Course Title:

Principles
of
Marketing
CHAPTER 3

MARKET OPPORTUNITY
ANALYSIS AND CONSUMER
ANALYSIS
MARKET OPPORTUNITY ANALYSIS
Is a tool to determine and access the desirability of a business
opportunity. It forms a portion of the business strategy; wherein,
before launching a new product or service ,the market is analyzed to
identify the anticipated revenues and profits from it
THE STRATEGIC MARKETING
PROCESS
 STEP Mission
1
Identification

The company’s mission statement is articulated. A

mission statement defines what an organization
is, why it exists, its reason for being, its primary
customers, the products and services it provides.
STEP 2
Situation Analysis

This step assesses and evaluates the market, customers,

and the company’s internal and external environment. The
objective is to identify the company’s strengths and
weaknesses, as well as the available opportunities and
possible threats.
 Step Objective Setting
3

Objectives are marketing targets that are Specific, Measurable,

Attainable, Realistic, and Time-bound (SMART). These enable a
company to control its marketing plan and provide a consistent
focus for all functions of an organization. These objectives include
sales revenue, market share, and profits. They are used as basis
for strategy selection and development .
Step
Marketing strategy
4 development

The development of a marketing strategy involves market

segmentation, identification of target market, positioning,
selection of broad marketing strategies, and the translation of
strategies into action plan. Strategies can be broadly
classified into three categories. The are cost leadership,
differentiation, and focused.
 COST LEADERSHIP
This is a strategy primarily for achieving low cost
leadership among industry competitors. Cost
leadership can be achieved through low cost supply
contracts, overhead expense control, economies of
scale and comprehensive cost-cutting efforts, among
others.
 DIFFERENTIATION
Differentiation seeks to achieve superior
product attributes and features that are
different from industry competitors. This
results in pronounced consumer preference
for the company’s products.
 FOCUSED

Efforts are concentrated on a relatively small but profitable

market. The development od products and services
primarily ensures that the needs and wants of this market
are addressed and that satisfaction is provided.
Cost leadership, differentiation, and focused strategies may be implemented through
the following subcategories:

• Forward Integration -This involves gaining ownership or increased control over distributors
or retailers.

• Backward Integration -This involves gaining ownership or increased control over

suppliers.

• Horizontal integration -This involves purchase of or increased control over competitors.

• Market penetration - The objective of this strategy is to increase market share of current
products or services in current markets through greater and more intensive marketing
efforts.
• Market development - This strategy involves the introduction of existing products or
services into a new geographical area or market.

• Product development - This strategy involves the improvement of current products or

services or the development of new products with the purpose of increasing sales.

• Related diversification- This involves introducing new but related products or services.

• Unrelated diversification- This involves introducing new but unrelated products or services.
• Retrenchment -This involves halting or reversing declining sales and profits through
cost or cost reduction.

• Divestiture- This involves selling a division or part of an organization.

• Liquidation- This involves selling all of a company’s assets, in parts or as a whole, for
the tangible worth.
Step
5
Strategy evaluation
and control
After the strategy is developed, periodic
monitoring and evaluation are needed. This
is necessary to identify deviations and make
necessary adjustments and corrections.
 The Tactical
Marketing Process
 Complementing the strategic
marketing process ,the tactical
marketing process determines the
means or tactics to implement the
strategies. The objective is to
ensure that the strategies are
implemented successfully .
 The Marketing
Microenvironment
 The marketing environment includes forces
that are internal to the company or those
that are relevant to operation. The
consideration of these is important as they
affect the company’s ability to build and
maintain sustainable relationships with
current and prospective customers.
 THE COMPANY

Marketing may be the “lifeblood” of an organization, but it cannot exist

independently of other organizational functions. These functions
include research and development, finance, operations and human
resources. Recognition of the importance of these functions is
essential for marketing. Moreover, marketing cannot function in a
vacuum as marketing decisions must always be aligned with the
organizations goals and strategies.
 SUPPLIERS

Suppliers provide raw materials, utilities, labor, capital,

and equipment. The availability and prices of these supplies should
be monitored. Effective partnership or relationship management with
suppliers is essential. The performance of suppliers can directly
impact an organizations ability to continuously satisfy its consumers.
Substandard raw materials will negatively affect product quality, and
the unstable supply process may hurt profits and affect
organization’s ability to provide superior value to customers.
 Market intermediaries

Intermediaries are channels that link the organization to

its customers. Most products are delivered to customers through
intermediaries. In comparison to organizations distributing
products by themselves, distribution through intermediaries is
more practical and less costly. The most common intermediaries
are distributors, wholesalers, and retailers.
 CUSTOMER
S

Customers create the demand for products and services. They can
either be customers or end-users, businesses or organizations.
Companies must attract and maintain customers through products
and services that meet and exceed customer expectation.
 COMPETITION

refers to the rivalry between businesses or brands that offer

similar products or services to the same target audience. It is a
fundamental aspect of the marketing landscape, as it drives
innovation, pricing strategies, and customer acquisition efforts.
Understanding the competitive landscape is crucial for businesses
to develop effective marketing strategies that can help them stand
out from their competitors and attract and retain customers. In this
article, we will explore the concept of competition in marketing and
its importance for businesses.
 PUBLICS

Publics may include any individual or entity with an

actual or potential interest in the company and its
products and services. These includes the
shareholders, the community, financial institutions,
media, the government and society.
IDENTIFYING STRENGTHS AND WEAKNESSES

Strengths and weaknesses ca either be controllable or uncontrollable. The factors

present within the firm's control . The five other forces (suppliers ,market
intermediaries ,customers ,competition , and the various publics) that are essentially
uncontrollable although they are within the sphere of the company’s influence .

Microeconomic factors that are favorable to a firm are classified as strength, while
unfavorable factors are termed weakness. Companies should utilize strengths as the
foundation for effective strategies, with the most dominant and sustainable strength
as its major competitive advantage. Weaknesses, on the other hand, should be eliminated with
aggressive action, and eventually be converted to strengths.
 The Marketing
Macroenvironment
 All business organizations operate within a particular
macroenvironment.The marketing macroenvironment
includes factors that are external to the organizations.
Essentially ,these can neither be influenced nor altered
by the company. However, they can affect a company's
operational viability. They can be opportunities ,which a
business organizations can take advantage of , or threats
,which the company must avoid.
 Economic
Macroenvironm
ent

Represents economic factors that can directly affect

organizations. Economic factors are significant because
they indicate the cost of doing business as well as
consumer buying power.
 POLITIAL-LEGAL
MACROENVIRONMENT

The political-legal macroenvironment includes both political

and legal factors. A highly uncertain political situation, such as an
impending national election, may affect the stability of businesses. A
new administration may have different economic and monetary
priorities and may favor a divergent legislative agenda. Political
unrest may lead to government instability. This will always cause
economic and business uncertainty.
 POLITIAL-LEGAL
MACROENVIRONMENT
Legal factors include laws passed recently, as well as legislative
bills that could be enacted into laws. The effects of these should be in a
company's planning agenda. One example is the approved legislation
increasing tax exemption on the amount of 13th month pay of employees.
The exempted amount translates into higher consumer spending at the
end of 2015. This is highly favorable for retailers. In contrast, the proposed
legislation imposing a 10% ad valorem tax on soft drinks and other
sweetened beverages may result in the decline or flattening of the
demand for carbonated beverages, juices, and similar refreshments.
Companies belonging to these industries may consider product
 Sociocultural
Macroenvironment
Sociocultural Macroenvironment each geographical area has a
specific culture that dictates how business is conducted. Culture is defined
as the beliefs, customs, arts, etc., of a particular society, group, place, or
time.Having been colonized by the Spaniards, Americans, and the Japanese,
the Filipino sociocultural macroenvironment is far more challenging to
understand than that of its ASEAN neighbors. The most evident result of
Philippine colonial history is colonial mentality. All things being equal,
Filipinos tend to prefer products manufactured by certain countries (such as
the United States, Japan, and some countries of the European Union) over
 Demographic
Macroenvironment
A company's demographic macroenvironment consists of
Changes in population characteristics. These include population
rate, gender, age, income composition patterns, civil status, and
family size. Population increase rates can be particularly beneficial
for mass marketing efforts. Positive shifts in gender and age
composition patterns can be utilized as opportunities for gender-
and age-specific products like sanitary napkins and toys. The
growing population with higher income presents opportunities for
higher-priced products. Increased family size can predict a higher
demand for minivans and full-sized vans, and lower demand for
 Technological
macroenvironment

The technological macroenvironment is

composed of current and impending technological
change. This is sometimes the single factor that can
cause the rapid acceleration or bring about the
untimely demise of products, services, or companies.
 The Natural
Macroenvironment
refers to natural resource inputs and environmental
concerns. The uncontrolled use of finite natural resources
including fossil fuel in organizational activities has heightened
concern for the sustainability of the natural environment. Other
equally pressing issues are pollution, global warming, and the
rampant denudation of forests. Although legislation is in place,
the preservation of the natural environment is a major factor to
consider in a company's activities.
IDENTIFYING STRENGTHS AND WEAKNESSES

After relevant economic ,politic legal,

sociocultural ,demographic ,technological and natural macroenvironment
factors have been identified and analyzed ,the company shall now proceed
to identify threats or opportunities among these factors.

Although both opportunities and threats are external in nature and

essentially uncontrollable ,opportunities are favorable to a company and
therefore can be capitalized on, while threats are unfavorable end require
mitigation
 MARKETING
RESEARCH
Marketing Research Marketing research is a function under a
business organization's Marketing Information System (MkIS). MkIS is
primarily responsible for the gathering, analysis, and timely
distribution of information for the use of marketing decision makers.

Definition Marketing research is the function responsible for

acquiring and evaluating market and consumer-based information for
decision making and the determination of marketing strategic
direction.
THANK YOU!