Market Evaluation: Using Simple Tools to Determine Market Position
In order for a business to succeed in their marketing plan they have to understand how to use market evaluation tools to analyze the market around them. Determining your key differences and understanding your market gives you a leg up over your competition and overall makes you a better business, as Margaret Molly, chief marketing manager of Siegel & Gale, says, "Great Execution is the Ultimate Differentiator.” Knowing your market allows you to execute your plan with knowledge and gives you something to measure against. So how does this work? What is needed to accomplish? Will it be difficult to make into actionable items?
To answer these questions, we need to dig into the overall goal of a market analysis. Market analysis according to the Ovidijus Jurevicius involves the collection and portrayal of information about external factors which have, or may have, an impact on business, (Jurevicius, 2013) in other words its understanding your specific market in a specific location or customer base. This is the first step in understanding your market. Once you have determined your specifics you can use a few different tools such as, Pestle analysis ( Fig 1), 4 P marketing mix (Fig 2), and/or the SWOT analysis (Fig 3) to clearly define external and internal risk and opportunities for your business. (Kotler & Keller, 2012)
There is no one tool fits all. As a marketing leader you have to determine the key concepts that matter to your company. The method in which you determine your market potential can be one or all of these. In my experience, it is far better to develop a modified tool using parts of all of the above concepts to get a broad picture of the market. For instance, an online company may not be able to determine a full scope based on the Pestle analysis alone; the majority of their market may deal with less external forces so they may need to focus on the SWOT to determine true market needs. To answer our questions best it is far better to tailor a marketing analysis around the business itself. Recently I was able to develop a specific tool for a local small business using the 4P’s; product, price, place and promotion. Additionally I also used key indicators from the SWOT analysis to help determine where the business stood as a key player against market competitors. The results were very interesting, the business owner was not aware she was not taking full advantage of her businesses strength’s over a key competitor. The analysis helped her understand that not only is she able to overcome the lead market holder but that she has the skillsets to do it now. With a few small adjustments she should be able to corner her market. So what is needed to accomplish a solid marketing analysis?
The best answer is time. You need to develop your key indicator tool and then research and work towards answering the items as best as you can. According to Entrepreneur Magazine you should take a couple of months to develop your evaluation and then ultimately your plan. “Developing your plan is the heavy lifting of marketing. While executing your plan has its challenges, deciding what to do and how to do it is marketing’s greatest challenge.” ( Ellis, 2014 ) This is where the rubber meets the road. The tools referenced above give great insight to your strengths, weakness, and overall opportunities; now what do you do about them?
The above chart ( Fig 4 ) is a partial piece of a marketing assessment tool. This portion covers the promotion segment. As you can see there are opportunities for this business. The assessment gave the reviewer the ability to see where the gaps were and allowed the person to look at possible options. From this small piece of the puzzle you can take the needed items and strategize against the company goals. This allows you to prioritize what is necessary and actionable versus what can wait to be taken care of at a later date, the beauty of the assessment is the clear visual understanding of where you are at the time of the work, current state, which allows you to determine your strategic marketing plan. The future state is the ability to come back to this tool monthly, quarterly, and even yearly to assess your progress. Charmayne Smith said, “Entrepreneur Magazine recommends that marketing strategies be reviewed quarterly to ensure that they meet the needs of the business. Since business environments constantly change, you should review the analysis itself during the business review process.” ( Smith, 2004 )
Finally, the use of marketing segmentation and analysis tools are vital to your overall business success. The ability to use the tools in this article is vital to understand the business market and what risk and opportunities that market presents. As a business leader you have to know what you are up against at all times, as Jack Welsh says, “If you don’t have a competitive advantage, don’t compete.” How will you know if you have a competitive advantage without clearly understanding your market consumer and market competitors? The tools mentioned in this article give you the ability to determine your internal challenges, your external risk, and your actionable strategic goals.
“ Carmon McCulley is an experienced business leader in the manufacturing industry, holding positions from plant manager to regional director. He has over a decade of business management and strategic financial analysis experience in “product-to-market” strategy. He has been in varying differing markets and is currently studying to increase his scope in executive understanding of business needs with an MBA at Oklahoma Baptist University.”
Jurevicius, O. (2013, February 13). If it's Time to be Brave a PEST may be your Best Defense. Retrieved February 01, 2018, from https://www.strategicmanagementinsight.com/tools/pest-pestel-analysis.html
Kotler, P. & Keller, K. (2012). Marketing management. New York, NY: Prentice Hall.
Ellis, S. (2014, May 27). How to Create a Marketing Plan. Retrieved February 01, 2018, from https://www.entrepreneur.com/article/43018
Bradley, M. (2015, July 1). Understanding the Marketing Mix and the 4 Ps. Retrieved February 1, 2018, from https://www.linkedin.com/pulse/understanding-marketing-mix-4-ps-martin-bradley/
SWOT in Marketing Analysis. (2004, July). Retrieved February 01, 2018, from http://smallbusiness.chron.com/swot-marketing-analysis-1420.html
© 2018 Carmon McCulley