1.

Market Environment
Laurel and Dimond Districts Description of Market Environment ABCs two
stores are located in the Berrydale (original store) and Appletree (newer
store) Districts in the City of Mayfield. They are in a very culturally diverse
neighborhood on two busy streets; namely, Rosemount Drive and Sunset
Road, which is intersected by another busy street, Main Boulevard. Both
the Appletree and Berrydale Districts have been in flux for last ten years as
older homeowners move away and younger families move in with higher
incomes. With the renovation of older homes and more community
involvement cleaning up "troubled" areas, the neighborhood surround ABC
is improving. ABC presence is helping to revitalize and support this
transition.
The Local Demographics To market ABCs products and services effectively,
Exhibits 7-9 may be useful. According to the U.S. Census Bureau's 20062008 American Community Survey where 90,000+ respondents
participated, Mayfields demographics and population are as follows:
40Market Environment Local Demographics (cond) Exhibit 7 Exhibit 9
Ethnic Population Miscellaneous Demographic What Population % White
46.9% African American 19.8% What Households % Native American .6%
(150,000 Surveyed) Asian American 15.6% Children(Under18 28.6% Pacific
Islander .5% years old) Hispanic or Latino 25.2% Married Couples 34.0%
Other Races 12.9% Single Female 17.7% Two or More Races 3.7% Nonfamilies 42.7% Individuals 32.5% Exhibit 8 65+ years old 8.6% Age and
Income 18-24 years old 9.7% Demographic 25-44 years old 34.0% 45-64
years old 20.0% Miscellaneous Home Ownership 41.0% Figures
Unemployment Rate 17.5% Median Age 33 years old (as of August 2009)
Median Income $40,055 Median Income for $44,384 Family Male Median
$37,433 Income Female Median $35,088 Income Female to Male 100
females (18+ Ratio age) to 93.2 males Source: U.S. Census Bureaus 20062008 American Community Survey (90,000 (18+ years old) Respondents)
City of Mayfield 41
2. 42. Market Environment The Customer Profile Based on its history, ABC has
identified its customer profile according to the characteristics and traits
outline in Exhibit 10 below. Accordingly, most of the product mix and
services offered by ABC have been geared towards this customer profile.
Exhibit 10 Characteristic and Traits Caucasian Married with children
Professional 35+ years old Middle to higher income level Higher
Educational level Community-oriented Conservation conscientiousness
Environmentally conscientious Reside in local area (within 10 miles of ABC
stores) 42
3. 43. Market Environment Sales and Marketing Sales within ABC is generally
the responsibility of all employees although there are no specific targets
set by the Owners. To date there are no systems or processes for gathering
or disseminating sales information regularly to managers or employees so
it can be used to improve sales. Marketing is generally the responsibility of
one person who does not appear to have formal training in marketing. This
individual is also responsible for running the grocery department and the
human resource function, both of which are being learned by rote and by

doing. The marketing function by all measures is highly dependent on the

random availability of the assigned individual. Strength of Market
Environment The target customer base that has been developed over the
years at ABC is consistent with the demographic characteristics of
residents in the City of Mayfield. For example, 35+ years old account for
about 65% of ABCs customer base and ~54% of the city-wide population
is between the ages of 25-65 years old. The median income of Oakland
residents is $44,284, which is consistent with the affordability range of
products offered at ABC. A majority of the ABC customers are Caucasians
and Latinos and they accumulatively account for ~72% of the total
population in the City of Mayfield . There are also a healthy percentage of
other demographic groups (e.g., married couples, single females,
homeowners) in Mayfield that can be accessed in the market environment
by ABC. Because ABC is positioned more as a neighborhood marketplace
as opposed to a corporate marketplace, they have a high loyalty rating,
which helps with their customer retention value. Weakness of Market
Environment An area of weakness in the market environment is the
difficulty with which to access the rest of the population (e.g., Asians and
African Americans) in the immediate, geographic location where ABC
operates. Asians in the immediate vicinity tend to be immigrant 43
4. 44. Market Environment (cond) families with a preference for ethnic foods,
which is highly specialized and more easily serviced in Mayfields specialty
grocery stores. With respect to the African American residents in the
immediate area, it appears most of them prefer to shop at their local
supermarkets (e.g., Safeways). The product mix offered at ABC does not
appear to entice the patronage of this community either. Another area of
weakness in the market environment is whether there are enough
customers to support ABCs and all the other like competitors within the
City of Mayfield. For example, there is crossover between the customer
base of ABC and those for Whole Food and Trader Joes. The presence of
Safeway and the various weekly produce markets in the neighborhoods
also cut into sales at ABC. This presents a real challenge for ABC to
distinguish itself from all of the other offerings in the city. Opportunities
with Market Environment ABC has an opportunity to differentiate itself from
the rest of the competition via its community involvement, improved
professionalism and brand image, and through its distinctive customer
service. The people on the front line and critical to making this
distinction will be ABCs employees. Threats Associated with Market
Environment The principle threat to ABC will be the migration of their
customer base to their competitors; especially Trader Joes, which has a
high level of professionalism and consistency in their brand image. Trader
Joe employees are consistently engaging, friendly, and efficient which goes
a long way to providing a positive customer experience. ABC has some
work to do before it can achieve the same positive customer experience.
Part of the problem is the ABC staffing, which does not view itself as part of
the product offering that insures a good quality brand image. Until ABC
institutes a program that trains the staff to view themselves as part of
ABCs brand, the threat of losing customers and the prospect of having to
continuously find new customers will forever be present. Having a positive

customer experience is as important as buying a fresh peach from a

merchant; especially when there are other outlets for fresh peaches. 44
5. 45. Market Environment (cond) Risk Assessment Probability: Moderate
Impact: High Comment: Probability is moderate but Impact is high because
of lack of marketing plan and failure to aggressively distinguish itself
among competitors. Recommendations for Market Environment ABC may
want to invest in a good strategic marketing plan covering a 3-5 year
period with a solid implementation plan to go with it. However, before
embarking on this, it is recommended that ABC make a concerted effort to
get the staff to recognize that they are as much a product as the items
sold in the store. Improving ABCs brand should be a high priority exercise
and only after this has been accomplished can ABC and its product and
service be successfully marketed. Implementation Samples or Plan for
Market Environment Exhibit 11 Marketing Process A. Define the Aims and
Objectives for Marketing Plan B. Identify all of the Contents of the
marketing plan C. Detail the plan (and sub-plans and programs that go
with them) D. Establish the means by which progress can be measured
(e.g., pre- and post-sales figures) E. Examine all performance analyses to
tweak marketing plan 1. Sales analysis 2. Market share analysis 3. Expense
analysis 4. Financial analysis 45
6. 46. Market Environment (cond) Exhibit 12 Activities in Marketing 1. Review
of the marketing environment. A study of the organization's markets,
customers, competitors and the overall economic, political, cultural and
technical environment; covering developing trends, as well as the current
situation. 2. Review of the detailed marketing activity. A study of the
company's marketing mix; in terms of the 8 Ps - (see below) 3. Review of
the marketing system. A study of the marketing organization, marketing
research systems and the current marketing objectives and strategies. The
last of these is too frequently ignored. 4. Portfolio planning. In addition, the
coordinated planning of the individual products and services can contribute
towards the balanced portfolio. 5. 80:20 rule. To achieve the maximum
impact, the marketing plan must be clear, concise and simple*. It needs to
concentrate on the 20 percent of products or services, and on the 20
percent of customers, which will account for 80 percent of the volume and
80 percent of the profit. 6. 8 P's: Product, Place, Price and Promotion,
Physical Environment, People, Process, Packaging. The 8 P's offer a
framework from which to build action plans. 1. Price - The amount of
money needed to buy products 2. Product - The actual product 3.
Promotion (advertising)- Getting the product known 4. Placement - Where
the product is located 5. People - Represent the business 6. Physical
environment - The ambiance, mood, or tone of the environment 7. Process
- How do people obtain your product 8. Packaging - How the product will be
protected 46
7. 47. Market Environment (cond) *Ingredients of a Good Marketing Plan
Clear - They should be an unambiguous statement of 'exactly' what is to
be done. Quantified - The predicted outcome of each activity should be, as
far as possible, quantified, so that its performance can be monitored.
Focused - The temptation to proliferate activities beyond the numbers
which can be realistically controlled should be avoided. The 80:20 Rule

applies in this context too. Realistic - They should be achievable. Agreed Those who are to implement them should be committed to them, and
agree that they are achievable. The resulting plans should become a
working document, which will guide the campaigns taking place
throughout the organization over the period of the plan. If the marketing
plan is to work, every exception to it (throughout the year) must be
questioned; and the lessons learned, to be incorporated in the next year's
planning. 47
8. 48. Market Environment (cond) Exhibit 13 Components of a Marketing Plan
(Developing the Marketing Plan) I. Title Page II. Executive Summary III.
Current Situation Macro-environment a. economy b. legal c. government
d. technology e. ecological f. socio-cultural g. supply chain IV. Current
Situation - Market Analysis a. market definition b. market size c. market
segmentation d. industry structure and strategic groupings e. Porter 5
forces analysis f. competition and market share g. competitors' strengths
and weaknesses h. market trends V. Current Situation - Consumer Analysis
a. nature of the buying decision b. participants c. demographics d.
psychographics e. buyer motivation and expectations f. loyalty segments
Vi. Current Situation - Internal a. company resources i. financial ii. people
48
9. 49. Market Environment (cond) Exhibit 13 Components of a Marketing Plan
(Developing the Marketing Plan) (cond) iii. time iv. skills b. objectives i.
mission statement and vision statement ii. corporate objectives iii.
financial objective iv. marketing objectives v. long term objectives vi.
description of the basic business philosophy g. corporate culture VI.
Summary of Situation Analysis a. external threats b. external opportunities
c. internal strengths d. internal weaknesses e. Critical success factors in
the industry f. our sustainable competitive advantage VII. Marketing
research a. information requirements b. research methodology c. research
results VIII. Marketing Strategy - Product a. product mix b. product
strengths and weaknesses i. perceptual mapping c. product life cycle
management and new product development d. Brand name, brand image,
and brand equity e. the augmented product f. product portfolio analysis i.
B.C.G. Analysis ii. contribution margin analysis 49
10.50. Market Environment (cond) Exhibit 13 Components of a Marketing Plan
(Developing the Marketing Plan) (cond) iii. G.E. Multi Factorial analysis iv.
Quality Function Deployment IX. Marketing Strategy - segmented
marketing actions and market share objectives a. by product, b. by
customer segment, c. by geographical market, d. by distribution channel.
X. Marketing Strategy - Price a. pricing objectives b. pricing method (e.g.,
cost plus, demand based, or competitor indexing) c. pricing strategy (e.g.,
skimming, or penetration) d. discounts and allowances e. price elasticity
and customer sensitivity f. price zoning g. break even analysis at various
prices XI. Marketing Strategy - promotion a. a. promotional goals b.
promotional mix c. advertising reach, frequency, flights, theme, and media
d. sales force requirements, techniques, and management e. sales
promotion f. publicity and public relations g. electronic promotion (e.g.,
Web, or telephone) h. word of mouth marketing (buzz) i. viral marketing
XII. Marketing Strategy - Distribution a. geographical coverage b.

distribution channels c. physical distribution and logistics d. electronic

distribution XIII. Implementation a. personnel requirements 50
11.51. Market Environment (cond) Exhibit 13 Components of a Marketing Plan
(Developing the Marketing Plan) (cond) i. assign responsibilities ii. give
incentives iii. training on selling methods b. financial requirements c.
management information systems requirements d. month-by-month
agenda i. PERT or critical path analysis e. monitoring results and
benchmarks f. adjustment mechanism g. contingencies (What if's) XIV.
Financial Summary a. assumptions b. pro-forma monthly income statement
c. contribution margin analysis d. breakeven analysis e. Monte Carlo
method f. ISI: Internet Strategic Intelligence XV. Scenarios a. Prediction of
Future Scenarios b. Plan of Action for each Scenario XVI. Appendix a.
pictures and specifications of the new product b. results from research
already completed 51
12.52. Market Environment (cond) Exhibit 14 Types of Performance Analyses
(after Marketing Plan is Implemented) 1. Performance analyses To track
marketing performance, the following analyses are performed and
reviewed: 2. Sales analysis Most organizations track their sales results.
Tracking the sales variances (i.e., deviation from targeted figure) provides
a more immediate picture of sales effort. `Micro-analysis' can then be done
to investigate the underlining reason (individual products, sales territories,
customers, etc.) for success or failure to those sales figures. 3. Market
share analysis Tracking market share is an important metric. Though
absolute sales might grow in an expanding market, a firm's share of the
market can actually decrease which bodes ill for future sales when the
market starts to drop. Where such market share is tracked, there may be a
number of aspects which will be followed: a. overall market share b.
segment share - that in the specific, targeted segment c. relative share -in
relation to the market leaders d. annual fluctuation rate of market share 4.
Expense analysis The key ratio to watch in this area is usually the
`marketing expense to sales ratio'; although this may be broken down into
other elements (advertising to sales, sales administration to sales, etc.). 52
13.53. Market Environment (cond) Exhibit 14 Types of Performance Analyses
(after Marketing Plan is 5. Financial analysis The "bottom line" of marketing
activities should at least in theory, be the net profit. There are a number of
separate performance figures and key ratios, which need to be tracked:
gross contribution<>net profit gross profit<>return on investment net
contribution<>profit on sales Performance Analysis 53
14.54. Market Environment (cond) Exhibit 15 Sample Flowchart for Marketing
Planning Process