Marketing involves a range of processes concerned with finding out what consumers want, and then providing it for them. This involves four key elements, which are referred to as the 4Ps. A useful starting point therefore is to carry out market research to find out about customer requirements in relation to the 4Ps.

1. Click to add text
SWOT analysis
Principle Of Marketing
Ahmad Idrees

2. SWOT analysis is a planning method used to evaluate
Strengths and Weaknesses and an organisation as well
as Opportunities and Threats
that an organisation faces.
To understand SWOT, We will perform SWOT analysis of
a large pet food division of a multinational.

3. SWOT ANALYSIS
• An analysis of the internal and external audits which draws
attention to the critical organisational strengths and
weaknesses and the opportunities and threats facing the
company

4. SWOT of a PET FOOD COMPANY
• Strengths
 Market leader in the dry cat food market.
 Have leading world position in food technology.
 Market leader in luxury pet foods.
 The group’s excellent worldwide distribution.
 Pet food market leader in several big markets, including
France, Italy, Spain and South America.

5. • Weaknesses
 Number three in the wet pet food market.
 Too many of product range with several low-volume brands.
 Most brand names are little known.
 Relatively low advertising and promotions budget.
 Product range needs many new manufacturing skills.
 Poor store presence in several large markets: Germany, UK, USA and Canada.
 Overall poor profit performance.

6. •
• Managers need to identify the main threats and opportunities
also that their company faces. The purpose of the analysis is to
make the manager anticipate important developments that can
have an impact on the firm.

7. • Opportunities
 Economic climate. Because of improved economic conditions, pet ownership is
increasing
in almost all segments of the population.
 Demographic changes. (1) Increasing single parenthood, dual-income families
and ageing
will increase the trend towards convenient pet foods ; and (2) the aged
population will grow and increasingly keep pets as company.
 Market. The pet food market will follow the human market in the concern for
healthy
eating and pre-prepared luxury foods.
 Technology. New forms of pet food that are low in fat and calories, yet highly
nutritious
and tasty, will soon emerge. These products will appeal strongly to many of today’s pet
food buyers, whose health concerns extend to their pets.

8. • Threats
 Competitive activity. A large competitor has just announced that it will introduce a new
premium pet food line, backed by a huge advertising and sales promotion blitz.
 Channel pressure. Industry analysts predict that supermarket chains will face more than
10,000 new grocery product introductions next year.
 Demographic changes. Increasing single parenthood and dual-income families will
encourage the trends towards (1) pets that need less care ,and (2) smaller pets that eat less.
 Politics. European Union legislation will force manufacturers to disclose the content
of their pet food. This will adversely affect the attractiveness of some ingredients

9. Porter's Five Forces
Five forces model was created by M. Porter to understand how five key
competitive forces are affecting an industry.
These forces determine an industry structure and the level of competition
in that industry. If these forces are stronger then the industry is less
profitable it is.
An industry with low barriers to enter, having less buyers and suppliers but
high substitute products and high number of competitors will be seen as
very competitive and thus, not so attractive due to its low profitability.
The tool is very useful in formulating firm’s strategy as it reveals how
powerful each of the five key forces is in a particular industry.

10. PEST ANALYS

11. Five Forces Analysis
• Threat of new entrants.This force determines how easy (or not) it is to
enter a particular industry. If an industry is profitable and there are less barriers to
enter, then rivalry soon get trougher. When more organizations compete for the
same market share, profits start to fall. . Threat of new entrants is high when:
 Low amount of capital is required to enter a market;
 Existing companies can do very little to strike back;
 Existing firms do not possess patents, trademarks or do not have established
brand reputation;
 There is no government related regulation;
 It doesn’t cost a lot of money for a firm to switch to other industries);
 Products are similar;
 Economies of scale / Low Production Cost can be easily achieved.

12. • Bargaining power of suppliers. Strong bargaining power allows
suppliers to sell higher priced or low quality raw materials to their buyers. This
directly affects the buying firms’ profits because it has to pay more for materials.
Suppliers have strong bargaining power when:
 There are few suppliers but many buyers;
 Suppliers are large and threaten to take over your organisation;
 Few substitute raw materials exist;
 Suppliers hold scarce resources;
 Cost of switching raw materials is especially high.

13. • Bargaining power of buyers. Buyers have the power to demand lower price
or higher product quality from industry producers when their bargaining power is
strong. Lower price means lower revenues for the producer, while higher quality
products usually raise production costs. Both scenarios result in lower profits for
producers. Buyers exert strong bargaining power when:
 Buying in large quantities
 Control many access points to the final customer;
 Only few buyers exist;
 Switching costs to other supplier are low;
 There are many substitutes;
 Buyers are price sensitive.

14. • Threat of substitutes This force is especially threatening when buyers
can easily find substitute products with attractive prices or better quality
and when buyers can switch from one product or service to another with
little cost. For example, to switch from coffee to tea doesn’t cost
anything, unlike switching from car to bicycle.

15. • Rivalry among existing competitors.
• Competitive rivals are organisations with similar products and services
aimed at the same customer group = direct competitors. In competitive
industry, firms have to compete aggressively for a market share, which
results in low profits. Rivalry among competitors is intense when:
• There are many competitors;
• Exit barriers are high;
• Industry of growth is slow ;
• Products are not unique and can be easily substituted;
• Competitors are of equal size;
• There is high fixed cost