Identifying your competitors: The first step in conducting a competitor analysis is to identify your competitors. Begin this process by considering the range of competition in your market-space because not all competition is the same, there are different types of competitors your organization will face. Finding your competitors: Who are your competitors? How do you find them? Not only are there advanced search tools available to assist you in finding competitors, but their motivation to have a high profile on the Internet makes it impossible for competitors to hide from your searching efforts. So, the most logical and best place to start looking for as each competitor is identified, visit their Web site and form some initial impressions about how much of a major competitor they are. Your focus here is on same or similar target markets, products, and value propositions; don't let a flashy Web site convince you that this is a major competitor when the value proposition is all wrong. Creating a competitor analysis grid (or use the one provided above): With a list of competitors in hand, the next step is to conduct a methodical analysis of their strengths and weaknesses.
Step one — identify why a customer would want to buy your product/service.
Step Two: segment your overall market.
Size of Company
Number of Branches
Number of Employees
Age of Company
Step Three: research your market
Research on place
Places are increasingly at risk - as a result of the change in the global economic, political and technological environment.
Places are increasingly at risk - as a result of the inevitable process of urban evolution and decay.
Places are facing a growing number of competitors in their efforts to attract scarce resources.
Places have to rely increasingly on their own local resources to face growing competition.
Research on price
A major factor in determining the profitability of any product is establishing a base price. There are three methods of setting a product’s base price:
- Cost-oriented pricing
- Demand-oriented pricing
- Competition-oriented pricing
Research on product or service
This approach is common to new businesses, especially if their founder is rather inexperienced in marketing analysis, and/or has a strong passion – even an obsession – about providing a certain product or service. He bases his belief almost entirely on his or her own perception, even though there is sometimes no verified evidence of a market for the product or service. In this approach, the founder of the product or service:
- On his own, designs a new product or service.
- Applies to get funding from investors and is turned down due to lack of evidence that there really is a need for the product or service.
- Advertises to the community, usually through word-of-mouth, flyers, brochures and direct mailings.
- Experiences a great deal of frustration that most people do not flock to buy the product or service.
- Substantially increases the advertising throughout the community.
- Continues to experience frustration that sales remain very low.
- Either abandons the effort or, if there really is a market for the product or service, persists and accomplishes the seat-of-the-pants approach to product or service development.
Research on promotion
When you do your promotion planning (as part of your strategic planning) - the basic questions to ask are:
Who do we want to communicate with?
Why do we want to communicate with them?
What do we want to communicate with them about?
What is the best way to communicate with them?
How much will this strategy cost? What is our budget for this?
How will we know if we have been successful?
In order to assess where the bank is at present, detailed information concerning both the past state, as well as present state is necessary. Costs, revenues and profits achieved are analyzed over time for the longer-term period. It is best to compare the development of our own bank with the most influential competitor. It is also suitable to analyze the development of comparable products with those of the competition. An analysis of the results achieved is performed for the bank as a whole, or also according to individual market segments (for example by age group). A detailed analysis of the results achieved helps in setting realistic marketing objectives, which represents the second stage of planning. Further information is necessary for elaborating marketing implementation so that it is possible to adopt corrective measures in the control phase (Veresová, 2002).
Peter Drucker identified the following fields for objectives setting:
- Market position
- Market share in the total sales according to individual products and market segments,
- Level of service for the customer,
- Availability of services,
- Innovation: new services necessary for achieving the market objectives,
- Productivity of employee and capital,
- Physical and financial resources:
- Buildings, equipment, processes, and technology,
- Capital, profit:
- Necessary for the reproduction of capital,
- For innovation and further growth,
- As business remuneration for the risk undertaken and for attracting new capital,
- Performances of managers and their improvement,
- Performance and approaches of employees (Lynn, 2011)
- Public responsibility.
Marketing objectives usually have the form of expected results in specific market segments and also for the market as a whole. According to McDonald, they cover these fields volume of sales, market share, profit, customer objectives and marketing expenses (Selecting target market, 2017).
Banks must consider how they will manage individual productivity for achieving their objectives. It is necessary to ensure balance in the growth of earnings, the cash flow, and the risk. With a growth or decline in the range of services and with a change in the market the overall nature of the business portfolio changes. Various portfolio models serve for solving this question, and which have the form of matrices and depict the external and internal business environment. For an estimate of the attractiveness for individual strategic units, we can use5 the growth share or matrix created by the Boston Consulting Group, which gives precedence to the flow of incomes over other criteria. Among the most known multi-factor models are also the portfolio matrices of the firm McKinsey and Shell, often known as the matrices of market attractiveness and business strengths. Another model is the General Electric model, which works with the factors market attractiveness and the competitive position of the bank. In this model, the attractiveness of the market influences the size and speed of market growth, competitive behavior, gross profit achieved and sensitivity to economic fluctuations (Lynn, 2011). The competitive position of the firm is expressed by the share of the bank in their overall market, customer loyalty, and the nature of the distribution system and the level of expenses. An evaluation of the portfolio helps managers to set objectives and strategy which are in accordance with the possibilities and abilities of the business. These approaches, however, have their limitations. One of their greatest weaknesses is the difficulty of defining other boundaries of the business activities and the general assumption that the market share always has a positive correlation with the return on investments - thereby ignoring the fact that also small business subjects operating in a gap in the market can achieve high a rate of return on investments. Portfolio models are of great benefit for planning for the marketing strategy, though only where all risks are known (Metaxas, 2005).
The aim of marketing programs is to ensure that the practical realization of the marketing strategies adopted. This includes a delegation of rights and responsibilities of individual employees, as well as the distribution of available financial resources. Marketing programs, like marketing objectives and strategies, should fulfill certain requirements. Each program must clearly define the resources, as well as the time schedule. Before actually realizing a program it is necessary to set out a detailed marketing budget including expenses and the deployment of resources (The Marketing Plan, 2017). The budget is created similarly as in the case of an advertisement either through an annual increase/decrease or through the more appropriate method according to first chosen objectives. The role of the marketing program is to prioritize marketing activities, dividing these into important marketing activities, partial steps, and tactical tasks. Part of this is also the preparation of time plans stipulating the limits for fulfilling key tasks. It may also be evaluated at regular meetings, for example as part of the monthly cycle.
A marketing plan requires:
- A good level of internal and external communication between all subjects involved in the process of implementing the marketing plan,
- Precise market research determining customer needs and the quality of services in comparison with the competition,
- Internal marketing for the support of external marketing activities (Schnaith, 2011).
A useful aid for ascertaining differences between the actual and the target state is discrepancy analysis. This is a measure of the success of a marketing plan in ensuring the desired business objectives. It is most often used in the case of revenues and profitability but also can serve as the evaluation of other variables, for example, the return on investments etc.
Assessment of alternative marketing mixes
The idea of assessing alternative mixes is to find the most appropriate marketing strategy prior to beginning implementation of the plan. In the assessment, various analytical approaches can be used or simple methods on the basis of trial and error. The next step is setting alternative or backup plans. Since we cannot elaborate an alternative plan for every case, we should evaluate the influence of various groups of assumptions and find areas of greatest risk (Ghauri and Cateora, 2011).
Monitoring, control, and evaluation
As results from Kotler’s research in 75 firms operating in the services fields, many of the control systems are inadequate.
- Smaller businesses have in comparison with larger businesses control and management process of lower quality.
- Only fewer than half of all firms know the profitability of individual products. One-third do not have any system set for evaluating, or identifying weak products and services.
- At least half of all businesses do not make a breakdown of costs, an evaluation of advertising, comparison of prices which are the prices of the competition and do not write reports on business negotiations (Strategic evaluation and control, 2013).
- In many businesses there are documents for assessment delivered following a large delay of 4 to 8 weeks and are often imprecise.
Berkowitz cites as the most frequent reasons for the failure of the marketing plan as10:
- Not taking account of external factors,
- Not monitoring client needs – motivation merely on the basis of economic challenges there has not had to mean a benefit for the bank,
- Over-extension of the marketing plan,
- Non-familiarization of each employee with the marketing plan. It is not only the elaborator who is responsible for fulfilling the marketing plan, but also all who have shared in its creation (OTIENO, 2017).
From the above, it results that the marketing plan is becoming an important aid and tool for asserting the bank in the marketplace. It contains information necessary for managing and making well-grounded decisions. Its advantage is its comprehensiveness, therefore it is essential that all employees get acquainted with it. Every employee must recognize that as long as the bank as a whole prospers and that employees have the same objectives and through joint efforts achieve good results, this, in the end, will mean certainty in life also for employees.
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Lynn, M. (2011). Segmenting and Targeting Your Market: Strategies and Limitations. School of Hotel Administration Collection. [online] Available at: https://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1238&context=articles [Accessed 24 Apr. 2017].
Metaxas, T. (2005). Market research and target market segmentation. Department of planning and regional department, [online] 38. Available at: https://www.prd.uth.gr/uploads/discussion_papers/2005/uth-prd-dp-2005-03_en.pdf [Accessed 24 Apr. 2017].
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Schnaith, P. (2011). The Implementation of Marketing Programs for New Target Segments. I S S E R T A T I O N of the University of St. Gallen, School of Management. [online] Available at: https://www1.unisg.ch/www/edis.nsf/SysLkpByIdentifier/3979/$FILE/dis3979.pdf [Accessed 24 Apr. 2017].
Selecting target market. (2017). [online] Available at: https://agrilifecdn.tamu.edu/cromptonrpts/files/2011/06/Full-Text14.pdf [Accessed 24 Apr. 2017].
Strategic evaluation and control. (2013). Undergraduate Strategic Management. [online] Available at: https://web.idv.nkmu.edu.tw/~hgyang/Module9.pdf [Accessed 24 Apr. 2017].
The Marketing Plan. (2017). MARKETING PLAN OUTLINE. [online] Available at: https://www.sbdc.umb.edu/pdfs/marketing_plan.pdf [Accessed 24 Apr. 2017].
Veresová, E. (2002). MARKETING PLAN. Economic Focus. [online] Available at: https://www.nbs.sk/_img/Documents/BIATEC/BIA08_02/14_18.pdf [Accessed 24 Apr. 2017].