming
and/or promote the company’s products to final antage strangers in the room Inability to share
buyers s Maybe influenced by experiences and build
- Financial intermediaries opinions of others from others
companies or individuals who help give credit for Inability to follow up
the company’s products to final buyers. individual replies
Communities
public stakeholders where the organization needs to be
sensitive to their public opinions.
- Financial publics
- Media public
- National Government public
 Typical questions asked in usage, attitude and 5. Interpret data
image study (UAI) - Cluster and convert “what” to “so what”
6. Recommend solution
Sections of UAI Detail topics Probed in - Convert “so what” to “now what”
UAI
Brand Awareness Brand awareness,
advertising awareness,
sources of awareness
Usage behavior Product category use, or
why not it is used – never
or not anymore, size or
variant mix, usage
frequency, who uses, who
else uses, etc.
Purchase behavior Where it was last bought,
where it is most often
bought, purchase
frequency, size mix
purchase, quantity last
bought, etc.
Product experience Product attribute/s desired,
likes about existing
brands, dislikes about
existing brands, rating of
competing brands on
attributes, socio-
demographics data, media
habits
Market research allows the marketers and
entrepreneurs to answer the various “W” questions
(who, what, when, etc.):

- Macro level, market segmentation answers the

question, “What are the groupings of similar
customers?”
- Micro level:
a. Decision Making Unit points to “Who
purchases the product?”
b. Decision Making Process answers the
question, “How, where, and when it the
purchase made?”
c. Consumer motivation and preferences
guide the marketer to answer, “What do the
consumers want and why?”

6 STEPS IN MARKETING RESEARCH

1. Define research problems/issues
- Gives focus and clarity
- How data will be used in making decisions
2. Choose marketing research approach
- Qualitative or quantitative?
- Specific type of marketing research to use to
attain research goals
3. Create research design
- Draft and test questions
- Sampling target
- How data will be analyzed
4. Collect data
- Respondents will answer research completely