Intelliaction Market Analysis and Planning

Although a vast array of different approaches exist for developing a market analysis framework, there is one aspect which all seem to agree on. Every company must focus its efforts on products and services that meet a market need (solve an important customer pain) and have a sustainable competitive advantage (SCA) over its competitors.

A potential marketing strategy (or product position) could be to deliver either the highest value or the lowest cost. The companies caught in the middle, with no differentiation, run the risk of not breaking into the market or losing market share.

Much of marketing analysis is thus geared toward positioning a product or service in comparison to the competition and deriving a sustainable competitive advantage (SCA) and unique selling proposition (USP) for that product or service.

The basic components of a Market Analysis consist of:

• Macroenvironment: What are the important demographic, economic, technical, and political changes that may affect your company or market?
• Company Analysis: What are the company's strengths and weaknesses? How is it organized to serve the market? What resources does it have? What are the company's core competencies that may offer it a SCA?
• Competitor Analysis: What are the threats and opportunities? Who are the competitors? What substitute products exist or may appear in the future? How are you better or worse than each competitor?
• Customer Analysis: What major market segments exist? What are their needs? What marketing channels exist? Who are the decision makers within the target market?
• Overall Market Analysis: How big is the market? Is it growing or flat? What are the core product benefits, actual product benefits, and extended product benefits? At what stage is the product life cycle?

Once the company decides what it should offer to the market, it must decide how to market and sell it. Based on the above analyses, a sustainable competitive advantage (SCA) is determined for each product and service. Products and services with no SCA should be abandoned or milked as "cash cows". Based on the SCA, a marketing strategy is then developed to answer the 4 P's:

• Product: What specifically is the product (or service)? What is the core product (market need served or key benefit), actual product (features, quality, color, packaging...) and augmented product (delivery, credit terms, installation, customer support...)?
• Price: Is the price set to cover costs, obtain maximum market penetration, or maximize profits? What is the price elasticity of demand (i.e. will total profits increase with an increase or decrease in the selling price)? Is your cost higher or lower than the competition?
• Place: What is the distribution strategy? What value is being added by your distribution channels in return for the margins? How are your distribution channels supported?
• Promotion: How is the marketing budget set? Should the company pursue advertising, direct mail, telemarketing, trade shows, articles, newsletters, or the Internet? What is the appropriate promotional mix? What is the primary image you want to leave in the target decision maker's mind? What is your Brand Promise?

One important method of improving future market plans is to implement a Market Information System. A good Market Analysis can form the foundation for such an ongoing Market Information System so that future analyses may be improved and refined.

Having a sound, written Market Analysis forms the foundation for Strategic Planning, Action Plans, Marketing and Sales materials and tracking the implementation of new business initiatives.

Although a tremendous number of marketing companies exist, you should choose one that has the technical expertise to understand your product or services and the industry that you operate in. All the sophisticated marketing analysis in the world cannot make up for a basic lack of understanding of your technology and business.

For more information about How to Write a Business Plan or How to Develop a Marketing Plan, please see the Course Materials on Establishing an eBusiness on this site.

Intelliaction Inc. offers comprehensive services for commercializing advanced technology, combining managerial and technical expertise with the financing and infrastructure resources required to be successful. We assist entrepreneurs, boards and venture capital firms in making and managing investment decisions.

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