Market Analysis

Ken Kaweesa

K.KAWEESA2
@derby.ac.uk

LECTURE 2
 Week 1 Recap
Module Introduction & Learning Outcomes
Assessment CW1
Understanding consumer research
SEMINAR: Working with Mintel databases

Today’s learning
objectives:

• Understanding situation analysis

• Using different models to analyse the market environment.
What is a situation
analysis?
•Understanding the current position of an
organisation – internally and externally

•Understanding factors that affect an organisation,

brand, product or service

•Providing information to inform business decisions

such as;
 • Providing evidence
• Improves understanding
• Informs decision making
• A useful tool for understanding
the environment “big picture” in which the
organisation operates
•Helps recognise the opportunities
•Recognise the threats that lie within it and
minimise risk.
What does a
situation
analysis
include?
What does situation
analysis include?
1. Analysis of customer data

2. Analysis of the external environment (PESTEL)

3. Competition analysis (and understanding the whole

supply chain, Porter’s 5 forces)
4. Analysis of the internal environment (SWOT, TOWS,
portfolio analysis, existing internal data).

Focus of your assignment will be on the first two.

Marketing Manager’s Interactions

Manager

Co
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mp
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Internal Interactions External Interactions

eti
Cu

ti
Marketing Research Advertising Agency

on
s
Sales Suppliers
PR Channels
Purchasing Media
Manufacturing /Distribution Government
R&D cc
Legal
Finance
Senior management

•
So
cia
l
•
tec l
hn
olo e nta
gic nm
al External Environment nviro
• E
Econo• litical
mic Po •
 • Macro-Environment Audit: PESTLE/PESTEL: Political,
Economic, Sociological, Technological, Legal, Environmental
How do • Task environment: Markets, Customers, Competitors,
distribution and dealers, suppliers, facilitators and marketing
we organisations & Publics

conduct • Marketing strategy audit: Business mission, Marketing

objectives & goals, strategy
a • Marketing organisation audit: formal structure, functional
efficiency and interface efficiency
situatio • Marketing systems audit: MIS, Marketing planning system,
n marketing control system, new product development system

analysis • Marketing productivity audit: profitability analysis, cost-

effectiveness analysis

? • Marketing function audit: Product, price distribution,

advertising, sales promotion, PR
PESTEL analysis
PESTEL in context
P The macro environment
E
The micro environment
Economic
Political forces
legal suppliers The internal customers

L
forces environment
Production E
Finance Environment
R&D & sustainability
other HR etc.
stakeholders competitorsSocial
cultural
forces
intermediaries

T Technological
forces S
Note: The focus of CW1 is on the consumer
 The “P” Element of PEST: Political
•Government (local and national) type and stability
•Freedom of press, rule of law and levels of bureaucracy and
corruption
•Regulation and de-regulation trends
•Social and employment legislation
•Tax policy, and trade and tariff controls
•Environmental and consumer-protection legislation
•Likely future changes in the political environment
Political factors

England

USA

China
 Interactions and power
Not laws and structures affecting
regulations (that’s societies, governments
Legal) and organisations
before law is enacted

Result from an
interaction of cultural
factors
•Political factors are frequently outside an organisation’s
control, but organisations use

• lobbying groups,
• PR professionals
• industry associations
• affiliated unions
• influencers in the media

•to influence the outcome of political decisions

Economic factors
Income
Inflation
Taxes
Boom Recession
GDP
Exchange Rates
Recovery Depression Controls & Duties
Other Example of Economic
factors
• Current and projected economic growth, inflation, interest rates etc
• Unemployment and labour supply , Labour costs
• Levels of disposable income and income distribution
• Likely future changes in the economic environment (ex no deal Brexit?)
• The effect of economic boom, recession, or even depression, on the
consumer, e.g.
 Taxation, Interest rates, Disposable income
• And the effect on the business itself?
 Competitive activity
 Supply and demand
 Business survival
 Overdraft/loan rates?
 Payment from customers?
 Reduction in demand?
 Increasing competition?
Activity
• Identify the 5 most pressing
political and economic
issues that the energy
sector is facing at this
moment in time in UK.

• Evaluate the extent to

which these issues are
immediate and the impact
they have by mapping them
on to a grid
Socio-cultural
factors
Lifestyles

Demographics
Life expectancy
Examples of Socio-Cultural factors

Population health, Population

Population growth education and social employment patterns,
rate and age profile mobility, and job market freedom
attitudes to these and attitudes to work

Press attitudes, public

Lifestyle choices and Religion, language,…
opinion, social
attitudes to these, etc (elements seen
attitudes and social
values, trends above)
taboos
Technologic
al factors
•Technology can be a disruptive game
changer.
•All companies are affected in some
way or another
•Can affect product and service
development, product lifecycles,
marketing practices, customer
behaviour, competition in the market,
etc.
•Research and development is under
way all the time
Example of Technological factors
The E Factor:
Environmental/ec
ological factors

• Consider the impact the

organisation has on the natural
environment
• Sustainability
• Recycling
• Carbon footprint and low carbon
• Fairtrade
• Can link to legal and socio-
cultural factors
The UK’s greenest summer ?
52% of Britons There have Almost ¼ of Britons
swapped their been 1.69bn bought fewer clothes
52% single-use plastic fewer plastic 24%
bottles and coffee
bottles used
cups for re-usable
ones.
in the UK this They have saved over
summer £4.3bn

Went out of their way to

10% The UK will
recycle products
explored have reduced
alternative, its emission
eco-friendly of carbon 64%
routes to dioxide by Resulting in a reduction of
travel 9.1m tonnes 345,600 tonnes of
household waste over 3
months
Adapted from: Be kind magazine (2019)
Legal factors
Laws and regulations in all the countries that an
organisation works in, such as:
• Health and safety legislation
• Food safety legislation
• Product safety, packaging and labelling legislation
• Trading standards
• Sector-specific regulations, codes of conduct and professional standards
• Environmental regulations
• Advertising Standards, Market Research Society Code of Practice
Some further
note on data…
• Keep the data secure (Data Protection Act and
General Data Protection Regulations)
• Share with appropriate people in house
• Update it regularly
• Use to inform strategic and tactical planning
• Be aware of the Freedom of Information Act
• There are companies that provide legal advice to
companies for every aspect of their work (SEE
DOCUMENT: ASK THE EXPERT in study materials)
Summary of PESTEL data you can
collect for CW1
Area of the macro- Factors for consideration
environment
Sociological demographics, lifestyles, social issues, education levels,
attitudes, consumerism
Legal competition & employment law, foreign trade
regulation, environmental protection/consumer
protection legislation
Economic Business cycles, inflation & unemployment rates, GDP
trends, patterns of ownership, sectorial trends
Political political/government stability, political orientation,
taxation policies, pressure groups, trade union strength
Technological developments & government investment in technology,
product life cycles
 Task Environment
Sub-section Issues to be addressed

Markets Market size, growth, geographical distribution, profits, changes in market

segment sizes and opportunities.
Customers Attitudes towards the company and competitors, decision-making processes,
evolving needs and wants.
Competitors Objectives and strategies of competitors, identifying competitors, trends in
future competition.
Distribution and dealers Main trade channels. Efficiency levels of trade channels.

Suppliers Availability of key resources, trends in patterns of selling.

Facilitators Cost and availability of transport, finance and warehousing, effectiveness of

advertising and other agencies.
Summary
• This module brings together whole-market level economic
analysis and customer-level data analysis
• Situation analysis is an important first step in marketing planning
and customer data feeds into this in several ways
• A PESTEL analysis is a convenient way of analysing the external
factors that may affect an organisation in the future
• We have had some practice with PESTEL
• The assignment has been introduced and requires a PESTEL
analysis
References and reading
Armstrong, G. and Kotler, P. (2012), Marketing: An Introduction, Pearson Education Limited,
Harlow. ISBN 978-0-273-76260-7
Baines, P. and Fill, C. (2014), Marketing (3rd edition), OUP, Oxford, chapter 4.
Be Kind Magazine (2019): The UK Greenest Summer.
https://www.bekindmagazine.com/the-uks-greenest-summer/ accessed on
13/9/2021
Euromonitor and Mintel for consumer trends news
Financial Times, Forbes, Economist, Guardian, for economic/political UK news
(free to access from library)
Seminar Activity:
situation analysis
Working in small groups, continue exploring the Supermarket
sector, but we are now focusing on a specific supermarket brand
i.e. Tesco (remember: we already know how big the market is, the
competitors and that Tesco is a market leader)
• Customers – who are they? What do they buy? (note: we have
data for all sector in Mintel report)
• Let’s run a PESTEL analysis

1. Which factors (think PESTEL) are most likely to affect Tesco’s

position in the market currently or in the future? Why?
2. What are competitors doing at moment, in regards to these
factor?
 HOMEWORK activity – FOR NEXT
WEEK
Read
• Hague et al. (2013) Market Research in Practice (Kogan Page, Edition 2): Chapter 1 and Chapter 2.

Continue exploring the Mintel 2019 supermarket database/report, to answer the questions:
• Consumer behavior – What further customer data not present here would you recommend that Tesco might
collect in 2020, compared to the data from 2019?

Start working towards your CW1:

• Carry out a more in depth PESTEL analysis for the sector, which will enrich your background section

Further reading:
• You can deepen your understanding of alternative methods to run a situation analysis, such as Porter 5 forces,
BCG Matrix, by considering the chapter “Fundamental of Strategy”, available in blackboard