I’ll continue with the Marketing Systems Approach I covered briefly in the last article. The Marketing Systems Approach is also known as a SWOT Analysis; and SWOT stands for Strengths, Weaknesses, Opportunities and Threats of a company’s marketing strategy.
The marketer begins with a SWOT analysis to determine the company’s target market. The SWOT analysis is divided into two steps: analyzing the opportunities and threats of the external macro environment and analyzing the strengths and weaknesses of the internal micro environment. In the first step we must analyze the opportunities and threats of the industry to identify how to meet the demand of the market. By doing so, the marketer must evaluate the market’s demographics, economics, social and culture, politics and law, technology, and competition. By researching these macro environmental dimensions the marketer can turn a threat into opportunity.
The second step of the SWOT analysis is understanding the strengths and weaknesses of the specific company to identify how to leverage the company’s key competitive advantage. By researching the company’s strengths and weaknesses the marketer can pinpoint what niche in the market the company should fulfill. For example, Apple’s key competitive advantage is innovation and Disney’s key competitive advantage is creativity and imagination. The company should build upon their strengths and weaknesses but the marketer should avoid the company’s weaknesses and leverage their strengths if at all possible.
Once the SWOT analysis is complete and the marketer knows how to leverage a key competitive advantage, the marketer will develop the marketing mix that fits the company’s target market. The marketing mix is essentially the mix of strategies a company should focus on and is made up of the four P’s: product, placement, price, and promotion. The company should focus on product when the products they currently have do not meet the demand of the target market; placement when the product needs to be marketed to a specific niche within the target market; price when the product’s price needs to be determined by the target market’s perceived value; promotion when the product needs a specific kind of advertisement to reach the target market.
In conclusion, the SWOT analysis is an analysis to determine the target market, how the company can leverage a key competitive advantage, and the marketing mix necessary to provide a successful marketing strategy. In the next article, I will focus on the Consumer Buying Behavior that takes place when a customer makes a purchase.
