LESSON 3: Market Opportunity Analysis and Consumer Analysis

Strategic Marketing Versus Tactical Marketing

• Strategic marketing – it consists of selling your product in such a way that

you achieve a goal. Goals can include increasing sales, revenues, market share,
segmenting the market or creating a new brand or position in the marketplace.
An example of a marketing strategy would be to maintain your existing
revenues with less advertising or using fewer locations.

Even though strategic marketing goals might be conceptual, try to make them as
specific as possible. For example, instead of setting a goal of increasing sales,
set a goal of increasing sales by a certain percentage or among a specific market
segment, such as women, seniors or parents. Part of strategic marketing includes
adjusting your price, position and actual product or service to help you achieve
your goals.

• Tactical Marketing - Once you have goals, including specific strategies for
achieving your goals, determine how you will implement your strategies. If you
want to increase your revenues, one tactic might be to raise your prices in
conjunction with rebranding a product or service as upscale. If you want to
increase market share among health-conscious consumers, you might start
sponsoring sporting events or advertising in health and fitness magazines.

Know Your Customers To create tactics to support your marketing strategies,

create detailed profiles of your customers. Learn the age, gender, marital status,
geographic location, educational level, parental status and other information
about your current customers, as well as customers you want to attract. Without
this information, it will be difficult to create strategies and even more difficult to
tactically implement them. Knowing your customer demographics will help you
choose the right marketing channels, such as advertising media, to reach your
customers.

• Marketing Channels - Use a variety of marketing channels to implement

tactics. Selecting the right advertising media, public relations, cause marketing,
sports marketing, public relations and distribution channels are critical to
creating effective tactics. For example, if your strategy to increase revenue is to
position and price your shoes as upscale, but you sell the shoes in discount
stores, your tactic will not effectively support your strategy. If one of your
strategies is to increase sales among single women, sponsoring women’s 5K
runs and tennis leagues might be an effective tactic.
 Macro Environment - The major external and uncontrollable factors that
influence an organization's decision making, and affect its performance and
strategies. These factors include the economic factors; demographics; legal,
political, and social conditions; technological changes; and natural forces.

Specific examples of macro environment influences include competitors,

changes in interest rates, changes in cultural tastes, disastrous weather, or
government regulations.

Micro Environment - Factors or elements in an organization's immediate area

of operations that affect its performance and decision making freedom. These
factors include competitors, customers,

The Impact Of Micro and Macro Environment Factors on Marketing

Micro Environment Factors

● The suppliers: Suppliers can control the success of the business when they
hold the power. The supplier holds the power when they are the only or the
largest supplier of their goods; the buyer is not vital to the supplier’s business;
the supplier’s product is a core part of the buyer’s finished product and/or
business.

● The resellers: If the product the organization produces is taken to market

by 3rd party resellers or market intermediaries such as retailers, wholesalers, etc.
then the marketing success is impacted by those 3 rd party resellers. For
example, if a retail seller is a reputable name then this reputation can be
leveraged in the marketing of the product.

● The customers: Who the customers are (B2B or B2C, local or

international, etc.) and their reasons for buying the product will play a large role
in how you approach the marketing of your products and services to them.

● The competition: Those who sell the same or similar products and
services as your organization are your market competition, and the way they sell
needs to be taken into account. How does their price and product differentiation
impact you? How can you leverage this to reap better results and get ahead of
them?
 ● The general public: Your organization has a duty to satisfy the public.
Any actions of your company must be considered from the angle of the general
public and how they are affected. The public has the power to help you reach
your goals; just as they can also prevent you from achieving them.

Macro Environment Factors

● Demographic forces: Different market segments are typically impacted

by common demographic forces, including country/region; age; ethnicity;
education level; household lifestyle; cultural characteristics and movements.

● Economic factors: The economic environment can impact both the

organization’s production and the consumer’s decision making process.

● Natural/physical forces: The Earth’s renewal of its natural resources

such as forests, agricultural products, marine products, etc must be taken into
account. There are also the natural non-renewable resources such as oil, coal,
minerals, etc that may also impact the organization’s production.

● Technological factors: The skills and knowledge applied to the

production, and the technology and materials needed for production of products
and services can also impact the smooth running of the business and must be
considered.

● Political and legal forces: Sound marketing decisions should always take
into account political and/or legal developments relating to the organization and
its markets.

● Social and cultural forces: The impact the products and services your
organizations bring to market have on society must be considered. Any elements
of the production process or any products/services that are harmful to society
should be eliminated to show your organization is taking social responsibility. A
recent example of this is the environment and how many sectors are being
forced to review their products and services in order to become more
environmentally friendly.

Marketing research - it is "the process or set of processes that links the

producers, customers, and end users to the marketer through information —
information used to identify and define marketing opportunities and problems;
 generate, refine, and evaluate marketing actions; monitor marketing
performance; and improve understanding of marketing as a process.

Steps in Marketing Research

Step 1. Define the Objective & Your “Problem” Perhaps the most important
step in the market research process is defining the goals of the project. At the
core of this is understanding the root question that needs to be informed by
market research. There is typically a key business problem (or opportunity) that
needs to be acted upon, but there is a lack of information to make that decision
comfortably; the job of a market researcher is to inform that decision with solid
data. Examples of “business problems” might be “How should we price this new
widget?” or “Which features should we prioritize?”

Step 2. Determine Your “Research Design” Now that you know your research
object, it is time to plan out the type of research that will best obtain the
necessary data. Think of the “research design” as your detailed plan of attack. In
this step you will first determine your market research method (will it be a
survey, focus group, etc.?).

Step 3. Design & Prepare Your “Research Instrument” In this step of the
market research process, it’s time to design your research tool. If a survey is the
most appropriate tool (as determined in step 2), you’ll begin by writing your
questions and designing your questionnaire. If a focus group is your instrument
of choice, you’ll start preparing questions and materials for the moderator.

Step 4. Collect Your Data This is the meat and potatoes of your project; the
time when you are administering your survey, running your focus groups,
conducting your interviews, implementing your field test, etc. The answers,
choices, and observations are all being collected and recorded, usually in
spreadsheet form. Each nugget of information is precious and will be part of the
masterful conclusions you will soon draw.

Step 5. Analyze Your Data Step 4 (data collection) has drawn to a close and
you have heaps of raw data sitting in your lap. If it’s on scraps of paper, you’ll
probably need to get it in spreadsheet form for further analysis. If it’s already in
spreadsheet form, it’s time to make sure you’ve got it structured properly. Once
that’s all done, the fun begins. Run summaries with the tools provided in your
software package (typically Excel, SPSS, Minitab, etc.), build tables and graphs,
 segment your results by groups that make sense (i.e. age, gender, etc.), and look
for the major trends in your data. Start to formulate the story you will tell.

Step 6. Visualize Your Data and Communicate Results You’ve spent hours
pouring through your raw data, building useful summary tables, charts and
graphs. Now is the time to compile the most meaningful take-aways into a
digestible report or presentation. A great way to present the data is to start with
the research objectives and business problem that were identified in step 1.
Restate those business questions, and then present your recommendations based
on the data, to address those issues.

Consumer - A purchaser of a good or service in retail. An end user, and not

necessarily a purchaser, in the distribution chain of a good or service. See also
customer.

Business markets - are generally made up of businesses which buy products

and raw materials for their own operation.

Marketplaces - where organizations purchase raw materials, natural resources

and components of other products for their resale or for use in manufacturing
another product.

Buying Behavior – is often irrational and unpredictable. Consumer often say

one thing but do another. Still, the effort spent trying to understand consumers is
valuable because it can provide needed insight on how to design products and
marketing programs that better meet consumer needs and wants.

Consumer Buying Process:

1. Need Recognition – the buying process begins when consumers recognize

that they have an unmet need. This occurs when consumers realize that there is a
discrepancy between their existing level of satisfaction and their desired level of
satisfaction. Consumers can recognize needs in a variety of settings and
situations.
External stimuli – such as hunger, thirst, and fatigue. Other needs have their
basis in external stimuli, such as advertising, window shopping, interacting with
salespeople, or talking with friends and family.

2. Informative Search – information can also come from personal sources:

including word-of-mouth advice from friends, family, co-workers,. External
 sources of information include: advertising, magazines, websites, packaging,
displays, and salespeople.

3. Evaluation of Alternatives - consumers evaluate products as bundles of

attributes that have varying abilities to satisfy their needs. In buying a car, for
example, each potential choice represents a bundle of attributes, including brand
attributes: (e.g.image, reputation, reliability, safety), product features: (e.g.
power windows, automatic transmission, fuel economy), aesthetic attributes:
(e.g. styling, sportiness, roominess, color), and price.

Purchase Decision - after the consumer has evaluated each alternative in the
evoked set, he or she forms an intention to purchase a particular product or
brand. However, a purchase intention and the actual act of buying are distinct
concepts. A consumer may have every intention of purchasing a new car, for
example, but several factors may prevent the actual purchase from taking place.
The customer may postpone the purchase due to unforeseen circumstances, such
as an illness or job loss.

Purchase Evaluation – it is the connection between the buying process and the
development of long-term customer relationships. Marketers must closely
follow consumer’s responses during the stage to monitor the product’s
performance and its ability to meet consumer’s expectations.

Buying Behavior:

Behavioral segmentation - is the most powerful approach because it uses actual

consumer behavior or product usage to make distinctions among market
segments.

Four Types of Business Markets:

1. Commercial Markets – these markets buy raw materials for use in producing
finished goods, and they buy facilitation goods and services used in the
production of finished goods.
2. Reseller Markets – these markets consist of channel intermediaries such as:
wholesalers, retailers, or brokers that buy finished goods from the producer
market and resell them at a profit.
 3. Government Markets- these markets include federal, state, country, city, and
local governments. Government buy a wide range of finished goods ranging
from aircraft carriers to fire trucks to office equipment.
4. Institutional Markets – these markets consist of a diverse of noncommercial
organizations such as churches, charities, schools, hospitals, or professional
organizations.

Market segmentation - The process of defining and subdividing a large homogenous

market into clearly identifiable segments having similar needs, wants, or demand
characteristics. Its objective is to design a marketing mix that precisely matches the
expectations of customers in the targeted segment.

The four basic market segmentation-strategies are based on:

● behavioral,
● demographic,
● psychographic, and
● geographical differences.

Market Positioning – it is the act of establishing a strong brand image for a

product. This includes telling the market exactly what your product is, who it is
for, what product category it belongs to, what its most essential attributes or
benefits are, and what it is not.

Positioning Strategies - a firm can design its marketing program to position and
enhance the image of its offering in the minds of target customers. To create a
positive image for a product, a firm can choose to strengthen its current position
or fina a new position.

Example: A firm known for excellent customer service must continue to invest
time, money, talent, and attention to its product position to protect its market
share and sales from competitive activity.

Perceptual Mapping – is a technique of attempting to determine through

graphing how different product brands are perceived by consumers when
mapped or compared against two or more product dimensions.

Bases for Positioning:

 1. Attribute – highlight a product feature or customer benefit; example: Tide
detergent powder is positioned on bringing incomparable whiteness.
2. Price and Quality – stress high price as an indication of quality or emphasize
low price as a signal of value; example premium automobile brands like BMW
and Mercedes maintain their quality such that their customers are ready to give
the highest pricing for the cars.
3. Use or application – stress unique use/s; example are mobile phones and
telecom companies with their different offerings.
4. Product user – focuses on a personality of type of user; example; L’Oreal
position itself targeting fashion-conscious women.
5. Product class – associate with a particular category of products; example
margarine brand with butter.
6. Competitor – an explicit or implicit frame of reference of one or more
competitors; example Philippine Daily Inquirer and Manila Bulletin in terms of
circulation and readership.
7. Emotion – focuses on how the product makes customer feels; example Nike’s
“Just do it” offers an emotional message of achievement and courage.

Segmenting Business Markets

Business Markets can be segmented in a variety of ways depending on the

marketer’s overall objectives and product and service offerings.

1. Geographical location – companies situated in same region most probably

have similar environment or culture as well as they speak similar languages.
People living in different places will have different resources and culture.

2. Company size (small, medium, large)- there can be segments on the basis of
the company size as it can be prominently noticed that the companies that are
larger in size have different goals as compared to the companies that are small.

3. Usage Rate – (non user, light user, moderate user and heavy user) – in
business-to-business market there can be segment based on the consumption of
the product. The companies that give continuous order for the product can be
grouped as the frequent buyers who are actually the regular customers.

4. End user Application – the product that are used in the formation of another
product without undergoing any further processing.

5. Type of buying situation (straight re-buy, modified re-buy, and new task)
there can be segments on the basis of buying situation as in straight re-buy it is
 routine purchase order, in modified re-buy there a need of some research when
the buyer wants some changes in size, color or price and in new task there is a
lot of research required to come up with a new product.

LESSON 4: DEVELOPING THE MARKETING MIX

Product – it is anything in the form of good, service, or idea consisting of a bundle of

tangible and intangible attributes that can be offered to a market that might satisfy a want
or need and is received in exchange for money or something else of value.

Three components of a product:

1. Core product - this is the end benefit for the buyer. The core product is what the
buyer really buying, For example, the buyer of a car is buying a means of transport, the
buyer of aspirin is buying pain relief and the buyer of financial advice is hoping to buy
financial security and peace of mind.

2. Formal Product - this the actual physical or perceived characteristics of the product
including its level of quality Special features, styling, branding and packaging.

3. Augmented Product – these are the support items that complete the total product
offering such as after-sales service, warranty, delivery and installation.

Specific Categories of Consumer Products:

1. Convenient Products - these are products that appeal to a very large market segment.
They are generally consumed on routine with little thought and purchased frequently.
Ex: Food, cleaning products, and personal care products.

2. Shopping Products – these are products consumers purchase and consume on a less
frequent schedule compared to convenience products. Consumers are willing to spend
more time locating these products since they are comparatively more expensive than
convenience products and because these may have additional psychological benefits for
the purchaser, such as raising their perceived status level within their social group.

Ex: household furnishings, clothing products, personal services, electronic products.

3. Specialty Products – these are products that are likely to carry a high price tag
relative to convenience and shopping products. Consumptions may happen at about the
same rate as shopping products but consumers are much more selective.

Ex: high - end luxury automobiles, expensive champagne, and celebrity hair care
experts.

4. Unsought Products - these are products whose purchase is unplanned by the

consumer but takes place as a result of marketer’s actions. Such purchase decisions are
made when the customer is exposed to promotional activity such as a salesperson’s
persuasion or purchase incentives like special discounts offered to certain online
shoppers.

Product Life cycle – has four very clearly defined stages, each with its own
characteristics that mean different things for business that are trying to manage the life
cycle of their particular products.

1. Introductory Stage – this stage of the cycle could be the priciest for a company
launching a new product.

2. Growth Stage - it is normally characterized by a strong growth in sales and profits.

3. Maturity Stage - during the maturity stage, the product is established and the aim for
the manufacturer is now to keep the market share they have built up. They also need
products to consider any product modifications or improvements to the production
process which might give them a competitive advantage.

4. Decline Stage – this reduction could be due to the market becoming saturated(like all
the customers who will buy the product have already purchased it.), or because the
consumers are switching to a different type of product.

Decision could be to retire the product altogether or extend the life cycle of the
product through a number of strategies.

1. Re-Packaging – is a way for the company to give a mature product a new image,
particularly if the product’s earlier image has limited its target audience.
2. Discounting – designing a new pricing strategy does not have to be a short term
alternative for a mature product.
3. Re-Branding – a mature product can be a somewhat extreme approach to extending
its life cycle, but it can also be a valuable method.
4. Expanding Abroad – in a foreign country to reach out to a totally unserved market
can make longer the product life cycle on a different level.

Allowance Pricing – is a promotional allowance offered by a manufacturer to a retailer

to feature a product in some way, this is done to cover the cost of distributing the
manufacturer’s products.
Segmented Pricing - this is when company sets more than one price for a product
without experiencing significant differences in the costs of producing or distributing the
product.
Market Segments – an example of segmented pricing is the web page indicating other
discounts given by ticket world for senior citizens, students and the like.
Psychological Pricing – this is defined as setting prices according to the psychographics
for the market segment.

Reference Pricing – this is psychological pricing method wherein the cost that
consumers anticipate paying or considering to pay for a particular good or service is
considered by the marketer.

Odd even pricing - A pricing method that takes advantage of the psychological fact that
customers are greatly influenced by certain prices or price ranges. Initially, this method
was intended to enable accurate registration of transactions through the tendering of
change.

LESSON 5: MANAGING THE MARKETING EFFORT

SWOT analysis is a tool for auditing an organization and its environment. It is the first
stage of planning and helps marketers 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. A strength is a positive internal
factor. A weakness is a negative internal factor. An opportunity is a positive external
factor. A threat is a negative external factor.

• Simple rules.

• Be realistic about the strengths and weaknesses of your organization.

• It should distinguish between where your organization is today, and where it could be
in the future. • It should always be specific. Avoid grey areas.
• Always apply the tool in relation to your competition i.e. better than or worse than your
competition.
• Keep your audit short and simple. Avoid complexity and over analysis
• It is subjective.
• A strength could be:
• Your specialist marketing expertise.
• A new, innovative product or service.
• Location of your business.
• Quality processes and procedures.
• Any other aspect of your business that adds value to your product or service.

• A weakness could be:

• Lack of marketing expertise.
• Undifferentiated products or services (i.e. in relation to your competitors).
• Location of your business. – Poor quality goods or services.
• Damaged reputation.

Opportunities and threats are external factors.

• A developing market such as the Internet.
• Mergers, joint ventures or strategic alliances.
• Moving into new market segments that offer improved profits.
• A new international market.
• A market vacated by an ineffective competitor.

• A threat could be:

• A new competitor in your home market.
• Price wars with competitors.
• A competitor has a new, innovative product or service.
• Competitors have superior access to channels of distribution.
• Taxation is introduced on your product or service.

A Marketing Plan – it is a comprehensive document or blueprint that outlines a

company's advertising and marketing efforts for the coming year. It describes business
activities involved in accomplishing specific marketing objectives within a set time
frame.

A marketing plan also includes a description of the current marketing position of a

business, a discussion of the target market and a description of the marketing mix that a
business will use to achieve their marketing goals.

• Marketing Plan Outline

• A marketing plan should be based on where a company needs to be at some point in the
future. These are some of the most important things that companies need when
developing a marketing plan:
• Market research: Gathering and classifying data about the market the organization is
currently in. Examining the market dynamics, patterns, customers, and the current sales
volume for the industry as a whole.
• Competition: The marketing plan should identify the organization's competition. The
plan should describe how the organization will stick out from its competition and what it
will do to become a market leader.

Market plan strategies: Developing the marketing and promotion strategies that the
organization will use. Such strategies may include advertising, direct marketing, training
programs, trade shows, website, etc.
Marketing plan budget: Strategies identified in the marketing plan should be within the
budget. Top managers need to revise what they hope to accomplish with the marketing
plan, review their current financial situation, and then allocate funding for the marketing
plan.
Marketing goals: The marketing plan should include attainable marketing goals. For
example, one goal might be to increase the current client base by 100 over a three month
period.

Monitoring of the marketing plan results: The marketing plan should include the process
of analyzing the current position of the organization. The organization needs to identify
the strategies that are working and those that are not working.

8 P's of Marketing Price

Price — The amount of money needed to buy products

Product — The actual product Promotion (advertising)- Getting the product known
Placement — Where the product is sold
People — Represent the business
Physical environment — The ambiance, mood, or tone of the environment
Process — The Value-added services that differentiate the product from the competition
(e.g. after-sales service, warranties)
Packaging — How the product will be protected

A target market is the market a company wants to sell its products and services to, and
it includes a targeted set of customers for whom it directs its marketing efforts.
Identifying the target market is an essential step in the development of a marketing plan.
A target market can be separated from the market as a whole by geography, buying
power, demographics and psychographics.

• Market positioning is a critically important part of marketing strategy since it

determines to a large extent what customers perceive is being offered to them.

The role of market positioning in marketing strategy

Businesses use marketing to create value for customers by making two key decisions:

Decision 1: Choose which customers to serve This involves: Market segmentation (analysing the
different parts of a market) Targeting (deciding with market segments to enter)
Decision 2: Choose how to serve those customers This also involves two important parts of
marketing strategy:

Product differentiation (what makes it difference from the competition)

Market positioning (how customers perceive the product)

Positioning is a marketing strategy that aims to make a brand occupy a distinct position, relative
to competing brands, in the mind of the customer. Companies apply this strategy either by
emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or
they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-
level or high-end, etc.) through advertising. Once a brand is positioned, it is very difficult to
reposition it without destroying its credibility. It is also called product positioning

Types of Promotion:

• Advertising – this is non personal communication that utilizes media. This is a paid form of
communication done by an identified sponsor.
• Sales promotion – this represents all marketing activities to boost sales in the short term.
• Personal selling – this is personal communication that requires a sales representatives who
needs to maintain direct contact with prospects and customers. This is a paid form of
communication.
• Public Relations (PR)- it identifies relevant publics (shareholder, customer, government, etc)
and making sure that the company has good relations with this publics.
• Direct Marketing – companies directly communicate with consumers. This may involve the
following forms: email marketing, telemarketing, direct mail, direct advertising, direct selling
etc.