Marketing Management - session 4-Marketing Internal and external analysis.pptx

Marketing internal and external analysis

1. Marketing Management Prepared by Shahin Rasoulian 1 Session 4 : Chapter 4 Internal and external analysis

2. Objectives Internal and external analysis, SWOT, porter’s value chain, benchmarking, porters’ five forces, macro-micro environment, Marketing IS session 3 2

3. SWOT strategic analysis session 3 3 Helpful (to achieving the objective) Harmful (to achieving the objective) Internal origin (organizational) Strengths Weaknesses External origin (environment) Opportunities Threats Provides an internal framework of analysis for an entire organization or one of its strategic business areas Helps to detect opportunities and threats within this strategic business area

4. Value chain analysis (for internal analysis) session 3 4 Corresponds to the steps an organization follows to develop, produce, and deliver its offerings. Each step represents an opportunity to gain a competitive advantage

5. Value chain analysis (for internal analysis) session 3 5 Company infrastructure Human resource management Research and development Purchasing Supply chain logistics Manufacturing Marketing logistics Marketing communication and sales Peripheral services MARGIN Support activities Primary activities Innovation culture Closeness to cheap recourses Installation Repairs Technical support Administration Financial Strategy Quality control

6. Value chain analysis (for internal analysis) session 3 6 Supply chain logistics: reception of raw materials and inventory management Manufacturing: processing of raw materials into finished products or services Marketing logistics: order intake, preparation and shipping, and inventory management Marketing communication and sales: the most skilled companies in marketing and sales usually have considerable competitive advantages Peripheral services: installation, repairs and technical support

7. Value chain analysis (for internal analysis) session 3 7 Company infrastructure: services required for the organization to function, such as administration, financial management, strategic planning, and quality control Human resource management: capability to attract and retain talent Research and development (R&D): company’s ability to innovate quickly implement product development Purchasing: decrease procurement costs, from raw materials to other products and services

8. Benchmarking (for internal analysis) session 3 8 Consists of studying and analyzing the techniques and methods used by other organizations. Externally , relative to competitors, and internally , within other divisions or strategic business areas. Benchmarking is an ongoing process of research , comparative analysis , adaptation and implementation of these best practices to improve the performance of various business processes and functions

9. Marketing core competencies (for internal analysis) session 3 9

10. Marketing core competencies session 3 10 1. Product development capability Quick development and marketing capability (time-to-market) Innovation Product development Marketing

11. Marketing core competencies session 3 11 2. Customer satisfaction capability Basic factors: Can trigger dissatisfaction if they are not present, but will not trigger delight if are present “Wow” factors: If not present do not affect satisfaction, but if present can trigger delight Performance factors: Have both negative and positive effect of satisfaction

12. Marketing core competencies session 3 12 3. Its brand Customer greater willingness to buy and pay Customer loyalty

13. Marketing core competencies session 3 13 4. Distribution networks Blocking access to competitors Stronger effort of distributors

14. Marketing core competencies session 3 14 5. Strategic partnerships Using the brand power and networks of partners

15. Marketing core competencies session 3 15 6. Information Gathering and processing On market, competitors, and own organization

16. SWOT external analysis session 3 16 Examination of the different dimensions of the business environment and their management consequences Micro-environment : the forces directly affecting a company’s operations. Porter’s five forces Macro-environment: the forces that are more indirect and more distinct from daily business operation. Economy, technological changes, and political and legal conditions .

17. Porter’s five forces (for micro-environment) session 3 17 Competitive rivalry within an industry Threat of new entrants Bargaining power of customers Bargaining power of suppliers Substitute products

18. Porter’s five forces (for micro-environment) session 3 18 1. Bargaining power of suppliers: an imbalance between supply and demand for products used in the manufacturing or delivery of goods and services by the business customer The bargaining power of suppliers is greater when: The inputs are differentiated The input has a strong impact on the company There are no substitute input There is solidarity among workers (government or union might force you to buy from specific suppliers)

19. Porter’s five forces (for micro-environment) session 3 19 2. Bargaining power of customers: When customers are few or when supply is greater than demand, we call it buyers’ market in which customers have considerable bargaining power. Factors affecting customers’ bargaining power: Product differentiation (quality, features, innovative, customer service, brand) Price sensibility Purchase volume Availability of substitute product Availability of information The bargaining power of both end users and intermediaries must be taken into account

20. Porter’s five forces (for micro-environment) session 3 20 3. Threat of new entrants Generally, the number of suppliers will inevitably increase as long as the profit realizes on the market is very high relative to the risk. Barriers against new entrants: Regulatory barriers A powerful brand Access to distribution Customer loyalty to a supplier Economies of scale or experience Entry capital requirements

21. Porter’s five forces (for micro-environment) session 3 21 4. Threat of substitute products Substitute products although not identical to the original product, fulfill the same function. The threat of substitute products is grater when: Consumers are looking for variety There is a major price advantage There are no transfer costs No differentiation is perceived

22. Porter’s five forces (for micro-environment) session 3 22 Competitive rivalry within an industry Competition can be more or less fierce depending on several factors: the profitability of the industry the personal rivalries between company executives or large families The greater the rivalry within an industry = The less attractive it is for businesses

23. The business macro-environment (for external analysis) session 3 23

24. The business macro-environment (for external analysis) 1. Economy Economic activities ultimately determines consumers’ purchasing power through their income, capital gains and dividends. Economic performance (regional, national, global) Example of an indicator: GDP Consumers’ purchasing power Example of an indicator: GDP per capita Factors affecting economic activities: Technological development Education Regulation Globalization 24 session 3

25. The business macro-environment (for external analysis) 2. Government and legal environment Such as, blocking the repatriation of profits, hiking the minimum wage, limiting the working hours, high tax, etc. Important factors: Type of government: democratic/totalitarian, stable/unstable Legislation: protects the market from abusive practices. The way products should be labeled/ languages to use/ units of measurement, etc. 25 session 3

26. The business macro-environment (for external analysis) 3. Demographic aspects Population size and distribution Age distribution Level of education and income Ethnic origin Religious faith 26 session 3

27. 4. Sociocultural aspects Culture The prevailing culture affects people’s views and mentality concerning consumption. Generational cohorts Traditionalists: Oldest. Silent generation. Values dedication, duty, loyalty, conformity. Resists new ideas and change. Baby boomers: Enormous. Living to work. Finding offerings that meets their needs. Generation X: Latchkey. Working to live. Value the end more than means. Millennial generation: Echo boomer. Nexters . Access to information, curious, confident. The business macro-environment (for external analysis) session 3 27

28. It is a new vision of the environment (The classic vision is losing ground) The business environment should not be considered as static and independent but rather as a network of interdependent elements Companies must constantly and proactively seek to establish mutually beneficial relationships with consumers, suppliers and competitors. Co-evolution of large industrial groups with their sub-contractors The business ecosystem (for external analysis) session 3 28

29. A good practice to monitor the business environment is using marketing information system. The MIS is a Continuous and interacting structure of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information from i nternal and external sources to marketing decision makers. The MIS (for external analysis) session 3 29

30. The MIS (for external analysis) session 3 30 Diagram of a marketing information system

31. The MIS (for external analysis) Internal data Such as, Accounting system, customer complaints CRM or Customer Relationship Management Data related to contacts (basic information, along with birthday, favourite wine spouse’s name, etc.) Details of sales activities (dates of meetings, discussions held, etc.) Problems raised and the progress of the sales process (probability that the customer will buy something during the quarter and the expected value of the order) 31 session 3

32. CRM system 32 session 3

33. The MIS (for external analysis) Secondary external data: gathered by organizations for their own purposes or for public use Market studies Reports by industrial associations and companies, and private studies 33 session 3

34. The MIS (for external analysis) Primary external data Sometimes secondary data does not meet managers’ needs, so companies must gather their own data. Qualitative research: open-end questions, exploratory research, ethnography, netnography , etc. By: Group discussion, individual interview, observation, Quantitative research: closed-end questions, confirmatory research Survey or other methods 34 session 3

35. The MIS (for external analysis) The information from MIS must have four basic qualities: accurate, easy to understand, useful, timely 35 session 3

36. Logical order of research 36 session 3