Market Analysis Shad Valley Entrepreneurship Lecture 3 This presentation contains adapted material from Zikmund, W.,d’Amico, M., Browne, P. Anthony, D., Monk, J. & Donville, L. (2008). Effective Marketing: First Canadian Edition. Toronto: Nelson.

Marketing Defined – what do you think marketing is? Shad Valley - Marketing

Definitions of Marketing ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably’ ‘The right product, in the right place, at the right time, and at the right price’ ‘Marketing is the human activity directed at satisfying human needs and wants through an exchange process’ Kotler 1980 ‘Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others’ Kotler 1991

Marketing Management The process of 1) planning, 2) executing, and 3) controlling marketing activities to attain marketing goals and objectives effectively and efficiently. 123

Strategic Business Unit  Identify goals and objectives  Design strategies and tactics to reach those goals  Strategic Business Unit (SBU)  Partly Autonomous, but plan must support org mission  Focuses on product/market/segment  Controls their own business model (strategy)/performance

Strategic Marketing Process 1: Identify and Evaluate Opportunities 2: Analyze market segments and select target markets 3: Plan a market position and develop a marketing mix strategy 4: Prepare a formal marketing plan5: Execute and 6: Control

1: Identify and Evaluate Opportunities  Situation Analysis – Perform a SWOT  Diagnostic process of interpreting environmental conditions and changes in light of an organization’s ability to capitalize on potential opportunities and ward off problems  Environmental Scanning – gathering info  Environmental Monitoring – using info to detect trends  Look for strategic gaps between where you want to be, and where you are. Plan accordingly

2: Analyze Market Segments and Select Target Markets  Market is a group of individuals or organizations that are potential customers for the product or services being offered.  B2B, B2C, B2B2C  Market Segment – a segment of a larger market  Eg. Homeowners > Female Homeowners > Female Homeowners with gas stoves  Target Market - Market Segment which the marketing plan is aimed at  Estimate the size of the target market “you can’t be all things to all people”

Market Segmentation  Location: countryside, town, county, state, national & regional market.  Size: based on volume of dollar sales/votes, area/shopping center & number of customers.  Product and Seasons: market can be identified by different product, winter, summer, and etc.  Demand factors: price, people, places, income & things that influence demand must be identified and satisfied.  Consumer satisfaction: demand, needs, wants, & preferences  Convenient service: alter or extend your hours to accommodate customer needs.  Demographics: age, race, religion, nationality gender, marital status, occupation, education, job title & etc.  Competition:market can segmented according to free, perfect, monopoly market.  Potential growth: quality and price are different according to the degree of growth.

Target Market Who are my customers Economic Level (income range) Sex Age Range Psychological Make-Up (lifestyle) Buying Habits Lot Size Frequency of Purchase Purchase Location What are the Customers’ Needs? How can I meet These Needs? Location 1. Where do my customers live? 2. Where do they work? 3. Where do they shop? Projected Size of Market What is Unique About my Business?

3: Plan a market position and develop a marketing mix strategy  4Ps  Talk directly to the customers perception of the product  Controllable by marketers Product (core, feature)Price (value, cost) Place (supply chain) Promotion (advertising, PR, sales promotion, direct marketing, personal selling) 4Ps

Services Marketing: 4 Ps + 3 Services Require 3 More Ps  Process: what consumers must go through to do business with us  People: who interface will represent us well  Physical Place: place in which we do business is right for the market

Mix Elements: Products  Product design/core features  Supplementary Features  Cost target (or profit target)  Competitive positioning (ie low cost, differentiated)  Name, and fit with branding  Packaging  Customer service  Breadth and depth of product line (versions)

Product Life Cycle Early Adopters/ Pioneers Mass Market/ Followers End of Life Time Number of customers

Mix Elements: Price  Prices: manufacturer, wholesaler, distributor  Payment terms and conditions  Warranty  Discount policies  Price strategy vs. competitors  Bidding tactics  Exclusivity

Mix Elements: Place  Distribution strategy  Channels of distribution  Summarize channels of distribution  Distribution by channel  Show plan of what percent share of distribution will be contributed by each channel -- a pie chart might be helpful

Mix Elements: Promotion Branding Advertising Direct marketing (mail, catalog, telemarketing, internet) Public relations and industry relations Trade shows and events Price promotions

Mix Elements: Promotion Logo  Text Logo  Symbol Logo  Text & Symbol Steps to Develop a Logo 1. Gather information/material to help inspire. 2. Determine how the logo will be used. 3. Sketch ten logos freely, experiment. 4. Sift through sketches, and modify if need be 5. Computer skills can be key at this point 6. Show critics and get feedback.

Mix Elements Fit The mix should “fit” with…..  Needs/desires of the target market  The company’s competencies and “image”  Competitors and their strategies/programs  Channel partners’ needs and competencies  And….the competitive advantage decision

Marketing Research “the systematic collection, analysis and interpretation of information relevant to marketing decisions” What features do my customers actually need? Should I start looking at markets in Europe? Do my customers prefer my product over my competitors’? Should I make more red cars than green ones?

Marketing Research  An “investment” to reduce uncertainty  Can help guide decisions on  Whether to enter  Product characteristics  Promotional strategy  Positioning  Must weigh costs and benefits of research  Money  Time spent  No perfect method—tradeoffs between methods

Marketing Research - Process Define objectives Planning Collecting the data Analysis and presentation Decision making

Market Research – Questions  What kind of business should I do?  What is the demand for my business?  Who are my customers?  What are the market forces that will affect my business?  Where should I locate my business?  How much profit can I get at different locations and times?  Who are my competitors and what kind of product, price and service they offer?  How I differentiate my business from my competitors?  What types of service do my customer prefer?  What types of advertising attract my customers?  What is the market price and how I can change my price accordingly? What Market Questions To Ask???

Marketing Research – Data Collection  Secondary: use of existing research already done  Government  Consulting firms  Newspaper and magazine articles  Social Media  Primary: creation of specific studies to answer specific questions

Marketing Research – Secondary Data  Canadian Government  Books, periodicals, newspapers  Trade organizations  Consultants  Nielsen  Be weary of web sites  Company sites are glorified advertisements!  Anyone can publish a web site. Sources of Secondary Data

Advantages Less Expensive than primary data. Obtained rapidly Marketing Research – Data Collection Disadvantage  May be too old  May not be in the right form  May not be able to assess accuracy Secondary Data

Marketing Research – Data Collection  Surveys  Experimentation  Observation  Focus groups  In-depth interviews Primary Data

Marketing Research – Surveys  Planned questions  Open-ended  Closed-ended  Need large sample sizes for precise conclusions  Forms  Mail  Telephone  Mall Intercept  Social Media  Problem questions  Leading  Ambiguous  Unanswerable  Two questions in one  Non-exhaustive question  Non-mutually exclusive answers

Marketing Research – Experimentation  Subjects in different groups treated differently  E.g., for some, “target” product is given better shelf space  E.g., some get coupon  Can help isolate causes  Subject is biased by questions—does not know how others are treated

Marketing Research – Observation  Looking at consumers in the field— e.g.,  Searching for product category area  Number of products inspected and time spent on each  Involvement of others  Behavior under limiting circumstances (e.g., time constraints)

Marketing Research – Focus Groups  Groups of 8-12 consumers assembled  Start out talking generally about context of product  Gradually focus in on actual product

Marketing Research – In-depth interviews  Structured vs. unstructured interviews  Generalizing to other consumers  Biases

Marketing Research – Analysis and Presentation Quantitative  Graphs  Tables  Microsoft Excel Qualitative  Word Frequency  Thematic Analysis  Word Cloud  Text Analytics  Wordclouds.com

Marketing Plan Shad Valley - Marketing

The Marketing Plan  Target Market - Define  Competition – Identify  Industry Trends - Analyse  Methods of Distribution - Identify  Formulate product in terms off 4Ps  May require research  2 or 3 research questions, and design subsequent research method/questionnaire/focus group  Make sure that everything “fits”