Customer & Competitor Analysis and STP Strategies

Ms.Anubha RastogiAsst. Professor

Vidya School Of Business

• Also called Background Review• It’s a Summation of current knowledge:

– Current Users– Seasonality– Geography– Creative Requirements– Purchase Cycle– Competitive Review

1. Situation Analysis

And anything else that might help you understand your situation.

• You do Secondary Research first• You do Primary Research second• Research is usually in these three areas:

– Target Audience• Improve Understanding, Gain Insight

– Factors That Motivate Purchase Behavior• Improve Effectiveness, Gain Insight

– Unique Brand Characteristics• Look for key point of difference

2. Research

• Also known as a “SWOT” Analysis– Strengths, Weaknesses, Opportunities, Threats

• “For every problem there is an opportunity”• Understanding problems is a critical skill• Identify the right problem and you’re on the road to the solution• And, whatever you do…

3. Problems & Opportunities

Don’t solve the wrong problem!

• The Marketing Objective is a number4. The Objective

It is the goal of your marketing activities Usually, it is a sales or volume goal It may be difficult to get to, but the final answer is simple and

measurable. Identifying target market(s) [STP]

5. Developing Campaign Objectives– 25% unprompted recall of Vegetale in your target

market, by the end of a 3-month media campaign

6. Planning And Budgeting– The Channels To Be Used (E.G. Newspaper And

Television Adverts, In-store Promotions); – The Timescale Of The Campaign;

7. Drafting Material – Key Messagese.g. your key messages might be that Vegetale is a new, nutritious, low-fat product, derived entirely from natural vegetable ingredients, which can be prepared much like meat and which has a similar texture to veal.

Creating The Advertising Message:• A Sample Creative Strategy Template:

– To convince: ___________________– To use: ___________________– Instead of: ___________________– Because: ___________________

Target AudienceBrand/ProductCompetition

Factors that influence purchase behavior + (Target Audience Insight)

• A good Media Plan considers these important factors:

8. Advertising Media

Media Cost-Effectiveness: GRP (TRP) - Gross & Total Rating Points Reach Frequency

Media Cost-Efficiency: CPM - Cost per thousand CPP - Cost per point

Customer Analysis Objective: • It identifies target customers• Ascertains the needs of these customers• And then specifies how the product satisfies these needs.

A customer analysis can be broken down into:# Behavioral Profile (why your product matches a customer's lifestyle)# Demographic Profile (describing a customer's demographic attributes).

Behavioral Analysis (Customer Buying Criteria)

• Identify And Weigh Factors Consumers Use To Choose One Product Over Another. (Buying Criteria)

• Four major criteria includes: Price, Quality, Convenience And Prestige.

• In business-to-business (B2B) transactions (also called industrial marketing), service issues such as Reliability, Payment Terms, and Delivery Schedule become much more important.

Behavioral Analysis (Purchase Process and Patterns)• Customer Behavior Analysis Requires A More In-depth Understanding

* What steps are involved in the decision-making process?* What sources of information are sought?* What is a timeline for a purchase (e.g., impulse vs. extended decision-making)?* Will the customer consult others in their organization/family before making a decision?* Who has the authority to make the final decision?* Will the customer seek multiple bids?* Will the product/service require significant modifications?

• To understand the buying habits and patterns of your customers, answer the following questions:

* Reason/occasion for purchase?* Number of times they'll purchase?* Timetable of purchase, every week, month, quarter, etc.?* Amount of product/service purchased?* How long to make a decision to purchase?* Where does the customer purchase and/or use the product/service?

Customer Demographics

Typical questions to ask when determining the demographics of the target market include:* What is the age range of the customer who wants my product or service? * Which gender would be most interested in this product or service? * What is the income level of my potential customers? * What level of education do they have? * What is their marital or family status: Are they married, single, divorced?

Do they have kids, grandkids?* What are the hobbies of my target customers?

Competitor Analysis

Comparative Size & Growth (BCG)Growth of industry

Comparative market share

Company A

Company B

Company C

Company E

Company D

= sales

High

Low

High

Low

Determining the “Marketing Mix”Product Price Promotion Distribution

Company A hi quality hi price extensive specialty TV, net stores

Company B hi quality medium limited specialty hi service price TV, hi net stores

Company C lo quality lo price heavy net masslo service promos market

Hi = HIGHLo= LOW

Critical Success Factors ComparisonCritical Success Company A Company B Company C USFactors1. Hot Design2. Internet Hype3. Trained Sales Reps4. Liberal Return Policy5. Mass DistributionOverall rating(1 = low, 10= high)

What now?• What will be competitors’ strategies?1. continue as is2. change due to

– Changes in marketplace– Changes in management– Changes in financial goals

• How to determine new direction?– Management judgment– Simulation

• What will be competitors’ reaction to our strategy?

Some Popular Advertising FormatsSlice of Life This traditional format has been commonly used on television adverts for fast-

moving consumer goods and domestic appliances such as washing machines.

Humorous Visual and verbal humour which is used for all kinds of products.

Aspirational Imagery is used, either to enhance a brand identity, or to suggest that consumers can obtain some element of fantasy lifestyle by purchasing the product.

Endorsement The receiver is given an assurance regarding the message, because it is delivered by someone that they know or trust.

Demonstration It is effective for introducing novel products or ones that are difficult to understand.

Postmodern Bizarre and self-parodying adverts where the promotional message appears obscure, if not unintelligible.

Beyond STP—Regular Assessment1. Reassess segmentation strategy:

Exam the current target segment to develop new and better ways of meeting its needs.

Change the target and reposition the brand to a new segment. 2. Pursue product differentiation strategy:

Emphasize or create differences in brands to distinguish them from competitors.

Advertising plays a critical role because the consumer will have to be convinced that the difference is meaningful.

Advertising and promotion targeted to: Heavy users Nonusers Brand-loyal users

Switchers/Variety seekers Emergent Consumers

– Point of entry marketing strategy

Positioning1. By attributes - shampoo (Pantene Pro V)2. By price - Zeller’s “lowest price is the law”3. By competitor- Snapple, “We’re #3”4. By application - Nutrigrain - until we get beamed to work!5. By product user - consumer, industry, govt

6. By product class - convenience, shopping, specialty goods

Benefit Positioning User Positioning Competitive Positioning

Fundamental Positioning Themes

Repositioning

Used to revive an ailing brand or fix a lackluster new market entry

Advertising themes and positioning can be trendy and become outdated

The challenge: Changing perceptions of a brand forged over years of advertising.

Common Mistakes in Developing Advertising

• Failure to distinguish ad positioning (what you say) from ad creative (how you say it)

• Mistaken assumptions about consumer knowledge• Improperly positioned• Failure to break through the clutter• Distracting, overpowering creative in ads• Under-branded ads• Failure to use supporting media• Changing campaigns too frequently• Substituting ad frequency for ad quality