APC: Mission-Driven Business Planning Toolkit- Marketing Toolkit

Marketing Toolkit

Developed by Charles P. Sitkin, In Affiliation with Carnegie-Mellon University
October 1998

Introduction | Market Analysis Tools | Client Satisfaction | Market Planning |
Presentation

3.0 Introduction

This Market Research Tool Kit is designed to match the capacity and capabilities of the APC members to perform market research.¹

As the APC members have experienced, the ISP market has become increasingly competitive in recent years with the entrance of more and more For-Profit companies. The "Competitive Intensity"² graphic below clearly shows that an organization must deal with many competitors.

Figure 1
Competitive Intensity

The APC members know their market. What is needed is a structured way to define the business environment in which they work. They need a way to document what they know so that they need not repeatedly visit the same questions. They need insight to distinguish clients’ wants from what APC members may perceive to be their clients’ needs; and, what APC members have traditionally offered or would like to offer.

The Marketing Toolkit

The first section of this toolkit, "Marketing Analysis Tools," provides an orderly way for planners to organize what they know and to set a clear direction for future activities. Market research tools include: profile, present business activities, environment, sector, market, client structure, competitor, and organizational analyses.

In Section 2, "Client Satisfaction," we present an approach to ascertaining client satisfaction with the products and services you provide. The many benefits of asking your clients for their opinions about your products and services are also discussed.

A description of how to develop a marketing plan is presented in Section 3, "Market Planning Process." This section provides an overview describing how you might formalize the market planning developed through the forms-driven market analysis approach described in Section 1.

3.1 Market Analysis Tools

This section provides a forms-driven approach to market analysis. The subsections should be approached sequentially. Depending on the size of your organization, you may want to have several people take part in the exercise, each person completing separate forms. Summary forms can be easily created and used where appropriate in order to average or consolidate the planning team’s collective thinking.

The planning tools subsections are:

Profile analysis — a subjective evaluation of the internal capabilities of the organization and its staff.
Present business activities – a listing of the benefits currently provided to clients through products and services. These can be categorized by client groups and delivery methods.
Environment, sector, and market analysis – a candid assessment of the leverage and vulnerability of the member’s organization vis-à-vis the competitive world.
- Environmental Analysis
- Sector Analysis
- Market Analysis – Qualitative
- Market Analysis – Quantitative
Client Structure Analysis
Competitor Analysis – a subjective evaluation of the competition.
Organizational Analysis – an examination of the main market trends and their effects on the current and future business activities of the organization.
- Main Trends and Effects
- Possible New Business Activities
Product and Service Differentiation – a structured way to evaluate each product and service.

Profile Analysis

As part of the process to establish your organization’s position in the market, it is useful to examine how your organization’s current capabilities and staff skills match with what you believe to be your clients’ current and future needs.

Profile Analysis (Forms P.1 through P.5) will lead you through an exercise to organize your perceptions of how your capabilities and preferences fit with your clients’ needs. In this exercise, you are asked to select and rank the five most important products/services, from a larger list of APC oriented products/services, in response to each of the following questions:

What do you believe your organization is especially good at delivering? (Form P.1)
Which products/services do you and your colleagues particularly enjoy working on? (Form P.2)
Which products/services are most needed by your clients? (Form P.3)
Which products/services will be most critical to the success of your organization in the foreseeable future? (Form P.4)

The Profile Analysis Summary (Form P.5) is used to compare the answers provided on each of the other forms. If more than one member of your planning team takes part in this exercise, an average response should be prepared when completing this form. It will be informative to see how the responses to each product/service varies by the questions asked by Profile Analysis (Forms P.1 through P.4).

The last form (Form P.6) portrays your current allocation of resources. This should be compared against the Profile Analysis Summary Sheet (Form P.5) to see how closely your organization’s work meets your perception of the work to be done.

We suggest that you take a break after completing each form (at least several hours) so that you won’t bias your answers based on how you responded when asked the same questions from a different perspective.

The results in themselves do not point to what you should be doing, but they do serve to raise your understanding of how your organization fits with your clients’ desires. This will be helpful as you converge on your appropriate product/service mix for the future.

Present Business Activities

Present Business Activities Analysis (Form M1) highlights which benefits are being provided to whom, using what technologies. The data collected will be the basis for discussion of your organization’s present capabilities.

Responses are required to the following questions:

What benefits are we currently providing to our clients through our products and services? (e.g.: Access to the World-Wide Web)
Which groups of clients are we benefiting in this way? (consider principal characteristics of groupings of your clients—depending on the complexity of your market, you may not have groupings)
What technologies or processes and methods are we now using to provide these benefits? (e.g.: internet servers, software, consulting, etc.)

Each member of your planning team should complete the exercise and the responses should then be summarized for analysis. The process may be facilitated by the creation of individual and summary forms based on the following template.

Form M.1: (download file- pdf | word/97 | rtf ) and

Form M.1s: (download file- pdf | word/97 | rtf )

Environment, Sector, Market Analysis

The purpose of the Environmental, Sector, and Market Analysis (Form M.2) is to help you gather some preliminary ideas on the scope of the Environment, Sector, and Market Analyses to be conducted. When looking at these factors, a candid assessment of the strengths and weaknesses must be made. This is a time for soul searching and honesty to help you understand both points of leverage and vulnerability vis-à-vis the competition. It may turn out that you decide certain analyses should be conducted that have not been addressed by forms in this tool kit. If so, formalize your analysis need, create the necessary forms, and go for it.

The Environment

The environment being considered is both the internal and external. Internally this may include products and services offered, financial resources, facilities, labor resources, and management depth. Externally this may include the ecological environment, technologies, laws, the economy in general, and those aspects that impact the organization’s market such as political and social forces.

The Sector

The analysis of sector(s) might cover industry structure, client structure, employment and competitive situations, the most important competitive advantages, distribution structures, and business orientation. The following questions might help highlight areas for sector analysis.

What is our market share today? What has it been over the last three to five years?
Who are our major competitors? What are their market shares and growth trends? What are the changes in their shares over the last few years?
What are our competitors’ strengths and weaknesses? Where do they have leverage? Where are they vulnerable?
How do we compare to competition on the important factors in the business (price, quality, manufacturing, etc.)?
What is our distinctive competence – the one thing we do better than anyone else?
What are our competitors’ strategies?
Where will our sales and market share be in five years? What about our competitors?
How will we and our competitors fund future business?
What is our financial health? How does it compare to our competitors’?
How much research and development are we doing relative to competition? What is our trend over time?
Where are we investing for the future? How about our competitors?

The Market

The market is all clients – current and potential. Market analysis covers both qualitative and quantitative data. Quantitative data might include market volumes, the life cycle status of the market, market growth, and/or market share. Qualitative data might include structure of client requirements, their motivation for purchasing, purchasing procedures and market power of competitors. This analysis might include obtaining answers to the following questions for the organization’s existing and proposed markets:

What market are we in? How big is it?
What is its expected growth rate over the next year or two? Three to five years? How does that compare to GNP? What is real, uninflated growth?
What are the key factors for success in the business? What phase of maturity is the market in? (Embryonic, on a growth curve, mature, or declining).
Is the technology dynamic or static? How fast does it change? How major are the changes?
How strong are the capital and technological barriers that would make it difficult for a new competitor to enter?
How stable is the market? Are competitors entering or leaving the business? How difficult is it to leave?
Is the market held by a small or large number of competitors? Is there a trend toward consolidation?
What is the basis of competition (price, quality, other) in the industry?
What is the industry’s financial structure? Where is the most value added in the channel?

If necessary, individual and summary forms can be created based on the following template.

Form M.2: (download file- pdf | word/97 | rtf )

form m.2

Having discussed the scope of the necessary Environment, Sector, and Market Analyses, the next step is to proceed with the analysis. The purpose of Environment Analysis, Sector Analysis, and Market Analysis (Forms 3/4/5) is to capture your planning team’s perceptions relating to: (3) the environment, (4) the state of the sector, and (5) the state of the market sector in which your organization operates.

Completing the Analysis Forms

The first column of this form should contain the "Main Criteria" relating to the environment, sector, or market as determined by the type of analysis being conducted. Suggestions for each of the three areas are listed in the table on the following page. Note, these are simply suggestions, the worksheet should be drawn up in keeping with your organization’s individual situation. The second and third columns should be filled in according to perceptions relating to "Evident Trends" and "Effects."

If necessary, individual (M.3, M.4, M.5) and summary (M.3S, M.4S, M.5S) forms can be created based on the following template.

Form M.3: (download file- pdf | word/97 | rtf )
Form M.3s: (download file- pdf | word/97 | rtf )

Form M.4: (download file- pdf | word/97 | rtf )
Form M.4s: (download file- pdf | word/97 | rtf )

Form M.5: (download file- pdf | word/97 | rtf )
Form M.5s: (download file- pdf | word/97 | rtf )

form m.3/4/5

Suggestions: Main Criteria for Analysis (click below to view )

Environmental
Sector
Market (Qualitative)

Market Analysis—Quantitative

The Quantitative Market Analysis worksheet (Form M.6) provides you a way to record your perceptions of your current and potential market share. When completing this form, you should select your clients or client groups from Present Business Activities (Form M.1 or M.1S) for column one. The clients in each group should be both current and potential. In column three enter your present sales percentage as the portion of the total group you have under contract or currently sell to. Then, subjectively place a check in the column that you believe best represents your current and potential market share.

Form M.6: (download file- pdf | word/97 | rtf )

Form M.6 Market Analysis – Quantitative Customer Structure on Market Date: __________
Customer Group -(see forms M.1/M.1S)	Present Number of Customers per Group	Our Present Sales per Group				Possible Additional Sales Potential per Group
		Percentage of Group	Assessment			Assessment
		Percentage of Group	Low	Medium	High	Low	Medium	High

(section 3.1 continued on next page)

Footnote:

1. The approach suggested in this kit is largely qualitative because the cost and time required to collect valid quantitative data in the members' markets is not justified by the increase in knowledge that planners would obtain

2. Michael E. Porter