MODULE 2

Analysing Marketing Opportunities

Internal and External Marketing
Environment Analysis,
Introduction to Marketing Information
System and Marketing Research, BCG
matrix, GE 9 cell model.
• With an 88 per cent market share in the EV market, Tata Motors already
has around 40,000 EVs on road.
• Company is looking to expand its EV portfolio from 3 EVs at present to 10
by FY26.
• Tata Motors is already a market leader in India’s passenger EV market,
with sales of over 45,000 units thus far.
• The Tiago EV should give the electric car market further momentum. The
Tiago EV's operating cost is expected to be about a seventh of the gasoline
version, making it a "compelling proposition", Shailesh Chandra, managing
director of Tata Motors.
• “Disruptive" pricing would open new opportunities and markets for Tata in
smaller towns and cities.
• Hyundai Motor and Kia Motors also have plans to launch their EVs in India
but they may be priced higher than Tata’s Tiago and Tigor EV
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 Tata launches Nexon EV MAX XM at Rs 16.49 lakh;
to hit market by April 2023
• Electronic parking brake,
automatic climate control,
electronic stability program with
i-VBAC, ZConnect connected car
tech with smartwatch
connectivity and rear disc brakes.
• Brand has realigned the entire
variant line-up of the all-electric
SUV.
• Nexon EV MAX variants have
been enhanced to 453 km,
(according to modified Indian
driving cycle range certification).

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 • Entry-level Nexon EV Prime
• Range enhancement will XM comes with features like
be offered to current projector headlamps and
Nexon EV MAX owners LED DRLs, push-button
through a software start, digital TFT instrument
upgrade, at dealerships, cluster, cruise control &
from February 15, 2023, ZConnect connected car tech
with smartwatch connectivity,
Harman infotainment system,
automatic climate control,
has now been repositioned at
Rs 14.49 L.

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• Tata has led the EV race in the country with its Tata Nexon EV
SUV which was the most-sold electric car in the country in H1
2022 with 13,280 units.
• Tata’s Tigor EV was the second most-sold passenger vehicle in the
country in H1 2022 as 5,532 units were registered.
• MG ZS EV remained a distant third with a total of 1,198 units in
the first half of this calendar.

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 Marketing and Market Research

Marketing research - is the gathering of information

on all activities of marketing.

Market research - is the gathering of information on a

particular market for a product or service

Marketing research has a wider scope than market

research
 Purposes of Marketing Research
1. Identify changes in the existing market
2. Build up a knowledge bank
3. Improve market awareness & opportunities
4. Reduce risk and uncertainty
5. Support marketing mix decisions
6. Support marketing planning and controls
7. Improve understanding of marketing
8. Solve ad hoc problems
 Types of research information
MARKET RESEARCH
Demands, Characteristics & Trends of Market
PROMOTION RESEARCH
Effects of advertising on sales
Effectiveness of promotion methods/media in sales areas
PRODUCT RESEARCH
Proposed/improved product,
Test marketing of potential new users
PRICE RESEARCH Customer
perception of price/quality/value
Profit margin
Distribution research Location &
design of distribution centre
 Marketing research

1. Design
2. Collection
3. Analysis
4. Reporting of data about a situation
5. Distributing Information to the right managers at the right time.
(Routine information for decision making )
(Non-routine information for special situations)
 Primary research methods
(Direct from source)
Observation
Questionnaire
Consumer panels & Trade/retail audits
Pre-testing
Post-testing
Types of Research
Exploratory research
Problem solving research
 Qualitative V Quantitative Research
• Qualitative research • Quantitative research
-seeks in-depth, open-ended and -seeks structured
unquantifiable information responses that can be
describing opinions, values etc, quantified in numerical
rather than sizes and amounts in form rather than general,
numerical form open-ended information
 Additional data collection methods
Regularly comments received by front line staff from
Customers.
Staff suggestion schemes.
Sharing data throughout a supply chain.
Listening to Internet chat rooms.
Providing novel and easy methods for customers to make
comments (eg video booths).
Mystery Shopping.
 Business Environment
Business Environment refers to those aspects of
the surroundings of business enterprise, which affect or
influence its operations and determine its effectiveness.

According to Keith Davis:

“Business environment is the aggregate of all
conditions, events and influence that surrounds and
affects it”
 Nature of Business Environment

Complex:
Environment consists of a number of factors, events,
conditions arising from different sources which impact business
thus making the business complex.

Interdependence :
Factors affecting business environment like social, economic,
legal, cultural etc. are inter dependent. E.g. A rich country can
make sufficient expenditure on the research and development.

Dynamic:
Business environment is dynamic as it keeps on changing in
terms of technological improvement, changes in consumer
preferences, entry of new competitors.
 Uncertainty


Business environment is largely uncertain as it is

very difficult to predict future happenings.

Relativity
Business environment is a relative concept as it differs
from country to country and region to region.
e.g. Demand of saree is high in India comparative to other

countries.
Specific and General forces
Specific forces affects individual enterprises directly and
immediately whereas general forces have impact on all business

enterprises.
Forecasting is not possible for all developments
Interest rate fluctuations, the rate of inflation etc are difficult to
 Objectives of Business
Environment

Knowledge of Information:
Every businessman should be aware about the current
environment of the business to change accordingly.

Basis of Decision:
It contains all the information which is needed for taking good
decision.
e.g. If a business knows about its competitors, suppliers and
 customers they take decision about price, purchase, salary etc.

Helpful in making of policies:

For making good business policies one needs to know and
scan business through business environment.
Technological Planning
In today's environment it is really important for the business
houses to keep themselves changing according to the technological
changes in the market.

Survive in the business

Sometimes industry may face recession. In such condition

only those business will survive who estimate this entire situation
in advance through business environment study.
Process of Environment Scanning
Identifying Environmental Factors

Scanning & Selecting Relevant & Key Factors

Defining Variables for Analysis

Using Different Methods, Techniques & Tools

Forecasting Environmental Factors Designing

Profiles

Strategic position and Report Writing

 Environment Scanning

Environmental Scanning in business means to “Carefully analyze
the various factors influencing the business”.

Process by which the organizations monitor their relevant

environment to identify opportunities and threats affecting their
business.

“ The advocates of systematic corporate planning (strategic management

process) base their case on the view that the determination of the future can
be improved by a systematic analytical approach which reviews the business
as a whole in relation to the environment.” - B. W. Denning
 Significance of Business Environment
First Mover Advantage:
Awareness of environment helps an enterprise to take
advantage of early opportunities instead of loosing them to
competitors.

Early Warning Signal:

Environmental awareness serves as an early warning signal. It
makes a firm aware of the future threats or crisis so that the
firm can take timely action to minimize the adverse effects.
Customer Focus:
Environmental understanding makes the
management sensitive to the changing needs and
expectations of the consumers.
 Strategy Formulation:
Environmental monitoring provieds relevant
information about the business opportunities on the
basis of which firms makes their stratrgies.

Public Image:
A business firm can improve its imageby showing that it is
sensitive to its environment and responsiveas per the need
of customers.
Continuous Learning:
Environmental analysis serves as broad and ongoing
education for business executive so that they can react in an
appropriate manner to the changing scenario and therby
increase the success of their organization.
SWOT Analysis
Layers of the business environment
 Types of Business Environment

Internal Environment External Environment

• Financial Resources
• Physical and Micro Environment Macro Environment
human Resources
• Objectives of
Business
• Work Environment
• Corporate Image
• Labour management
• Relationship
7) Technological
Capabilities
Demand Industry Competition Trade
Market
Condition Analysis Analysis Analysis
Segment
Analysis

MARKET OPPORTUNITY

a. Size of the market

b. How well the market is served
c. Any niches?
d. Marketing mix required to succeed
e. Core competencies required
• Analysis of Macro Environment
• PESTEL

• Industry analysis (Micro Environment)

• 5 Forces Model
Macro-environment – PESTEL (1)
 Macro-environment – PESTEL (2)

Political Economic
• Government stability • The Economic Growth
Rate.
• Taxation policy
• Interest rates.
• Foreign trade
regulations • Money supply.
• Social welfare • Inflation.
policies. • Unemployment.
• Tax Rate.
• Foreign exchange rates.
 Macro-environment – PESTEL (3)
Socio-cultural Technological
• Population • Government spending on
demographics. research.
• Income distribution. • Government and industry
• Lifestyle changes. focus on technological
• Attitudes to work and effort.
leisure. • Speed of technology
• Levels of education. transfer.
 Macro-environment – PESTEL (4)
Environmental Legal
• Environmental • Competition law.
protection laws. • Employment law.
• Waste disposal. • Health and safety.
• Energy consumption. • Product safety.
 2. Industry Analysis

Porter’s Model of Industry Competition, commonly known as

“Porter’s Five Forces”
 Porter’s Model provides a framework for analyzing the

influence of the forces on the industry to determine the

industry’s profitability and competitiveness.

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Porter’s Five-Forces Model of Competition

3-32
 Porter’s Five Forces model

Porter's Five Forces model is made up by identification of 5

fundamental competitive forces:

1. Barriers of New Entrants.

2. Threat of substitutes.
3. Bargaining power of buyers.
4. Bargaining power of suppliers.
5. Rivalry among existing firms.

3-33
Porter Model of Five Forces
 1. Threat of New Entrants

• Factors making easy entry to industry:

• Low economies of scale.
• Low product differentiation.
• Low capital requirements.
• No switching costs for buyer.
• Easy access to distribution channels.
• Little government regulation.

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 2. Supplier Power

Factors giving power to supplier

• Supplier industry dominated by few firms.

• Buyer is not important to customer.
• Supplier’s product is important input to buyer’s product.
• Supplier’s products have high switching costs.
• Supplier can “integrate forward” and become competitor of
buyer.

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 3. Threat of Substitutes
• Factors indicating high threat of substitutes

• Few switching costs for buyer.

• Price of substitute lower or quality higher than
for your products.
• Firms offering substitutes have high
profitability.

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4. Buyer Power
• Factors contributing to high buyer power:

• Few buyers compared to the number of

sellers.
• Buyers purchases high relative to seller’s
sales.
• Products are undifferentiated.
• Buyer has low switching costs.
• Buyer has low profits.
• Buyer can “integrate backward” and supply
the product to itself.
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 5. Competitive Rivalry

• Factors leading to high competitive rivalry:

• Numerous or equally balanced competitors.

• High fixed costs.
• Slow industry growth.
• Lack of differentiation or switching costs.
• High strategic stakes.
• High exit barriers.

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The Strategic Planning Process
Organizational portfolio plan

Organizations at a particular time are a portfolio of businesses: product lines, divisions,

schools.
Management must decide which businesses to build, maintain, or eliminate, or which new
businesses to add.

Organizations can create strategic business units (SBU) which could be a single product,
product line, or division.

SBU must have the following three characteristics:

It should be a single business of collection of related business that can be planned
independent of the rest of firm.
It has its own set of competitors.
It is headed by a manager who is accountable for strategic planning and profit generation.
BCG Matrix
Relative market share
This indicates likely cash generation, because the higher
the share the more cash will be generated. As a result of
'economies of scale‘. it is assumed that these earnings
will grow faster the higher the share

Market growth rate

Rapidly growing in rapidly growing markets, are what
organizations strive for; but, as we have seen, the penalty
is that they are usually net cash users – they require
investment. The reason for this is often because the
growth is being 'bought' by the high investment, in the
reasonable expectation that a high market share will
eventually turn into a sound investment in future profits
 Stars Question marks
(high growth, high market share) ( high growth, low market share)
Generate large amount of cash – Growing rapidly and consumes large
market share. amounts of cash But they have low
Consumes large amount of cash –
market share.
market growth.
It has the potential to gain market
It will become cash cow when share and become a star and when the
market growth rate declines. market growth is slow it will become
Frequently roughly in balance on cash cow.
net cash flow however if needed When market growth declines it will
any attempt should be made to be degenerate into dog.
hold share, because the rewards will
be cash cow if market share is kept. It must be analyzed carefully whether
there is worth of investment required
to grow market share.
 Cash cows Dogs
( low growth, high market share) (low growth, low market share)

Generates stable cash flow. Neither generate nor consume

profits and cash generation a large amount of cash.
should be high, and because of Avoid and minimize the
the low growth , investment number of dogs in a company.
needed to be low. Keep profits Beware of expensive turn
high. around plans.
Cash cows provide the cash Deliver cash, otherwise
required to turn question liquidate.
marks into market leaders, to
cover R&D and to pay
dividends to shareholders.
 Limitation
BCG matrix uses only two dimensions relative
market share & market growth rate.
Problem of getting data on market share &
market growth.
High market share does not mean profits all
time. Business with market share can be
profitable too.
 Star Marketing Strategies

1. Entrenchment
4. Going international
2. Switching to
Intermediaries 5. Broadening product
horizons
3. Mandatory consumption

Existing Uses
P
R
O 6. New applications 8. Repositioning
D 7. New situations 9. Redefining markets
U
C
T
New
Users
 GE Matrix
• Y-Axis
• The vertical axis scores the industry
attractiveness (either low, medium, or
high) of SBUs. A higher score on this axis
will place an SBU higher in the GE
Matrix.
•
X-Axis
• The horizontal axis indicates the SBU's
strength as either low, medium, or high.
It moves from right to left, but it goes
from high to low.
• SBUs in green blocks have a mixture of
solid business performance and an
attractive industry. They are primed for
growth and should be allocated
resources and capital.
• Selectivity/Earnings (Orange)
• SBUs that fall within these blocks aren’t performing optimally or
operate in an unattractive industry. These business units require a
more conservative approach to either growth or divestment
strategies.
• Harvest/Divest (Red)
• If an SBU is mapped in the red blocks, this indicates that a
divestment/harvest strategy should be taken. Generally, this
means that a business should be closed, further investment should
be withheld, or the company should be run for cash.
 Strategic Planning Process

Situation Audit
(Where are we? How did we reach here? Who have been our major
competitors? Their strategies?)

Analysis of firm’s strengths and weakness

What are the key facilitators or hindrances in our situation

Objective Setting
Market share? ROI? Sales turnover?

Develop and evaluate strategy options

Strategy decision

Implementation

PIMS (Profit Impact of Marketing

Strategies)
Strategic planning and marketing planning