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The Role of Situation Analysis in Marketing Plan

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The role of situation analysis in marketing plan

Facing to more complex business environment, systematically marketing plans are important to organizations in terms of maintaining a high level of operating efficiency and achieving goals fully. According to Sally and John (1996:3), marketing plans are “the written document or blueprint for implementing and controlling an organization’s marketing activities related to a particular marketing strategy” (Sally, D., Lyndon S., & John, B., 1996: 3). A successful marketing plan is able to improve organizations’ profits and growth, uses in objective setting and monitors results (Subash Jain, Michael D. Clemes, Gregory Brush, 2008: 5)

In order to gain a successfully marketing plan, it is important to marketing decision makers to understand the current situation comprehensively and trends affecting the future of the organization. There are two major reasons to explain why situation analysis plays a vital role in developing marketing plan.

Firstly, dynamic marketing environment will lead to uncertainty, threats and opportunities for marketers. Marketing managers who success to know changes in environment through situation analysis can lead their companies to capitalize on opportunities and cope with threats created by changes.

Then, systematically analyzing situational environments is a crucial way for organizations to identify their customers and understand their needs. As Peter(1998: 23) said, “The successes of any marketing plan hinges on how well it can identify customer needs and organize its resources to satisfy them profitably” (J. Paul Peter, James H. Donnelly, JR, 1998)

Here is an example about Brumby’s to adapt to the marketing environment. Since Australians are looking to alter their lifestyles and are conscious about what they eat, Brumby’s has now launched a low-carbohydrate white bread and emphasizes that its bread is preservative free to respond to these changes (S. Rundle-Thide, D.Waller, G. Elliott, A. Paladino, 2007: 64)

Brumby’s not only seize the opportunity but also satisfy complex customers demand. Comparing to its competitors, it has more chances to build its customers’ loyalty in order to develop its sustainable competitive advantages.

Hence, situation analysis is a key and basic function to marketing plan, which provide comprehensive and accurate information to the plan. In addition, through a detailed situation analysis, managers can find some key performance issues which are unnoticed in day-to-day operations. According to those issues, managers can make plan to address those weaknesses for organizations surviving and long-term achievement of their goals.

Factors in situation analysis

Basing on marketing environment factors, situation analysis consists of reviewing of organization internal environment and external environment.

1) Company’s capabilities analysis

First of all, a marketing manager constructing a situation analysis should consider the company’s capabilities including “the business unit’s financial position, management and leadership capabilities, human resource capabilities, research and development capabilities and operations capabilities” (Reed. Peter W, 2006: 74)

An example about NEPC, the marketing manager diagnose its non-marketing capabilities may have the following resultsпјљ

пЃµ What business in: “NEPC is manufacturer and marketer of a variety of food and nonfood products including coffee, cake mixes, toothpaste, diapers, detergents, and health-related remedies.”

пЃµ About development capabilities and financial position: “In 2003, the company’s worldwide sales amounted to $43.4 billion”

One market decision relating to this analysis is “to strengthen significantly the company’s core businesses (I.e., toothpaste, diapers, and detergents)” (Subash Jain, Michael D. Clemes, Gregory Brush, 2008: 37)

2) Marketing capabilities analysis

The other capability should be considered is marketing capabilities including “the firm’s competitive position, brand recognition and loyalty, its intelligence gathering capabilities and marketing control strategies” (Reed. Peter W, 2006: 74)

Since understanding KFC is more popular than McDonald in Chinese market and it enjoys higher brand recognition than McDonald among Chinese, therefore, managers of KFC can launch a consumer loyalty program in order to gain more marker share.

3) Macro level environment analysis

Next, managers have to review external environment including the macro level and the industrial level. As Rundle-Thide (2007: 65) said, macro level external environment includes “the economy, socio-cultural, political factors, legal, global” (S. Rundle-Thide, et al, 2007: 65) and technology factors, which are PEST factors.

Different business cycle stages may affect buying power or consumer expenditure levels. For example, during a recession stage, for unemployment rises will lead to buying power declines, managers may make decision to decrease the price to appeal to consumers.

With the growing threats from the greenhouse gases and the increasing realization protecting of environment, automakers must increase the investigation on technology in terms of CO2 emissions and enhance communication with their consumers. Otherwise, they may lose their market share, such as general motors in American market (John DeCicco, Freda Fung, Feng An, 2003: 10)

4) Industrial environment analysis

As Rundle-Thide (2007: 65) said, the industrial level external environment includes “market review, competitive review, distribution channel and buyers review, customer analysis and supply characteristics”

The industrial environment analysis about Levi Strauss presents it has established a well-known trademark for its blue jeans. However, it has lots of potential competitors and their brands are available. Therefore, this may imply firm exist in a monopolistic competition and it should develop strategy to emphasis on product differentiation (S. Rundle-Thide, et al, 2007: 71)

Ypartnership is a company which offers cruising travel and it supposes its major customers are young people who are in 18-28 age groups. However, through customer analysis there are 36% customers

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