Structure
Traditionally, marketing analysis was structured into three areas:
Customer analysis,
Company analysis, and
Competitor analysis (so-called "3Cs" analysis). More recently, it has become fashionable in some marketing circles to divide these further into certain five "Cs": Customer analysis, Company analysis, Collaborator analysis, Competitor analysis, and analysis of the industry Context.
Customer analysis is to develop a schematic diagram for
market segmentation, breaking down the market into various constituent groups of customers, which are called customer segments or market segmentation's. Marketing managers work to develop detailed profiles of each segment, focusing on any number of variables that may differ among the segments: demographic, psycho graphic, geographic, behavioral, needs-benefit, and other factors may all be examined. Marketers also attempt to track these segments' perceptions of the various products in the market using tools such as
perceptual mapping.
In company analysis, marketers focus on understanding the company's cost structure and cost position relative to competitors, as well as working to identify a firm's
core competencies and other competitively distinct
company resources. Marketing managers may also work with the
accounting department to analyze the
profits the firm is generating from various
product lines and customer accounts. The company may also conduct periodic
brand audits to assess the strength of its brands and sources of
brand equity.
The firm's collaborators may also be profiled, which may include various suppliers,
distributors and other channel partners,
joint venture partners, and others. An analysis of
complementary products may also be performed if such products exist.
Marketing management employs various tools from
economics and
competitive strategy to analyze the industry context in which the firm operates. These include
Porter's five forces, analysis of
strategic groups of competitors,
value chain analysis and others.Depending on the industry, the
regulatory context may also be important to examine in detail.
In Competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using
SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive
positioning and
product differentiation, degree of
vertical integration, historical responses to industry developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. As such, they often conduct
market research (alternately
marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include:
Marketing managers may also design and oversee various
environmental scanning and
competitive intelligence processes to help identify trends and inform the company's marketing analysis.
Marketing strategy
If the company has obtained an adequate understanding of the customer base and its own competitive position in the industry, marketing managers are able to make their own key strategic decisions and develop a
marketing strategy designed to maximize the
revenues and
profits of the firm. The selected strategy may aim for any of a variety of specific objectives, including optimizing short-term unit margins, revenue growth,
market share, long-term profitability, or other goals.
To achieve the desired objectives, marketers typically identify one or more target customer segments which they intend to pursue. Customer segments are often selected as targets because they score highly on two dimensions: 1) The segment is attractive to serve because it is large, growing, makes frequent purchases, is not price sensitive (i.e. is willing to pay high prices), or other factors; and 2) The company has the resources and capabilities to compete for the segment's business, can meet their needs better than the competition, and can do so profitably. In fact, a commonly cited definition of marketing is simply "meeting needs profitably."
The implication of selecting target segments is that the business will subsequently allocate more resources to acquire and retain customers in the target segment(s) than it will for other, non-targeted customers. In some cases, the firm may go so far as to turn away customers who are not in its target segment.The doorman at a swanky nightclub, for example, may deny entry to unfashionably dressed individuals because the business has made a strategic decision to target the "high fashion" segment of nightclub patrons.
In conjunction with targeting decisions, marketing managers will identify the desired
positioning they want the company, product, or brand to occupy in the target customer's mind. This positioning is often an encapsulation of a key benefit the company's product or service offers that is
differentiated and superior to the benefits offered by competitive products.
[ For example,
Volvo has traditionally positioned its products in the
automobile market in
North America in order to be perceived as the leader in "safety", whereas
BMW has traditionally positioned its brand to be perceived as the leader in "performance."
Ideally, a firm's positioning can be maintained over a long period of time because the company possesses, or can develop, some form of
sustainable competitive advantage.
[8] The positioning should also be sufficiently relevant to the target segment such that it will drive the purchasing behavior of target customers.
Implementation planning
The Marketing Metrickjjntinuum provides a framework for how to categorize metrics from the tactical to strategic.
After the firm's strategic objectives have been identified, the target market selected, and the desired positioning for the company, product or brand has been determined, marketing managers focus on how to best implement the chosen strategy. Traditionally, this has involved implementation planning across the "4Ps" of marketing:
Product management, Pricing (at what price slot do you position your product, for e-g low, medium or high price), Place (the place/area where you are going to be selling your products, it could be local, regional, country wide or International) (i.e. sales and
distribution channels), and
People. Now a new P has been added making it a total of 5P's. The 5th P is Politics which affects marketing in a significant way.
Taken together, the company's implementation choices across the 4(5)Ps are often described as the
marketing mix, meaning the mix of elements the business will employ to "
go to market" and execute the marketing strategy. The overall goal for the marketing mix is to consistently deliver a compelling
value proposition that reinforces the firm's chosen positioning, builds
customer loyalty and
brand equity among target customers, and achieves the firm's marketing and financial objectives.
In many cases, marketing management will develop a
marketing plan to specify how the company will execute the chosen strategy and achieve the business' objectives. The content of marketing plans varies from firm to firm, but commonly includes:
- An executive summary
- Situation analysis to summarize facts and insights gained from market research and marketing analysis
- The company's mission statement or long-term strategic vision
- A statement of the company's key objectives, often subdivided into marketing objectives and financial objectives
- The marketing strategy the business has chosen, specifying the target segments to be pursued and the competitive positioning to be achieved
- Implementation choices for each element of the marketing mix (the 4(5)Ps)
Project, process, and vendor management
Once the key implementation initiatives have been identified, marketing managers work to oversee the execution of the marketing plan. Marketing executives may therefore manage any number of specific projects, such as sales force management initiatives, product development efforts, channel marketing programs and the execution of
public relations and advertising campaigns. Marketers use a variety of
project management techniques to ensure projects achieve their objectives while keeping to established
schedules and budgets.
More broadly, marketing managers work to design and improve the effectiveness of core marketing
processes, such as
new product development,
brand management,
marketing communications, and pricing. Marketers may employ the tools of
business process reengineering to ensure these processes are properly designed, and use a variety of
process management techniques to keep them operating smoothly.
Effective execution may require management of both internal resources and a variety of external vendors and service providers, such as the firm's
advertising agency. Marketers may therefore coordinate with the company's Purchasing department on the procurement of these services.
Organizational management and leadership
Marketing management may spend a fair amount of time building or maintaining a
marketing orientation for the business. Achieving a market orientation, also known as "customer focus" or the "marketing concept", requires building consensus at the senior management level and then driving customer focus down into the organization. Cultural barriers may exist in a given business unit or functional area that the marketing manager must address in order to achieve this goal. Additionally, marketing executives often act as a "brand champion" and work to enforce
corporate identity standards across the enterprise.
In larger organizations, especially those with multiple business units, top marketing managers may need to coordinate across several marketing departments and also resources from finance, research and development, engineering, operations, manufacturing, or other functional areas to implement the marketing plan. In order to effectively manage these resources, marketing executives may need to spend much of their time focused on political issues and inte-departmental negotiations.
The effectiveness of a marketing manager may therefore depend on his or her ability to make the internal "sale" of various marketing programs equally as much as the external customer's reaction to such programs.
Reporting, measurement, feedback and control systems
Marketing management employs a variety of metrics to measure progress against objectives. It is the responsibility of marketing managers – in the marketing department or elsewhere – to ensure that the execution of marketing programs achieves the desired objectives and does so in a cost-efficient manner.
Marketing management therefore often makes use of various organizational control systems, such as sales forecasts, sales force and reseller
incentive programs,
sales force management systems, and
customer relationship management tools (CRM). Recently, some software vendors have begun using the term "
marketing operations management" or "
marketing resource management" to describe systems that facilitate an integrated approach for controlling marketing resources. In some cases, these efforts may be linked to various
supply chain management systems, such as
enterprise resource planning (ERP),
material requirements planning (MRP),
efficient consumer response (ECR), and
inventory management systems.
Measuring the
return on investment (ROI) of and
marketing effectiveness various marketing initiatives is a significant problem for marketing management. Various market research, accounting and financial tools are used to help estimate the ROI of marketing investments.
Brand valuation, for example, attempts to identify the percentage of a company's
market value that is generated by the company's brands, and thereby estimate the financial value of specific investments in brand equity. Another technique,
integrated marketing communications (IMC), is a CRM database-driven approach that attempts to estimate the value of marketing mix executions based on the changes in customer behavior these executions generate.
