Situation Analysis


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Situation Analysis

  1. 1. Situation Analysis Advertising Campaigns
  2. 2. Discovery Stage Identify emerging and relevant values and attitudes shaping behavior in order to make optimal marketing decisions.
  3. 3. Purpose of the Situation Analysis <ul><li>Answers the why are we here? </li></ul><ul><li>It provides a background on the factors that influence the company’s functions and performance </li></ul>
  4. 4. Sample Questions <ul><li>Who is our Target Audience ? </li></ul><ul><li>What motivates their behavior? </li></ul><ul><li>Where can I find them? </li></ul><ul><li>What message will be most meaningful to them? </li></ul><ul><li>How can I reach them efficiently and effectively? </li></ul>
  5. 5. Situation Analysis <ul><li>Examine the current condition that impacts the company and its business environment. </li></ul><ul><li>Company </li></ul><ul><li>Consumers </li></ul><ul><li>Product Offering </li></ul><ul><li>Competitive Environment </li></ul><ul><li>Market Conditions </li></ul><ul><li>Other factors of influence: Legal, Political… </li></ul><ul><li>Problems/Opportunities </li></ul>
  6. 6. Problem Identification <ul><li>A brief statement that summarizes the core dilemma and/or challenge a company must overcome </li></ul>
  7. 7. Company Analysis <ul><li>What the company is concerned with </li></ul><ul><li>What it stands for </li></ul><ul><ul><li>Usually this information is found in mission and vision statements </li></ul></ul>
  8. 8. Company Analysis (cont) <ul><li>Company’s mission ( Annual report ) </li></ul><ul><li>History </li></ul><ul><li>Sales and profits </li></ul><ul><li>Market standing/category share </li></ul><ul><li>Product offerings </li></ul><ul><li>Key personnel </li></ul><ul><li>Capital resources </li></ul>
  9. 9. Consumer Analysis <ul><li>Information that helps us gain a grasp on the (current/potential) consumer </li></ul><ul><li>Major questions to be answered </li></ul><ul><ul><li>Who are they? </li></ul></ul><ul><ul><li>What motivates them to buy? </li></ul></ul><ul><ul><li>How do they use the product? </li></ul></ul><ul><ul><li>What is important to them in a product? </li></ul></ul><ul><ul><li>How do they look at life? </li></ul></ul><ul><ul><li>Where are they? </li></ul></ul>
  10. 10. Research Sources <ul><li>Yankelovich Monitor: </li></ul><ul><li>-Provides consumer trends for 25 broad subjects and 102 specific areas of interest. </li></ul><ul><li>-Helps determine strategic directions for creative and media. </li></ul>
  11. 11. Research Sources cont’d… <ul><li>MRI-MediaMark Research Inc. National Study: </li></ul><ul><li>-A national syndicated research study provides comprehensive demographic, psychographic and media usage data on target segments. Research is based on the usage of specific products/services, participation in leisure activities and shopping behavior, among others. </li></ul><ul><li>-Used to understand the demographic, psychographic, media usage and leisure activities/interest data of targeted audiences. </li></ul>
  12. 12. Research Sources cont’d… <ul><li>Scarborough: </li></ul><ul><li>-A comprehensive syndicated local market study provides demographic, shopping, lifestyle and media usage data for 75 measured markets. </li></ul><ul><li>-The study enables RJC to determine and refine local market strategies and tactics. </li></ul>
  13. 13. Research Sources cont’d… <ul><li>SRDS - Standard Rates and Data Services: </li></ul><ul><li>-SRDS provides contact information, descriptions and non-negotiated rates for print, broadcast, out-of-home and online media. </li></ul><ul><li>-SRDS books are used during the preliminary planning stages for rough budgeting purposes. </li></ul>
  14. 14. Research Sources cont’d… <ul><li>SRDS - Lifestyle Market Analysis: </li></ul><ul><li>-Provides market profiles for 210 DMA’s, lifestyle profiles for 76 consumer interests and segment profiles for 40 demographic segments. </li></ul><ul><li>-The Lifestyle Market Analysis provides attributes of various targeted audiences, in conjunction with the MRI study, provides in-depth target audience profile and media usage data. </li></ul>
  15. 15. Sample of Marketing Plan Development <ul><li>Understand What Truly Motivates The Consumer </li></ul><ul><li>-Intimate understanding of how people live, work and play </li></ul><ul><li>-Understanding of their deepest and most personal levels of motivation </li></ul>
  16. 16. Sample of Marketing Plan Development cont’d… <ul><li>Determine What It Is About Our Business Offering That Resonates With The Consumer </li></ul><ul><li>-How does the product relate to the consumer’s emotional needs and desires? </li></ul>
  17. 17. Sample of Marketing Plan Development cont’d… <ul><li>Translate Our Business Offering Into An Emotional Trigger (desires, aspirations, etc.) </li></ul><ul><li>-Build Upon the common denominators that translate to trust. </li></ul>
  18. 18. Sample of Marketing Plan Development cont’d… <ul><li>Use The Emotional Trigger To Build Consumer Trust (demonstrating an intimate understanding of what motivates our consumers) </li></ul><ul><li>-If it is fear, communicate security or safety </li></ul><ul><li>-If it is insecurity, communicate belonging </li></ul><ul><li>-If it is stress, communicate escape </li></ul>
  19. 19. Discovery Nuggets (Examples) <ul><li>Ice Cream Reward </li></ul><ul><li>Milk Guilt </li></ul><ul><li>Real Estate Hiving </li></ul><ul><li>Tourism Bounce Back </li></ul><ul><li>Donating Altruism </li></ul><ul><li>Blood </li></ul>
  20. 20. Consideration Set <ul><li>Products on a person’s mind when selecting a good to satisfy a need </li></ul>Direct competitors I am thirsty! Soft drink Beer Sports drink Gas Milk No gas Water Bottled Tap Pepsi Coke Indirect competitors Categories
  21. 21. Product Analysis <ul><li>Focuses on the abstract and concrete qualities of the company’s product </li></ul><ul><ul><li>Product attributes/functions </li></ul></ul><ul><ul><li>Positioning/Brand personality </li></ul></ul><ul><ul><li>Cost/Margins </li></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Packaging </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Promotions used </li></ul></ul><ul><ul><li>Media spent </li></ul></ul>
  22. 22. Purchasing Process <ul><li>Folks choose emotionally and validate rationally. </li></ul>
  23. 23. Case History Client: Superstition Mountain <ul><li>Background: </li></ul><ul><li>Much of new real estate growth in the Arizona market has been centered around the Scottsdale area with its plethora of shops and restaurants. </li></ul>
  24. 24. Superstition Case History cont’d… <ul><li>Background cont’d: </li></ul><ul><li>Our client, Superstition Mountain, faced the isolation dilemma, located one half hour away from the hub of Scottsdale. In addition, Superstition Mountain is faced with the Apache Junction conundrum, i.e. “take a left at the second trailer park and head straight for the mountains.” </li></ul>
  25. 25. Superstition Case History cont’d… <ul><li>Background cont’d: </li></ul><ul><li>To help overcome these and other surmounting challenges, we began by creating the Superstition Mountain story based on the legend and lore of Superstition Mountain. </li></ul>
  26. 26. Superstition Case History cont’d… <ul><li>The Story of Superstition Mountain: </li></ul><ul><li>The legend of Superstition Mountain centers around the quest for an elusive gold mine which dated back over a century. </li></ul><ul><li>The legend and lore captures the essence of the energy that awaits those who choose to live at the foot of this towering summit. </li></ul>
  27. 27. Superstition Case History cont’d… <ul><li>The Story cont’d: </li></ul><ul><li>Superstition Mountain offers a very tangible treasure—a rich lifestyle with a small town experience, a scenic landscape with all the attendant beauties of a pristine desert environment and superbly built homes. </li></ul>
  28. 28. Superstition Case History cont’d… <ul><li>Objectives: </li></ul><ul><li>Create a point of differentiation within a category (Arizona Real Estate) which has been saturated for quite a while. </li></ul><ul><li>Overcome the “isolation” factor. </li></ul>
  29. 29. Superstition Case History cont’d… <ul><li>Objectives cont’d: </li></ul><ul><li>Create awareness of Superstition Mountain as a desirable neighborhood/place to live. </li></ul><ul><li>Increase the number of inquiries received by 5%. </li></ul><ul><li>Increase number of sales by 3%. </li></ul>
  30. 30. Superstition Case History cont’d… <ul><li>Our Point of Connection: </li></ul><ul><li>Parallel the search for rich gold treasure to the search for a richer, more meaningful life. </li></ul>
  31. 31. Superstition Case History cont’d… <ul><li>Brand Promise: </li></ul><ul><li>“You Can Discover the Treasure.” </li></ul><ul><li>Target Audience: </li></ul><ul><li>Primary: Adults 50-67 years of age </li></ul><ul><li>Secondary: Builders and realtors </li></ul>
  32. 32. Superstition Case History cont’d… <ul><li>Positioning Strategy: </li></ul><ul><li>Superstition Mountain residents will find emotional comfort which is part of a balanced living environment; the serenity and security of a small town, along with a full complement of activities which nurture friendships. </li></ul>
  33. 33. Superstition Case History cont’d… <ul><li>Reasons to Believe: </li></ul><ul><li>Superstition Mountain provides access to activities including 36 holes of Nicklaus-designed golf, healthy exercise, tennis and swimming, and borders on 2.9 million acres of national forest. </li></ul>
  34. 34. Superstition’s Case History cont’d... <ul><li>Reasons to Believe cont’d: </li></ul><ul><li>Superstition Mountain is a sanctuary which offers eternal sunshine and the inspiration of the Arizona desert. </li></ul><ul><li>At Superstition Mountain, residents will find a small community of people who share similar life experiences, interests and needs. </li></ul>
  35. 35. Superstition Case History cont’d… <ul><li>Reassurance: </li></ul><ul><li>Living at Superstition Mountain provides a sense of well-being. It represents the recognition and reward they’ve earned for years of hard work and achievement. </li></ul>
  36. 36. Basics of Pricing <ul><li>Price = Fixed costs + Variable costs + Margin </li></ul><ul><li>Margins differ by industries </li></ul><ul><ul><li>Luxury products </li></ul></ul><ul><ul><li>Commodities </li></ul></ul><ul><li>Volume is also important </li></ul><ul><ul><li>Profit = Margin x Sales volume </li></ul></ul>
  37. 37. Competitive Analysis <ul><li>Considers all options consumers might think about in their purchasing decision </li></ul><ul><ul><li>Who are the brand’s major direct competitors? Indirect competitors? </li></ul></ul><ul><ul><li>What is the competitor’s brand position? </li></ul></ul><ul><ul><li>What is the price of their product? </li></ul></ul>
  38. 38. Competitive Analysis (cont) <ul><li>What is the respective market share? </li></ul><ul><li>What is their communication strategy? </li></ul><ul><li>How much do they spend on media? </li></ul><ul><li>Where is competitive media spending concentrated? </li></ul>
  39. 39. Market Analysis <ul><li>Helps planners identify which geographic areas are key </li></ul><ul><li>These areas are important due to: </li></ul><ul><ul><li>The strong position the advertiser enjoys in the region </li></ul></ul><ul><ul><li>The problems associated with doing business in the region </li></ul></ul>
  40. 40. Market Analysis: Development Index <ul><li>Brand development index (BDI) </li></ul><ul><li>Category development index (CDI) </li></ul><ul><li>If BDI>100, … </li></ul><ul><li>If CDI>100, … </li></ul>% of a brand’s total US sales in a market x 100 % of total US population in a market = BDI % of a category’s total US sales in a market x 100 % of total US population in a market = CDI
  41. 41. Calculating CDI for gender (51.1/24.1)*100= 47 47 24.1 51.1 Female 155 75.9 48.9 Male CDI % of category expenditures % of US Pop. Gender 75.9 48.9 X 100
  42. 42. Macro-Environmental Considerations <ul><li>Industry/category </li></ul><ul><ul><li>Size of the market in general </li></ul></ul><ul><ul><li>Growth trends </li></ul></ul><ul><li>Demographic trends </li></ul><ul><li>Economic trends </li></ul><ul><li>Technological issues </li></ul><ul><li>Political/legal issues </li></ul><ul><li>Socio/cultural trends </li></ul>
  43. 43. Looking for Information
  44. 44. A Word About Sources <ul><li>Primary sources: </li></ul><ul><ul><li>Quantitative: </li></ul></ul><ul><ul><ul><li>Experiments </li></ul></ul></ul><ul><ul><ul><li>Surveys </li></ul></ul></ul><ul><ul><li>Qualitative </li></ul></ul><ul><ul><ul><li>One on one interviews </li></ul></ul></ul><ul><ul><ul><ul><li>Consumers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Employees </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Competitors </li></ul></ul></ul></ul><ul><ul><ul><li>Focus groups </li></ul></ul></ul>
  45. 45. A word (or two) about sources <ul><li>Secondary sources : </li></ul><ul><ul><li>Librarian at Zimmerman </li></ul></ul><ul><ul><li>Databases </li></ul></ul><ul><ul><ul><li>Industry, consumer news: ABI Inform, Lexis-Nexis </li></ul></ul></ul><ul><ul><ul><li>Market research:, Euromonitor </li></ul></ul></ul><ul><ul><ul><li>Demographics: 2000 Census </li></ul></ul></ul>
  46. 46. A word (or three) about sources <ul><li>Periodic publications </li></ul><ul><ul><li>Tracking data: Arbitron’s Company & Brands </li></ul></ul><ul><ul><li>Company’s annual report </li></ul></ul><ul><ul><li>Industry trends: Standard & Poor’s Industry surveys </li></ul></ul><ul><ul><li>Consumer spending: NSP’s Household Spending </li></ul></ul><ul><ul><li>Market share: Gale’s Market Share Reporter </li></ul></ul><ul><ul><li>Product usage: MRI’s product usage data </li></ul></ul><ul><ul><li>Consumers: Lifestyle Market Analyst’s Profile, The Right Site </li></ul></ul>