Data Driven Marketing For Dummies
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A situation analysis is the one tool every marketer needs to ensure her marketing tactics are taking advantage of real opportunities and solving real problems. In other words, it provides the context you need to move forward with your planning.

Your situation analysis helps you define the context for your marketing plan by looking at trends, customer preferences, competitor strengths and weaknesses, and anything else that may impact sales. The question your situation analysis must answer is, “What’s happening?” To answer this question, you should analyze the most important market changes affecting your company. These changes can be the sources of problems or opportunities.

To prepare a situation analysis, you must consider challenges and trends that can affect your marketing program, be prepared for economic cycles, and review your competition’s current status. After you identify these threats and opportunities, you need to give some serious thought to how to respond to them.

Your marketing strategies are basically your responses to your strengths, weaknesses, opportunities, and threats, so your situation analysis feeds naturally into your strategies and plans.

One good (and very traditional) way to organize a situation analysis, also known as SWOT analysis, is to write something for each of these four categories:

  • Strengths: Identify the strong points of your products, brand image, and marketing programs so you know what to build on in your plan. Your strengths are the keys to your future success. For example, if your website is a strength, then your plan should focus on making it even better, and your objectives should include increased web sales.

  • Weaknesses: Pinpoint the areas in which your products, brand image, and marketing programs are relatively weak. For example, perhaps you have several older products that are losing to hot new competitors, or maybe you rely too heavily on newspaper advertising (which is a weakness, because newspaper readership is dropping). Your plan should propose changes that shore up or eliminate weak products and practices.

  • Opportunities: Your situation analysis needs to look for opportunities, such as a hot new growth market you can participate in or an exciting new way to reach prospective customers.

  • Threats: A threat is any external trend or change that can reduce your sales or profits, or make it hard to achieve your growth goals. Common threats include new technologies that create new competitors, large competitors that can outspend you, and economic or demographic shifts that cut into the size or growth rate of your customer base.

    Your plan needs to respond to threats effectively, so identify the main ones as accurately and honestly as you can.

This table shows you some of the typical marketing challenges and opportunities to get you thinking.

Common Marketing Threats versus Opportunities
Common Threats Common Opportunities
New, tough competitors New products
Economic problems or trends New ways to promote or sell
Aging or loss of a customer base New types of customers to pursue

You also want to make sure you review trends in your situation analysis, because trends can have a big impact on your business — for better or for worse. Identify the trends that can hurt you and plan how to respond to them; similarly, note the trends that can help you and plan how to take advantage of them.

Check on the economic growth rate of the population to which you sell (the cities in which you operate if you’re a regional operation, for example). Also check the growth rate of the demographic group you sell to. Are there going to be more or less people in the age range of your typical customer?

Then look at technological and social trends. Is the technology you use going out of date, or is it increasing in popularity? What new lifestyle choices or trends in fashion might affect your customers’ buying habits?

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