Market Analysis and Segmentation. Internal Factors
Category: Marketing
Having reviewed the external factors which affect your business, you should now consider what internal factors affect you. These factors which are outlined below and detailed on the succeeding pages, are within your sphere of influence.
— Products/Services
— Pricing
— Place/Distribution
— Promotion
— Marketing Organization/Procedures
— Marketing Information System
— Financial Resources
Products/Services
— What are the prime features of your products (or services) which make them novel or distinct?
— What are the benefits of your products and services to your customers? (There is an important difference between benefits and features)
— What new products or services need to be developed, either by modifying the
existing products or using research and development?
— What is your firms R & D capability?
— Which products or services are least profitable? Should they be discontinued? If not, why not?
— What other needs of your customers could be satisfied by altering your products or services? Is it worth it-? Would new or different products or services attract new buyers? If so, which ones are likely to yield greatest result?
Pricing
— What profit margins are required? (by you/by your customers?)- What is the impact of having different prices for different customers? (e g, makes you more competitive, alienates your company etc )
— How competitive are you? How do your prices relate to those of your competitors?
— How well could you cope with a price war? (assess impact, calculate profit erosion)
— Could you increase your prices? What effects might this have? (e g, 3% increase in price could reduce volume by up to 10% but could increase marketing contribution by 20%).
— What do your prices say about the quality of your products?
Place/Distribution
— Who are your customers for your products or services?
— How can you ensure your customers are being reached by the most cost effective
route?
— Are alternative means of distribution open to you? (e g agents distributors wholesalers direct sales mail order?)
— How frequently do you review your distribution relationships? Should the frequency be modified?
Promotion
— How do you let the market know about your products? How successful has this activity been?
— Have you considered alternatives (e g direct mail press releases advertising exhibitions sponsorship)?
— What image do you project of your company/products? How can this be improved?
— Are you stressing the benefits of your products/services in your promotional strategy? Are your customers receiving your benefits message the way you intended?
— Is your packaging compatible with your intended image? What changes may be required?
— Are you underselling the value of your products? What steps might be taken to avoid this?
Marketing Organisation/Procedures
— How is your marketing organisation structured? Who reports to whom-? Who is responsible/accountable for key activities-? (e g Title Responsible for
— Marketing • Marketing Budget Ј400k
— Director • All Marketing Personnel)
— How is performance effectiveness monitored/controlled? (e g budgets sales/expenditure analysis weekly/monthly meetings activity reports contingency plans)
Marketing Information System
— Does your company have a formal marketing information system?
— What internal sales information is readily available? How detailed is it? How frequently is it available?
— What external marketing information is available? (e.g., reports, scanning of papers/journals etc?)
— Who is responsible for providing sales/marketing information?
— How is your sales and marketing information collected? (e.g., incoming orders, invoices, dispatch notes, expenses claims, daily reports). How is the information used? Is it adequate or more detailed than it need be? Should the format be changed?
— How is the information shared with key personnel? (e.g., Sales Manager, Sales Representatives) How frequently is it made available? Is this sufficient?
— What external marketing information is available? (e.g., reports, scanning of papers, journals) How are these distributed internally?
— What market research studies are carried out and for what purpose? How frequently is this done?
Financial Resources
— What financial resources are available to the company? (e g, fixed capital/shareholders funds, bank borrowings)- How profitable is your business? How do you monitor financial performance? (e.g., weekly sales/expenditure analyses, monthly management accounts, bank statement reconciliation)- Is your cash flow adequate to meet your month to month needs? How can this be improved? (e.g., improve debt collection, reduce stocks, take full supplier
credit terms)
— How effectively are your finances administered? Do you have a full time accounting resource-? Do you have sufficient fixed capital in the business to sustain your growth objectives? To what extent are you reliant on bank borrowings? How can this be reduced? (e.g., seek additional fixed capital, reduce your working capital (debtors and stocks)