What is the importance of marketing ?It is the window of the company to the external entities Understanding the customer needs as software developers
Start by a discussion about companies:BataCoronaUnileverP&GIf the marketer understands consumer needs; develops products that provide superior customer value; and prices, distributes,and promotes them effectively, these products will sell easilyDifference between marketing and sales :The marketing involves getting a product or service into the market, promoting it, influencing behavior, and encouraging sales. Sales are the actual transaction of getting a product or service into the hands of your customers.
Deprivation: نقص أو حرمانAn American needs food but wants a Big Mac, french fries, and a soft drink. A person in Papua New Guinea needs food but wants taro, rice, yams, and pork. Wants are shaped by one’s society and are described in terms of objects that will satisfy those needsWants backed by buying power become demands. Given their wants and resources,people demand products with benefits that add up to the most value and satisfaction.Outstanding marketing companies go to great lengths to learn about and understand their customers’ needs, wants, and demands. They conduct consumer research and analyze mountains of customer data.
There are 5 conditions so as Exchange successes: 2 parties exist Each has something of value to offerEach party is capable of communication and deliveryEach party is free to accept or rejectEach party believes it is appropriate or desirable to deal with the other.
A market is the set of actual and potential buyers of a product or service. These buyers share a particularneed or want that can be satisfied through exchange relationships. Marketing involves serving a market of final consumers in the face of competitors. The company and the competitors send their respective offers and messages to the consumers either directly or thru the marketing Each party in the system is affected by majorenvironmental forces (demographic, economic, natural, technological, political, andsocial/cultural).
Selling concept takes an inside out perspective. It starts with the factory, focuses on the company’s existing products and calls for heavy selling and promotion to obtain profitable sales. It focuses on customer conquest- getting short term sales with little concerns about who buys and why. The marketing concept, takes an outside – in perspective. This concept starts with a well defined market, focuses on customer needs and integrates all marketing activities that affect customers. It yields profits by creating lasting relationships with the right customers based on customer value and satisfaction.The Selling ConceptMany companies follow the selling concept, which holds that consumers will not buyenough of the firm’s products unless it undertakes a large-scale selling and promotion effort.The selling concept is typically practiced with unsought goods—those that buyers donot normally think of buying, such as insurance or blood donations. These industries mustbe good at tracking down prospects and selling them on a product’s benefits.Such aggressive selling, however, carries high risks. It focuses on creating sales transactionsrather than on building long-term, profitable customer relationships. The aim oftenis to sell what the company makes rather than making what the market wants. It assumesthat customers who are coaxed into buying the product will like it. Or, if they don’t like it,they will possibly forget their disappointment and buy it again later. These are usually poorassumptions.The Marketing ConceptThe marketing concept holds that achieving organizational goals depends on knowingthe needs and wants of target markets and delivering the desired satisfactions better thancompetitors do. Under the marketing concept, customer focus and value are the paths tosales and profits. Instead of a product-centered “make and sell” philosophy, the marketingconcept is a customer-centered “sense and respond” philosophy. The job is not to find theright customers for your product but to find the right products for your customers.The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company’s existingproducts, and calls for heavy selling and promotion to obtain profitable sales. Itfocuses primarily on customer conquest—getting short-term sales with little concern aboutwho buys or why.In contrast, the marketing concept takes an outside-in perspective. As Herb Kelleher, thecolorful founder of Southwest Airlines puts it, “We don’t have a marketing department; wehave a customer department.” The marketing concept starts with a well-defined market, focuseson customer needs, and integrates all the marketing activities that affect customers. Inturn, it yields profits by creating lasting relationships with the right customers based on customervalue and satisfaction.
“think consumer.” According to a former Xerox CEO, to provide a great customer experience, Xerox must “find out what customers are facing—what their problems and opportunities are. Everyone at Xerox shares this responsibility. That includes people and departments that have not always been customer-facing, like finance, legal, and human resources.”
Toyota’s competitors often alienate suppliers through self-serving, heavy-handed dealings.According to one supplier, U.S. automakers “set annual cost-reduction targets [forthe parts they buy]. To realize those targets, they’ll do anything. [They’ve unleashed] areign of terror, and it gets worse every year.” By contrast, rather than bullying suppliers,Toyota partners with them and helps them meet its very high expectations. Toyotalearns about their businesses, conducts joint improvement activities, helps train supplieremployees, gives daily performance feedback, and actively seeks out supplier concerns.It even recognizes top performers with annual performance awards. Highsupplier satisfaction means that Toyota can rely on suppliers to help it improve its ownquality, reduce costs, and quickly develop new products. Even after the recent massiverecall following unanticipated acceleration problems with some Toyota models, thecompany didn’t point blame at the accelerator part supplier. Instead, Toyota took blamefor a faulty part design and even issued a statement supporting the “long-term and valuedsupplier.” In all, creating satisfied suppliers helps Toyota produce lower-cost,higher-quality cars, which in turn results in more satisfied customers
www.CokeSolutions.com, provides retailers with a wealthof information, business solutions, and merchandising tips
Publics :الرأي العام
Difference between customer and consumer ?CONSUMERS are those that would use the productCUSTOMER are those that would buy it..ex wholesalers' and retailers
Changes in income: there are 4 levels of income which are as follows; Upper class consumers whose spending patterns are not affected by the change in the economic events and are a major market of the luxury goods. Middle class that are careful about their spending but still can afford the good life. Working class spend on the basics as food, shelter and clothing and they try to save. Under class that are the poor ones Changes in customer spending; ex – when the income rises the percentage on food decreases but the spending in the utilities are the same. Inflation : affects pricing by increasing production costs which must be passed along to middlemen and subsequently consumers
Shortage of raw material as water that seem to be infinite resources. Nonrenewable resources as oil, coal and various minerals. Increased pollution, as chemical and nuclear wastes, quantity of chemical pollutants in the soil
Consumer products are products and services bought by the final consumers for personal consumption. Examples of consumer products :Convenience products : products and services that are usually bought with minimum comparison and effort as soap, candy, newspaper.Shopping products: customer select and purchase, i.e compare on bases as quality, price and style as furniture, clothing, used cars.Specialty products: products with unique characteristics or brand identification for which needs special effort as specific types of cars, designer clothes, medical service.Unsought products : consumer either doesn’t know about it or knows but doesn’t normally think of buying it as life insurance, blood donations.Industrial products bought by individuals and organizations for further processing or use in conducting business. Raw materials : fruits, cotton, wheat.Capital items: buildings, generators, hand tools, fax machine, desks.Supplies and services : paper, pencils, legal ,management and advertising services.
Introduction stage : when the sales growth is slow, as the product is introduced in the market. Profits are non existence in this stage because of the heavy expenses of the product.Growth stage: is a period of rapid market acceptance and increasing profits. The early adopters will continue to buy and later buyers will start follow up.Maturity stage: slowdown in the sales growth because the product achieved acceptance by most of the potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.Decline stage: when the sales fall off and profits drop. in this stage the company can do one of the 3 options: reduce costs Differentiate the product at the time competitors begin to exitExit and finalize this product
Core benefit level; the customers purchase a product because of the functional benefit the product offers. Actual Product level; they take into account how the product’s attributes, features, quality, styling, packaging. Augmented Product level; customers consider the value they receive from a vendor after sales support, warranty, promise of free delivery or installation.
1] Wholesalers buy in bulk and sell in bulk. Unlike retailers.  Wholesalers do not usually sell to the end-consumer unlike retailers. Wholesalers sell to institutional customers (including retailers), while the retailers usually sell their stuff to the end-customer.  Wholesalers are the intermediaries in the value-chain between the manufacturer and the customer. Unlike the retailers which are the last link before the product/service reaches the end-user. The buying price and selling price of goods at the stage of a wholesaler is significantly lesser to the price points at that of a retailer.Vertical Marketing SystemsFor the channel as a whole to perform well, each channel member’s role must be specified, andchannel conflict must be managed. The channel will perform better if it includes a firm, agency,or mechanism that provides leadership and has the power to assign roles and manage conflict.Historically, conventional distribution channels have lacked such leadership and power,often resulting in damaging conflict and poor performance. One of the biggest channel developmentsover the years has been the emergence of vertical marketing systems that providechannel leadership. We can contrasts the two types of channel arrangements.A conventional distribution channel consists of one or more independent producers,wholesalers, and retailers. Each is a separate business seeking to maximize its own profits,perhaps even at the expense of the system as a whole. No channel member has muchcontrol over the other members, and no formal means exists for assigning roles and resolvingchannel conflict.In contrast, a vertical marketing system (VMS) consists of producers, wholesalers,and retailers acting as a unified system. One channel member owns the others, has contractswith them, or wields so much power that they must all cooperate. The VMS can be dominatedby the producer, the wholesaler, or the retailer.We look now at three major types of VMSs: corporate, contractual, and administered. Eachuses a different means for setting up leadership and power in the channel.
D- Product quality leadership : products that are of high prices with high quality needed to be known and positioned in consumer minds with this feature
A- Maximize short term profit : This strategy drawback is that the company runs the risk of sacrificing long term profits, higher prices makes substitutes more attractive. High profit levels encourage competitors to enter the market, forcing the company to split the earnings with the new entrants.B- Maximize current market share : Pricing low is an effective means of entering into a new market and building volume. The higher the volume, the lower per unit cost which leads to higher long term profit. Drawbacks: 1- while a low price is great for consumers, short term profit levels get hit. 2- Keep price at a low level for extended periods of time creates a perception that the price should always be low, making it difficult to raise the prices in the long term.C-Survival: Companies set survival as their fundamental objective if they are troubled by too muchcapacity, heavy competition or changing consumer wants. To keep a factory going, a companymay set a low price through periods of low demand, hoping to increase prices when demand recoverscompany adopting this strategy signals to the market that the firm is in trouble. Drawback: adopting this strategy is not sustainable, since competitors can employ whatever strategy so a to fight for remaining the market share from the struggling rival.
Promotion involves disseminating information about a product or a company.
Advertising steps are as follows: a- Setting the advertising objective b- Budget decision c- Developing advertising strategy d- Selecting the advertising media- There are 3 advertising objectives: Informative : Explaining how the product worksTelling the market about a new productCorrecting false impressionsInforming the market with price changePersuasive: becomes more important when competition increasePersuade the customers to purchase nowBuilding brand preferenceConvincing the customers to tell others about the brandReminder: important for mature products Reminding the customers that the product may be needed in the near future.Reminding the customers where to buy the product Keeping the brand in customers’ minds
Nations can use this tool to attract tourists, foreign investment and international support. Ex Ï ♥ NewYork
Personal selling is direct, interpersonal communication that lets the sender immediately receive and evaluate feedback from the receiver. In personal selling, a personalized message is tailored to the individual receiver
Telemarketing : telemarketer follows a script. The message is not really personalized because the telemarketer's responses have already been scripted. In some cases, the telemarketer may also use personal-selling techniquesBenefits to buyers:Convenient, easy and private; customers from home and offices can browse catalogs and companies’ websites at anytime.Direct marketers can offer almost an unlimited selection to customers as customizing your own Nike shoes.It gives the buyers the access of wealth information about companies, products and competitors.It is interactive and immediate Benefits to sellers:It is a powerful tool to build customer relationships, because of the one to one nature they learn more about their needs and tastes. Low cost, speedy, and efficient for reaching the market ex- amazon where they avoid costs of rent, insurance and utilities. Flexibility, allows marketers to make ongoing adjustments in prices or programs and immediate announcements Gives access to buyers that couldn’t reach thru other channels.
Marketers see themselves as selling products; customers see themselves as buying value or solution to their problems. Customers are interested more than just a price, they are interested in the total costs of obtaining, using and disposing of a product. Customers want the product and services to be conveniently available as possible. Finally, they want a 2 way communication
The problem with SWOT is potentially more serious than just wasting time. It overlooks and ignores some sensible things as company’s objectives and goals.
Example of intangible assets would be as copyrights, goodwill, computer software and developments costs.
Example of NIKE SWOT :Strengths : - Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is evidenced by its evolving and innovative product range. - Nike is a global brand. It is the number one sports brand in the World.2- Weakness :The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes. 3 – Opportunities:There is also the opportunity to develop products such as sport wear, sunglasses and jewellary. Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes. 4- Threats :Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss.Competitors are developing alternative brands to take away Nike's market share.
Marketing management topic 1
Prepared by : Soft Skills Unit
Lecture 1 : Marketing Principles
Lecture 2 : Market Segmentation and Target Markets
Lecture 3 : Consumer Buying Behavior and Decision
Lecture 4 : Marketing plan
Lecture 1 - Contents
C. Difference Between Marketing & Selling
D. The Marketing Environment
E. The Marketing Mix – 4Ps
F. The Marketing Analysis
- Marketing deals with identifying & meeting human & social needs.
- Marketing is a societal process by which individuals and groups obtain what they
need through creating , offering and freely exchanging products and services of
value with others.
-Marketing is the process by which companies create value for customers and build
strong customer relationships in order to capture value from customers in return.
1. Customer Needs, Wants and Demands
2. Exchange and Transactions
B .1. Customer Needs, Wants and Demands
Needs: They are states of felt deprivation, They include basic physical needs for
food, clothing, warmth and safety
Wants: They are the form human needs take as they are shaped by culture and
Ex: An American needs food but wants a Big Mac, French fries, and a soft
Demands: Human wants that are backed by buying power.
B .2. Exchange
Exchange : The act of obtaining a desired object from someone by offering
something in return.
• It is the core concept of marketing.
• Exchange is a value creating process because it normally leaves both parties
B. 3. Markets
The Market word has many definitions :
• A market is a place where buyers and sellers meet, good and
services are offered for sale and transfers for ownership occurs.
• A market is the set of actual and potential buyers of a
product or service.
C. Difference between Marketing & Selling
The Selling concept takes an inside-out perspective.
It starts with the factory.
It focuses on the company’s existing products.
It calls for heavy selling and promotion to obtain
• It focuses primarily on customer conquest—getting
short-term sales with little concern about who buys or
C. Difference between Marketing & Selling
• The Marketing concept starts with a well-defined market.
• It focuses on customer needs
• It integrates all the marketing activities that affect
• It yields profits by creating lasting relationships with the right
customers based on customer value and satisfaction
• A $30 billion diversified technology company
• “Our goal is to lead customers where they want to go before
they know where they want to go.”
• 3M Innovations
D. The Marketing Environment
-The Marketing Environment is the actors and forces outside marketing that affect
marketing management ability to build and maintain successful relationships with target
- It is made up of microenvironment and macroenvironment.
- The microenvironment consists of the actors close to the company that affect its ability
to serve its customers.
- The macroenvironment consists of the larger societal forces that affect the
Actors in the Microenvironment
1- The Company: Marketers must work in harmony with other company
departments to create customer value and relationships.
• Walmart’s marketers can’t promise us low prices unless its operations
department delivers low costs.
2- Suppliers: provide the resources needed by the company to produce its goods and
Supply shortages or delays, labor strikes, and other events can cost sales in the short run
and damage customer satisfaction in the long run
DENSO Australia Wins Toyota Supplier Of The Year
3- Marketing Intermediaries: They include resellers, physical distribution firms,
marketing services agencies, and financial intermediaries
• Resellers are distribution channel firms that help the company find customers or
make sales to them. These include wholesalers and retailers who buy and resell
Microenvironment: Marketing Intermediaries
• Physical distribution firms help the company stock and move goods from
their points of origin to their destinations.
• Marketing services agencies are the marketing research firms, advertising
agencies, media firms, and marketing consulting firms that help the
company target and promote its products to the right markets.
• Financial intermediaries include banks, credit companies, insurance
companies, and other businesses that help finance transactions or insure
against the risks associated with the buying and selling of goods.
4- Competitors: The marketing concept states that, to be successful, a company
must provide greater customer value and satisfaction than its competitors do.
5- Publics: it is any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives
Financial publics. This group influences the company’s ability to obtain
funds. Banks, investment analysts, and stockholders are the major financial
Media publics. This group carries news, features, and editorial opinion. It
includes newspapers, magazines, television stations, and blogs and other
Government publics. Management must take government developments
into account. Marketers must often consult the company’s lawyers on issues
of product safety, truth in advertising, and other matters.
Citizen-action publics. A company’s marketing decisions may be questioned
by consumer organizations, environmental groups, minority groups, and
others. Its public relations department can help it stay in touch with
consumer and citizen groups.
• Consumer markets consist of individuals and households that buy goods
and services for personal consumption.
• Business markets buy goods and services for further processing or use in
their production processes.
• Reseller markets buy goods and services to resell at a profit.
• Government markets consist of government agencies that buy goods and
services to produce public services or transfer the goods and services to
others who need them.
• International markets consist of these buyers in other countries, including
consumers, producers, resellers, and governments.
Major Forces in the Company’s Macroenvironment
1- The Demographic Environment: Demography is the study of human
populations in terms of size, density, location, age, gender, race, occupation, and
Ex: China’s one-child rule created a generation of people who have been
pampered by parents and grandparents and have the means to make indulgent
Also, Millennials (Americans born between 1977 and 2000) share an utter fluency
and comfort with digital technology.
2- The Economic Environment: consists of economic factors that affect
consumer purchasing power and spending patterns.
• Marketers in all industries are looking for ways to offer today’s more financially
cautious buyers greater value—just the right combination of product quality and
good service at a fair price.
3- The Natural Environment: involves the natural resources that are
needed as inputs by marketers or that are affected by marketing
• Marketers should be aware of several trends in the natural environment,
They are the growing shortages of raw materials, increased pollution and
increased government intervention.
• PepsiCo markets hundreds of products that are grown, produced, and
consumed worldwide. Making and distributing these products requires
water, electricity, and fuel.
• In 2007, the company set as its goal to reduce water consumption by 20
percent, electricity consumption by 20 percent, and fuel consumption by
25 percent per unit of production by 2015.
4- The Technological Environment: Forces that create new technologies,
creating new product and market opportunities.
•Transistors hurt the vacuum-tube industry, CDs hurt phonograph records, and
digital photography hurt the film business. When old industries fought or ignored
new technologies, their businesses declined.
5- The Political and Social Environment: Laws, government agencies, and
pressure groups that influence and limit various organizations and individuals in a
6- The Cultural Environment: Institutions and other forces that affect
society’s basic values, perceptions, preferences, and behaviors.
E. The Marketing Mix
The set of tactical
product, price, place, and
that the firm blends to
response it wants in the
The Four Ps of the
Product is anything that can be offered to a market for attention, acquisition,
use, or consumption that might satisfy a want or need.
Products also include services.
Service: is an activity, benefit, or satisfaction offered for sale that is essentially
intangible and does not result in the ownership of anything.
1. Consumer Products: products and services bought by the final
consumers for personal consumption
2. Industrial Products: products bought by individuals and organizations
for further processing or use in conducting business
Marketing Considerations for Consumer Products
Three Levels Of Product
1. Core benefit level; the customers purchase
a product because of the functional benefit
the product offers.
2. Actual Product level; they take into
account how the product’s attributes,
features, quality, styling, packaging.
3. Augmented Product level; customers
consider the value they receive from a
vendor after sales support, warranty,
promise of free delivery or installation.
• Place: refers to how an organization will distribute the product or service they are offering
to the end user.
• The organization must distribute the product to the user at the right place at the right
•Marketing channel (or distribution channel): it is a set of interdependent organizations that
help make a product or service available for use or consumption by the consumer or business
•One of the biggest channel developments over the years has been the emergence of vertical
marketing systems that provide channel leadership
A conventional distribution channel consists of one or more independent producers,
wholesalers, and retailers. Each is a separate business seeking to maximize its own profits,
perhaps even at the expense of the system as a whole.
A vertical marketing system (VMS) consists of producers, wholesalers, and retailers acting as
a unified system. One channel member owns the others, has contracts with them, or wields so
much power that they must all cooperate. The VMS can be dominated by the producer, the
wholesaler, or the retailer
Comparison of Conventional
Distribution Channel with
Vertical Marketing System
Price: It is the amount of money charged for a product or service.
•It is agreed upon that the price offered must cover the cost of the product and
return a profit to the producer.
New-Product Pricing Strategies:
1- Market-skimming: Setting a high price for a new product to skim maximum revenues
layer by layer from the segments willing to pay the high price; the company makes
fewer but more profitable sales.
When Apple first introduced the iPhone, its initial price was as much as $599 per phone..
Six months later, Apple dropped the price to $399 for an 8GB model and $499 for the
16GB model to attract new buyers. Within a year, it dropped prices again to $199 and
$299, respectively, and you can now buy an 8GB model for $99. In this way, Apple
skimmed the maximum amount of revenue from the various segments of the market.
2- Market Penetration Pricing
Setting a low price for a new product to attract a large number of buyers and a large
The high sales volume results in falling costs, allowing companies to cut their prices even
E.4 Promotion Mix
It is the specific blend of promotion tools that the company uses to persuasively
communicate customer value and build customer relationships.
The five major promotion tools are:
1- Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods,
or services by an identified sponsor.
2- Sales Promotion: Short-term incentives to encourage the purchase or sale of a product
3- Public Relations: Building good relations with the company’s various publics by
obtaining favorable publicity, building up a good corporate image, and handling or
heading off unfavorable rumors, stories, and events.
4- Personal Selling: Personal presentation by the firm’s sales force for the purpose of
making sales and building customer relationships.
5- Direct Marketing: Direct connections with carefully targeted individual consumers to
both obtain an immediate response and cultivate lasting customer relationships.
•There are many advertising 'media' such as newspapers, magazines and journals,
television, cinema, outdoor advertising (such as posters, bus sides).
•To create a good ad, the marketer must create a message that is distinct,
meaningful and credible.
• Can reach masses of geographically dispersed buyers at a low cost per exposure
•It enables the seller to repeat a message many times
•large-scale advertising says something positive about the seller’s size, popularity, and
•Consumers tend to view advertised products as more legitimate
•It allows the company to dramatize its products through the artful use of visuals, print,
sound, and color
•Advertising can trigger quick sales
•Advertising can carry on only a one-way communication with an audience
•Audience does not feel that it has to pay attention or respond
•TV advertising, require very large budgets
2. Sales Promotion
Short term incentive to encourage customers to make a purchase.
• There are many sales promotion types as :
a. Advertising Specialties: A product imprinted with a logo as mugs, T
b. Cash Rebates: A partial refund to the buyer
c. Discounting : Reducing the listed price for a limited period of time
Advertising says ―Buy our product‖, Sales promotion says ―Buy it now‖
3. Public Relations
• Used to obtain favorable publicity, building good corporate image and handling
unfavorable rumors, stories and events
•The message gets to buyers as ―news‖ rather than as a sales-directed communication
• Influence the public beliefs, feelings and opinions about the company .
• Mass promotion tool & cheap
• There are several types of public relations :
a. Written material: as brochures, magazine articles..etc
b. Special Events: as presentations, conferences
Public Service Activities: as donating money, volunteers or resources to
activities designed to a social cause
d. Speeches: as giving talks
4. Personal Selling
• Personal presentation by the firm’s sales force for the purpose of
making sales & building customer relations
• The sales message can be customized to meet the needs of the
• Involves 2 way personal communication
•The buyer usually feels a greater need to listen and respond,
even if the response is a polite ―No thank-you.‖
•A sales force requires a longer-term commitment than does
5. Direct Marketing
• Direct marketing is a type of advertising campaign that seeks to elicit an action (such as
an order, a visit to a store or Web site, or a request for further information) from a selected
group of consumers in response to a communication from the marketer.
• Types of direct marketing:
• Direct Mail
• Email Marketing
4 Ps Versus 4Cs
In this age of customer value and relationships, the four sellers’ 4 Ps might be better described
as the customers’ four Cs
•Marketers see themselves as selling products;
customers see themselves as buying value or
solution to their problems.
• Customers are interested more than just a
price, they are interested in the total costs of
obtaining, using and disposing of a product.
• Customers want the product and services to be
conveniently available as possible.
• Finally, they want a 2 way communication
What is Organization’s SWOT ?
• It is a marketing analysis tool that involves monitoring the external and internal
• Internal environment (strengths / weakness) analysis:
o A strength is something a firm does well or a characteristic that enhances its
o A weakness is something a firm lacks, does poorly, or a condition placing it at a
Strength can be …
Valuable competencies or know-how
Valuable physical assets
Valuable human assets
Valuable organizational assets
Valuable intangible assets- e.g. ―Image‖
Important competitive capabilities
An attribute that places an organization in a position of competitive
Alliances with capable partners
Weakness can be …
• Deficiencies in know-how or expertise or competencies
• Lack of important physical, organizational, or intangible assets
• Missing capabilities in key areas
• High unit cost
• Poor relationship with employees / suppliers
• External environment (opportunities / Threats) analysis:
o An opportunity is a factor that the company may be able to exploit to its
o An environmental Threat current and emerging external factors that may
challenge the company’s performance.
Sources of a marketing opportunity…
• Diversify your business interests
• Is to supply an existing product or service in a new or superior way.
• A new product.
• Changes in use of technology opening up opportunities for your business
to utilize these technologies such as E-commerce or Internet sales
Examples of threats…
• Changing customer tastes
• Technological advances
• Tax increase
• Change in governmental policies
• Closing of geographic markets
Build on your
Sonic’s Strengths, Weaknesses, Opportunities, and Threats
Tools for Strategy Formulation
SO Strategies: Use strengths to take advantage of Opportunities
WO Strategies: Overcome weaknesses to take advantage of Opportunities
ST Strategies: Use Strengths to avoid Threats
WT Strategies: Minimize Weaknesses and avoid Threats