2

INTEGRATED USE
OF STRATEGIC
MARKETING
CONCEPTS

Strategic Marketing Management

TOPICS

External Analysis
Customer Analysis
Competitor Analysis
Market/submarket Analysis
Environmental Analysis and Strategic Uncertainty

Setting priorities for Businesses and Brands

EXTERNAL ANALYSIS
Trends / future events
Threats / Opportunities
Identificati
on
Strategic Uncertainties

Analysis

Strategic
Decisions

Information need areas

Scenario analysis

Where to compete
How to compete

STRATEGIC UNCERTAINTIES

Strategic uncertainty is a particular useful

concept in conducting external analysis

It focuses on specific unknown elements that

will affect the outcome of strategic decisions

Each of these strategic uncertainties can in

turn, generate another level of strategic
uncertainties

Strategic Uncertainties
Will a major firm enter?
Will a technology be replaced /
Will the rupee strengthen against
an offshore currency?
How sensitive is the market to
price?

Strategic Decisions
Investment in a product market
Investment in a technology
Commitment to offshore
manufacturing
A strategy of maintaining price
parity

THE SCOPE OF EXTERNAL

ANALYSIS

The scope of industry external analysis can involve an

industry broadly defined (transport industry), narrowly
defined (luxury train coaches) or using a scope that may
fall in between:
Railways
Passenger

trains
Express trains

The level of analysis will depend on the organizational

unit and strategic decisions involved

One approach to defining the market is to specify the

business scope. It can be identified in terms of the
product market and in terms of the competition

Approach to External analysis

Customer
analysis

Competitor
analysis

Market
analysis

5W MODEL FOR
CUSTOMER ANALYSIS
Who are our Current and Potential Customers?
1. What

are the demographic, geographic and psychographic

characteristics of our customers?
2. Who actually purchase our products?
3. Do these purchasers differ from the users of our products?
4. Who are the major influencers of the purchase decision?
5. Who is financially responsible for making the purchase?

What do customers do with our products?

6. In

what quantities and in what combinations are our products

purchased?
7. How do heavy users of our products differ from the light users/
8. Do purchasers use complimentary products during the
consumption of our products?
9. What do the customers do with our products after consumption?
10.
Are our customers recycling our products or packaging?

Where do customers purchase our products?

1. From what types of vendors are our products purchased?
2. Does e-commerce have an effect on the purchase of our
products?
3. Are our customers increasing their purchasing from non
store outlets?

When do customers purchase our products?

1. Are

the purchase and consumption of our products

seasonal?
2. To what extent do promotional events affect the purchase
and consumption of our products?
3. Do the purchases and consumption of our products vary
based on physical surroundings, perceptions or the
purchase task?

Why (and how) do customers select our products?

1. How do our products features compare with competitors?
2. What are the customers needs fulfilled by our products
and our competitors products?
3. Are the needs of our customers expected to change in the
future? If so, how?
4. What mode of payment do customers use when
purchasing our product?
5. Is the buying behavior discrete or relationship building?
6. How can we develop, maintain and enhance customer
relationship?
7. What are needs of the customers which are not met by our
products?
8. What is the potential of converting noncustomers to
customers of our products?

STEPS IN CUSTOMER ANALYSIS

How the market segments
An analysis of customer motivations
Exploration of unmet needs

THE THREE DIMENSIONS

OF SEGMENTATION

Can a
competitive
offering be
developed
and
implemented?

Is the
competitive
offering
sustainable?

Is the
resulting
business from
the target
segment
worthwhile?

HOW SHOULD SEGMENTS BE

DEFINED?
CUSTOMER CHARACTERISTICS
Geographic

Small per-urban communities for

discount stores

Type of organization

Computer needs of banks vs retailers

Size of the firm

Large hospitals were small sized ones

for pharmacy purchases

Lifestyle

Metro sexual men prefer man saloon

services

Sex

Mother of young children

Age

Cereals for kids

HOW SHOULD SEGMENTS BE

DEFINED?
PRODUCT RELATED APPROACHES
User type

Appliance buyers- home builders,

homeowners

Usage

Concerts: seasonal ticket holders,

occasional patrons, nonusers

Benefits sought

Dessert eaters- calorie conscious

versus convenience seekers

Competition

For Mc donalds: KFC, Hardees, Burger

King

Price sensitivity

Economy driven Q mobile buyers

versus prestige driven I Phone users

Brand loyalty

Those who stick to Heinz ketchup

versus price buyers

CUSTOMER MOTIVATIONS

After segmentation, you need to answer

questions such as:
What

is behind the purchase decision?

How does that differ by segment?

CUSTOMER
MOTIVATIONS

Newbie shoppers: need simple interface, and lot of

hand holding and assurance
Reluctant shoppers: need information, reassurance
and access to live customer support
Frugal shoppers: need to be convinced that price is
good and they dont have to search elsewhere
Strategic shoppers: need access to opinions of peers
or experts and choices in configuring the products
they buy
Enthusiastic shoppers: need community tools to share
their experiences as well as engaging tools
Convenience shoppers: want superior customer
service

CUSTOMER MOTIVATION

Role of Qualitative Research

Qualitative research is a powerful tool in
understanding customer motivation
It can involve:
Focus

group sessions
In-depth interviews
Customer case studies

CUSTOMER MOTIVATION

Buyer Hot Buttons

Hot

buttons are motivations whose salience and

impact on markets are significant and growing.
e.g. retail food products hot buttons include:

Freshness
Healthy eating
Gourmet eating
Meal solutions
Low carb foods

UNMET NEEDS

An unmet need is a customer need that is not

being met by the existing product offering
Unmet needs represent opportunities to
increase market share of firms, break into a
market or create and own new markets
They can also be a threat for established
firms since they can be a lever enabling
competitor entry
The key is to stretch the technology or apply
new technology in order to expose unmet
needs

COMPETITOR ANALYSIS

COMPETITORS ANALYSIS

Who are the competitors?

Against whom do we usually compete/ Who
are our most intense competitors ? Less
intense but still serious competition?
Can these competitors be grouped into
strategic groups?
Who are the potential competitive entrants?
What are the entry barriers

SOURCES OF COMPETITIVE
INFORMATION

Public
Trade
Government
Investors

COMPETITORS ANALYSIS

Evaluating the competitors

What

are their objectives and strategies? Their

level of commitment?
What is their cost structure?
What is their image and positioning strategy?
What are the strengths and weaknesses of each
competitor?

FOUR BASIC TYPES OF

COMPETITION
Product
Category

Brand
Competitors

Product
Competitors

Generic
Competitors

Total Budget
Competitors

Luxury cars
(transportatio
n)

Toyota
Honda

Trucks
Passenger
cars
Minivans

Rental cars
Motor cycles
Bicycles

Vacation
Home
remodeling

Soft drinks
(refreshments
)

Coca cola
Pepsi cola

Tea
Orange juice
Bottled
water

Tap water

Candy
Potato chips
Gum

Movies
(entertainme
nt)

Harry
potter
The Matrix

Cable TV
Video rentals

Athletic
events
Concerts

Shopping
Reading
Vacations

IDENTIFYING COMPETITION STRATEGIC

GROUPS

A strategic group is a group of firms that:

Over

time pursue similar competitive strategies

(e.g. use of same distribution channel, the same
type of communication strategies, or the same
price / quality position)
Have similar characteristics (e.g. size,
aggressiveness)
Have similar assets and competencies (such as
brand associations, logistics, capability, global
presence and development)

COMPETITIVE ANALYSIS
Competitive analysis should progress through the
following stages:
1.

2.

3.

4.

5.

Identification: Identify all current and potential brands,

products, generics, and total budget competitors
Characteristics: Focus on key competitors by assessing
the size, growth, profitability, objectives, strategies and
target market for each one
Assessment: Assess each competitors strengths and
weaknesses
Capabilities: Focus the analysis on each key
competitors marketing capabilities
Response: Estimate each competitors most likely
strategies and responses under different environment
situations as well as its reactions to firms own
marketing effort

POTENTIAL COMPETITOR
ANALYSIS
It is also important to consider potential market
entrants such as firms that might engage in:
1. Market expansion: e.g. a fast food chain should
observe chains in other regions e.g. Hardees outlet
opening in Karachi
2. Product expansions: Khaadi going into formal
wear by introducing Khaadi Khas
3. Backward integration: Fruit orchids acquired by
Mitchells
4. Forward integration: Apple opening its own outlets
in Karachi
5. The export of assets or competencies: e.g. A weak
competitor acquired by a big market player or
strategic mergers

MARKET ANALYSIS

MARKET ANALYSIS

Market analysis builds on the customer and

competitor analysis to make some strategic
judgments about the market and submarket
and its dynamics
One if the primary objectives of market
analysis is to determine the attractiveness of
a market to current and potential
participants
The need is to identify emerging submarkets,
key success factors, trends, threats,
opportunities and strategic uncertainties

DIMENSION OF MARKET ANLYSIS

Emerging submarkets
Actual and potential market size
Market growth
Market profitability
Cost structure
Distribution system
Key success factors

EMERGING SUBMARKET

Important questions to be answered:

Are

submarkets emerging defined by lower price

points, emergence of niches, new applications, a
customer trend or new technology?
What is the size and growth of the submarket?
Can we make money in this submarket?
What is the cost structure for operations?
What are the dynamics of distribution system?
What are the key success factors, assets and
competencies needed in this submarket?

PORTERS FIVE FORCES

KEY SUCCESS FACTORS (KSF)

KSFs are the assets and competencies that provide the basis
for competing successfully

They are of two types:

Strategic

necessities: do not necessarily provide and advantage

because others have them, but their absence would create a
substantial weakness

Strategic

strengths: firms assets and competencies which provide a

base of advantage

Also it is critical to determine new and emerging KSFs of the industry e.g.
for industrial firms technological innovation is important in introduction and
growth phase but role of systems capability, marketing and services
becomes important in maturity phase . For consumer goods, marketing and
distribution is important in intro and growth phase while manufacturing and
operations become crucial in maturity phase.

ENVIRONMENTAL ANALYSIS AND

STRATEGIC UNCERTAINTY

Technology trends
Technologies

changing ? Maturing ?

Consumer trends
Emerging

consumer trends ? Life styles ? Fashion?

Demographics and its impact on market size and
submarkets

Government / economic trends

Regulation,

political risks of operating in a

government jurisdiction

General Questions
Significant

trends and future event s

Uncertainty in the environment

Thank You