Marketing Strategy: Situational Analysis
Hello, it’s George here from Childcare Marketing! This blog will provide you with a number of strategic marketing techniques that are used by marketers everywhere to analyse the business environment that surrounds their product/service. Writing a marketing strategy plan is absolutely essential for achieving long term results. Without a strategy, a business will not be able to achieve a competitive advantage over its competitors, will be unaware of the market conditions and also, won’t be prepared for sudden changes in the business environment. By analysing the environment, you can identify problems and opportunities to base your marketing strategy around. Before any problems and opportunities are identified three stages of analysis are necessary: remote environment, near environment and finally, the internal analysis.
The remote environmental analysis involves scanning the wider market to see the problems and opportunities that may affect the success of your marketing campaign. The framework used by marketers to carry out this form of analysis is known as a PESTLE analysis. I will spell out the meaning of each letter of this acronym below:
- Political- This involves scanning the political situation surrounding your business. This may involve legislation, taxation, regulation, trade, and/or globalisation. An example may be that a certain country has a regulation against the use of your product meaning that the market is unsuitable.
- Economic- This relates to the economic situation surrounding both your business and your business’ target market. Key important economic factors include economic growth rates, business/consumer confidence, unemployment rates and exchange rates. For example, if consumer confidence levels are high it may be the perfect time to release a social media advertising campaign.
- Socio-Cultural- This point is split into three main factors: demographic factors, sociological factors (For ex, levels of income, education, and family structures) and cultural factors. An example of an influential demographic factor is that a country may have an aging population, this will massively affect the marketing channels and materials you choose to use in your campaign.
- Technological- What technological factors might affect your business and your marketing campaign? An example is that your target market might be most active on Facebook meaning this might become your primary digital marketing channel.
- Legal- Are there any tax policies, employment laws or health and safety regulations that may influence your business’ marketing strategy? For example, do health and safety regulations affect how you’re able to market your product?
- Environmental- This factor is of particular importance in recent years due to the environmental crisis we find ourselves in. At Childcare Marketing we understand this and show a key focus on these factors. An example may be that your product/service may be or may have the potential to be environmentally beneficial meaning this could be a key focus of your marketing campaign.
Once you have a clear picture of the wider factors that affect your business and your subsequent marketing strategy, you should look to factors closer to your business such as your competitors. A competitor analysis is a popular framework used for this purpose and involves looking at what your competitors are doing now and also what they’re going to do in the future. This involves four main areas of analysis which are explained below:
1. Competitor’s objectives- By finding out what your competitors are trying to achieve you can gain valuable insight that will shape your marketing strategy. For example, by evaluating the objectives of well-established companies in the market it can give you a good indication of realistic and achievable objectives for your business.
2. Competitors current strategy- Your competitor’s strategy will majorly affect the strategy that you choose to employ. Some key indicators of their strategy include their target market and their price level. If your competitor is using an aggressive strategy to price competitors out of the market, then it may be a wise idea to avoid competing with them for now by employing a bypass strategy (read the following blog to learn more about different types of strategy).
3. Competitor’s resource portfolio- By exploring the resource profiles of your competitors it can give you a great idea of the strength of your competitors and whether they’re a serious threat. For example, if the company is a well-established market leader you would avoid trying to directly compete with them. You may try and position your product/service differently as a result.
4. Predicted future strategy- By not only looking at the current strategy of your competitors but also focusing on their future intentions you can adjust your strategy depending on your predictions. For example, a company that has a large resource portfolio may be avoiding investing money until the market conditions are better. Therefore, you may avoid this market as they would easily be able to price you out of the market.
Once you have a clear idea about the external environment for your business, it’s time to investigate your own business. By carrying out a value chain analysis you can understand where your unique advantages lie. You should map out your business into several sections (see example diagram below) and locate your key benefits.
Once these three levels of analysis have been completed you need to bring it all together into a problems and opportunity statement. In this stage, you work out what the information you have collected means for your business and your marketing strategy. The problems and opportunity statement will be the driving force for the rest of your strategy. This consists of splitting the information into five different sections which are listed and explained below:
- Your organisation’s capabilities that are key to your business’ success.
- Other opportunities- Where capabilities are present but aren’t completely critical to your success.
- Future opportunities- Where you don’t have capabilities but there is potential for development.
- Problems that need to be addressed- Threats from the remote and near environment.
- Strategic implications of the above four factors- The strategic issues/challenges confronting your business.
Now you have completed the situational analysis you can use this information to formulate your objectives and subsequent marketing strategy which I will discuss in my next blog. You are on the way to creating a well-justified marketing strategy that will put you one step ahead of your competitors. Alternatively, you can outsource your marketing strategy to our experts who will come together and formulate an appropriate strategy to elevate your business’ marketing efforts. Not only will we create the perfect strategy for your company, but we will also carry this out for you. You can sit back and watch your childcare business grow in size and reputation with no cost to the environment and minimal cost to your bank account!
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At the recent Childcare and Education Expo event, we also interviewed Ben Rolfe, Founder of Childcare Marketing. Ben provides top tips on what nursery practitioners can do to keep communication with existing and prospective parents flowing and explains why creating a ‘brand’ is important for a setting that wants to attract new parents and recruit new staff. Head here to watch the interview: https://connectchildcare.com/blog/ask-the-expert-episode-1-ben-rolfe/