Market Situation Analysis
Market analysis is a documented investigation of a market that is used to inform a firm’s planning activities particularly around decision of: inventory, purchase, work force expansion/contraction, facility expansion, purchases of capital equipment, promotional activities, and many other aspects of a company.1 It is essential to understand the certain trend in the market to make sales forecasting and preparing a good plan if there is a problem occurred.
The customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.2
The Market Segmentation came from the word market segment which is a group of people or organizations sharing one or more characteristics that cause them to have similar product and/or service needs. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. The term is also used when consumers with identical product and/or service needs are divided up into groups so they can be charged different amounts. These can broadly be viewed as ‘positive’ and ‘negative’ applications of the same idea, splitting up the market into smaller groups.3
The competitor analysis is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats.4 Using the knowledge of determining the capacity of each competitor in the certain area, the business that studying the market strategy thoroughly can lead the market competition.
To identify the performance of the business in the market, there are important elements that serve as a ground basis.5 Enumerated as Sales analysis, Market share analysis, Expense analysis, and financial analysis.
The above performance analyses concentrate on the quantitative measures which are directly related to short-term performance. But there are a number of indirect measures, essentially tracking customer attitudes, which can also indicate the organization’s performance in terms of its longer-term marketing strengths and may accordingly be even more important indicators. Some useful measures are: Market research, lost business, and Customer complaints.
The opportunity cost or economic opportunity loss is the value of the next best alternative forgone as the result of making a decision. Opportunity cost analysis is an important part of a company’s decision-making processes but is not treated as an actual cost in any financial statement. The next best thing that a person can engage in is referred to as the opportunity cost of doing the best thing and ignoring the next best thing to be done.6
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered on the key concept that customer satisfaction is the main goal.7
The Market segmenting is the process that a company divides the market into distinct groups who have distinct needs, wants, behavior or who might want different products & services.8 Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which don’t always fit into convenient demographic boundaries.
The perceptual mapping is a graphics technique used by asset marketers that attempts to visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand, or company is displayed relative to their competition.9 Perceptual maps can have any number of dimensions but the most common is two dimensions. Any more is a challenge to draw and confusing to interpret.
In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the ‘relative competitive comparison’ their product occupies in a given market as perceived by the target market.10
The re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market.
The de-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market.
The original work on Positioning was consumer marketing oriented, and was not as much focused on the question relativity to competitive products as much as it was focused on cutting through the ambient “noise” and establishing a moment of real contact with the intended recipient. The growth of high-tech marketing may have had much to do with the shift in definition towards competitive positioning.
The New Product Development (NPD) is the term used to describe the complete process of bringing a new product or service to market. Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of product life cycle management used to maintain or grow their market share.11
The product design can be defined as the idea generation, concept development, testing and manufacturing or implementation of a physical object or service. Product Designers conceptualize and evaluate ideas, making them tangible through products in a more systematic approach. The role of a product designer encompasses many characteristics of the marketing manager, product manager, industrial designer and design engineer.12
The market test in the field of business and marketing is a geographic region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll-out. The criteria used to judge the acceptability of a test market region or group includes the population that is demographically similar to the proposed target market; and relative isolation from densely populated media markets so that advertising to the test audience can be efficient and economical.13
The research and development (also R&D) refers to “creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications”.14
The Services marketing is marketing a service or a product. The marketing service-base business is different from marketing a goods-base business.15 Service Marketing has been relatively gaining ground in the overall spectrum of educational marketing as developed economies move farther away from industrial importance to service oriented economies.
The retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by post, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a “retailer” buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. 16
On the other hand, the logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. Logistics involves the integration of information, transportation, inventory, warehousing, material-handling, and packaging, and occasionally security. Logistics is a channel of the supply chain which adds the value of time and place utility.17
The pricing is a key variable in selling a merchandise or service. Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors.18
The theory of demand and supply is an organizing principle to explain prices and quantities of goods sold and changes thereof in a market economy. It refers to price and output determination in a perfectly competitive market. This has served as a building block for modeling other market structures and for other theoretical approaches.19
The forecasting is the process of estimation in unknown situations. Prediction is a similar, but more general term. Both can refer to estimation of time series, cross-sectional or longitudinal data. The risk and uncertainty are central to forecasting and prediction. Forecasting is used in the practice of Customer Demand Planning in every day business forecasting for manufacturing companies. The discipline of demand planning, also sometimes referred to as supply chain forecasting, embraces both statistical forecasting and a consensus process.20
Meanwhile, the Integrated Marketing Communications (IMC), Integrated Marketing Communications is a term used to describe a holistic approach to marketing. It aims to ensure consistency of message and the complementary use of media. The concept includes online and offline marketing channels. Generally marketing starts from “Marketing Mix”. Promotion is one element of Marketing Mix. Promotional activities include Advertising (by using different medium), sales promotion (sales and trades promotion), and personal selling activities. It also includes Internet marketing, Sponsorship marketing, Direct marketing, Database marketing and Public relation. And integration of all these promotional tools along with other components of marketing mix to gain edge over competitor is called as Integrated Marketing Communication.21
Although integrated marketing communications is more than just an advertising campaign, the bulk of marketing dollars is spent on the creation and distribution of advertisements. Hence, the bulk of the research budget is also spent on these elements of the campaign. Once the key marketing pieces have been tested, the researched elements can then be applied to other contact points: letterhead, packaging, logistics, customer service training, and more, to complete the IMC cycle.
The advertising is a form of communication used to help sell products and services. Typically it communicates a message including the name of the product or service and how that product or service could potentially benefit the consumer. However, advertising does typically attempt to persuade potential customers to purchase or to consume more of a particular brand of product or service.22
Many advertisements are designed to generate increased consumption of those products and services through the creation and reinvention of the “brand image”. For these purposes, advertisements sometimes embed their persuasive message with factual information. There are many media used to deliver these messages, including traditional media such as television, radio, cinema, magazines, newspapers, video games, the carrier bags, billboards, mail or post and Internet.
Meanwhile, false advertising or deceptive advertising is the use of false or misleading statements in advertising. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or misleading advertising. Truth in labeling refers to essentially the same concept, that customers have the right to know what they are buying, and that all necessary information should be on the label.23
Marketing decision support systems (MKDSS) is an information system that helps with decision-making in the formation of a marketing plan. The reason for using an MKDSS is because it helps to support the software vendors’ planning strategy for marketing products; it can help to identify advantageous levels of pricing, advertising spending, and advertising copy for the firm’s products.24
Lastly, a business can use any process in market analysis. The use of any aspect can gradually affect the business flow for the sudden change. Incredibly, all the mentioned factors can be use in whatever study that a business is proposing to do. The fact that all the study is concerned in the marketing situation, the study may still have a time allotted. The effective use of any market analysis still depends on the size of the market, on what the type of market or the projected target market, and the product that the business is offering. The way how that the supply answers the demand considered as an effective market study, no matter how shortage or surplus the business may experience.
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