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Topic 3: Situation Analysis: Objectives

A situation analysis examines internal and external factors to identify strengths, weaknesses, opportunities, and threats. It provides the foundation for strategic planning. The 5 C's framework analyzes the company, collaborators, customers, competitors, and climate. This environmental scan covers the internal, micro-environment, and macro-environment. Understanding these principles is essential for developing a successful marketing plan.

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121 views

Topic 3: Situation Analysis: Objectives

A situation analysis examines internal and external factors to identify strengths, weaknesses, opportunities, and threats. It provides the foundation for strategic planning. The 5 C's framework analyzes the company, collaborators, customers, competitors, and climate. This environmental scan covers the internal, micro-environment, and macro-environment. Understanding these principles is essential for developing a successful marketing plan.

Uploaded by

Kiplagat Allan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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TOPIC 3: SITUATION ANALYSIS

Introduction
A situation analysis is the foundation of the strategic planning process for a marketing plan. It
includes an examination of both the internal factors (to identify strengths and weaknesses) and
external factors (to identify opportunities and threats). A useful tool in performing a Situation
Analysis is what we might call The C's of Marketing. The C's of marketing help companies focus
on key elements that apply directly to marketing.

Objectives

Objectives by the end of this topic you should be able to:


 Explain the meaning and importance of situation analysis
 Explain the five key elements involved in marketing situation analysis

Learning activities
Learning Activity 3.1: Reading
Read the provided topic notes on Situation Analysis: Collecting and analyzing marketing
information.
Learning Activity 3.2: Discussion
Discuss the five key elements involved in marketing situation analysis

Assessment
The discussion in activity 3.2 will be graded

Topic Resources
i. Hiam (2004) Marketing for Dummies, 2nd Edition, Wiley Publishing Inc.
ii. Lancaster, G. and Massing, L. (2004).  Strategic Marketing Planning & Evaluation. 4th ed.
London: Pearson Education Limited.
iii. Thompson and Strickland, (2005) “Crafting and Executing Strategy”, 14th ed., McGraw Hill
International Edition,

TOPIC 3 NOTES

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3.1 SITUATION ANALYSIS
A situation analysis is the foundation of the strategic planning process for a marketing plan. It
includes an examination of both the internal factors (to identify strengths and weaknesses) and
external factors (to identify opportunities and threats). A useful tool in performing a Situation
Analysis is what we might call The C's of Marketing. The C's of marketing help companies focus
on key elements that apply directly to marketing. Understanding these principles is essential in
developing a successful marketing plan

In order to profitably satisfy customer needs, the firm first must understand its external and
internal situation, including the customer, the market environment, and the firm's own
capabilities. Furthermore, it needs to forecast trends in the dynamic environment in which it
operates.
A useful framework for performing a situation analysis is the 5 C Analysis. The 5C analysis is
an environmental scan on five key areas especially applicable to marketing decisions. It covers
the internal, the micro-environmental, and the macro-environmental situation. The 5 C analysis
is an extension of the 3 C analysis (company, customers, and competitors), to which some
marketers added the 4th C of collaborators. The further addition of a macro-environmental
analysis (climate) results in a 5 C analysis, some aspects of which are outlined below.

3.2 The 5 C Analysis


1. Company – I includes the product time line, experience in the market, image in the market,
technology, culture and goals.
For example product analysis provides detailed analysis of the company’s product(s) in terms of:
a) Product Attributes
Describe the main product features, major benefits received by those using the product, current
branding strategies, etc.
b) Pricing
Describe pricing used at all distribution levels such as pricing to final users and to distributors,
incentives offered, discounts, etc.
c) Distribution
Describe how the product is made accessible to final users including channels used, major
benefits received by distributors, how product is shipped, process for handling orders, etc.
d) Promotion
Describe promotional programs and strategies in terms of advertising, sales promotion, personal
selling and public relations, how product is currently positioned in the market, etc.
e) Services Offered
Describe support services provided to final users and distributors before, during and after the sale
2. Collaborators

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Collaborators (or Partners) - Distributors, suppliers, and alliances. These are any companies that
you work with on a day to day basis to help your company run.
a) Distributors
b) Suppliers
c) Alliances
3. Customers
Customers - This is your market. Ask yourself what benefits they are looking for. What
motivates them in the purchase process? Where do the customers actually purchase your
product? How the product is purchased (impulse buys, internet, etc)? Understand the quantity a
customer will purchase and even trends in consumer tastes.
a) Market size and growth
b) Market segments
c) Benefits that consumer is seeking, tangible and intangible.
d) Motivation behind purchase; value drivers, benefits vs. costs
e) Decision maker or decision-making unit
f) Retail channel - where does the consumer actually purchase the product?
g) Consumer information sources - where does the customer obtain information about the
product?
h) Buying process; e.g. impulse or careful comparison
i) Frequency of purchase, seasonal factors
j) Quantity purchased at a time
k) Trends - how consumer needs and preferences change over time
4. Competitors
Competitors - Both your actual and potential competitors and those that directly or indirectly
compete with you. Understand their products, positioning, market shares, strengths and
weaknesses.
a) Actual or potential
b) Direct or indirect
c) Products
d) Positioning
e) Market shares
f) Strengths and weaknesses of competitors
5. Climate (or context)
Climate (or Environment) - These are governmental policies and regulations that affect the
market. It is also the economic environment around your company; which is the business cycle,
inflation rate, interest rates, and other macroeconomic issues. Society's trends and fashions are
found in the "climate." The technological environment is creating new ways of satisfying needs
(i.e. using technology to enhance the demand for existing products).
The climate or macro-environmental factors are:
a) Political & regulatory environment - governmental policies and regulations that affect the
market
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b) Economic environment - business cycle, inflation rate, interest rates, and other
macroeconomic issues
c) Social/Cultural environment - society's trends and fashions
d) Technological environment - new knowledge that makes possible new ways of satisfying
needs; the impact of technology on the demand for existing products.
The analysis of these four external "climate" factors often is referred to as a PEST analysis.

3.3 Information Sources


Customer and competitor information specifically oriented toward marketing decisions can be
found in market research reports, which provide a market analysis for a particular industry. For
foreign markets, country reports can be used as a general information source for the macro-
environment.
By combining the regional and market analysis with knowledge of the firm's own capabilities
and partnerships, the firm can identify and select the more favorable opportunities to provide
value to the customer.
Evaluating the company, collaborators, customers, competitors, and climate is a simple way to
get a leg up on your competitors. Marketing Plan Success can help you develop a successful
situation analysis, which is the foundation of the strategic planning process

EXERCISE
a) What is situation analysis?
b) Highlight and briefly explain the five elements in marketing situation analysis
c) State the sources of marketing research information

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