Analysis of situation

This section should include a summary of the company’s environment and the environment it works in. Analysis of the situation is collecting of data and performing analysis of the situation inside and outside the company (products, markets, past performance, competition, other environmental factors).

It allows to show some decision problems and the chances of their solutions. Decisions on segmentation, selection of target market and positioning of the product, proceedings against the competition are being explained.

The results of this stage are meant to enable to (Kłeczek, Kowal, Woźniczka 1996: 87):

  • determine the place of business in the market and its key areas of sales;

  • compare the company with its competitors;

  • determine the strengths and weaknesses of the company, its resources, organization and marketing offers;

  • identify opportunities and threats of the company stemming from the market situation;

  • assess the conditions for future marketing actions.

It should present sales predictions. It is important to define the product in terms of classes or types, specify the unit of measure that will allow to show the size of sales (e.g. pieces, tones, etc.), indicate the buyer of the product, the geographic area that the sale will be limited to. Further, an appropriate method of forecasting should be chosen (there are, among others, statistical methods, heuristic methods). It is best to carry out forecast for each market segment, which can be selected.

Performance of the market segments analysis can let you know what the preferences of specific groups of buyers are. Segmentation of buyers is useful when it gives the company the possibility to have a precise impact on them through properly conducted product modification, distribution or promotion. It seems that the most appropriate criterion for segmentation is to identify the reasons of customers’ purchases. Segmentation criteria are generally divided to: (1) response criteria of buyers (expectations, attitude, willingness to buy) and (2) the criteria for characterizing buyers (demographic, geographical, psychological characteristics). It is also worth to profile segments.

The next step is to be a subject to assessment of the competition. It is good to arrange competitive companies, taking into account their market share, i.e. sales share of a particular company to all sales of the product on the market. This allows you to specify what the role of a competitor is (the leader in the segment, the aggressor attacking the leader, imitator, exploiter of niche), describe the structure of competition, show what is the threat of entry of new companies and their offers on the market.

In analyzing the situation, you can also evaluate the marketing mix elements (such as: product, price, promotion, distribution channels) used so far by a company and its competitors in terms of their effectiveness. This will allow making more accurate decisions while making a choice, then carried on in the marketing plan.

SWOT analysis (strength and weaknesses, opportunities and threats) is a final part of the marketing evaluation and also the first step in the process of planning a marketing strategy. It involves identifying the strengths and weaknesses of the organization compared to the competition, as well as determining its strategic opportunities coming from the outside, and possible threats. The main task of the SWOT analysis is to collect all the information that will affect the strategic choices made later. There should be, despite the discussed earlier the characteristics of market and competition, defined enterprise resources (financial, personnel, production, etc.).

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