I. SITUATION ANALYSIS A.Marketing & Promo Mix B.Consumer / Market / Environment C.Competitive Situation D.Marketing / Advertising Objectives E.Creative Strategy Topic: Marketing Situation Analysis Note: Only B (excl. environment) & C will be discussed in the slides following. This power-point slides are intended for students who haven’t completed Com 352 and provide a review of some basic knowledge concerning situation analysis. Handouts are available for the asking.

B. Consumer, Market, Environment 1. Market (Geographic) Analysis 2. Consumer (Demography, Usage) Analysis 3. Environmental (Constraint) Analysis Topic: Marketing Situation Analysis B. Consumer, Market, Environment

1.Market Analysis Sales Potential Indicators: CDI & BDI n When market sales data are available: CDI % of Category Sales = /% of Persons Topic: Marketing Situation Analysis B. Consumer, Market, Environment BDI = % of Brand Sales /% of Persons

1.Market Analysis Sales Potential Indicators: CDI & BDI n When market sales data are NOT available: CDI % of Category Users = /% of Persons Topic: Marketing Situation Analysis B. Consumer, Market, Environment BDI = % of Brand Users /% of Persons

1. Market Analysis How are CDI/BDI used? Simple scenario approach Topic: Marketing Situation Analysis B. Consumer, Market, Environment

1. Market Analysis How are CDI/BDI used? Other Weighting Approaches Topic: Marketing Situation Analysis B. Consumer, Market, Environment n Equal weights:.5BDI +.5CDI n Unequal Weights (examples): n.75BDI +.25CDI n.33BDI +.67CDI Note: BDI/CDI are only two of many indicators of market potential and thus used with other market indicators in media/target decisions

1. Market Analysis Topic: Marketing Situation Analysis B. Consumer, Market, Environment Example 2 (see handout) : CDI & BDI  What do CDI and BDI for Seattle indicate about its market potential? CDI Setl. = BDI setl. = X 100 = X 100 = 168

1. Market Analysis Topic: Marketing Situation Analysis B. Consumer, Market, Environment Example 2 : CDI & BDI  What do CDI and BDI for S.F. indicate about its market potential? CDI S.F. = BDI S.F.. = X 100 = X 100 = 178

1. Market Analysis Example 2: CDI and BDI Topic: Marketing Situation Analysis B. Consumer, Market, Environment With equal weights given:.5BDI +.5CDI n Seattle =.5 X X 191 = 180 n San Francisco =.5 X X 167 = 153 Note: Based on the BDI and CDI alone, you will choose Seattle to spend surplus ad budget.

1. Market Analysis Example 2: CDI and BDI Topic: Marketing Situation Analysis B. Consumer, Market, Environment With un equal weights given:.75BDI +.25CDI n Seattle =.75 X X 191 = n San Francisco =.75 X X 167 = Note: With the BDI and CDI weighted unequally, you will choose San Francisco to spend surplus ad budget.

1.Market Analysis Sales Potential Indicators: CDI & BDI n When market sales data are not available: (case for your project) BDI % of Brand Users = = # of B. Users in Market # of Persons in Market OR /% of Persons / # of B. Users in Population / # of Persons in Population Topic 2: Marketing Situation Analysis B. Consumer, Market, Environment X 100

1.Market Analysis Sales Potential Indicators: CDI & BDI n When sales data are available by geo market: BDI % of Brand Sales = = B. Sales ($) in Market # of Persons in Market OR /% of Persons / B. Sales in U.S. / # of Persons in US Topic 2: Marketing Situation Analysis B. Consumer, Market, Environment X 100

1.Market Analysis Sales Potential Indicators: CDI & BDI n When data are not available: CDI % of Category Users = = # of C. Users in Market # of Persons in Market OR /% of Persons / # of C. Users in US / # of Persons in US Topic 2: Marketing Situation Analysis B. Consumer, Market, Environment X 100

2. Consumer Analysis Sales Potential Indicators: CDI & BDI n When sales data are available by consumer segment: CDI % of Category Sales = / % of Persons Topic: Marketing Situation Analysis B. Consumer, Market, Environment BDI = % of Brand Sales/% of Persons

Sales Potential Indicators –CDI, BDI n When sales data are NOT available Note: Sales potential indicators, CDI or BDI, are derived from MRI or Simmons data which report the product or brand usage index in ‘D’ column CDI % of Category Users = / % of Persons Topic: Marketing Situation Analysis B. Consumer, Market, Environment 2. Consumer Analysis: BDI = % of Brand Users/% of Persons

Sales Potential Indicators –CDI, BDI n MRI Index (for Category)-- E.g., age % of All Category Users = = # of C. Users in # of Persons in / % of All Persons / # of C. Users in All ages / # of Persons in All ages Topic: Marketing Situation Analysis B. Consumer, Market, Environment 2. Consumer Analysis: X 100

Sales Potential Indicators –CDI, BDI n MRI Index (for Brand): E.g., age % of All Brand Users = = # of B. Users in # of Persons in / % of All Persons / # of B. Users in All ages / # of Persons in All ages Topic: Marketing Situation Analysis B. Consumer, Market, Environment 2. Consumer Analysis: X 100

 How Is MRI/Simmons Index used? - Does the segment with the highest index have the greatest sales volume potential? Age % Pop % Users Calculation (17/13)X100 (18/20)X100 (33/36)X100 Index Topic: Marketing Situation Analysis B. Consumer, Market, Environment 2. Consumer Analysis:  Why or why not? Example:

How consumer segments should be analyzed for sales volume potential : Volume Potential = Volume Potential =.17X131= X92=30.4 Topic: Marketing Situation Analysis B. Consumer, Market, Environment 2. Consumer Analysis ---Use User Size and Index; Weigh User Size by Index to determine volume potential (value) of segment Note: the volume potential above is not actual sales volume but estimated composite weight that takes on meaning only when compared to other composite weights

C. Competitive Assessment: 3 Components 1. Market shares for all direct and indirect competitors 2. Competitive (and your) media mix and expenditure (in $ and % of their budget) 3. Share-of-Voice or Ad Share (brand’s expenditure as % of all brands’ spending Topic: Marketing Situation Analysis

1. Competition & Market Shares n For your project, Use LNA/Media Watch Data for competitive mix & expenditure and SOV n Our library has 1994 data (Jan-Sept), UCLA, management library has 1999 data. Topic: Marketing Situation Analysis C. Competitive Assessment

1. Competition & Market Shares n Direct Competition: n Indirect Competition Topic: Marketing Situation Analysis C. Competitive Assessment Brands in the same product class as yours; e.g., Brands in one or more different product classes; e.g.,

2. Media Mix & Expenditure (2 tables or 1 combined table) Topic: Marketing Situation Analysis C. Competitive Assessment  Raw Expenditures Table -- to show, for each competitor (& you): What media types have been used and how much ($) has been spent in each of the media?  Media Proportion Table Note: the two tables above may be combined into one as in the LNA exercise provided What percent of the brand budget is spent in each medium?

Topic: Marketing Situation Analysis C. Competitive Assessment 2. Media Mix and Expenditure

Topic: Marketing Situation Analysis C. Competitive Assessment 2. Media Mix and Expenditure

3. Share-of-voice or Ad Share (in %) Overall: SOV = Brand Y’s total $ x 100______ All Competitors or Brands total $ In Each Medium: SOV = Brand Y’s $ in medium x 100______ All Competitors or Brands total $ in medium Topic: Marketing Situation Analysis C. Competitive Assessment

Example (see handout) n SOV Sealy/Overall = (29,851.6 / 58,222.4) x 100 = 51.3 % (316.4 / 9,307.4) x 100 = 3.4 % Topic: Marketing Situation Analysis C. Competitive Assessment 3. Share-of-Voice (SOV) SOV Sealy/Mag =

Guidelines in Assessing Competitive Efforts 1)From competitive media mix table, determine what media have been used heavily and what rarely, and consider their implications for your own media mix -- what media must be used and why and assess threats and/or opportunities that might exist in the use of certain media Topic: Marketing Situation Analysis C. Competitive Assessment 2)From SOV analysis, assess your strengths/weaknesses against the competition, and see if any change in the mix and/or increase or decrease in spending for certain media is warranted for an effective media mix for your brand. Example: LNA Exercise #4