MARKET ANALYSIS

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MARKET ANALYSIS

• Session 3
• Monday, April 3 2000

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SESSION OUTLINE

• Companys micro and macro-environment
• Analysis of product demand
• static
• dynamic
• Competitive analysis
• Competitive strategy video  Marketing Warfare 

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Macroenvironmentexternal forces on the company
Techno- logical
Natural
Economic
Political
Demographic
Cultural
Company
4
The Companys Microenvironment

• Marketing success depends on others
• other departments in the firm
• suppliers
• marketing intermediaries
• customers
• competitors
• relevant publics

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Microenvironmentcompanys internal environment
R D
Purchasing
Finance
Manufacturing
Top management
Accounting
Marketing
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DEMAND ANALYSIS

• Descriptive analysis
• number of customers
• average purchase
• geographical concentration
• 20/80 rule
• Dynamic analysis
• Product Life Cycle

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Product Life-Cycle Strategies
Sales Profit ()
Sales
Profits
Loss ()
Growth
Decline
Development
Introduction
Maturity
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COMPETITIVE ANALYSIS FLOWS OUT OF CUSTOMER
ANALYSIS

• Understand customers needs and wants
• Identify current and potential competitors
• Perform industry analysis, identify suppliers and
  common intermediaries
• Understand your competitors
• Determine competitor strategies (present and
  future)

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COMPETITORS TO CONSIDER

• CURRENT
• market structure analysis
• perceptual analysis
• POTENTIAL (potential entry of new competitors)
• remain alert to their possibility
• depends on
• barriers to entry
• expectations about competitive reactions

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BARRIERS TO ENTRY OF NEW COMPETITORS

• Economies of Scale
• Lack of Product Differentiation
• Capital Requirements
• Access to Distribution Channels
• Buyer Switching Costs
• Government Policies and Regulations

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HOW DO YOU COMPETE?

• Offensive Strategies
• Concentrate on the competitors relative
  weaknesses
• 5 types
• Defense Strategies
• Goal is to counter each offensive strategy
• 6 types

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OFFENSIVE STRATEGIES

• 1) Frontal attack
• direct confrontation
• most difficult and dangerous
• 2) Flanking attack
• addresses gaps in competitions market coverage

• 3) Encirclement
• forcing competitor to spread resources thin by
  probing on many fronts at once
• 4) Bypass attack
• avoids confrontation
• diversification
• 5) Guerrilla warfare
• small, intermittent attacks

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DEFENSE STRATEGIES

• 4) Flank-positioning
• extend firms offerings into new segments to
  protect existing
• 5) Counter-offensive Defense
• gathering resources and counter-attacking when
  threatened
• 6) Strategic Withdrawal

• 1) Position Defense
• fortify firms existing position
• 2) Mobile Defense
• Market broadening
• 3) Preemptive Defense
• Attacking first (first strike)

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NEXT SESSION

• Wednesday, April 5 2000
• Segmentation, targetting, positioning
• Chapter 4
• Articles in readings package
• Read Sally Goodman visits Hydro-Québec