2 market analysis (s1)
TRANSCRIPT
Action Plan
segmentation–targeting–positioning
Marketing Objectives
Marketing Strategy
Product
Marketing Mix
Promotion Price
Distribution
Control
International
Marketing
Plan
Market Analysis
Strongly held enduring beliefs
National culture influence (Hofstede 1991)
▪ Individualism/collectivism
▪ Power distance
▪ Masculinity/femininity
▪ Uncertainty avoidance
▪ Long/short term orientation
Gender Role Identity
Traditional Sex Role Attitude
Egalitarian Sex Role Attitude
Gender Role and Marketing Strategy
“Real men don’t cry!”
Barbara K tools – cushioned
handles
Smith & Wesson – redesigned to
“fit” women’s hands
Product Strategy
Homedepot targeting at women
Example: Today,
women influence 80%
of all vehicles sold.
Implications for
dealerships and sales
training?
Marketing Communication
Rising incomes
Stock market
Interest rates
Purchasing power
Inflation and interest
rates
Recession
E.g., U.S. house-market
Income Distribution
Diamond-shape
Pyramid-shape
Income
Distribution
E.g., US,
Japan
15%, more
than 100K
15%, less
than 15%K
Emerging Markets: Opportunity or threat?
China’s stock market (Shanghai stock exchange)▪ 2006 Gain – 130%
▪ 2007 Gain (January to May) – 50%
Emerging markets▪ Botswana: 1-year 100%, 5-year 226%
▪ Romania: 1-year 17%, 5-year 612%
▪ Pakistan: 1-year 15%, 5-year 574%
Developing nations are growing at faster rates
than developed nations – 7.3% vs. 3.1% in 2006
(WB).
Greater growth is partially due to increased commodity
prices, e.g., metals prices leapt by 57% last year (IMF).
Face hypercompetitive yet high-growth
domestic markets
Able to make profits at low prices
▪ E.g., Ranbaxy sells $1-a-day generics AIDS treatments.
Ciprofloxacin (US price = $51; India price = $.63).
Cost efficient
▪ E.g., Embraer wages 1/3 of those at Boeing.
Access to low cost, high quality “knowledge”
▪ E.g., Huawai employs 7,000 engineers.
Ideas from Prahalad and Lieberthal (1998)
Western multinationals in the 80’s viewed emerging markets as “marginal” – new markets for “old” products.
▪ Targeted high-end consumers
▪ Non-responsive adaptation
▪ Differences in distribution systems were ignored
“Growth” in EM is in the middle-class. They are brand loyal and have a greater concern for value. This market is not “marginal” any more. Population (in millions) with annual purchasing power above $5,000 in 2,002: China (392), India (195), Brazil (51), Mexico (40).
Consumers in EM with annual PP of $6,000 or more buy durable goods, high-end electronics, and some “branded” products.
Common law English root - tradition/precedent
Code law Roman root – written
Theocracy Islamic law
Hebrew law
International Law? International Court of Justice (The Hague)
Extraterritoriality
Common Law vs. Code Law
Olga Romero vs. McDonalds Corporation in Ecuador
(and the Andean Group) – who owns the name? Mrs.
Romero registered the name first (1974) – 27-years of
legal battle.
Degree of litigiousness
Lawyers per 10,000 people (BW 2002) ▪ United States 307.4
▪ UK 102.7
▪ Germany 82.0
▪ Japan 12.1
▪ China 1.0
China – Piracy Markets Video
Black market incentives
Enforcing challenges
▪ Legal aspects
▪ Ethical aspects
Enforcement – winners and losers
Why are IPR fiercely protected?
Think of new mobile technologies introduced in past 2–3 years. Examples:
WAP (Wireless Application Protocol)
▪ enable access to the Internet from a mobile phone or PDA
4G (4 Generation)
▪ incorporate high-speed internet access and video telephony
MMS (Multimedia Messaging Service)
▪ allow sending messages that include multimedia objects (images, audio, video, rich text) and not just text as in Short Message Service (SMS)
What issues do these raise for managers?
SMS/text messaging
Wi-Fi services
Mobile commerce
Some digital technologies directly
related to marketing activities
Interactive/digital TV
Digital radio
A mobile phone can be used as:
SMS
Music playing system
E-mail reading platform
Camera
Personal organizer
Internet access device
Global positioning system (GPS)
One of the Wi-Fi
applications:
Voice over Internet
Protocol (VoIP)
Video – Trade Wars Discussion
Rationale behind tariffs
Winners and losers
Short-term and long-term effects
▪ Unemployment
▪ Retaliation
Micro-environmental factors:
▪ Demand analysis
▪ Customer research
▪ Competitor analysis
▪ Intermediary analysis
The Micro Environment
Substitute
Products and Services
Bargaining Power of Supplies
Potential New Entrants
Bargaining Power of Buyers
Rivalryof
Firms
Industries that are hard to enter are cozy for insiders, but also often attractive to outsiders longing for the value being shared by so few.
The threat of new entrants is large if,
The barrier of entry to the industry is high/low.
Economies of scale has not been built up/has been built up.
Access to distribution is easy/difficult.
Industries with few substitute products are
more/less attractive than those with many
substitutes.
The threat of substitutes is large if,
Relative price performance of substitutes is high/low.
Switching cost to new products is high/low.
Buyer propensity to substitute is high/low.
Attractive industries feature disorganized, small customers, with little purchasing and negotiating power.
A buyer has bargaining power if,
It has large, concentrated buying power that enables it to ____________.
What it is buying is customized/undifferentiated and there are few/many alternative resources.
It could integrate backwards/forwards and so take over a supplier.
Attractive industries feature small and disorganized suppliers.
Suppliers gain power when: They are small/large, relative to the buyers (e.g., Alcoa).
It is difficult for buyers to switch to competing suppliers (e.g., customized/undifferentiated products).
They pose a credible threat of integrating forward/backward and taking over the buyers’ functions.
Attractive industries are controlled by monopolies or gentlemanly oligopolies.
Rivalry is intense if: Competitors are numerous or are roughly equal in size
and power.
Industry growth is slow, precipitating fights for market share.
The product or service lacks differentiation or switching costs.
The SWOT acronym stands for:
Strengths (of the organization, now and in the future)
Weaknesses (of the organization, now and in the future)
Opportunities (in the environment, now and in the future)
Threats (from the environment, now and in the future)
Consider from both the view of the organization
(product) as well as from customers and competitors
Realistic and not modest
One’s strength is another’s weakness
Questions:
▪ What are the organization’s advantages over others?
▪ What does the organization do well?
▪ What makes you stand out from your competitors?
marketing expertise
location of your business
innovative product
unique product or service
company image
any other aspect that adds value to your
product or service
Consider from internal and external viewpoint
Be truthful so that weaknesses may be overcome
as quickly as possible
One’s strength is another’s weakness
Questions:▪ What is done poorly?
▪ What can be improved?
▪ What should be avoided?
lack of marketing expertise
undifferentiated products and service (i.e. in
relation to your competitors)
poor brand recognition or not understood
location of your business
damaged reputation
An OPPORTUNITY is a chance for organizational
growth or progress due to a favorable juncture
of circumstances in the business environment.
Possible Opportunities:▪ Emerging customer needs
▪ Quality Improvements
▪ Expanding global markets
▪ Vertical Integration
a developing market such as the Internet
mergers, joint ventures or strategic alliances
a new market
a market vacated by an ineffective competitor
any external factor that may create demand or
the possibility for increased profitability
A THREAT is a factor in your company’s external
environment that poses a danger to its well-
being.
Possible Threats:▪ New entry by competitors
▪ Changing demographics/shifting demand
▪ Regulatory requirements
a new competitor in the market
price wars with competitors
a competitor has a new, innovative product or
service
competitors have superior access to target
customers
competitors with a strong brand
poor relationships with various stakeholders
SWOT analysis uses a matrix that has two axes
(strength/weakness & opportunity/threat), and so has
four cells in which appropriate strategies are identified
Opportunity
Threat
Weakness Strength
Macro
Micro
MAXI-MINI
How to take advantage
of opportunities by
reducing weaknesses?
Threat
Opportunity
Weakness Strength
MINI-MAXI
How to avoid threats by
using strengths?
MINI-MINI
How to avoid threats by
reducing weaknesses?
MAXI-MAXI
How to take advantage
of opportunities by
using strengths?
Possible strategies
WT Strategies
Counter weaknesses and
threats
= Build strengths for
defensive strategy
ST Strategies
Leverage strengths to
minimize threats
= Defensive strategy
Threats
WO Strategies
Counter weaknesses through
exploiting opportunities
= Build strengths for
attacking strategy
SO Strategies
Leverage strengths to
maximize opportunities
= Attacking strategy
Opportunities
WeaknessesStrengths
The organization