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Bus 188 Part 2
The Marketing &
Situation Analysis
Part 2 - The Marketing &
Situation Analysis

Topic 5. Define Your market

Topic 6. Personal Audit

Topic 7. Competition
Topic 5
Define Your Market
 1.
Estimate Demand:
Demand is a forecast of
future buyer behavior
characterized by:
Demand is...
…willingness of potential
buyers to purchase a given
amount of goods and
services at a given price at a
given time under given
circumstances...change
these factors and demand
will respond.
Demand
it presumes the ability to pay.
 demand may be split amongst
competitors.
 Past demand (actual) has been
recorded and can be looked up.
(market shares).
 potential new users can be
estimated.

2. Factors Affecting Buyer
Behavior
# of available substitutes?
 Quality of available substitutes?
 Can the buyer do without the
product?
 Can the buyer postpone the
purchase?
 Is it a hi or lo-involvement
decision?

Factors Affecting Buyer
Behavior
 How
motivated is the
buyer?
 How strong are the
competitors efforts?
 Seasonality?
 Other factors?
General Buyer Behavior is a
Result Of:
 Individual
and Internal
Factors
 Group
and External
Factors
Individual & Internal Factors
affecting Buyer Behavior
 Personality
 Learning
 Perception
 Motivation
 Attitudes
Group & External Affects on
Buyer Behavior
Culture
 Subculture
 Social Class
 Peer Groups

Reference
Groups
 Physical
Environment
 Political/Legal
 Marketers

A. Describing Your Market (s)

Decision Making Units - DMU's,
basic element making up your
potential market
• Person (individual)
• Informal Groups (Family,
Roommates)
• Formal Groups (Businesses,
Resellers, Government Agencies)
B. Set Limits and Define the
Potential Market



Geographics
Demographics
Lifestyle
AIO
Psychographics
Brand Loyalty
 Usage Patterns
 Key Benefits
needs/wants/moti
vations

C. Identify Market Segments &
Target markets

Demand
• # of Customers
(DMU’s)
• $ Sales Volume
• Unit Sales
Volume


Market
Penetration
Market Share

Special
Segments
Niches

Targeting
Strategies
•
•
•
•
Undifferentiated
Differentiated
Concentrated
Atomized
D. Describe The Typical
Consumer In Target Market
Roles Within The
 Decision
Decision Making
Maker
Units Are:
Purchaser
 Influencer
 User

5. Decision Making Process

(1) Recognize Needs/Wants Motivation
A. Instant Evoked Set

(2) Information Search
A. Internal - Evoked Set
(mental search)
B. External
5. Decision Making Process cont.

(3) Evaluate Alternatives/Make
Decisions
What, Where, When, How To Buy

(4) Implement Purchase Decisions

(5) Post-Purchase Evaluation Establish a Probability Of Repeating
Same Purchase Decision =
P(Beh.)
Analyzing Demand
Lo vs. Hi Involvement Decisions

Purchase Cycle
Frequency of purchases

Purchase Quantity
per visit, avg. per month, etc.

Perceptions
product type, brand issues

Key Decision Factors
Analyzing Demand
Who is the customer?





geographically
demographically
Lifestyle/AIO/Psychographically
Loyalty/Usage
Key benefits sought/wants &
needs
Average $ Sales per
Customer Visit
daily
# of customers
__________
weekly
__________
monthly
__________
# of units
__________
__________
__________
$value
/revenue
__________
__________
__________
High and Low Range
____________ _____________
Seeking A Competitive Advantage

1960’s - Marketing Based

1970’s - Manufacturing Based

1980’s - Quality Based & TQM

1990’s - Customer Service Based
SOURCE: Total Customer Service: the Ultimate Weapon by Davidow & Uttel; Harper Perennial
Identifying Competitors
 1.
3 types based on needs
filled & similarity of the
product/service:
 2. Unrelated: competition for
the same $.
Identifying Competitors cont.
Need
1) Direct
Same
Product/
Service
Similar
2) Indirect
Same
Dissimilar
3) Generic
same
Unalike
Identifying Competitors cont.
 Unrelated:
competition for
the same $.
(Gross Income; Disposable
Income; Discretionary
Income)