MARKET OPPORTUNITY ANALYSIS: CONSUMER ANALYSIS

 Marketing strategy is commonly referred to as a core PESTLE: POLITICAL, ECONOMIC, SOCIAL,

strategy. It is composed of market segmentation, targeting and TECHNOLOGICAL, LEGAL and ENVIRONMENTAL
brand positioning – collectively known as STP. forces.

 Marketing tactics, on the other hands are more popularly

known as 4Ps are composed of product, place, price and POLITICAL FACTORS (how and to what degrees do
promotions. government policies affect the economy)

• Tax policy
Strategic Marketing Tactical Marketing • Labor law
Concept Thought process (big idea – Taking action near • Environmental Law
Big Picture) term (how to) • Trade restrictions
Purpose To attain the company’s To execute the • Tariffs
objectives strategy
• Political Stability
Activities *Understanding the Promoting and
• Health
environment selling to the
*Understanding the industry consumers • Education
*Understanding the • Infrastructure
customers ECONOMIC FACTORS (the impact of a country’s
financial indicators on how business operate and make
decisions)
*understanding the
competition • Economic Growth
*understanding the brand • Interest Rates
• Exchange Rates
Key Concepts STP (Segmentation- Marketing mix (4Ps for • Inflation Rates
Targeting- Positioning) services to include SOCIAL FACTORS (how the demand for a company’s
people,process and physical product and how firms should operate are affected by social
environment) demographics, attitudes, and opinions on issues like careers
Timetable Timeless Time-bound and culture, education and ethics, health and safety,
Absence of the Too much talking- Blind action- Doing without housing and fashion immigration and diversity, among
other side Nothing gets done having a plan. others)

• Careers
Marketing is about value creation (serving customers better • Culture
than competition) and value capture (profit maximization). • Education
In order to do that marketers follow a marketing process • Ethics
• Health
• Safety
MARKETING MARKETING MARKETING MARKETIN • Housing
ANALYSIS PLANNING IMPLEMENTATI G CONTROL • Fashion and lifestyle
ON • Immigration
• Diversity
TECHNOLOGICAL FACTORS (how technological
Marketing strategy formulation must begin by analyzing aspects affect innovation, productivity, investment and
external factors of the business, focusing on seeking cost)
opportunities first rather than on marketing mix.
• R & D (research and development)
Marketing Environment includes the forces outside of
marketing. It consist of Macro- environment (national • Automation
issues) and Micro-environment (company issues) both of
which can influence marketing decisions. For Macro- • Technology Incentives
environment 3 popular frameworks are PESTLE,
• Rate of technological change
INDUSTRIAL ANALYSIS, and KEY FOR SUCCESS and
for micro- environment is the 6C’s. LEGAL FACTORS (how the laws of a country
can affect how companies adopt policies as to its
operation, cost structure, and the demand for its
MACRO-ENVIRONMENT products)

• Discrimination Law
 MARKET OPPORTUNITY ANALYSIS: CONSUMER ANALYSIS

• Consumer Law Rivalry among existing in competition is described to be

• Antitrust law the most intense in a price war, followed by promo war,
• Employment law which can significantly lower profitability.
• Health and safety law
Rivalry among existing competition is considered high
ENVIRONMENTAL FACTORS (ecological and when prices are adjusted downward frequently.
environmental aspects that can affect business such as
 NUMBER OF MAJOR OR
insurance, tourism, farming)
EQUALLY BALANCED
• Weather COMPETITION
• Climate and climate change  INDUSTRY GROWTH
 FIXED COSTS
 PRODUCT DIFFERENTIATION
INDUSTRIAL INDUSTRY  SWITCHING COSTS
Industrial Analysis  UNUSED PLANT CAPACITY OR
ENLARGED NEW CAPACITY
- it identifies the 5 interacting forces that affect the  DIVERSITY OF COMPETITION
profitability of an industry. These forces enable firms to  STRATEGIC STAKES
identify competitive pressures (those with high threat) as  EXIT BARRIER
well as opportunities in the marketplace.
4. BARGAING POWER OF CUSTOMERS
1. THREATS OF NEW ENTRANTS  VOLUME PURCHASE BY CUSTOMERS
o ECONOMIES OF SCALE  BUYING PRICE VIS-À-VIS PRODUCT COST-
o PRODUCT DIFFERENTIATION with small margins, industrial buyer would to
o CAPITAL REQUIREMENT constantly negotiate for better deals, better terms,
o SWITCHING COST – Ability to and better concessions.
change suppliers from one to another  NUMBER OF SUPPLIERS IN AN INDUSTRY
affects new entrants.  ACTUAL OR PERCEIVED
o ACCESS DISTRIBUTION DIFFERENTIATION- well-known brands enjoy
o COST DISADVANTAGE a higher stature than unknown brands, as they
INDEPENDENT OF SCALE become simplifiers of choice.
o GOVERNMENT POLICY
5. BARGAINING POWER OF SUPPLIERS
2. THREATS OF SUBSTITUTES  INDUSTRY DOMINANCE
 Substitutes should be considered from  AVAILABILITY OF SUBSTITUTES
the perspective of buyer and how they  IMPORTANCE OF BUYER TO SELLER
perceived.  IMPORTANCE OF INPUT TO BUYER
 PRODUCT DIFFERENTIATION
Examples
 SWITCHING COST
Bread for rice, marble for woods, orange juice for  THREATS OF FORWARD INTEGRATION
coffee.
They are indirect competition. KEY FOR SUCCESS AND SWOT

 Firms, whose products are deemed as Key for success, which is the source document of
substitutes must emphasize their key Strength, Weakness (SW) analysis, one half of
differentiating advantage to create SWOT analysis with OT being in the acronym
preference over the substitutes. for Opportunities and Threats.

Examples Key for success (KFS) also known as logic of

industry (LOI) or Economics of business (EOB)
EASTWEST SEEDS and is simply a blueprint composed of controllable
JOBSTREETS.COM and uncontrollable variables critical to success of
a firm that must be managed well, in order to
3. RIVALRY AMONG EXISTING attain its goal and outperform competition.
COMPETITION
 MARKET OPPORTUNITY ANALYSIS: CONSUMER ANALYSIS

When KFS is managed well in established advantage of a competition of a competitor’s key

markets, companies have higher chances to be weak points to satisfy their customers better.
successful.
Micro- environment
The word “key” in KFS connotes a limited Deals with company’s issues
number so it is important to include only those
that have a high impact to the industry and to the From 3C’s of marketing strategy namely
firm. company, customers, and competition to add 3
more variables namely channel, complementors
When looking at KFS its important to include and communities.
similar products that can provide the same
satisfaction to the consumers in considering 6C’s
segment. It all depends on how a consumer  Company
positions a product in relation to other products in  Customers
their minds.  Competition
 Channel
Another point to consider is that in defining KFS  Complementors
by market segment, what is true in one segment  Communities
may not be true in another.
1. Company can indicate a plus for relative
The industry the firm competes in must defined strength and minus the relative weakness for
well so that KFS can be distinguished thoroughly. each department’s performance. A weakness
The industry that a marketer defines will affect in a specific functional area means
their product’s positioning, success factors, improvement projects are needed.
marketing direction and etc.
 R&D
 Sourcing
KFS must reviewed periodically because not all
 Purchasing
rules will be the same in the future. Marketers
need to understand and anticipate changes in  Production
rapid transition industries.  Warehouse
 Finance
There are so called KFS a breakthrough idea can  Marketing
“reinvent” the rules in an industry especially as  Operations
firms approach non- customers or solve pain  Sales
points of existing customers.  Credit
 Order Processing
In the logic of strategy never fear dominant  Delivery
players.  Collection
 Service
The strengths and weaknesses of a firm are
measured against their target competition. 2. Customers (5 types of customers)
 CONSUMER MARKETS- Individual
An exception about strength of one being a
buyers who buy for their own use.
weakness of another is when firms make their
 BUSINESS MARKETS- organizational
weaknesses irrelevant by redefining rules of the
buyers who buy as input to their own
industry.
product.
 GOVERNMENT MARKETS- government
In terms of relevance. If a company is very strong
agencies that buy to produce public services.
or very weak in an area, but that strength or
 INTERNATIONAL MARKETS- buyers are
weaknesses is a factor for success in the industry.
from country.
Marketers must try to establish a cluster of  RESELLER MARKETS- organization or
strengths or differentiation to avoid being easily individual buyers who buy for resell at a
matched by competition. profit without adding anything to the
product.
In formulating marketing strategies, firms must
be able to exploit their strengths as well as take 3. Competition (2 types of competition)
 MARKET OPPORTUNITY ANALYSIS: CONSUMER ANALYSIS
 DIRECT COMPETITION- similar offering
from the perspective of the costumer.
 INDIRECT COMPETITION- offering
deemed as subtitles to another product or
services.
4. Channel- Individuals or companies who
buys and resell the company’s products to
final buyers.
 Distributors
 Wholesalers
 Retailers
 Direct sellers
 Home tv shopping
 Online retailers
5. Complementors Individuals or businesses
who can help an organization understand,
promote and/or sell its product or services.
 PHYSICAL DISTRIBUTION- companies
or individual who store and transport the
company’s product to final buyer.
 MARKETING AGENCIES- companies or
individual who helps to understand or
promote the company’s products to final
buyer.
 FINANCIAL INTERMEDIARIES-
companies or individual who help give
credit for the company’s products to final
buyer.
6. Communities- Public stakeholders where the
organization needs to be sensitive to their
product opinions.
 1. Financial public - organizations or
individuals who can ease or hinder an
organization’s access to credit.
 2. Media public- mass media or social
media.
 3. National Government Public –
government laws can be created that can
ease or restrict companys actions.
 4. Local Government public – mayors or
powerful councilors can create problem for
uncooperative businesses.
 5. General public – attitude of change in
attitude that can affect a company’s sales
volume.
 6. Local public- neighborhood and
community groups who can question a
companys effect on the local area.
 7. Citizen-action public- environmental or
Qualitative market research are conducted initially which
health groups can question the action of a
are validated subsequently with market research although
company’s publicity.
qualitative research are also used to probe deeper into
 8. Employees- individuals who are
employeed within an organization.
 9. Suppliers- organizations or individuals
who are employed to help an organization
produce products or get specific jobs done.
Firms usually sequence their analysis from
macro to micro- environment to find if they
have the opportunity or right to win in the
marketplace.
PESTLE Trends
Industry Analysis
Key Factors
for Success
6C
s
RIGHT TO WIN ANALYTICAL
SEQUENCE
Marketers must look outside of the firms to
consider the effect of PESTLE trends to
their marketing mix. They can look at the
industry they operate to understanding
where profitability can be compromised or
grown. Key factors for success also known
as (logic of industry) are used to understand
the existing winning variables of the
industry as basis to redesigning innovation
of what to add or what to abandon when new
industry rules are created.
The 3c’s of marketing is expanded into 6c’s
in order to analyze opportunities as well as
what may affect the company’s operations.
If attention is not given to one of the 6c’s.
Strong sense making skills are required to
analyze the macro and micro-environments.
MARKETING RESEARCH- An
indispensable tool for marketers to know
what needs to be done, albeit creativity will
still be needed in terms of how to
communicate and execute the strategy.
Types of marketing research
 MARKET OPPORTUNITY ANALYSIS: CONSUMER ANALYSIS

information (such as knowing why) gathered from

quantitative research.

SECTIONS OF Details topics probed in UAI

UAI
Focus group discussion (FGD) and In- depth interview Brand awareness Brand awareness, advertising awareness,
(IDI) source of awareness

Usage Product category use, or why not it is used

COMPARISSON behavior –never not anymore, size or variant mix,
usage frequency, who uses, who else uses,
Focus group discussion In- depth discussion when is the product used, product usage
(FGD) (IDI) ,brands use more often, brand being use
NUMBER OF 7- 9 BATCH INDIVIDUAL presently
PARTICIPANT
S
ADVANTAGE *SHARE *PRIVACY- NO
S EXPERIENCES NEED TO BE
*BUILD FROM CONCIOUS OF THE
OTHERS IN THE PRESENCE OF
ROOM OTHERS IN FGD’S
*ABILITY TO
FOLLOW UP
ANSWERS

Purchase behavior Where it was last bought ,where it

most often bought, purchase
frequency, size mix purchase
,quantity last bought , price paid,
alternative in mind during last
purchase, brand availability, what
else was bought with the brand

Product experience Products attributes desired ,likes

about existing brands, dislikes
DISADVANTAGE *DISCUSSION *MORE TIME- about existing brands, rating of
S WITH CONSUMING completing brands on attributes,
STRANGERS IN *INABILITY socio-demographics data, media
THE ROOM TO SHARE habits
*MAYBE EXPERIENCES
INFLUENCED AND BUILD
BY OPINIONS FROM
OF OTHERS OTHERS.
*INABILITY TO Market research allows the marketers and
FOLLOW UP entrepreneurs to answer the various “w”
INDIVIDUAL questions (who, what, when and etc.)
REPLIES
1. In macro level market segmentation answer the
question “What are groupings of similar
Some IDI’s are done in pairs. In FGD’s or mini-FGD’s of 4
customers?
to 5 people (for experts or when discussing sensitive topics.
2. In micro level these questions can be answered:
a. Decision Making Unit “Who purchases the
Among the quantitative market researches is product?
the Usage, Attitude and Image studies (UAI) b. In Decision Making Process (DMP) “How,
which help marketers understand the where and when is the purchase made?
consumer’s product usage and attitude (used c. Consumer motivation and guide the
in market segmentation) as well as image marketer “What do the consumer want and
(used in brand positioning). why?
 MARKET OPPORTUNITY ANALYSIS: CONSUMER ANALYSIS
Steps in Marketing Research
1. Define your research
problems or issues.
2.Choose your market
research approach
3. Create your research design
4. Collect the data
5.Interpret the data
6. Recommend Solutions
Steps in Marketing Research
What it is
This gives focus and clarity on why
you are doing market research and
how data will be used in making
decisions.
Determine if you need qualitative
and/or quantitative approach, then
determine the specific type of
marketing research you will use to
attain your research goals.
Draft and test the questions to be
asked to the right sampling target
and plan how data will be analyzed.
This involves having the invited
respondents answer your research
completely.
Cluster and convert the “what” to
“so what” to gain insights or new
truths.
Convert “what” to “now what”,
meaning, and the actions that should
be taken by the target users. It may
be possible to recommend different
actions for different users.
Example
Know the voice of channel
costumers, specifically pain points
and context of pain points of
distributors.
In-Home visit plus in-depth
interview (IDI) of distributors.
Ask dislikes as well as wish lists.
Subdivide respondents via new
distributors, lapsed distributors and
top performing distributors.
One-on-one interview.
Lapsed distributors lack
confidence. They quit after
experiencing a sales rejection even
after passing their sales training.
Offer demo assistance and
coaching to lapsed distributors who
easily get discouraged.