A Business Situation analysis looks at the multi-faceted factors that can affect your business. These factors are things like where your product fits in the competitive environment, what firm-specific strengths and weaknesses exist, and what specific product strategy you are trying to implement.
Tools for a Situation Analysis
- The Boston Consulting Group (BCG) Matrix categorizes products as either being a Star, a Cash Cow, a Question Mark, or a Dog. This tool is a two-by-two matrix that graphically describes the strength and attractiveness of a market.
- A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis can be a valuable tool in the development of a marketing plan and enables managers to look for ideas and strategies that might produce a competitive advantage.
- A Competition analysis looks at the company's direct competitors. It analyzes how these competitors position their products. This type of analysis helps managers understand how the competition's products compare using customer-focused metrics such as taste, value, pricing, convenience, and customer satisfaction.
The effectiveness of the marketing strategy depends on the objectives the firm has defined. Quality marketing objectives have three basic characteristics, they are Specific, Measurable, and Realistic. In order to set these goals, Marketers must identify who their intended customers are. That knowledge enables them to segment the market, identify a target market, and correctly position their product for that market.
A Tool for a Customer Analysis: Segmentation, Target Market, and Positioning (STP) analysis
- Segmentation - Market segmentation is the process of dividing a large market into smaller groups. Those smaller groups are market segments, the groups of consumers who have shared characteristics, and similar product needs.
- Target Market - A target market is the group of customers toward which an organization directs its marketing efforts. Small firms may have only one target market.
- Positioning - Success within the target market depends, to some degree, on how the firm positions its product. Positioning refers to the activities a firm undertakes to create a certain perception of its product in the eyes of the target market.
A company’s marketing strategy can follow various paths, which depend on the product and industry. Most marketing strategies seek to move the product in one of four directions:
- Market penetration: selling more existing goods and services to existing customers.
- Product development: creating new goods and services for existing markets.
- Market development: selling existing goods and services to new customers.
- Diversification: offering new goods and services to attract new customers.
It is important to identify which of these strategies is likely to be the most successful. This decision is unique to each business, its competitive situation, and its intended customers.
This week, you will submit Part B of your Marketing Plan.
Add this portion of your marketing plan to the portion submitted last week, so your marketing plan becomes a running document with additional sections added each week (be sure to continue the formatting provided in the template). This section of your plan should be approximately two (2) pages long and if you use any external resources, be sure to properly cite them with in-text citations. Use the headings in bold font below in your plan and cover the points beneath each heading.
Week 2 additional facts:
Competition: Currently there is only one other private Bakery in Hoboken. It is a bakery that focuses on special occasion cakes. These cakes are very unique and have an individualized design. They are a centerpiece for the occasion. Barbara has never had one of these cakes but has been told that they don’t taste very good even though they are very expensive. There is also a Panera Bread and Krispy Kreme donut shop in town.
Barbara’s 4Ps –
- Product: Currently Barbara strives to make her baked goods with the highest quality ingredients she can procure, although they are not organic. She also has regular drip American coffee, a variety of teas, lattes, juices, and bottled water. Occasionally she will have specialty items for seasonal holidays, such as Valentine’s Day, Easter, 4th of July, Halloween, Thanksgiving, and the winter holidays. She has made wedding cakes for friends but has not aggressively marketed those in the store.
- Price: This makes her product costs a bit higher since she cannot purchase in bulk due to storage capacity limitations. Barbara tries to keep her prices as reasonable as possible for everyday items, like her muffins. If she is asked for a special order, she adds on a bit more profit margin.
- Place: Currently, Barbara has just one storefront located on the historic downtown main street right next door to the dock for the Manhattan-Hoboken ferry. She is in the process of opening the second location near the metro station in Lackawanna.
- Promotion: Barbara advertises her store in the local Hoboken paper and has a website, but no online ordering features.
Business Situation
- Choose two of the three tools listed above and watch the three videos listed below (BCG Matrix, SWOT, or Competitive analysis) to conduct a simple situation analysis of the business. Explain the environment in which you feel this business operates.
Customer Analysis
- Using an STP analysis, describe the intended customer that this business is looking to attract. Be sure to address all three components: the segment that this customer belongs to, the specific target customer, and how the product is positioned.
Market Strategy
- Consider the four marketing strategies: Market penetration, Product development, Market development, and Diversification, and select one strategy that you feel is the most appropriate for this business. Be sure to explain WHY you feel that this is the best strategy.