MARK101 Week 3 Tuesday Lecture Notes

Microenvironment Analysis

Lecture Outline

The lecture covers the following topics:

  • Product Market Analysis
  • Competitive Analysis
  • Channel & Logistics Analysis
  • TOWS Analysis

Readings for the Week

  • Chapter 3
  • Chapter 4 (sections on primary and secondary data collection)

Marketing Plan

The marketing plan includes:

  • Action Programmes
  • Implementation Plans
  • Evaluation & Control
  • Budget
  • Controls
  • Organisation Mission, Goals & Objectives
  • Organisation Strategy
  • Marketing Strategies & Tactics
  • Product Programme
  • Market Targeting & Positioning Strategies
  • Pricing Programme
  • Communication Programme
  • Distribution Programme
  • Competitive Analysis
  • Macro-environmental Analysis
  • Product Analysis
  • Situational Analysis
  • Customer Analysis
  • Channels & Logistics Analysis
  • TOWS Analysis
  • Marketing Objectives
  • Need to understand the Brand’s Identity

Product Market Analysis

  • The product market is the industry in which the business operates and the product category/s in which it competes.
  • The product market analysis seeks to gain an understanding of the trends within this market.
Factors to Consider
  • What is the size of the product market?
  • Is it a growing product market? Stagnant?
  • What do industry reports suggest?
  • What are the different product categories in this product market?
  • What are the demand trends in this product market?
Defining Your Product-Market
  • How broadly or narrowly will you define your product-market?
  • Example: Automotive industry for private use (Motorcycles, Vans, Cars, Luxury, Large, Sports, Brand Y, Brand X, and so on…)
  • ACID TEST: Where is the competition primarily coming from?
Example: Fix & Fogg
  • What product market is Fix & Fogg currently in?
Passport on the VUW Library Site
  • Passport is a resource available on the VUW Library site that provides market data and analysis for various industries, consumers, and economies.

Recap: Situational Analysis & Marketing Research

  • A situational analysis involves conducting marketing research.
  • Secondary data consists of information that already exists somewhere, having been collected for another purpose.
  • Primary data consists of information collected for the specific purpose at hand.
  • Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

Competitor Analysis

  • To be successful, a company must provide greater customer value and satisfaction than its competitors do.
  • Marketers must do more than simply adapt to the needs of target consumers.
  • They must gain strategic advantage by positioning their offerings strongly against competitors’ offerings in the minds of consumers.
Competitive Marketing Intelligence
  • Competitive marketing intelligence is the systematic monitoring, collection, and analysis of publicly available information about consumers, competitors, and developments in the marketing environment.
  • Good marketing intelligence can help marketers to gain insights into how consumers talk about and connect with their brands.
Assessing the Competition
  • Who are my competitors?
  • Are some more important than others?
  • The competitors need to reflect your target market.
  • Have you identified the correct product market?
Class Questions
  • Who are McDonald's competitors?
  • Who are Rolls Royce competitors?
Competitive Analysis Grid
  • Factors to consider for each competitor:
    • Product offerings in relevant product category
    • Product attributes
    • Price range/structure
    • Product differentiation
    • Reputation/image
    • Distribution
    • Size of firm
    • Marketing communications
    • Other notes (optional)
Sustaining a Competitive Advantage
  • In order to develop a sustainable competitive advantage, three conditions must be met:
    • Competitors do not have the same particular strength; it is a relative strength.
    • The strength is relevant and important to customers.
    • The strength can be sustained over the long-term.
Sources of Advantage
  • What sources of advantage can a business have? (Example: Fix & Fogg)

Company’s Microenvironment: Marketing Intermediaries

  • Marketing intermediaries are the businesses that help the company to promote, sell, and distribute its products to final buyers.
  • They include the following:
    • Resellers – distribution channel firms that help the company find customers or make sales to them.
    • Physical distribution firms – help the company to stock and move goods from their points of origin to their destinations.
  • This relates to Channel & Logistics Analysis in the Situational Analysis.

SWOT/TOWS Analysis

  • A TOWS analysis is the summary of the external and internal situational analysis.
  • Each factor examined in the external analysis can result in a potential or actual threat or opportunity.
  • Each factor examined in the internal analysis can result in a potential or actual relative weakness or strength.
    *Ideally TOWS should be more than a simple list.
    *Each factor should be briefly described.
    *Supporting evidence should be provided.
    *Implications should be identified.
  • Opportunities: External factors that the company may be able to exploit to its advantage.
  • Threats: Current and emerging external factors that may challenge the company's performance.
  • Strengths: Internal capabilities that may help a company reach its objectives.
  • Weaknesses: Internal limitations that may interfere with a company's ability to achieve its objectives.
Threats and Opportunities
  • Are external factors that will help or hinder the business in the pursuit of its objectives.
  • Factors must be relevant to the specific objectives.
  • They come from any part of:
    • The macro-environmental analysis
    • The micro-environmental analysis
Weaknesses and Strengths
  • Strengths and weaknesses are internal factors which will have an impact on a business’s ability to achieve its objectives.
  • They can come from any part of the business’s operations, such as:
    • Management capabilities
    • Human resources
    • Financial factors
    • Production factors
    • Marketing capabilities
    • Suppliers
    • Distributors
  • For MARK101, you will conduct an ad hoc internal analysis (not a proper internal analysis).
Tips for TOWS Analysis
  • Include only the most important factors (issues) in a typical situational analysis.
  • List the factors in terms of importance.
  • Make sure you provide sufficient supportive evidence for each factor.
  • Strengths and weaknesses should be relative to the competitors.
  • Do not mix up strengths, weaknesses, opportunities, and threats.
TOWS Analysis Notes
  • Opportunities may be hindered by a firm’s weakness.
  • A threat may be overcome due to a firm’s strength.
  • Consider the implications in relation to your weaknesses & strengths.
Example: Whittaker's
  • The NZ Chocolate Market:
    • Drive to adapt eco-friendly packaging in response to demand for environmentally sustainable practices.
    • Health and wellness trends: Increased interest in chocolate variants with reduced sugar content or sugar replacements, chocolate with additional health benefits (greater cocoa content, minerals, vitamins, probiotics), and increase in plant-based options.
    • Changing climatic conditions in cocoa producing countries (El Nińo) resulting in supply shortages and a dramatic increase in the cost of cocoa beans and retail price.
    • Sustainable and ethical sourcing in chocolate production.
    • Cost of living crisis and its impact on discretionary income.
Relevant Factors & Implications of T & O based on W & S
  • External Threats:
    • Changing climatic conditions in cocoa producing countries (El Nińo) resulting in supply shortages and a dramatic increase in the cost of cocoa beans and retail price.
    • Cost of living crisis.
  • Opportunities: *Health and wellness trends.
    • Drive to adapt eco-friendly packaging.
      *Increased interest in chocolate variants and low sugar alternatives.
  • Weaknesses:
    • Whittaker’s lack international presence compared to competitors.
    • Whittaker’s do not offer sugar free or reduced free options.
    • Whittaker’s can be seen as expensive by some consumers as shown in the customer analysis.
  • Strengths:
    • New Zealand’s most trusted brand for 12 years.
    • The brand offers an oat milk flavour to cater towards consumers with a dairy intolerance.
    • The brand is sustainable and ethical with the sourcing of cocoa and the use of packaging methods.

Key Takeaways

  • Product-Market Analysis
  • Competitor Analysis
  • Marketing Intermediaries
  • TOWS Analysis