When traveling, a roadmap is used to determine where we are now. In marketing, this is called the Situation Analysis.
What's the current state of affairs and what recent and future changes do we see in the marketing environment in each of these areas?
- Market size: historical, current and projected
- Market share and trends.
- Competitive activities and positioning (real and intended).
- Product features and benefits.
- Pricing and overall cost to consumer.
- Communications to the trade and consumers.
- Distribution and convenience to the consumer.
- Consumer purchase motivations.
Answers to the questions above come from:
- Existing (secondary) internal research.
- New internal data gathering (sales force, store checks).
- Existing research from trade publications, associations and research firms.
- New (primary) research.
Research methods are changing rapidly. Computerization is making it more economically feasible to track consumer behavior. Therefore, it's becoming common to base marketing decisions more on actual behavior and less on consumer attitudes and intentions. Because of this and the proliferation of media choices, the question becomes more "What cells do we put in our test matrix?" and less "What will this year's campaign be?"
Planning based on actual behavior is more stable than projections from attitudes or "intention to buy" numbers.
Questions that must be answered are:
- Will the consumer want this?
- At a reasonable cost to them?
- Is it convenient for them to buy?
- Are we clearly communicating our story? (via all the points of contact: packaging, POP, advertising, sales promotions, editorial?)
- Where will society and our industry be in five years?
- How should that affect what we're doing today?
A review of the situation will:
- Confirm successes and failures of the past.
- Spawn insights and conclusions about the future.
- Help you understand "where you are now."
A situation analysis at The Phelps Group considers how the customer relates to the four marketing mix variables in light of the five marketing environment variables. This chart can serve as a quick checklist for the main areas of consideration in a situation analysis for any business.