MARKETING STRATEGYO.C. FERRELL MICHAEL D. HARTLINE3Situation AnalysisCollecting and AnalyzingMarketing Information

Issues to be Consideredin a Situation AnalysisExhibit 3.1

Conducting a Situation Analysis (1 of 2)Analysis Alone is Not the SolutionData and Information are Not the SameData: A collection of numbers or facts that have the potential to informInformation: Data that has been transformed or combined with other data in a manner that makes it useful to decision makers

Conducting a Situation Analysis (2 of 2)The Benefits of Analysis Must Outweigh the CostsConducting a Situation Analysis is a Challenging ExerciseOne of the most difficult parts of the marketing planShould provide a complete picture of three key environments: (1) Internal, (2) Customer, and(3) External

The Relationships AmongEnvironments in a Situation AnalysisExhibit 3.2

Discussion QuestionOf the three major environments in a situation analysis (internal, customer, external), which do you think is the most important in a general sense? Why? What are some situations that would make one environment more important than others?

The Internal Environment (1 of 2)Review of Current Objectives, Strategy and PerformanceAn important input to later stages in the planning processPoor or declining performance must be the result of:(1) Goals or objectives that are inconsistent with customer or external environments(2) Flawed marketing strategy(3) Poor implementation(4) Changes in the customer or external environment beyond the control of the firm

The Internal Environment (2 of 2) Availability of ResourcesIncludes review of financial, human and experience resources as well as resources from key relationshipsFinancial resources tend to get most attentionLabor shortages are expected to be a major problem in the coming yearsOrganizational Culture and StructureProblems can arise when marketing does not hold a prominent position in the political hierarchyCulture and structure are relatively stable but can be affected by mergers

Mergers Affect Corporate Culture

The Customer EnvironmentWho are our Current and Potential Customers?What do our Customers do with our Products?Where do Customers Purchase our Products?When do Customers Purchase our Products?Why (and How) do Customers Select our Products?Why do Potential Customers not Purchase our Products?

The External Environment (1 of 2)Competition(1) Brand competitors(2) Product competitors(3) Generic competitors(4) Total budget competitors

Major Types of CompetitionExhibit 3.6

Discussion QuestionDo you think brand competitors are always the most important type of competition? How would economic conditions affect the importance of brand competitors? In bad economic times, would total budget competitors become more important? Why or why not?

Stages of Competitive Analysis(1) Identify all current and potential competitors.(2) Assess each key competitor.(3) Assess each key competitors strengths andweaknesses.(4) Focus the analysis on each key competitorsmarketing capabilities.(5) Estimate each key competitors most likelystrategies and responses under differentenvironmental situations.

The External Environment (2 of 2)Economic Growth and StabilityPolitical TrendsLegal and Regulatory IssuesTechnological AdvancementsSociocultural TrendsDemographic TrendsLifestyle TrendsTrends in Cultural Values

Examples of Trends in theSociocultural EnvironmentDemographic TrendsAging of the American populationIncreasing population diversityPopulation growth in the Sun Belt statesLifestyle TrendsClothing has become more casual, especially at workGrowing focus on health and nutritionTime spent watching television has declinedTrends in Cultural ValuesLess focus on me-oriented valuesIncreasing importance of family and childrenGreater focus on ethics and social responsibilityFrom Exhibit 3.7

Marketing Strategy in ActionThis 1977 ad for a Technics turntable discusses its advanced technology. In less than a decade the compact disc would render devices for playing vinyl records obsolete.How does this illustrate the importance of being aware of the technological environment? How can companies like Panasonic prepare for the possible obsolescence of products that are currently state-of-the-art?

Collecting Environmental Dataand Information (1 of 2)Secondary Information SourcesInternal Data SourcesGovernment SourcesPeriodicals/Book SourcesCommercial (Fee-Based) Sources

Government Sources of Secondary Data

Collecting Environmental Dataand Information (2 of 2)Primary Data CollectionDirect ObservationFocus GroupsSurveysExperimentsOvercoming Problems in Data Collection

Discussion QuestionDo you think the Internet has made it easier or more difficult to collect data and information? Why? How might the major data collection issues of today compare to the issues that occurred in the pre-Internet era?