Marketing Unit b Audit, Research, Segments, Strategy

Marketing Audit and Tools An audit looks at the costs and effectiveness of a marketing strategy, activity, or overall mix –Considers internal and external factors SWOT analysis –Strengths and Weaknesses are internal –Opportunities and Threats are external Boston Matrix –Looks at market growth and market share for products and business units Ansoff Matrix –Help with product and market growth strategy Porter Five Forces (HL) –Looks at the competition PESTLE analysis

SWOT Analysis

Boston Matrix

Ansoff Matrix

Porter’s Five Forces

PESTLE analysis Political factors, or how and to what degree a government intervenes in the economy. –tax policy, environmental law, trade restrictions, tariffs, and political stability. –Provision of merit goods and restriction of demerit goods Economic factors –GDP, interest rates, exchange rates and the inflation rate. Interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy Social factors –Culture –Health –Population growth rate. Technological factors –Innovation and R&D activity –Automation –barriers to entry Legal factors –discrimination law –consumer law –antitrust law –employment law –health and safety law Environmental factors –weather, climate, and climate

Pest/Pestle/Steeple PoliticalEconomicSocialTechnologicalLegalEnvironmental To get to Steeple, add: Ethics

Market Research

Secondary Research

Internal Sources Company Accounts Internal Reports and Analysis Stock Analysis Retail data - loyalty cards, till data, etc.

External Sources Government Statistics (ONS) EU - Euro Stat Trade publications Commercial Data - Gallup, Mintel, etc. Household Expenditure Survey Magazine surveys Other firms’ research Research documents – publications, journals, etc.

Sampling Methods

Primary Research

Market Research Primary Research –First hand information –Expensive to collect, analyse and evaluate –Can be highly focussed and relevant –Care needs to be taken with the approach and methodology to ensure accuracy –Types of question – Closed – limited information gained; Open – useful information but difficult to analyse

Market Research Quantitative –Statistical basis –numbers 56% of eighteen year olds drink alcohol at least four times a week. Qualitative –more detail – tells you why, when and how –opinions

Purpose

Market Research Advantages of Market Research –Helps focus attention on objectives –Aids forecasting, planning and strategic development –May help to reduce risk of new product development –Communicates image, vision, etc. –Globalisation makes market information valuable (HSBC adverts!!)

Market Research Disadvantages of Market Research –Information only as good as the methodology used –Can be inaccurate or unreliable –Results may not be what the business wants to hear! –May stifle initiative and ‘gut feeling’ –Always a problem that we may never know enough to be sure!

Market Segmentation Breaking a market down into sub-groups with similar characteristics Segment---Target---Position

The Purpose allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures.

The market segment should be… 1. Clear, specific, measurable and based on hard facts. 2. Accessible by communication and distribution channels. 3. Different in its response to a marketing mix. 4. Durable (not changing quickly). 5. Substantial enough to be profitable.

Geographic Segmentation è Where the customer lives; zip code è Urban è Rural è Semi-rural è Suburban è Regional variables including population density, population growth rate

Demographic Segmentation è Age è Gender è Religion è Ethnic/culture è Level of education è Marital status è Income level è Social Class è A -- Higher managerial, administrative or professional. è B -- Middle managerial, administration or professional. è C1 -- Supervisory or clerical, junior managerial. è C2 -- Skilled manual workers. è D -- Semi and unskilled manual workers. è E -- Casual or lowest paid workers, unemployment.

Psychographic Segmentation è Personality and attitudes è Values and lifestyles  Includes behavioral segmentation  usage rate and patterns, price sensitivity, brand loyalty and benefits sought. è Preferences based on observable behaviors èWhat you wear, drive, listen to, watch.

Business Market Segmentation  Geographic segmentation  customer concentration  regional industrial growth rate  international macroeconomic factors.  Customer type  size of the organization  its industry  position in the distribution chain or value added chain  Buyer behavior  Loyalty to suppliers  usage patterns  order size  Order frequency

Targeting market segments After the process of segmentation the next step is for the organization to decide how it is going to target these particular group(s). –There are three targeting options an organisation can adopt. Undifferentiated (mass marketing) Differentiatedconcentrated Positioning is the process of creating the best marketing mix for each segment

Positioning: What to do with an identified group? After segmenting and targeting, the last step is positioning Marketing Mix  How would this group like the product presented  plain, fancy packaging, large amount, small amount  What price should be set for the product  price skimming, penetrating  How best do you reach this segment  mail order, retail, direct sales, e commerce...  What promotional activity would best inform this segment  vouchers, TV advertising, Internet banner ad

Examples: Marketing Strategies Examples: Marketing Strategies   Market Skimming   charge premium prices, attracting customers less concerned with price and interested in service, selection, and status   Market Penetration   Existing product, existing market   Market Development   existing products, new markets   Product Development   New product, existing market   Diversification   New products new markets