To create value the company must meet and exceed the customer’s needs. In order to satisfy customer needs, the firm first must understand its external situation, including the customer, the market environment and the firm’s own capabilities. Furthermore it needs to forecast trends in the dynamic environment in which it operates.
A useful framework for performing a situation analysis is the 5 C’s Analysis. The 5C’s is an environmental scan on five key areas especially applicable to marketing decisions. It covers the internal, the micro-environmental, and the macro-environmental situation, each change over time and success lies in anticipating the change and being prepared to win over it.
Customer:
In this day and age, a company’s marketing strategy needs to be customer focused. It’s about understanding the target consumer; their wants, needs and motivations. Not as demographics, psychographics or any other graphics, but as real people. Its understanding why customers do what they do (or don’t do), when they do it and why they do it.
Such knowledge is critical in marketing since having a strong understanding of buyer behavior will help shed light on what is important to the customer. It’s about focusing on the target customer first and then working back to the brand.
It’s imperative that companies have mindshare before focusing on market share. A lot of factors change for the customer which by default change his/her relation with the product – the changes could lie in priorities changing the value of the product, the customer becoming more and more savvy, the decision maker change as well or very simply the ability to pay may change.
Competitors:
Existing competitors. Potential future competitors – consider not only direct competitors, but also indirect threats such as alternative processes, materials, or developments
Strengths, weakness, opportunities, and threats (SWOT analysis) for each competitor
Market share of each competitor.
Competitor positioning – low price? high service?, premium product/service all have to be analysed.
Whether competitor comes out with a Me too product, a low cost knock off or a truly innovative imitation.
All these possibilities pose a threat and the major threat is the damage done through the pricing actions of competitors.
Collaborators:
Distributors and Representatives – region specific, market specific, knowledge specific
Industry associations – target industry associations, trade shows
Suppliers, Partnerships / Alliances – companies with complementing products, technical alliances with competing products - all are capable of bringing about change
Company
Over time company could lose its competitive advantage and the ability to provide and create value
Context:
Macroeconomic – inflation, interest rates, consumer confidence, and more. Social – society’s trends and perceived values. In composites ecological impact will continue to become a growing factor, driving towards closed molded processes and recyclable materials.
Political and Regulatory – policies and regulations that affect the market.
Technological – new technologies that affect existing products
The change in all theses can affect the value proposition.
Sustaining Value: Three Pathways
• Developing and Maintaining Brand Equity
Building the brand is crucial if value has to be created and sustained.
• Sustaining Proprietary Value Creation Processes
Through careful guarding of business processes and products, employing trade secrets and patents.
• New Product Introduction
Companies must remain on the path of product improvement, not fearing but understanding the economics of obsoleting your own products.
The ability to create value at a given moment in time is not the basis of a business. The consumer naturally changes over time; the competitor is more destructively oriented. In competitive battles it is the survival of the fittest. Survive or perish
2 comments:
“The main role of marketing in a company is [rooted in the fact that marketing is the process through which a company generates value for its target customers].”
You don’t really say what the main role of marketing is. You say it’s rooted in something, or based on something, but don’t follow up. You then define marketing in the predicate of the sentence and the meaning gets lost there.
I also disagree with your definition of what marketing is: “marketing is the process through which a company generates value for its target customers.” This sounds like something out of a book that a professor who never worked outside of a university might write.
Marketing is like fishing. Fishing is a set of actions that are executed with the intent of catching fish. In other words, fishing is something you do to catch fish. Marketing is something you do to build a market. But this begs the question of what is a market. A market is a group of potential buyers who perceive value in your product or service. The goal of a marketer is to increase the perceived value of your product or service and thereby increase the size of your market.
This is a big difference from actually generating value. And this is probably what separates a bad marketer from a good marketer. A bad marketer looks for real value, which doesn’t exist objectively. Value is a subjective idea and a good marketer understands this so can be more effective.
Without establishing a proper base understanding the rest of the post is shaky. You also bring up “need” a bit when this idea is not really of concern. People don’t actually need much. But you can get them to want almost anything. A good marketer doesn’t focus on looking for wants, he/she would certainly take advantage of existing wants, but the focus should be on generating a “want.”
The rest seems text-booky and a bit rigid for the real world.
It was an assignment called building blocks in which we had to summarize what we did that particular day.. I get your point about needs - and how we can be made to want anything.
This wasn't supposed to define marketing but how to ensure that we monitor every facet of our business...
But I like your fishing analogy - might use it if you don't sue me for infringement...
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