If you’re on your way to embarking on running a long-term marketing campaign, make sure you have a thorough situational analysis. A situational analysis is a set of methods used to thoroughly examine the internal and external factors of any business and their impacts on the company’s performance.
Only after performing a situational analysis can the marketing strategy be structured. Therefore, a situational analysis is of the utmost importance for any strategic marketing plan.
A situational analysis consists of different methods used with the same objective to discover the capabilities of the company, potential customers and the business environment.
After that, the company owners can generate a suitable marketing strategy to solicit their business based on the projected impacts of these above factors.
There are three methods typically used to complete a situational analysis, namely the 5CS analysis, the SWOT analysis, and the Porter Five Forces analysis. Among them, SWOT analysis is the most popular method used by various companies.
A SWOT analysis is an evaluation for a company, which refers to four aspects: strengths, weaknesses, opportunities and threats of a company. Depending on their scale, all the elements in a SWOT analysis can be listed into two groups of internal and external analysis.
Internal analysis, which consists of strengths and weaknesses, refers to any aspect within the business, such as company culture, organizational structure, employees, company capacity, brand awareness, financial resources, etc. In contrast, external analysis, which refers to opportunities and threats for the company, focuses on identifying external factors that influence business development.
What is situation analysis in MKT its components and how is it performed?
A situational analysis is a review of both competitors’ activities and various things that are happening in the market, such as trends.
A situational analysis brings a number of benefits:
- Define your target market and your target audience – you can do it robustly. Ultimately, what you are looking for is trying to identify new targets and new audiences that are not currently targeted by competitors.
- Understand the strengths and weaknesses of your competitors – This helps you define the digital marketing approach you then take to find a gap in the market so you can better penetrate and be more successful than your competitors.
- Identify opportunities and threats to your offering – Being able to identify these will be critical for you to overcome some of the obstacles and challenges that may come your way.
You may think that it is easy to understand who your competitors are. Actually in the current environment, it is very difficult. For example, who would have thought that Vodafone would become one of the largest financial services institutions in Kenya with M-Pesa, for example? Therefore, it is very difficult to identify who could be your current and future competitors.
There are a number of different techniques you can use to do this:
- Define your target market and your target audience – you can do it robustly. Ultimately, what you are looking for is trying to identify new targets and new audiences that are not currently targeted by competitors.
- Understand the strengths and weaknesses of your competitors – This helps you define the digital marketing approach you then take to find a gap in the market so you can better penetrate and be more successful than your competitors.
- Identify opportunities and threats to your offering – Being able to identify these will be critical for you to overcome some of the obstacles and challenges that may come your way.
· The first is to be able to determine who are the competitors of your main set.
· The next thing is to see who could be your secondary set or even substitutes for the competition. If it is not the product you are currently offering, what other products could it be? A simplistic example would be if a customer does not travel by train, they can take a plane or a car so that those people or those companies that operate in that environment also become their competitors.
How to do a situation analysis in marketing?
A situation analysis is the one tool every marketer needs to ensure their marketing tactics take advantage of real opportunities and solve real problems. In other words, it provides the context you need to move forward with your planning.
Analyzing your situation helps you set the context for your marketing plan by looking at trends, customer preferences, competitor strengths and weaknesses, and anything else that might affect sales. The question your situation analysis should answer is, “What is going on?” To answer this question, you need to analyze the most important market changes that affect your company. These changes can be the sources of problems or opportunities.
To prepare a situation analysis, you need to consider the challenges and trends that may affect your marketing program, prepare for economic cycles, and review the current state of your competition. After identifying these threats and opportunities, you need to think seriously about how to respond to them.
A good (and very traditional) way to organize a situation analysis, also known as a SWOT analysis, is to write something for each of these four categories:
Strengths – Identify the strengths of your products, brand image, and marketing programs so you know what to build into your plan. Your strengths are the keys to your future success. For example, if your website is a strength, then your plan should focus on making it even better, and your goals should include increased website sales.
What parts does the situation analysis contain within the marketing plan?
The situational analysis section is one of the most important parts of a marketing plan. Describes the objectives, strengths and weaknesses of your company; describes your target customers; identify your important partners and distributors; and provides an analysis of the competitive environment. The situation analysis is not an easy section to write and can take several months of research and planning. However, if you take the time to do it right, you can help differentiate your product or service in the marketplace.
In the first part of the situation analysis section of your business plan, start by outlining your company’s marketing goals and objectives. An example of a well-written objective statement is: “Use direct marketing to increase sales of our new training manual by 10 percent by August 30.” In your company analysis, you should also provide a description of your company’s mission and culture. Briefly describe your strengths, weaknesses, product offering, and market share.
The next part of the situation analysis is the target market analysis. First, describe the demographics of your target customers. Demographics are things like the age, level of education, nationality, and occupation of your target customers. If you don’t know about these features, hire a market research company or do your own research online. Next, go into more detail and describe the “psychographic” characteristics of your target market, which are things like personality and lifestyle traits. Finally, include any insights you have into the market behaviors of your target customers, such as their usage rates for your product, loyalty trends, and attitude toward your product or service.
Next, your situational analysis should include a section outlining the key partners for your business. Please describe any subsidiary, joint venture, or partnership strategies you have in place. Next, you describe your distribution strategy, which defines how you get your products to market. For example, you may have a warehouse operation at your company headquarters that distributes your product to retail locations via truck. Or you can produce your product in multiple locations and sell it entirely online.
The final part of the situational analysis of your marketing plan is the competitive analysis. This is where you list each of your competitors; Describe your product or service offering; communicate its key features and benefits; discuss your position and market share; and describe your competitive strengths and weaknesses. A competitive analysis is an important part of your marketing plan. It can provide key information about growth opportunities for your company.