Part 3 (Slide 1 Tot 66)

3.
2 Environment Analyses
A. Methodology :Market Research

B. DESTEP
C. Customer Analyses
D. Market form, competitors
E. Market Development
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Designed i.c.w. Leuven University College
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C. Customer analysis
“ The customer doesn’t expect everything will go right all the

time; the big test is what you do when things go wrong”
- Sir Colin Marshall

4
C. Customer analyses
Definition
“Collection and evaluation of data associated with customer
needs and market trends, through customer focus groups,
customer satisfaction measurement, field testing, etc.”
Source: www.businessdictionary.com

Customer hierarchy

Who are your customers?
B2B : business to business

– f.e. Toyota gives a incentive for his best sellers
to Malawi
B2C : business to consumer
– f.e I go on a holiday to Mzuzu
B2G : business to government
– f.e. KHLeuven needs professional help for
research in Malawi

Goals off this analysis
Segmentation and targeting
– Who, what, where, when, why?
Positioning en strength-weakness research
– Hierarchy of value and customer satisfaction: Why? Why
not?
Analysis of result and effects
– Measuring of brand awareness, brand associations and
customer satisfaction
Analysis of competitors
– Bench-marketing
Segmentation
Goal : targeting
Segments
Homogeneity / Heterogeneity
Sufficient volume
Measurable / easily to identify
Reachable

Basic customer analysis
Ferrell: the 6 W’s

– Who are our current and potential customers?
– What do our customers do with our products?
– Why do our customers buy our products?
– When do our customers buy our products?
– Where do our customers buy our products?
– Why aren’t our potential customers buying our
products?
Models of customer perception
We first have to understand client desires before we can
indicate them.
3 possible models:
• Multi - attribute attitude model
• Customer value model
• SERVQUAL -model for services

Multi - attribute attitude model

??????????
• When a group of 3
tourists go on a one day
trip with a tourguide
what are important
product charateristics?
• And rank them from
most important to less
important.

Customer value model

SERVQUAL-model

Examination of customer desires and perceptions
4 phases:
1. Determination of target groups
2. Determination of possible values for each target
group
3. Determination of the importance of values
4. Results of brands on values and distinction

Phase 1: Determination of target groups
 Segmentation
Gather data
Analyse data
– Forward segmentation: A priori segmentation
– Backward segmentation: Benefit segmentation
Specification of segments
– Create a profile for each segment

Phase 2: Determination
Determination of possible values for each target group
3 steps:
1. Specify possible situations of consumption
2. General values: things that people generally value
3. Product-related values: product qualities
Technique: laddering
Goal: information for decisions concerning positioning

Phase 3: Determination
Determination of the importance of values
Success factors
– Importance of general values

– Importance of product-related values
Goal: organization of customer values, necessary for decisions concerning

positioning decisions (competitive advantage)

Phase 4: Brand perceptions
How, good or bad, do we provide the desired customer values?”

“
Measuring brand value or brand equity (Keller)

– Brand awareness
Top of mind
Spontaneous
Helped
– Brand associations
Strength
Relevance
Differentiation

Remarks
Value for clients is the main point in each business plan

We will pay attention to:
– Customer needs
– Delivery of value
– Critical success factors
– Segmentation
– Positioning
Not limited to market research: combine results of market research with
other sources
Do not underestimate the importance of future needs
The tourist
Tourist motivations
New expectations: the rise of experience

Tourist types

Demographic factors Travelling style distinctions Product and activity
classifications
Age Accommodation used Cultural tourists:
Gender Activity participation -heritage tourists
Nationality Destination patterns -ethnic tourists
Additional demographic factors: Length of stay Nature oriented tourists:
•Expenditure Trip purpose -wildlife tourists
•Occupation Distance travelled -ecotourists
•Education Travel party composition Adventure tourists
•Family life cycle Seasonality / travel time Educational tourists:
Travel arrangements: -science tourists
-independent -volunteers
-package Theme park tourists
-mixed Casino tourists
Transport mode Urban tourists
Agricultural tourists:
-wine tourists
-farm tourists
Sex tourists:
-romance tourists
-companionship tourists
Business tourists:
-conference tourists
-event tourists
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Demographic: family life cycle
25
From: Page & Connell (2006: 74)
Motivations as the base for
tourist classifications

A typology of 15 leisure-
based
tourist roles
From: Page & Connell (2006: 72) after Foo,

McGuiggon & Yiannakis (2004)

Gallup classification model
Classification Description Impact

Adventurers Better educated, higher Attracted to new cultures
income and experiences
Indulgers Wealthier, both men and Want to be pampered and
women willing to pay
Economizers Older, men, average Vacations are routine part
income of life
Dreamers Older, women, modest View travel as meaningful
income and education experience, play safe on
choice, but dream of
more adventure
Worriers Less educated, lower Do not like to travel

income because of discomfort
with unknown
From: Kolb (2006: 118)

In which category would you classify these tourist?
Motivate your answer.

Exercise
• Group 1
• Make the Ferrell( 6W’s) analysis for Sunbird hotels
• Group 2
• Make the Ferrell(6W’s) analysis for Peters Lodge.
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3.2 Environment Analyses

B. DESTEP
D. Market form, competitors

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D. Market form, Competitors
In economics, the main criteria by which one can

distinguish between different market forms are: the
number and size of producers and consumers on the
market, the type of goods and services being traded,
and the degree to which information can flow freely.

Market forms
Perfect competition
= the market consists of a very large amount of firms producing
identical product
Monopolistic competition:
= a large amount of independent firms but there is a possibility to
differ
Oligopoly:
= a market is dominated by a small number of sellers
Monopoly:
= there is only one provider of a product or service
Monopsony
= when there is only one buyer in a market

Competitors analysis Why?
Three main goals:
1. Obtaining information about important

competitors
2. Using that information to predict their
behavior / strategies
3. Best source for our inspiration and ideas

Structure for competitive analysis
1. Identification and selection competitors

2. Aims competitors
3. Current strategies competitors
4. Identification success factors, strengths and
weaknesses competitors
5. Expected strategies competitors

Competitors
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Phase 1: Identification competitors
Number of competitors dependent on the market definition .

Methods:
– Competition oriented methods
• Management-opinion
• Strategic groups
– Consumer oriented methods
• Assessed data
• Behavioral data

Phase 2: Competitor’s aim
What does the competitor want?
How committed is he to reach his goal?

Phase 3: Current strategies competitors
Target group choice?
Chosen positioning ?
Which market instruments do they use?

Phase 4: Identification success factors,
strengths and weaknesses competitors
 Benchmarking
 Determining strong and weak points competitors
 Summarize results

Phase 5: Expected strategies competitors
What is our competitor going to do in the future?

Don’t forget the Suppliers
Major importance!
– We need to trust on our suppliers
– Therefore, strong relationships are very important
– Without suppliers, our own business would not be
possible.
– Reliable suppliers are even important as customers.

Don’t forget the Suppliers
Major importance!
– We need to trust our suppliers

– Therefore, strong relationships are very important
– Without suppliers, our own business would not be
possible.
– Reliable suppliers are as important as customers.

3.2 Environment Analyses

B. DESTEP
D. Market form, compitition

E. Market development
3 dimensions for growth (market definition Abell):
1.Products (customer technology)

2.Customer groups (segments)
3.Customer functions (needs)
Growth strategies Ansoff

Abell: defining the scope


Market penetration
– Existing product
– Existing market
Example:
– Price reduction
– Extra promotion

Product development
– Existing market
– New product
Example:
– Hotel with catering service
outside the hotel

Market development
– Existing product
– New market
Example:
– Hotel that attracts tourists
and businessmen

Diversification
– New product
– New market
Example
– Hotel that starts a tour
operator centre

Market development
Development of new activities

• Define the current market
• Make an extern analysis
• Define the desired market (if necessary out of
the existing market)
• Make a new extern analysis with changed
market definition

Market definition and competitors
Relation between market definition and the number of

competitors:
“market definition = defining the competitive set”
source : K.J. Alsem, strategic marketingplanning,..
Kind of competitors:
– Direct competitors
– Indirect competitors

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3 SWOT
 SWOT analysis is a tool for auditing an organization and its

environment.
 It is the first stage of planning and helps to focus on key

issues.
 SWOT stands for strengths, weaknesses, opportunities, and

threats.
 Strengths and weaknesses are internal factors. Opportunities

and threats are external factors.
SWOT: Strengths
A firm's strengths are its resources and capabilities that can be

used as a basis for developing a competitive advantage.
Examples of such strengths include:
 patents
 strong brand names
 good reputation among customers
 cost advantages of learning experience
 exclusive access to high grade natural resources
 favourable access to distribution networks

SWOT: Weaknesses
The absence of certain strengths may be viewed as a weakness.

For example, each of the following may be considered
weaknesses:
 lack of patent protection
 a weak brand name
 poor reputation among customers
 high cost structure
 lack of access to the best natural resources
 lack of access to key distribution channels

SWOT: Opportunities
The external environmental analysis may reveal certain new

opportunities for profit and growth. Some examples of such
opportunities include:
 an unfulfilled customer need
 arrival of new technologies
 changes in regulation
 removal of international trade barriers

SWOT: Threats
Changes in the external environment may also present threats

to the firm. Some examples of such threats include:
 shifts in consumer tastes away from the firm's
products
 emergence of substitute products
 new regulations
 increased trade barriers

3 SWOT
Strengths Weaknesses
- staff : lack of knowledge in English

- good reputation among customers
language
Opportunities Threats
- tourism sector is increasing - stiff competition

3.3 Swot- analyse
•SWOT-analysis/matrix
•Think of strengths and weaknesses of your business. Combine those with the opportunities and threats of the previous exercise.
• Write down possible solutions
Opportunities Threats
Strengths Possible strategies
Weaknesses


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3.

A. Methodology :Market Research

©Living Stone Dialoog v.z.w. 1

“ The customer doesn’t expect everything will go right all the

- Sir Colin Marshall

©Living Stone Dialoog v.z.w. 3

©Living Stone Dialoog v.z.w. 5

©Living Stone Dialoog v.z.w. 6

B2B : business to business

©Living Stone Dialoog v.z.w. 7

©Living Stone Dialoog v.z.w. 9

Ferrell: the 6 W’s

We first have to understand client desires before we can

• Multi - attribute attitude model

• Customer value model

• SERVQUAL -model for services

©Living Stone Dialoog v.z.w. 11

©Living Stone Dialoog v.z.w. 12

©Living Stone Dialoog v.z.w. 13

©Living Stone Dialoog v.z.w. 14

©Living Stone Dialoog v.z.w. 15

©Living Stone Dialoog v.z.w. 16

©Living Stone Dialoog v.z.w. 17

Determination of possible values for each target group

Goal: information for decisions concerning positioning

Determination of the importance of values

– Importance of general values

Goal: organization of customer values, necessary for decisions concerning

©Living Stone Dialoog v.z.w. 19

How, good or bad, do we provide the desired customer values?”

Measuring brand value or brand equity (Keller)

©Living Stone Dialoog v.z.w. 20

Value for clients is the main point in each business plan

©Living Stone Dialoog v.z.w. 22

©Living Stone Dialoog v.z.w. 23

©Living Stone Dialoog v.z.w. 26

From: Page & Connell (2006: 72) after Foo,

©Living Stone Dialoog v.z.w. 27

Classification Description Impact

Worriers Less educated, lower Do not like to travel

©Living Stone Dialoog v.z.w. 28

©Living Stone Dialoog v.z.w. 29

A. Methodology :Market Research

©Living Stone Dialoog v.z.w. 31

In economics, the main criteria by which one can

©Living Stone Dialoog v.z.w. 33

©Living Stone Dialoog v.z.w. 35

Three main goals:

1. Obtaining information about important

©Living Stone Dialoog v.z.w. 36

1. Identification and selection competitors

©Living Stone Dialoog v.z.w. 37

Number of competitors dependent on the market definition .

©Living Stone Dialoog v.z.w. 39

What does the competitor want?

How committed is he to reach his goal?

©Living Stone Dialoog v.z.w. 40

Target group choice?

Which market instruments do they use?

©Living Stone Dialoog v.z.w. 41

©Living Stone Dialoog v.z.w. 42

What is our competitor going to do in the future?

©Living Stone Dialoog v.z.w. 43