Managing the marketing function begins with a complete analysis of the company's situation. The company must analyze its markets and marketing environment to find attractive opportunities and to avoid environmental threats. It must analyze company strengths and weaknesses as well as current and possible marketing actions to determine which opportunities it can best pursue. Marketing provides input to each of the other marketing management functions.
A thorough analysis of the situation in which the company finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the company must understand its own capabilities and the environment in which it is operating.
The situation analysis thus can be viewed in terms an analysis of the external environment and an internal analysis of the company itself. The external environment can be described in terms of macro-environmental factors that broadly affect many companies, and micro-environment factors closely related the specific situation of the company.
The situation analysis should include past,present and future aspects. It should include a history outlining a history outlining how the situation evolved to its present state, and an analysis of trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists.
If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition.
There are several frameworks that can be used to add structure to the situation analysis:
A thorough analysis of the situation in which the company finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the company must understand its own capabilities and the environment in which it is operating.
The situation analysis thus can be viewed in terms an analysis of the external environment and an internal analysis of the company itself. The external environment can be described in terms of macro-environmental factors that broadly affect many companies, and micro-environment factors closely related the specific situation of the company.
The situation analysis should include past,present and future aspects. It should include a history outlining a history outlining how the situation evolved to its present state, and an analysis of trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists.
If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition.There are several frameworks that can be used to add structure to the situation analysis:
- 5 C's Analysis - Company, Consumers, Competitors, Collaborators, Climate. Company represents the internal situation; the other four cover aspects of the external situation.
- PEST Analysis - for macro-environmental political, economic, societal, and technological factors. A PEST analysis can be used as the "climate" Portion of the 5 C's framework.
- SWOT Analysis - Strengths, Weaknesses, Opportunities, and Threats - for the internal and external situation. A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess how well the firm is equipped to deal with them.
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