Marketing Strategy

This articles is a broad outline along which a very effective marketing strategy can be developed. If you decide to use this model for your business, please email me the results and any comments that you may have.

Concept design: Uditha P. Liyanage
Postgraduate Institute of Management
Sri Jayewardenepura University

Business Domain Analysis

This analysis refers to the broad context (or competitive scope) within which the

company operates. This type of analysis was formulated after the ground breaking article "Marketing Myopia" written by Theodore Levitt. BDA is a means of recognizing the competitive scope within which the business operates. All businesses have close and distant competitors. It is of vital importance that the business recognize the operational space within which it operates as this decides the marketing scope of management action.

The above diagram indicates the relationship between the business domain and operational space. The business domain is here defined as the beverage market and the operational space is defined as the market for mineral water. The forces that are impacting on the operational space are impelling forces from the business domain. Impelling forces in this situation may be the change in consumer taste due to advertising made by the non-mineral water competitors or a switch from mineral water to natural fruit drinks. The company should be acutely aware of activities outside the operational space but within the business domain.

If the operational space is too narrow then the business tends to be too Myopic as in the case of "Life" magazine that did not appreciate the threat posed by television. Another famous example is that of American Railways which defined its operational space as the "railway business" rather than the "transport business".

However, if the operational space is defined too widely then the marketing function tends to lose focus. This state is known as marketing mania. The company fails to concentrate on its core business and over-diversifies. All this is due to poor competitor analysis due to incorrect

Market Value Analysis & Key Competitor Analysis

Identify the key value attributes of the products - in terms of the importance to the customer. Prioritize based on the relative importance of the KVA's. Select a target competitor against whom you wish to compare performance. Give your own product/brand a score for each of the KVA's and then multiply the

Example:

The importance of this type of analysis is that the marketer recognizes that one of the methods of improving the product is by changing its product/brand rating and the other and more importantly to change the perceptions of the customer by changing the relative importance of the key value attributes to the one's that favour the company (in this cased taste rather than convenience).

Market Opportunity Analysis

Marketing opportunity analysis refers to the use of perceptual mapping to identify gaps in the market based on key attributes required by the products. An example of perceptual mapping is given below:

1. Identify the two most important key value attributes. (in this case convenience product nature)

2. Operationalize the 2 key value attributes (i.e. ready-to-drink RTD and  gassy) 

3. Develop the two opposites of the two operationalized value attributes (bipolar adjectives)

4. Develop a map of the opposites.

The map will look like this:

The area with less competitor activity will be the ideal market opportunity.

Perceptual mapping can be carried out for any number of combinations of Key value attributes to identify need gaps.

Market Environmental Analysis (Opportunities/threats)

Market environmental analysis (ETOP model - environmental threats and opportunities model) is carried out to understand and give quantitative measure to opportunities and threats that are impelling on the operational space of the company.

Example:

Company Capability Analysis (Strengths/ weaknesses)

Company capability analysis (OCP model) is used to assess the business's chance of success in relation to the market opportunity identified. After the analysis the company will know whether the internal competencies of the organization favour the proposed diversification.

Example:

Making the "go - no go" decision

Add the two scores of the market environmental analysis and the organizational capability analysis. If the addition is a non-negative figure then the company will normally go ahead with the project.

However before this decision is made management should consider the accuracy of the analysis carried out above and whether all variables have been taken into consideration. Sometimes even if the result is a negative number (meaning that the environment + company capability is not favourable to the project) the company might opt to go ahead with the project this is especially true if there are non monetary considerations at stake. (example: increasing market share, to get first mover advantage, technological edge, complementary supply and broad product range etc)

Customer Benefit Analysis (Segmenting, Targeting, Positioning)

This is better known as the process of the segmenting, targeting and positioning. Customer benefit analysis is essential to identify the customer profile and to understand the customer psychology in relation to the product.

Segmenting refers to splitting the total market to smaller constituents based on  heterogeneous factors, homogeneous and pre-defined criteria. Benefits of segmentation includes serving select customers better and increasing profitability. Also includes improving the quality of market share.

Marketing Mix Strategy

The marketing mix will be based on the STP analysis that has already been carried out. Traditionally the marketing mix is split into the four P's i.e. product, price, place and promotion. However, marketing gurus have given new insights into the people, package, service too should be included especially in the marketing of services.

Summary

The methodology described above provides a holistic view point of the marketing function and can be applied to almost any type of business organization.

Business domain analysis - to understand the spectrum of

Market value analysis and competitor analysis - What does the customer value. Are you satisfying customer requirement, or is your competitor doing a better than you

Market opportunity analysis - Use perceptual mapping to identify profitable niche markets.

Company capability analysis - Does the company have the resources necessary to exploit the market opportunity.

Market environmental analysis - is the environment favourable to the opportunity identified.