Knowledge Base

Marketing Research · 22 November 2005, 05:11 by Admin

Research and Analysis

The research and analysis stage of your planning process is very important. On the following pages, we’ll go over the steps you need to follow in order to build your plan. It is important to understand that each step builds upon the previous step.

You’ll build your plan layer by layer. For example:

•Research and analysis are critical because they lead you to identifying your product’s target audience, as well as its strengths, weaknesses, threats and, most importantly, opportunities.

•Knowing the threats and opportunities your product faces helps you more realistically set your sales goals and objectives.

•Knowing your opportunities, target audience, and sales goals will give you the information you need to set your marketing goals to take advantage of the opportunities and meet the sales goals.

•Knowing your marketing objectives will give you the information you need to set your positioning, pricing, distribution, and other marketing strategies.

•Having your strategies set will give you the road map to set up the tactical elements of your marketing plan, such as advertising, promotions, branding, packaging, etc.—all of those things you have to tailor to your market.

•Once your tactical elements are determined, you can determine your creative element, budgets, and calendar.

•Each step is critical to the success of your planning efforts.

The Business Review

What is the scope of your business? In other words, what business are you in? What is the essence of what your business does or what your product provides? Is it helping people lower their stress levels by helping them organize their daily lives (as in Day-Timers, PDAs, reminder services)? Is it helping businesses save money, improve working conditions and increase the safety of their employees (as in safety consulting and training services)? Is it helping kids learn to read and so have a greater chance in succeeding in school and their careers (as in educational television, educational computer games, or personal tutoring)?

What is your business’s philosophy and mission? Are you really on track with what you set out to do initially? Revisit your vision and mission statements.

In order to put together a good plan for marketing, you have to have a thorough knowledge of your product. Perform an exhaustive review of:

•Features
•Benefits
•Life cycle stage
•Safety
•Reliability
•Appearance and packaging
•Technology level (if applicable)
•Sales history
•Seasonality
•Pricing history
•Distribution history
•Promotion history
•Other areas specific to your product

Pay close attention to market segments. Markets have become increasingly fragmented. Market segments can be based on price, quality, product use, or even benefits consumers find through a product’s use. If you’re a small business, then finding the right market segment is very important. It can help you target your efforts and compete more efficiently.

See How Market Research Works for more information on conducting your research or finding secondary research sources.

Now it’s time to cover some important planning elements commonly referred to as SWOT and PEST.

PEST

PEST stands for Political factors, Economic factors, Social factors, and Technology factors. These are all elements that may have an effect on your future business. Make a list of all factors that may be either beneficial or detrimental to the success of your marketing efforts or business.

Political factors include regulatory issues that affect your product line (e.g. ergonomics issues and the current regulatory rulings), legal aspects such as patents and copyrights, or just the current political climate.

Economic factors include current financial forces on your target market. Is there currently a recession? Is the stock market falling or rising?

Social factors include changes in social trends, fads, or demographic groups as they affect your target market and its current opinions. This could include changes in shopping habits, such as the increase in online shopping or the super-mall trend. It could also include the aging of your current target market, or the population increase in the over-50 group.
Technology factors include everything that affects your product, its market, or information-gathering efforts of your market that come as a result of changes in technology. This would include the Internet, wireless communications, handheld electronic devices, and anything else technology-driven that is affecting your product or service.

All of the PEST factors will tie into and possibly have an effect on the strengths, weaknesses, opportunities, and threats you identify for your product and market.

SWOT

SWOT stands for Strengths, Weaknesses, Opportunities and Threats and is critical to your marketing plan. As mentioned before, your marketing plan builds upon itself, and one of the anchoring steps is the identification of SWOT. By completing the review of your business and your market, you should be armed with the information necessary to identify your SWOTs and PESTs.

Your strengths and weaknesses are determined by internal elements, while opportunities and threats (OT) are dictated by external forces. Sometimes it is recommended to identify your opportunities and threats first in order to more quickly bring to light the product strengths or weaknesses that should be considered first. For example, if you discover that your competitor is losing an exclusive distribution contract in the next two months, you could use this information to quickly fill that gap in the market. However, many of your threats will be based on weaknesses you’ve discovered.

Regardless of which you cover first, you need to understand what to look for. To come up with your OT, ask yourself these questions. Were any problems or opportunities identified in you’re:

•Company’s philosophy or mission?
•Product features, benefits or quality?
•Product’s competitive advantage? (Is there a competitive advantage?)
•Distribution methods or distributor satisfaction?
•Pricing structures? Is it priced much higher or lower than the competition?
•Target market’s awareness of your product?
•Target market’s attitudes toward the product (or its category)?
•Target market’s brand loyalty?
•Competition’s activities? (New product launches, price changes, new companies, etc.)
•Overall market? (Shifts in needs, trends, behaviors, etc.)

When coming up with your opportunities list, think specifically in terms of these processes:

Problem solving – What problems do customers currently have with the product that aren’t necessarily bad enough to warrant not using it or even complaining, but could benefit from improvement? For example, interviewing a customer might bring to light a statement like, “My potato chips always get crushed in the grocery bags on the way home from the store.” Enter Pringles brand potato chips. New packaging might just give your product or service an advantage in the market.

Product use cycle – What steps does the buyer go through to purchase, use, and dispose of the product? This method might bring to light new product ideas (or just enhancements or packaging ideas), services, or other value options.

Ideal scenarios – Sometimes customers’ “I wish…” statements can lead to whole new spin on a product. For example, someone at some point probably said “I wish I could check my e-mail from anywhere!” Enter the wireless communications addition to the PDA line.

Other areas may also need to be addressed depending on your company, product or market.

Now identify strengths and weaknesses. Strengths can be defined as any available company resource that you can use to improve your market share or financial performance. Weaknesses are any company resource that may cause you to lose a competitive advantage, position or financial state. Rate your product (or company) strengths in these categories on a scale of one to five. You can also rate each by importance. Remember, many of your weaknesses will be based on the threats you identified above.

External – Market-oriented
•Company/product reputation
•Market share
•Company’s/product’s ability to meet the needs and trends of the market
•Value your company brings to the market
•Quality of your product
•Quality of your customer service and support (or other area of service)
•Quality/effectiveness of past promotions and other marketing efforts
•Pricing
•Distribution
•Geographical advantages

Internal
•Operational leadership
•Financial strength
•Manufacturing capabilities
•Responsiveness of workforce

Expand on these categories as needed for your product or company.

Also keep in mind that, often, a threat can also be an opportunity, and strength can also be viewed as a weakness, all depending upon the viewer’s perspective. For example, you may see your large selection of products as strength, while your customers may consider it confusing and see it as making it difficult to find what they need. Put yourself in the consumer’s shoes and be objective when making your determinations.