The role of situation analysis in marketing plan activity
Marketing planning has been defined as the structured process of researching and analyzing the marketing situation, developing and documenting marketing objectives, strategies, programs, implementing, evaluating, and controlling those activities to achieve the objectives set (Berkowitz, Fredrick, Roger, Steven and William, 1998). Situation analysis is an important step in the marketing planning process and plays the following roleWe will write a custom Marketing Planning Process in the Company specifically for you
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One, it enables an organization to clearly define its market environment (Jain, 2004). Marketing oriented organization seeks to satisfy the needs of customers profitably and added value much better than their competitors. This can only be achieved through a proper assessment of the dynamic marketing environment. Also, situation analysis gives an organization the tools to create and establish a strategic match between the Company’s abilities and market opportunities (Jain, 2004). It, therefore, enables a company to understand itself, its abilities, limits, and to accurately identify those opportunities which if pursued offer the best strategic match.
Another importance of situation analysis is that it enables a company to acquire and sustain a competitive advantage (Jain, 2004). This is achieved through proper identification and development of key success factors, which are then used to develop appropriate marketing objectives, strategies, and marketing mix variables. By identifying the position of the company relative to its competitors and customers, a Company can develop strategies that enable it to meet marketing objectives effectively.
Finally, the situation analysis process enables a firm to correctly identify the resources it will need to achieve its marketing planning objectives, goals, and the activities needed to be done to achieve them. This information is also useful in the process of controlling and evaluating the effectiveness of marketing planning activities.
What are the internal and external variables that are considered in developing a situation analysis?
The situational analysis involves the evaluation of the 5C’s which includes; the company, the consumers, competitors, collaborators, and climate (Kotler, Keller, Brady, Goodman and Hansen, 2009). In the first C, Company analysis involves evaluation of the internal strengths and weaknesses of the organization and the following issues are often considered: the Company’s product line? What are they? Are they deep and wide enough? The company’s image, how favorable is it? For example, is the company considered innovative or youthful? How strong and effective are the company’s technology, experience, and workers’ expertise? Other factors that are considered are the organization culture? Does it foster innovation and teamwork? Are the firm’s goals robust enough to deliver growth and profitability and so forth?
The second C is collaborators; collaborators are partners and sponsors that a Company works with to deliver value to its customers (Armstrong and Kotler, 2010). They include suppliers, physical distribution firms, marketing services agencies, financial intermediaries, and resellers. Their resources, commitment, and abilities are evaluated.Get your
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On the other hand customers’ evaluation considers the market size and future growth prospects, the attractiveness and profitability of the consumer segments that the Company operates in. And finally, the behavior of consumers in buying, using, and disposing of the Company’s products are studied and analyzed.
The competitor is the fourth C; in this case, it involves analyzing important players in the environment. All competitors must be correctly identified both actual and potential. The resources of the competitors are considered as well as their behaviors. Their product lines, market share, strengths, and weakness are all considered.
Finally, the climate consists of the wide environmental factors that define the environment that the company operates in. They include political, economical, social, technological, environmental, and legal factors.
Situation Analysis for Moorilla Estate, Hobart
Motorola Estate is a winery that is located in the suburbs of Berriedale, Hobart, Tasmania. It was established in 1958 by a former textile merchant turned winemaker Claudio Alcorso. It is currently owned by David Walsh who bought it in 1995 and has since expanded the business into accommodation, restaurant, and a museum alongside winemaking and beer brewing business (Moorilla.com, 2011). The winery produces several cool climate wines and there are currently five beer brands under the Moo Brew label (Moorilla.com, 2011). The estate plans to expand further through the construction of residential apartments, expanded wine production, and an annual MONA FONA festival. In this section, I intend to develop a situation analysis for this enterprise.
The company is a 53 three-year-old business with a rich tradition in producing high-quality wines and providing hospitality initially through its cellar business and later in its restaurant and accommodation business. The company products include several renowned cool climate wine brands, five ‘Moo Brew’ beer brands, the iconic Source restaurant, Mona museum, and Pavilion apartments. The company intends to hold an annual art festival which will be called the ‘MONA FONA’ festival. The Company is well respected in the tourism industry and boasts of a well trained, friendly, and professional management and staff (Moorilla.com, 2011).
Moorilla clientele consists of both local and foreign tourists, business travelers, and family visitors who are “seeking excellent getaway holidays with the stunning natural environment of a romantic bygone era, unique decor, an extensive wine cellar, museum, and iconic restaurant and accommodation” as described by the Company (Moorilla.com, 2011). A typical client of the Moorilla is a successful business person, retired professional, and often newlywed couples on honeymoon. Whereas the company has a fully-fledged marketing department, most of its business comes from travel agents in Australia and other parts of the world. The estate has steady business all year round but demands peaks during the summer and Christmas period.
The estate competes directly with several wineries and breweries in the Tasmania winemaking region and indirectly with national beer brands and wines. The hospitality section competes directly with local hotels and chalets in the Hobart area and indirectly with countless hotel chains and establishments in the wider Tasmanian region which is a major world tourist destination. Whereas Moorilla is not a fully-fledged tourist hotel, some of its competitors are focused in one area and some are a global group of hotels that are better positioned to source clients globally because of their financial and managerial resources.We will write a custom
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The company has well-established collaborations with major tour and travel agencies in Australia, New Zealand, Japan, Singapore, China, Europe, and North America which supplies the Company with business all year round. However, some of them demand a high commission for their service. The company has a good network of reliable suppliers and distributors. The winery however requires strong international agents to distribute the products abroad.
The major macro-environmental factors are favorable. The Australian economy bounced back from the global recession quickly and has been growing strongly and steadily in the last year. The Chinese market has shown strong demand for wine products and hospitality and the political environment in Australia is currently stable as the coalition government is working well together. Nevertheless, environmental challenges remain and the region has been experiencing wild climatic conditions such as drought, wildfires, and the recent unprecedented floods that have directly affected the region’s economy.
Why is it necessary for marketing managers to assess their firm’s relative strengths and weaknesses and external opportunities and threats?
SWOT analysis refers to strengths, weaknesses, opportunities, and threats as used in the corporate and marketing planning process. It is a simple tool for making decisions by analyzing the company’s internal and external environment as well as its abilities and weaknesses (Ferrell and Hartline, 2011). It is carried out after a situation analysis has been completed because it uses the information generated from the situation analysis process. It can provide critical decision-making information quickly. If well utilized a SWOT analysis can enable a firm to utilize its strengths, correct its weaknesses, exploits the opportunities in the market as well as minimize the threats it faces in the environment (Ferrell and Hartline, 2011).
An assessment of the firm’s relative strength, weakness, opportunity, and threats is an important activity in marketing planning because it gives valuable insights into the environment in which the company is operating in. Marketing oriented companies are outward-looking (Amstrong and Kotler, 2009) and take consideration of the wider environment in their decision-making process. The assessment gives firms the information needed in market planning.
Thus, an assessment of the SWOT factors is compulsory in the formulation of appropriate strategies as they provide relevant information about critical variables in the operating business environment of the organization, which is used to develop a sustainable competitive advantage (Cravens and Piercy, 2006). A review of the SWOT elements can determine the chances of the Company’s survival in a competitive and dynamic environment. A company can identify its resources and opportunities and at the same time see the threats it faces. Thus a company can easily determine the chances for survival as well as what it is required to do to adapt to the market demands.
A review of the SWOT position can also quickly inform a planner of the level of profitability or return that is attainable in a particular market or investment i.e. the level of opportunities available and nature of competition as well as the Company’s internal resources and how they match vis-à-vis the competition. This can help a manager to quickly determine the attractiveness of an investment opportunity or market segment. Similarly, the level of risk in an investment or market segment can be determined in the process. The planner is better informed on the best place to invest scarce organization resources (Peter and Donnelly, 2006).Not sure if you can write
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Also, SWOT analysis can be used to determine a company’s position relative to its competitors. It thus functions as a yardstick that determines if a company is a market leader or follower, its size of market share, and whether it is growing, holding, or decreasing. Finally, a SWOT analysis can be used to determine if it is worth pursuing a particular investment or market segment. By evaluating the opportunities available and the intensity of competition in a segment or opportunity, a Company can determine if these environmental factors are favorable or not. An analysis of the environment can also quickly inform an organization on the areas that it requires to improve to survive or thrive.
Given these reasons, discuss the role that the SWOT analysis framework plays in the development of marketing strategies
A SWOT analysis framework plays a critical role in the development of marketing strategies and plans in many important ways, these include the following;
A marketing-oriented firm seeks to understand the needs of its customers and to satisfy its customers in a better way than its competitors (Armstrong and Kotler, 2010). A SWOT analysis is therefore a useful tool for auditing the micro and macro environment, and for providing vital information on their characteristics. This information is the basis of the formulation of market-oriented marketing strategies.
For this reason, SWOT Analysis is the first step that any person or organization involved in planning or management starts. It enables a planner to identify the most important and appropriate factors in the early stages of the planning process. This is of great importance because when key issues are identified and appropriate response determined at an early stage it reduces unnecessary wastage of time and other resources (Armstrong and Kotler, 2010).
A SWOT analysis is also a useful tool for tracking trends in the environment and can also be used to predict future trends (Reed, 2003). This information is useful in guiding an organization in making appropriate investment decisions. Marketing managers need to regularly assess their firm’s relative strengths and weaknesses as well as identify the external opportunities and threats that are found within the environment. This information is provided by the SWOT analysis. The SWOT also guides firms in the development of appropriate and competitive strategies and tactics needed to operate in particular environments (Reed, 2003).
This analysis helps Companies to identify areas that it requires to improve on. It is easy for a company to overlook particular areas because they do not consider it strategically important. However, when a Company carries out a SWOT analysis it can identify opportunities that it can pursue, resources that it can utilize, and thus expand the range of opportunities and strategic options available to the Company (Cravens and Piercy, 2006).
One of the most important roles of the SWOT analysis is the determination of the strategic match of organization resources and market opportunities (Ferrell and Hartline, 2011). A company has a high chance of survival and profitability when it operates in a market whose characteristics best match the organization’s resources. This information can best be obtained through SWOT analysis.
Another important role of SWOT analysis is its ability to help an organization convert its weaknesses into strengths and opportunities (Ferrell and Hartline, 2011). An organization’s weakness can pose a threat to its survival and profitability. By understanding its weakness, a company can work on them and convert them into strengths and opportunities and further increase its profitability and growth.
SWOT analysis is therefore a useful tool in planning and is preferred in the planning process because it is simple, easy to use and it generates crucial information quickly. Also, it is flexible and integrates all aspects of the organization’s internal and external environment, and is a useful tool that managers can use to create winning strategies (Reed, 2003).
Using examples, demonstrate how the marketing manager needs to express the individual elements of their SWOT for them to be useful in the strategic marketing process.
The example chosen is a SWOT analysis for the Moorilla Estate see attached file.
SWOT is expressed in a tabular format. This makes it easy to pick out the most important factors and determine the course of action that needs to be taken to achieve the organizational goals. Appropriate strategies are developed by matching the Company’s strengths to opportunities for example the opportunity to venture into the golf resort business is matched with the financial resource base of the Company. The strong Moorilla brand is also likely to influence positively such a venture.
The Company presentation of the SWOT in a summarized format that doesn’t involve extensive details and which provides sufficient information that enables the determination of the relative strength or weakness that is faced by a Company. A potential investor can quickly determine whether to invest using the summarized factual information. SWOT analysis can also facilitate good planning, control, and evaluation of a business because it provides a checklist of the key areas that a manager should track.
SWOT analysis also sets the standard for future performance which can be matched against it and enables analysis that integrates both internal and external aspects of the organization’s environment in one summarized report. The planner can see all the relevant information that is required in the decision-making process.
Also, the SWOT analysis presentation enables timely and informed actions by the organization to overcome its weaknesses and minimize its threats by using its resources and strengths to capitalize on its opportunities.
By presenting the organization context in a summarized format, it prepares the organization to focus on strategic issues that arise from the SWOT analysis. This means that planners do not have to do an environmental scan every time they need to decide because the information has already been found and has been presented in a simple format.
Berkowitz, E, Frederick C, Roger K, Steven H, & William, R. 1998. Marketing. New York: McGraw-Hill.
Cravens, D.W., and Piercy, N.F. 2006. Strategic Marketing. Sydney: Irwin.
Ferrell, O. & Hartline, D. M. 2011. Marketing Strategy. 5th edition. Ohio: South-Western.
Jain, S. 2004. Marketing: Planning and Strategy. Singapore: Thomson.
Kotler, P. & Armstrong, G. 2010. Principles of Marketing. New Jersey: Pearson Education.
Kotler, Keller, Brady, Goodman, K & Hanse, P. 2009. Marketing Management. New Jersey: Pearson Educational.
Moorilla.com. 2011. Moorilla Estate. Web.
Peter, J. & Donnelly, J. 2006. A Preface to Marketing Management. Sydney: Irwin.
Reed, P. 2006. Strategic marketing planning. Victoria: Thomson.