THREE CRUCIAL MARKETING FRAMEWORKS

The Vault.com Career Guide to Marketing and Brand Management

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When you're performing a marketing analysis, you should always be asking the same key questions:

• What are the major problems, opportunities, and threats facing the company?
• What's your strategy to address these issues?
• How much money will you need to make to make this strategy profitable?
• Why did you choose this strategy?
• How will you execute this strategy? What choices do you recommend for the marketing mix and tactics?

The 4 Cs, 5 Ps, and the break-even economic analysis will help you organize these questions and are a great way to begin analyzing a situation.

The 4Cs

The 4 Cs should be used when performing a market assessment and background evaluation of the situation at hand.

Context

• Consider macro-economic factors as well as other external factors (industry, consumer trends)

Company

• Organization's mission/objectives/strategy
• Strengths and weaknesses
• Basis for competitive advantage
• Financial and other performance indicators
• Brand/product specifics

Customer Analysis

• Target customer
• Consumer segmentation
• Decision-making process (When do they decide what brand they want to buy - at the store or prior to even going shopping?)
• Buying behavior (How often do they buy? What quantities do they buy at one time? Is it an impulse or planned purchase?)
• Latent or unmet consumer needs (Can you own something that no competitor has capitalized on yet?)

Competitor Analysis

• Basis of competition
• Degree of rivalry
• Major players and anticipated new entrants
• Competitor positioning
• Strengths/weaknesses of competitors as well as opportunities and threats
• Company specifics that might affect competition in the future (cost structure, change in focus)

The 5Ps

The 5 Ps should be used when you're ready to recommend a plan of action and create marketing mix specifics.

People

• Market selection
• Customer segmentation
• Estimation of market size

Product

• Positioning
• Product benefits (both tangible and intangible, in other words, functional AND emotional)
• Brand equity
• Packaging

Price

• Recommendations should consider unit cost, perceived value pricing (e.g. premium pricing for prestige)
• Skim vs. penetration pricing
• Price leader vs. price follower
• Role of consumer price promotion
• Elasticity analysis

Place/Distribution

• Channel selection
• Channel power and control (brand/store loyalty)
• Channel margins
• Channel support (financing, training)

Promotion

• Marketing message/motive (awareness, interest level, trial, repurchase, loyalty issues)
• Medium (TV, magazines, billboards)
• Pull and/or push strategy

Break-even analysis

The break-even analysis should be done to determine:

• Whether a company should enter a new market with a product
• How many units a company needs to sell of a certain product to break even or be profitable
• How much market share a brand will need to make the launch financially successful

What margins the manufacturers and retailers will need to secure

Example:

Mattel is deciding whether to start manufacturing their Mr. Potato Head Doll in Peru. They hope to sell the doll to local retailers for $23.00. Retailers in this market like to have a 40 percent margin on the goods they sell to customers.

The start-up investment, including all equipment to manufacture the dolls, will total $30,142. The cost of goods sold per doll is $5.25. The annual volume of sales is anticipated to reach 3,800, or a 19 percent share of the Peruvian market. Should Mattel launch Mr. Potato Head in Peru?