External Analysis Flashcards
7 Ws
who are our existing and potential customers
What do our customers do with our products/services
where do customers buy our products
when do customers buy our products
why do existing customers choose our products
why do potential customers not choose our products
wallet: how much money can they spend
customer segmentation
dividing a market into smaller segments with distinct needs, characteristics or behaviour that might require separate marketing strategies or mixes
different segmentation criteria
geographic segmentation
demographic segmentation
psychographic segmentation
behavioural segmentation
Five requirements for effective segmentation
Measurable
Accessible
Substantial
Differentiable
Actionable
Measurable requirement
the size purchasing power and profiles of the segments can be measured
accessible requirement
the market segments can be effectively reached and served
substantial requirement
the market segments are large or profitable enough to serve
differentiable requirement
the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If met and women respond similarly to marketing efforts for soft drinks they do not constitute separate segments
actionable requirement
Effective programs can be designed by for attracting and serving the segments. ( the firm needs to be able to implement a distinctive marketing mix for each market segment, the range of segments identified generally need to be defined for the capabilities and resources of the organization. So very specialized segments may not be appropriate
value proposition
consumers see a product / brand as a bundle of benefits and choose the product/brand that offers the best benefits in in return for the experienced sacrifices of costs
Multi attribute model
brand value for customers of one specific segment
importance of product characteristics * brand score on characteristics
Value curve
the value curve is used to analyze the customer needs and expectations in an intuitive way
its a vizualization of the customer value expected by your customer
this expected customer value can then be compared to the value offer by you and your competitors
in order to identify the right value elements you need a deep insight in the needs of your customer? This can be obtained via market research, observation and or data analysis
idem for the expected level
perceptual map
make a distinction between the value elements
a customer value proposition is a symbiotic bundle of competitive advantages
tickets to ride
the olympic minimum in order to be allowed in the arena
tickets to heaven
true competitive analysis
perceptual map definition
visualisation of the fit between customer value (your target group is looking for) and the value proposition (your company offering)
by selecting the 2 most relevant value elements and sticking your target segment and product offer on it
porters 5 forces model
Threat of new entrants
rivalry among existing competitors
bargaining power of suppliers
threat of substitutes
bargaining power of buyers
this model is used to analyze industry profitability and the attractiveness of a certain market
a 6th force
the threat of complementary products
harper hype cycle !!!!!!!!!!!! EXAM QUESTION!!!!!!!!!!!!!!
A graph that shows the visibility over time of certain technology, there is always a peak of inflated expactations and then there will be a curve
there is a technology trigger, which increases the visibility, and then there is too much expectations and the curve will go down
Harper hype cycle 5 phases
technology trigger
peak of enlightenment
trough of disillusionment
slope of enlightenment
plateau of productivity
barriers to entry
economies of scale
proprietary product differences
determinants of supplier power
differentiation of inputs
switching costs of suppliers and firms in the industry
substitutes
relative price performance of substitutes
switching costs
rivalry determinans
industry growth
intermittent overcapacity
Determinants of buyer power
bargaining leverage
- buyer concentration versus firm concentration
price sensitivity
- price/total purchases
product life cycle
Product development
Introduction
Growth
Maturity
Decline
introduction
slow sales growth
little or no profit
high distribution and promotion expense
Growth
sales increase
new competitors enter the market
price stability or decline to increase volume
Consumer education
profits increase
promotion and manufacturing costs gain economies of scale
maturity
slowdown in sales
many suppliers
substitute products
overcapacity leads to competition
increased promotion and R&D to support sales and profits
decline
maintain the product
harvest the product
drop the product
number of adopters
enthusiasts
early adopters (the chasm)
early majority
late majority
laggards
harvest strategy and drop the product
market strategy, important
direct competition
same products
Indirect competition
different product, same market category
competitor identification depends on market definition
product type
product category
generic
budget
Method A: Competition based competitor identification
management judgement (list is made during meeting or after interviews
competitors are put together in strategic groups
Method B: customer based competitor identification (best one)
Market research through questitonnaire
brand switching data
Other market research methods
brand switching data
retailer loyalty cards
shopping panel data
not available for all products only for FMCG
which competitor identification is mostly used
method A (competition based)
Additional info:
- not easy to do (own judgement)
- no additional field reserach
- danger: organization myopia
how to make a final competitor choice
most relevant competitors
- market share (size)
- product resemblance
- organization resemblance
Watch out for marketing myopia
markets get disrupted because new solutions are offered for existing needs
know thy enemy
competitors goals
competitors strategies
competitors success factors
what does the competitor want to achieve
market share, profitability
growth through new products or existign products
how eager is the competitor to achieve his goals
action taken?
market leader? Or market follower
how eager is the competitor to achieve his goals
action taken?
market leader? Or market follower
marketing strategy
start by analyzing the market instruments you can observe
Competitors strategies: marketing strategy
long term strategy
segmentation, targeting and positioning
start by analyzing the market instruments you can observe
4 ps
deduct from competitros marketing strategy
interviews articles website statements
Competitors success factors
the competitors success factors can be analyzed
- the internal organization of the competitor
- customer equity and brand equity
- value proposition
- etc
value curve competitors
comparing the value elements between competitor A and competitor B through their different offering levels
channel strategy needs to be analyzed:
distribution intensity
distributino channel choice
distribution channel management
3 analytic levels to be looked at
Macro (high level )
Meso (mid level)
micro (lowest level)
Macro level vertical
at the level of the high level horizontal and vertical design of your distribution chain
example of macro level vertical chain
enterprise brand
- agent
- importer
- wholesale
- third party retail
- own retail
- consumer
three different channels
long channel
short channel
direct channel
macro level horizontal
- enterprise brand
- -hypermarket
- -super market
- -discounters
- -convenience stores
- -specialist stores
- -gas station
- -consumer
research shopper phenomenon
the tendency of customer to use one channel for search and another for purchase
digitalization trend incremental or disruptive
Showrooming
Online retail
Webrooming
Traditional retail
Showrooming (omnichannel)
online purchasing but offline orientation
online retail (pure play)
online purchasing and online orientation
webrooming (omnichannel)
offline purchasing but online orientation
traditional retail (brick and mortar)
offline and offline purchasing and orientation
factors of what distribution to use: why?
experience
who buys in which shop
expensive/ cost /benefit
product type
control
margin in position
Disintermediation trend
overall there is disintermediation trend
make use of possibilities of the internet
no physical contact
note: you can eliminate the middle man, but not the middle mans function
where do we cut the middleman
direct to consumer initiatives
should tiptoh favour its company owned online channel
what is the appropriate strategy
one channel
multi channel
cross channel
omni channel
