A market analysis studies the attractiveness and the dynamics of a special market within a special industry.

Study designed to define a companys markets, forecast their directions, and decide how to expand the companys share and exploit any new trends. Market analysis may take two distinct forms. In the first, it is a method used by investors to look at the market and try to determine whether it is going up or down, in order to make investment decisions. In the second, it is a field used by marketers to analyze the target market of their clients and determine the best courses of action to take to improve sales and profitability. An evaluation of the market for a company's goods and services. Market Analysis The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm. David A. Aaker outlined the following dimensions of a market analysis: Market size (current and future) Market growth rate Market profitability Industry cost structure Distribution channels Market trends Key success factors Market Size The size of the market can be evaluated based on present sales and on potential sales if the use of the product were expanded. The following are some information sources for determining market size: government data trade associations financial data from major players customer surveys Market Growth Rate A simple means of forecasting the market growth rate is to extrapolate historical data into the future. While this method may provide a first-order estimate, it does not predict important turning points. A better method is to study growth drivers such as demographic information and sales growth in complementary products. Such drivers serve as leading indicators that are more accurate than simply extrapolating historical data. Important inflection points in the market growth rate sometimes

can be predicted by constructing a product diffusion curve. The shape of the curve can be estimated by studying the characteristics of the adoption rate of a similar product in the past. Ultimately, the maturity and decline stages of the product life cycle will be reached. Some leading indicators of the decline phase include price pressure caused by competition, a decrease in brand loyalty, the emergence of substitute products, market saturation, and the lack of growth drivers. Market Profitability While different firms in a market will have different levels of profitability, the average profit potential for a market can be used as a guideline for knowing how difficult it is to make money in the market. Michael Porter devised a useful framework for evaluating the attractiveness of an industry or market. This framework, known as Porter's five forces, identifies five factors that influence the market profitability: Buyer power Supplier power Barriers to entry Threat of substitute products Rivalry among firms in the industry Industry Cost Structure The cost structure is important for identifying key factors for success. To this end, Porter's value chain model is useful for determining where value is added and for isolating the costs. The cost structure also is helpful for formulating strategies to develop a competitive advantage. For example, in some environments the experience curve effect can be used to develop a cost advantage over competitors. Distribution Channels The following aspects of the distribution system are useful in a market analysis: Existing distribution channels - can be described by how direct they are to the customer. Trends and emerging channels - new channels opportunity to develop a competitive advantage. can offer the

Channel power structure - for example, in the case of a product having little brand equity, retailers have negotiating power over manufacturers and can capture more margin.

Market Trends Changes in the market are important because they often are the source of new opportunities and threats. The relevant trends are industrydependent, but some examples include changes in price sensitivity, demand for variety, and level of emphasis on service and support. Regional trends also may be relevant. Key Success Factors The key success factors are those elements that are necessary in order for the firm to achieve its marketing objectives. A few examples of such factors include: Access to essential unique resources Ability to achieve economies of scale Access to distribution channels Technological progress

Raw Materials: Industries may be agriculture based, Marine based, Mineral based, Forest based. Size: It refers to the amount of capital invested, number of people employed and the volume of production. Ownership: Industries can be classified into private sector, state owned or public sector, joint sector and co-operative sector

It is important to consider that key success factors may change over time, especially as the product progresses through its life cycle. GROWTH/DECLINE (COMPANY VS. INDUSTRY) A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. A company can be defined as an "artificial person", invisible, intangible, created by Law, with a discrete legal entity, perpetual succession and a common seal. It is not affected by the death, insanity or insolvency of an individual member. Industry refers to the production of an economic good or service within an economy. Industrial sectors There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction, and manufacturing; the tertiary sector, which deals with services (such as law and medicine) and distribution of manufactured goods; and the quaternary sector, a relatively new type of knowledge industry focusing on technological research, design and development such as computer programming, and biochemistry. A fifth, quinary, sector has been proposed encompassing nonprofit activities. The economy is also broadly separated into public sector and private sector, with industry generally categorized as private. Industries are also any business or manufacturing. Industries can be classified on the basis of raw materials, size and ownership.

Industry in the sense of manufacturing became a key sector of production and labour in European and North American countries during the Industrial Revolution, which upset previous mercantile and feudal economies through many successive rapid advances in technology, such as the steel and coal production. It is aided by technological advances, and has continued to develop into new types and sectors to this day. Industrial countries then assumed a capitalist economic policy. Railroads and steampowered ships began speedily establishing links with previously unreachable world markets, enabling private companies to develop to then-unheard of size and wealth. Following the Industrial Revolution, perhaps a third of the world's economic output is derived from manufacturing industriesmore than agriculture's share. Many developed countries and many developing/semi-developed countries (People's Republic of China, India etc.) depend significantly on industry. Industries, the countries they reside in, and the economies of those countries are interlinked in a complex web of interdependence. Industry is divided into four sectors. They are: Sector Definition This involves the extraction of resources directly from the Earth, this includes farming, mining and logging. They do not Primary process the products at all. They send it off to factories to make a profit. This group is involved in the processing products from primary Secondary industries. This includes all factoriesthose that refine metals, produce furniture, or pack farm products such as meat. This group is involved in the provision of services. They include Tertiary teachers, managers and other service providers. This group is involved in the research of science and Quaternary technology. They include scientists. As a country develops people move away from the primary sector to secondary and then to tertiary. There are many other different kinds of industries, and often organized into different classes or sectors by a variety of industrial classifications. divide Industry classification systems used by the government commonly industry into three sectors: agriculture, manufacturing, and

services. The primary sector of industry is agriculture, mining and raw material extraction. The secondary sector of industry is manufacturing. The tertiary sector of industry is service production. Sometimes, one talks about a quaternary sector of industry, consisting of intellectual services such as research and development (R&D). Market-based classification systems such as the Global Industry Classification Standard and the Industry Classification Benchmark are used in finance and market research. These classification systems commonly divide industries according to similar functions and markets and identify businesses producing related products. Industries can also be identified by product: chemical industry, petroleum industry, automotive industry, electronic industry, meatpacking industry, hospitality industry, food industry, fish industry, software industry, paper industry, entertainment industry, semiconductor industry, cultural industry, poverty industry labor-intensive industry - capital-intensive industry

market at a high price. Therefore, the majority of airlines' customers in Europe were those people with high incomes who could afford premium prices for faster travel. In 1985, Ryanair made a huge change in the European airline industry. Ryanair was the first airline to engage low-cost airlines in Europe. At that time, Ryanair's services were perceived as the innovation of the European airline industry (Le Bel, 2005). Ryanair tickets are half the price of British Airways. Some of its sales promotions were as low as 0.01. This made people think that air travel was not just made for the rich, but everybody (Haley & Tan 1999). Ryanair overcame the twin problems of innovation and invention in the airline industry by inventing air travel services that could serve passengers with tight budgets and those who just wanted to reach their destination without breaking their bank savings. Ryanair achieved this goal by eliminating unnecessary services offered by traditional airlines (Kaynak & Kucukemiroglu, 1993). It does not offer free meals, uses paper-free air tickets, gets rid of mile collecting scheme, utilizes secondary airports, and offers frequent flights. These techniques help Ryanair save time and costs spent in airline business operation (Haley & Tan 1999).

light industry - heavy industry

The growth and decline of the sectors The demand for different products and services changes over time Whole sectors can grow or decline, over a period of years Within deferent sectors, certain types of business may flourish whilst others do not Causes of primary and secondary sector decline Depleted natural raw materials Technology machinery has gradually taken over many jobs Lack of investment Cheaper to buy raw materials and manufactured goods from abroad Raw materials and labour cheaper in less developed countries What is industry lifecycle? Like other living creatures, industry also has its circle of life. The industry lifecycle imitates the human lifecycle. The stages of industry lifecycle include fragmentation, shake-out, maturity and decline (Kotler 2003). These stages will be described in the followings section. What are the main aspects of industry lifecycle? 1. Fragmentation Stage - Fragmentation is the first stage of the new industry. This is the stage when the new industry develops the business. At this stage, the new industry normally arises when an entrepreneur overcomes the twin problems of innovation and invention, and works out how to bring the new products or services into the market (Ayres et al., 2003). For example, air travel services of major airlines in Europe were sold to the target

2.

Shake-out - Shake-out is the second stage of the industry lifecycle. It is the stage at which a new industry emerges. During the shake-out stage, competitors start to realize business opportunities in the emerging industry. The value of the industry also quickly rises (Ayres et al., 2003).

For example, many people die and suffer because of cigarettes every year. Thus, the UK government decided to launch a campaign to encourage people to quit smoking. Nicorette, one of the leading companies is producing several nicotine products to help people quit smoking. Some of its well-known products include Nicorette patches, Nicolette gums and Nicorette lozenges (Nicorette 2007). Smokers began to see an easy way to quit smoking. The new industry started to attract brand recognition and brand awareness among its target market during the shake-out stage (Hendrickson et al., 2006). Nicorette's products began to gain popularity among those who wanted to quit smoking or those who wanted to reduce their daily cigarette consumption. During this period, another company realized the opportunity in this market and decided to enter it by launching nicotine product ranges, including Nic Lite gum and patches. It recently went beyond UK boarder after the UK government introduced non-smoking policy in public places, including pubs and nightclubs. This business threat created a new business opportunity in the industry for Nic Lite to launch a new nicotine-related product called Nic Time (ABC News 2006).

Nic Time is a whole new way for smokers to "get a cigarette" an eightounce bottle contains a lemon-flavored drink laced with nicotine, the same amount of nicotine as two cigarettes (ABC News 2006). Nic Lite was first available at Los Angeles airports for smokers who got uneasy on flights, but now the nicotine soft drinks are available in some convenience stores (ABC News 2006).

same organization, such as doctors and nurses. Then, the cutting edge of the communication industry emerged in the form of the mobile phone. The communication process of pagers could not be accomplished without telephones. To send a message to another pager, the user had to phone the call-centre staff who would type and send the message to another pager. On the other hand, people who use mobile phones can make a phone-call and send messages to other mobiles without going through call-centre staff (Hui et al., 2002). In recent years, the features of mobile phones have been developing rapidly and continually. Now people can use mobiles to send multimedia messages, take pictures, check email, surf the internet, read news and listen to music (Hui et al., 2002). As mobile phone feature development has reached saturation, thus the new innovation of mobile phone technology has incorporated the use of computers. The launch of personal digital assistants (PDA) is a good example of the decline stage of the mobile phone industry as the features of most mobiles are similar. PDAs are hand-held computers that were originally designed as a personal organizer but it becomes much more multi-faceted in recent years. PDAs are known as pocket computers or palmtop computers (Wikipedia, 2007). They have many uses for both mobile phones and computers such as computer games, global positioning system, video recording, typewriting and wireless wide-area network (Wikipedia, 2007). MARKET OPPORTUNITY ANALYSIS What? A tool to identify and assess the attractiveness of business opportunity Why? Unique e-commerce environment: Competition across (vs. within) industry boundary Competition between co-opetitors (vs. competitors) Competition on speed of response New ways to bring value to customers New ways to reconfigure value chains & value systems

3.

Maturity - Maturity is the third stage in the industry lifecycle. Maturity is a stage at which the efficiencies of the dominant business model give these organizations competitive advantage over competition (Kotler, 2003). The competition in the industry is rather aggressive because there are many competitors and product substitutes. Price, competition, and cooperation take on a complex form (Gottschalk & Saether, 2006). Some companies may shift some of the production overseas in order to gain competitive advantage.

For example, Toyota is one of the world's leading multinational companies, selling automobiles to customers worldwide. The export and import taxes mean that its cars lose competitiveness to the local competitors, especially in the European automobile industry. As a result, Toyota decided to open a factory in the UK in order to produce cars and sell them to customers in the European market (Toyota, 2007). The haute couture fashion industry is another good example. There are many western-branded fashion labels that manufacture their products overseas by cooperating with overseas partners, or they could seek foreign suppliers who specialize in particular materials or items. For instance, Nike has factories in China and Thailand as both countries have cheap labor costs and cheap, quality materials, particularly rubber and fabric. However, their overseas partners are not allowed to sell shoes produced for Adidas and Nike (Harrison & Boyle, 2006). The items have to be shipped back to the US, and then will be exported to countries worldwide, including China and Thailand.

4.

Decline - Decline is the final stage of the industry lifecycle. Decline is a stage during which a war of slow destruction between businesses may develop and those with heavy bureaucracies may fail (Segil, 2005). In addition, the demand in the market may be fully satisfied or suppliers may be running out (Ayres et al., 2003).

A value chain: a set of value creating activities within a firm A value system: a set of value creating activities connecting a firm with other firms and customers How? Using a market opportunity analysis framework that revolves around four key elements:

In the stage of decline, some companies may leave the industry if there is no demand for the products or services they provide, or they may develop new products or services that meet the demand in the market. In such cases, this will create a new industry (Francis & Desai, 2005). For example, at the beginning of the communication industry, pagers were used as the main communication method among people working in the

Customer Customer

Analysis of the customer environment uncovers unmet or underserved customer needs, as well as the market they occupy Analysis of the technology environment reveals the readiness of the particular technology, as well as any alternative technologies, on which the manager anticipates deploying the firms offering Analysis of the company environment provides the current state of the companys resources Analysis of the competition environment reveal the structure of the industry and market, key competitors in the marketplace, and the firms relative advantage to each of the key players

solutions, the more questions that have to be asked and answered. Each alternative is assessed in turn. Role of internet- potential purchasers will look for recognized brands online, or anything within a website that suggests stability and credibility such As: a. b. c. d. e. Crests Partnerships with recognized brands Awards Consumer feedback and opinion Site quality

Technology Technology

Company Company

4.

Purchase the individual has decided what alternative they will go with because it offers the best perceived combination of goal achievement and minimization of risk.. they purchase Post Purchase Evaluation it involves the individual asking themselves a series of questions, but this time the questions are designed to help the individual learn from his/her mistakes: a. Did the purchase accomplish its objectives? b. Were any of the risks realized?

Competition Competition

5.

DIAGNOSING BUYING PROCESS What is buying process? A standard process that corporations and individuals progress through (in order) when purchasing a product or service. Also known as the 'Buying Cycle' or 'Purchase Process'. The Purchase Process: 1. Need/ Problem Recognition or Identification This is the initial stage where an individual comes to the realization that she has a problem (or opportunity). It is only once an individual recognizes a problem that she can start looking for a solution. This stage cannot be skipped, and is always the first stage of the process. 2. Information Gathering / Determination of Alternatives this is the 2nd stage of the purchase process where an individual now begins to look for solutions to their problems or to the opportunities that theyve identified. There are often more ways than one to achieve the given objective. Role of internet it improves an individuals ability to find alternatives and information about most of those alternatives.

Ultimately, an individuals satisfaction with a purchase, and their likelihood of becoming a brand advocate, will be based on the perceived results relative to expectations. Did the purchase exceed their expectations, merely meet their expectations, or fall beneath expectations? If it exceeded expectations, youve got a brand advocate. If merely met, the individual is likely have a brand basher, spreading news of their negative experience in as many places as possible Role of internet- plays a tremendous role in spreading both the brand advocate and brand basher messages. Blogging and micro-blogging make it possible for people to share their experiences with hundreds ( even thousands) of others with minimal effort. At the same time, these post purchase opinions often remain online indefinitely, leading to a sudden rise in the need for online reputation management.

3.

Assessment of Alternatives / Allevation of Risk with an eye to reduce risk, and maximize the probability the objectives set forth is satisfied. The more complex and costly the possible

DEFINING TARGET MARKET ( DEMOGRAPHIC AND PSYCHOGRAPHIC) 80/20 rule - states that 80 percent of sales will come from 20 percent of our customers. DEMOGRAPHICS: Age Income Marital Status, Education, Family Size Gender Occupation PSYCHOGRAPHICS: Brand Preferences Price Sensitivity Conservative Environ-Friendly Hobbies Lifestyle Buy Based on Trends Influenced by Peers TARGET THE RIGHT CUSTOMERS, USING DEMOGRAPHICS AND PSYCHOGRAPHICS Analyzing demographic criteria and psychographic criteria information will help us to create the most well-defined target market. DEMOGRAPHIC CRITERIA Consumer demographics are described as variables of age, gender, income, marital/family status, and education. Knowing the demographics of the target market is very essential. We can easily sell products to our target market when we know their demographics. We can easily think what product will fit on them base on their age, gender, etc. PSYHOGRAPHIC CRITERIA A psychographic criterion takes into consideration psychological and sociological information. Psychological nature consists of personality, motivations, and attitude. Sociological nature includes lifestyles, activities, and daily routines. Consumers are motivated to buy if the purchase will provide satisfaction and give shape, substance, and character to their identities. Knowing these characteristics are also important, same with the demographics, we can easily sell our products to our target market, because we already know their lifestyles, activities, attitude, etc. we can easily get their attention by showing, giving or offering products that will satisfy their needs.

DESCRIBING THE SEGMENT A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. Market segmentation is about understanding the needs of customers and, therefore, how they decide between one offer and another. This insight is used to form group of customers who share the same or a very similar value criteria. There are several important reasons why businesses should attempt to segment their markets carefully. These are summarized below: Better matching of customer needs Enhanced profits for business Better opportunities for growth Retain more customers Target marketing communications Gain share of the market segment The people in a given segment are supposed to be similar in terms of criteria by which they are segmented and different from other segments in terms of these criteria. These can be broadly viewed by these examples: Gender Price Interests Location Religion Income Size of household ANALYZING COMPETITORS POSITIONS Three basic competitive strategies to consider 1. become the low-cost supplier. By under-pricing the competition, you can achieve greater volume, which can drive your costs down eveb further by realizing economies of scale. 2. Achieve product or service quality differentiation. Think about the hundreds of companies that have achieved such differentiation for themselves. 3. pursue a market niche, especially one that has been neglected by the dominant firm in your industry. Competitive analysis is the practice of analyzing the competitive environment in which your business operates (or wishes to operate), including strengths and weaknesses of the businesses with which you compete, strengths and weaknesses of your own company, demographics and desires of marketplace customers, strategies that can improve your

position in the marketplace, impediments that prevent you from entering new markets, and barriers that you can erect to prevent others from eroding your own place in the market. Competitor analysis has two primary activities: 1. Obtaining information about important competitors. 2. Using that information to predict competitive behavior. The goal of competitors analysis is to understand: With which competitors to compete, Competitors strategies and planned actions, How competitors might react to a firms actions, How to influence competitor behavior to the firms own advantage Competitors analysis framework This framework is based on the four key aspects of a competitor: Competitors objectives Competitors assumptions Competitors strategies Competitors capabilities Elements of competitive Analysis 1. Defining competitors 2. Analysis of competitors strength and weaknesses 3. Analysis of internal strength and weaknesses 4. Analysis of customers needs and wants 5. Studying impediments to market for you and for your competition 6. Building strategic plans to improve marketplace position MARKET MEASUREMENT Usually applied to fundamental measurement of market volume, value, brand shares and the trends of all of these. Data for these may be collected from secondary sources, from special censuses or surveys, or from syndicated research such as CONSUMER PANELS. The definition of the market to be measured is often difficult, and depends on the marketing or corporate objectives involved. LEVELS OF MARKET MEASUREMENT Consumer Level The most popular level used as it provides information on the number of final consumers defined in different market segments

Product Level As most marketers are targeted by various formats of the same product, the market measurement can also be expressed in terms of the total number of current buyers for each product type. Geographic Level The total market can be divided into geographical segments and it is thus possible to express the market measurement in geographic terms Time Level A market measurement should also be specific in terms of the time of purchase and provide information on the sales over different time periods such as monthly sales, seasonal sales and annual sales MARKET POTENTIAL The estimated maximum total sales revenue of all suppliers of a product in a market during a certain period. Estimating Market Potential Determine the potential buyers or users of the product Determine how many individual customers are in the potentials groups of buyers Estimate the potential purchasing or usage rate Sales revenue-The amount realized from selling goods or services in the normal operations of a company in a specified period. Suppliers- A party that supplies goods or services. A supplier may be distinguished from a contractor or subcontractor, who commonly adds specialized input to deliverables. Also called vendor. Product- A good, idea, method, information, object, or servicethat is the end result of a process and serves as a need or want satisfier. It is usually a bundle of tangible and intangible attributes (benefits, features, functions, uses) that a seller offers to a buyer for purchase. Market- An actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods,services, or contracts or instruments, for money or barter Period- A quantifiable segment of time, such as a week, month or quarter that a company uses to forecast or claim business activities

SALES FORCASTING Sales Forcasting is the process of estimating what your businesss sales are going to be in the future. The Importance of Sales Forecasting Sales forecasting is a self-assessment tool for a company. You have to keep taking the pulse of your company to know how healthy it is. Methods of sales forecasting 1. for your type of business 2. for your specific location 3. maximum sales a company should consider the maximum amount of sales that they may be able to have in a given period of time. Factors that contribute to this figure are number of staff working, staff productivity, amount of available product to sell, cost per item and the amount of time available to sell a product. Break-even sales The total amount of sales needed all their costs without turning any kind include expenses such as rent, general employee salaries, insurance and material by a company in order to cover of profit in the process. Costs maintenance bills, advertising, costs for products to sell.

oriented marketing strategies try to help establish long-term relationships between customers and businesses. Competitor-oriented marketing strategy, on the other hand, focuses on outdoing competitors by strategically manipulating the marketing mix: product, price, place, and promotion. Competitor-oriented strategies will lead companies to imitate competitor products, match prices, and offer similar promotions. This kind of marketing strategy parallels military strategy. For example, this approach to marketing strategy leads to price wars among competitors. Successful marketing strategies, however, usually incorporate elements from both of these orientations, because focusing on customer satisfaction alone will not help a company if its competitors already have high levels of customer satisfaction and because trying to outdo a competitor will not help a company if it provides inferior products and customer service. GENERAL STRATEGIES. Marketing strategies can be identified by the goals they attempt to accomplish in order to boost company profits. The three basic marketing strategies include price reduction (for market share growth), product differentiation, and market segmentation. The market share strategy calls for reducing production costs in order to reduce consumer prices. Via this strategy, companies strive to manufacture products inexpensively and efficiently and thereby capture a greater share of the market. According to this strategy, companies avoid diverse products lines and marginally successful products and allocate minimal funds to product development and advertising. The competitive advantage this strategy offers is the ability to provide products at a lower price than competing companies. Companies implementing this strategy cut their profit margins and rely on sales volume to generate profits. The price reduction strategy, however, has three drawbacks: finding markets without or with few low-cost retailers, losing flexibility because of limited product line and limited market, competing with other companies using the same strategy. The product differentiation strategy involves distinguishing a company's products from its competitors' by modifying the image or the physical characteristics of the products. Unlike the market share strategy, product differentiation requires raising product prices to increase profit margins. Companies adopting this strategy hope that consumers will pay higher prices for superior products (or products perceived as superior). As a result of this strategy, companies usually either achieve high profit margins and a low market share (such as luxury car manufacturers) or they achieve slightly higher profit margins and a moderate to large market share (such as popular food brands such as Kraft and Heinz). This strategy depends on the production of quality goods, brand loyalty, consumer preference for quality over cost, and ongoing product innovation. Nevertheless, product differentiation has a couple of disadvantages. First, competing companies often can easily imitate products thereby undercutting product differentiation efforts. Second, companies cannot

Market-Based Forecast A market-based forecast is tricky because it factors in figures that are hard to pinpoint directly. Market-based forecasts are based on the potential amount of customers a product or service may have, how many potential customers use this product or service, how often this product or service would need to be done and how many of these potential customers a business believes it can realistically get. REPORT BY GROUP 2 MARKETING STRATEGY TYPES ORIENTATIONS Contemporary approaches to marketing often fall into two general but not mutually exclusive categories: customer-oriented marketing strategies and competitor-oriented marketing strategies. Since many marketers believe that striving to satisfy customers can benefit both consumers and businesses, they contend that marketing strategy should focus on customers. This strategy assumes that customers tend to make more purchases and remain loyal to specific brands when they are satisfied, rather than dissatisfied, with a company. Hence, customer-

raise their prices too high without losing customers, even if they provide better products. Market segmentation refers to the process of breaking the entire market into a series of smaller markets based on common characteristics related to consumer behavior. Once the market is divided into smaller segments, companies can launch marketing programs to cater to the needs and preferences of the individual segments. Moreover, companies can choose to court all the segments of the market through "differentiated marketing," to concentrate on one or two of the smaller segments overlooked by other companies through concentrated marketing (niche marketing), or to focus on very small markets or even individual customers through atomized marketing. Market segmentation also can involve the other two strategies, because marketers can target various segments using a price reduction strategy or a product differentiation strategy. If a segment grows, however, large competitors can begin targeting it as well. Companies that focus on one or two segments also are vulnerable to changes in the segment's size and preferences. Hence, if the segment dwindles or its tastes no longer correspond to a company's offerings, a company's revenues can fall precipitously. SPECIFIC STRATEGIES Furthermore, marketers also have developed specific strategies for specific kinds of marketing obstacles, which may serve as part of a general marketing strategy. Moreover, parts of general marketing strategies can be implemented for narrower ends. For example, in Marketing Strategy, Orville C. Walker, Harper W. Boyd Jr., and Jean-Claude Larreche identified marketing strategies for various marketing problems and activities such as new markets, growth markets, mature and declining markets, and international markets. Their marketing strategies included a plethora of specific marketing strategies for a host of situations: pioneer strategy, follower strategy, fortress strategy, flanker strategy, confrontation strategy, market expansion strategy, withdrawal strategy, frontal attack strategy, leapfrog attack strategy, encirclement strategy, guerrilla attack strategy, divestment strategy, global strategy, national strategy, exporting strategy, pricing strategy, channels strategy, and promotion strategy. In addition, Joseph P. Guiltinan and Gordon W. Paul, authors of Marketing Management, outlined primary demand strategies and selective demand strategies. They also developed product-line marketing strategies, including strategies for substitutes (line extension strategies and flanker strategies) and strategies for complements (leader strategies, bundling strategies, and systems strategies). The primary demand strategies included user strategies (increasing the number of users) and rate of use strategies (increasing the purchase quantities). User strategies were, in turn, divided into willingness strategies (emphasis on willingness to buy) and ability strategies (emphasis on ability to buy). The rate of use strategies were divided into usage strategies (increasing the rate of usage

such as brushing your teeth after each meal) and replacement strategies (increasing the rate of use by replacementsuch as replacing your toothbrush every month). The selective demand strategies included retention strategies (retaining the organization's existing customers) and acquisition strategies (acquiring customers from the competition). Retention strategies were divided into: 1. Satisfaction strategies, which include ways to maintain or improve customer satisfaction levels, such as reducing delivery time from three days to 24 hours. 2. Meeting competition strategies, which include matching or "bettering" competitive approaches, such as charging the same price or a price stipulated at a percentage lower than the competition. 3. Relationship marketing strategies, which include establishing enduring relationships with customers, such as developing a computer-based automatic inventory replenishment system. On the other hand, acquisition strategies were divided into: 1. Head-to-head strategies, which include direct, aggressive competitive tactics, such as using comparative advertising copy. 2. Differentiated strategies, which include making an organization's offering different from the competition, such as being the only firm to have a wireless feature on a notebook computer. 3. Niche marketing strategies, which include concentrating on narrow marketssuch as a direct-marketing mail catalog of premium priced female clothing targeted at large females in the uppermiddle and upper classes. These marketing strategies are not mutually exclusive. They can be used in combination. They also are not exhaustive. In general, additional dimensions and levels can be generated. In other words, other levels and types of strategies at any level can be developed. The actual wording of the final and most refined level of strategy will probably be unique in each situation for each organization for each decision maker. Marketing strategy development is a creative act, requiring an application of science and art. The decision maker should eventually arrive at a specific stratagem or set of strategies designed to achieve the stated objective. The entire articulated set of decisions (selected strategies) is called the marketing strategy. If the marketing strategy is part of a marketing plan, some or all of the strategy decisions could be formally stated. In some cases, only the lowest level of strategy is indicated. The formal articulation of marketing strategy is a function of the decision maker's preferences, the organization's policy, user needs, and resources available.

PRINCIPLES The basic principles or theories of marketing appropriate to the successful development of marketing strategy are universal. They can be applied by anyone at any time in any kind of organization to any type of marketing problem in any part of the world. They are relevant to international marketing strategy as well as domestic marketing policy. They are useful in both profit-oriented organizations and nonprofit institutions, and are appropriate for both services and products. If you are generating leads or interest in your business, but are struggling with making sales or deals happen, you may be mistaking the type of demand your prospects are showing. If you have had limited success in the types of marketing you have been doing, you may be too limited in how you market and to the levels of demand you are reaching. Have you ever asked yourself, "Should I spend more time educating potential customers on the benefits of our service or product or should I spend more time telling them why we are better than the competition?" The answer often lies in the type of demand you have generated or are seeking. The first type of demand is called primary demand. Primary demand is when a potential buyer, or prospect, is showing interest in a product or service for the first time. Often times it is because the prospect was never exposed to the "concept" of the product or service or never really understood it. But now due to new circumstances she has an apparent need all of a sudden. You may recognize primary demand when someone says, "Hmm... that sounds really interesting and something I/my company could use. Please tell me more." Basically, when someone has primary demand for your services or products they are at the stages where they are at first only considering your "type of service or product." They have to be convinced that this is even right for them before they even consider you (or someone else). At this point, they have not even compared you to the competition. Therefore, when facing primary demand situations you have an excellent opportunity to gain new business. It's also an ideal way to "sidestep" your competition! When you have a prospect with primary demand for your products or services your goal is to EDUCATE, EDUCATE, and EDUCATE this person. Ask questions to uncover possible problems this person is facing or opportunities he wishes to explore. Then when appropriate, explain how your product or service is the perfect match.

If you have good communication skills you can close almost all deals when a prospect has primary demand. We will discuss strategies and approaches to create more primary demand in a minute. But first let's move on to the second type of demand, "selective demand." Selective demand is when a prospect has a need, has identified the need, and is ACTIVELY seeking out a solution. In these cases the prospect will come to you if he feels comfortable in your company's ability to solve his needs. This sounds good right? Buyers who already know what they want. No need for educating them. Just get to the point and sell. Well, it's not that easy! When someone has selective demand they are more proactive in their search for information. They usually give themselves enough time to compare the quality, value, and offers of different companies. So while they are calling you they are also likely calling others as well. So before we go any further, do you now understand the difference between the two types of demand? Can you begin to see how your approach will vary greatly? Types of Strategies Primary demand = someone has identified a need for the first time, often using your help. To sell and market your solution use education, exploration of problems, and explain and demonstrate how you have the solution. Selective demand = someone has identified the need or problem on her own and is already seeking a solution before you came along. To sell and market to someone with selective demand, first determine how you can better serve your prospect's needs and communicating this clearly to him, before he goes to someone else! Ways to increase "primary demand": Use "pre-emptive" marketing. Rather than wait until the day comes when your prospects discover they have a need and allow them to do their own search, hoping they find you and call you, make sure you reach them first! Ways to do this: Networking - by focusing on the problems you solve, you are likely to meet interested people - use especially when marketing to businesses

Direct Mail - use your letter to 1st help the reader identify a problem or need, 2nd magnify this problem or need to how it affects his business or life, and 3rd provide a solution using your company Display Ads in newspapers - similar approach as in Direct Mail, but uses print media instead - use ads LARGE enough to get noticed Publicity - it's a great way to get people's attention...if you can first get the publicity Referrals - get referred to the people and businesses likely to benefit from your offer - many times people will be receptive to new ideas when they are referred by someone they already know and trust Telemarketing - often a "tough sell", but if you reach enough of the right people it can work - stick to telemarketing to businesses - leave consumers who are at home eating dinner alone! (Thank you!) These marketing tactics tend to work best for primary demand because they catch someone when they are "not already" considering your business or your type of product or service. Just remember, these people did NOT expect to hear from you or about you on this particular day. So you must tell them in your marketing, right up front "What's in it for them." In other words, you must use your marketing to ask probing questions, identify needs, and then educate them on how their problems can be solved using your product, service, or company. Ways to increase Selective Demand: Four Steps: 1) Determine where your prospects typically turn to for more information about your type of services or products. For example: Internet Search Engines, Yellow Pages, Classified Sections, Business Directories, Advice from others. 2) Do everything possible to gain tremendous exposure for your company in the specific places that your potential customers turn to when looking for a company like yours. If it's a form of media, (online or offline) advertise there. If it's word of mouth, identify who has strong levels of "influence" over other people's decisions and build relationships with these people. 3) Recognize your company's strongest competitive advantages and communicate them in all marketing and advertising you do. Do NOT be another "me too" company and look like everyone else. You will NOT get noticed that way. Stand out in a GOOD way.

4) Have excellent customer service and "incoming call" sales people ready to answer all questions and sell your company. If necessary, have great sales people who can meet prospects in person on appointments to close business and start new relationships. SWOT Analysis Step By Step Process SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. SWOT analysis groups key pieces of information into two main categories: Internal factors The strengths and weaknesses internal to the organization. External factors The opportunities and threats presented by the external environment to the organization.

Strengths: characteristics of the business, or project team that give it an advantage over others Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others Opportunities: external chances to improve performance (e.g. make greater profits) in the environment Threats: external elements in the environment that could cause trouble for the business or project

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. Use of SWOT analysis The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. Examples include: non-profit organizations, governmental units, and individuals. SWOT analysis may also be used in pre-crisis planning and preventive crisis management. SWOT analysis may also be used in creating a recommendation during a viability study/survey. Competitive analysis The competitive analysis is a statement of the business strategy and how it relates to the competition. The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent

competition from entering your market, and any weaknesses that can be exploited within the product development cycle. The first step in a competitor analysis is to identify the current and potential competition. As mentioned in the "Market Strategies" chapter, there are essentially two ways you can identify competitors. The first is to look at the market from the customer's viewpoint and group all your competitors by the degree to which they contend for the buyer's dollar. The second method is to group competitors according to their various competitive strategies so you understand what motivates them. Once you have grouped your competitors, you can start to analyze their strategies and identify the areas where they are most vulnerable. This can be done through an examination of your competitors' weaknesses and strengths. A competitor's strengths and weaknesses are usually based on the presence and absence of key assets and skills needed to compete in the market. A competitive analysis of your markets should include all the key influencing factors that affect the way in which you can compete. A competitive review is important for two reason. Firstly, even if you know what the customers want and have the resources to meet the customers' demands, it may be that the competitive environment means that it is not worth pursuing particular parts of the market for a whole range of strategic reasons, such as the threat a price war, channel conflict, or legal or ethical considerations. Secondly, you need to know if your competitors are doing things better than you are, or more dangerously, whether they are looking to change the basis of competition in the market, for instance by moving to a direct sales model, or by introducing some revolutionary new product or technology. The main types of competitive analysis from a strategic point of view are: "The Five Forces" Benchmarking and competitive evaluation Five forces The five forces come from Porter's famous framework and are: Power of Buyers Power of Suppliers Threat of substitutes Barriers to entry Competitors

The idea is that change in your market is likely to come as the basis of one of these five areas. For instance, buyers may distort the market by forcing prices down, or by deciding to take build products inhouse. In considering how these "forces" act on your markets, you get a picture of issues such as channel conflict, threats from vertical integration, the impact of regulatory change or the advent of new technology. You can also take a view as to how you are or can affect the competitive situation for your own benefit, rather than statically accepting the status quo. Consequently it becomes possible to play around with different future competitive scenarios and to use these to test different propositions to try and guess how the market will change. Your strategy can then include contingencies and responses to changes that might affect you, or changes that you might make to the market. Benchmarking Benchmarking is used to ascertain how well you are doing against the competition. Are there areas that you can learn from the competition? Are there ideas in markets outside your own that would be worth bringing into your market to give you a competitive advantage? Your competitors can also be a source for information about the general market. Their advertising and marketing is telling you something about the messages and approaches that they think are applicable to your market. If they have done their research, you can learn from their approaches. One common issue that comes from looking at the competition is what do you do about it? The options are: Ignore Fight Adopt In practice, if there is merit in something new and you ignore it, it is likely to bite you later. If you fight against it, you add to your costs potentially just to save market share, rather than to win market share. Consequently often adoption of the competition's good ideas is the best way forward (although perhaps after a little fighting to test whether the ideas are sound). Microsoft's Embrace and Extend and Intel's "Only the Paranoid Survive" are good examples of companies that use the competition to keep their products at the cutting edge. Often there can internal cultural issues that mean this can be difficult to accept. But learning from the competition, doesn't mean following the competition. This approach, known as an "invest in your threats"strategy, can be an extremely effective way of keeping up with and ahead of the market.