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out this analysis are SWOT and perceptual mapping。
Strengths； weaknesses； threats and opportunities （SWOT）
This is a general…purpose tool developed in the late 1960s at Harvard by
Learned； Christensen； Andrews and Guth； and published in their seminal
book； Business Policy； Text and Cases （Richard D Irwin； 1969）。 The SWOT
framework consists of a cross； with space in each quadrant to summarize
your observations； as in Figure 3。2。
Figure 3。2 Example SWOT chart for a hypothetical Cobra Beer petitor
Strengths Weaknesses
1。 Beginning to get brand
recognition
2。 Established strongly in Indian
restaurants
1。 Don’t have own production
2。 Need more equity finance to be
able to advertise more strongly
Opportunities Threats
1。 We could capitalize more on
our relationships in Indian
restaurants
2。 We are only in the UK – so
have the world to go for
1。 We are vulnerable to a big player
targeting our niche
2。 Our sector looks like being the
target of major tax rises which
could reduce overall demand
In this example the SWOT analysis is restricted to a handful of areas； though
in practice the list might run to a dozen or more areas within each of the
four quadrants。 The purpose of the SWOT analysis is to suggest possible
ways to improve the petitive position and hence market share while
minimizing the dangers of perceived threats。 A strategy that this SWOT
would suggest as being worth pursuing could be to launch a low…alcohol
product （and sidestep the tax threat） that would appeal to all restaurants；
Marketing 85
rather than just Indian （widen the market）。 The pany could also start
selling in India using the international cachet of being a UK brand。 That
would open up the market still further and limit the damage that larger UK
petitors could inflict。
SWOT is also used as a tool in strategic analysis and indeed it was so
used by General Electric in the 1980s。 While it is a useful way of pulling
together a large amount of information in a way that is easy for managers
to assimilate； it can be most effective when used in individual market
segments； as a strength in one segment could be a weakness in another。 For
example； giving a product features that would enhance its appeal； say； to
the retirees market may reduce its appeal to other market segments。
Perceptual mapping
Perceptual or positioning maps are much used by marketing executives to
position products and services relative to petitors on two dimensions。
In Figure 3。3 the positions of panies peting in a particular industry
are pared on price and quality； on a spectrum from low to high。
Similar maps can be produced for any bination of variables that are
of importance to customers – availability； product range； a。。er…sales support；
market image and so on。 The technique is used in a variety of ways；
including highlighting possible market gaps when one quadrant is devoid
of players； suggesting areas to be built on or extended； or where a USP （see
below） is required to create a petitive edge。
High quality
Skoda Audi
Low quality
Low price High price
Proton Triumph Stag
Figure 3。3 Perceptual mapping
86 The Thirty…Day MBA
UNDERSTANDING CUSTOMERS
Without customers no business can get off the ground； let alone survive。
Knowing something about your customers； what they need； how much
they can ‘consume’； who they buy from now； all seems such elementary
information that it is hard to believe so many people could start without
those insights： and yet they do。
There is an old business maxim that says the customer is always right。
But that does not mean they are necessarily right for you。 So as well as
knowing who to sell to； you also need to know the sorts of people who are
not right for you and accept that trying to interest them will be a waste of
scarce resources on your part。
Recognizing needs
The founder of a successful cosmetics firm； when asked what he did；
replied： ‘In the factories we make perfume； in the shops we sell dreams。’
Those of us in business usually start by defining our business in physical
terms。 Customers； on the other hand； see businesses having as their
primary value the ability to satisfy their needs。 Even firms that adopt
customer satisfaction； or even delight； as their stated maxim o。。en find it
a more plex goal than it at first appears。 Take Blooming Marvellous
（see below）。 It made clothes for the mother…to…be； sure enough： but the
primary customer need it was aiming to satisfy was neither to preserve
their modesty nor to keep them warm。 The need it was aiming for was
much higher： it was ensuring that its customers would feel fashionably
dressed； which is about the way people interact with each other and how
they feel about themselves。 Just splashing； say； a Tog rating showing the
thermal properties of the fabric； as you would； say； a duvet； would cut no
ice with the Blooming Marvellous potential market。
Until you have clearly defined the needs of your market（s） you cannot
begin to assemble a product or service to satisfy them。 Fortunately； help
is at hand。 An American psychologist； Abraham Maslow； who taught at
Brandeis University； Boston and whose International Business School
now ranks highly in the Economist’s survey of top business schools （see
the Appendix for more on business school rankings）； demonstrated in
his research that ‘all customers are goal seekers who gratify their needs
by purchase and consumption’。 He then went a bit further and classified
consumer needs into a five…stage pyramid he called the hierarchy of needs。
Self…actualization
This is the summit of Maslow’s hierarchy； in which people are looking for
truth； wisdom； justice and purpose。 It’s a need that is never fully satisfied
Marketing 87
and according to Maslow only a very small percentage of people ever reach
the point where they are prepared to pay much money to satisfy such
needs。 It is le。。 to the likes of Bill Gates and Sir Tom Hunter to give away billions
to form foundations to dispose of their wealth on worthy causes。 The
rest of us scrabble around further down the hierarchy。
Esteem
Here people are concerned with such ma。。ers as self…respect； achievement；
a。。ention； recognition and reputation。 The benefits that customers are
looking for include the feeling that others will think be。。er of them if they
have a particular product。 Much of brand marketing is aimed at making
consumers believe that by conspicuously wearing the maker’s label or
logo so that others can see it； it will earn them ‘respect’。 Understanding
how this part of Maslow’s hierarchy works was vital to the founders of Responsibletravel。
（responsibletravel）。 Founded six years ago
with backing from the late Anita Roddick （Body Shop） in Justin Francis’s
front room in Brighton； with his partner Harold Goodwin； it set out to be
the world’s first pany to offer environmentally responsible travel and
holidays。 It was one of the first panies to offer carbon offset schemes
for travellers and it boasts that it turns away more tour panies trying
to list on its site than it accepts。 It appeals to consumers who want to be
recognized in their munities as being socially responsible。
Social needs
The need for friends； belonging to associations； clubs or other groups and
the need to give and get love are all social needs。 A。。er ‘lower’ needs have
been met； these needs； which relate to interacting with other people； e
to the fore。 Hotel Chocolat （hotelchocolat。uk）； founded by Angus
Thirlwell and Peter Harris in their kitchen； is a good example of a business
based on meeting social needs。 It markets home…delivered luxury chocolates
but generates sales by having Tasting Clubs to check out products each
month。 The concept of the club is that you invite friends round and use the
firm’s scoring system to rate and give feedback on the chocolates。
Safety
The second most basic need of consumers is to feel safe and secure。 People
who feel they are in harm’s way； either through their general environment
or because of the product or service on offer； will not be over…interested in
having their higher needs met。 When Charles Rigby set up World Challenge
（world…challenge。uk） to market challenging expeditions to exotic
locations around the world； with the aim of taking young people up to
around 19 out of their fort zones and teaching them how to overe
adversity； he knew he had a challenge of his own on his hands： how to
88 The Thirty…Day MBA
make an activity simultaneously exciting and apparently dangerous to
teenagers； while being safe enough for the parents writing the cheques to
feel fortable。 Six full sections on its website are devoted to explaining
the safety measures that the pany takes to ensure that unacceptable
risks are eliminated as far as is humanly possible。
Physiological needs
Air； water； sleep and food are all absolutely essential to sustain life。 Until
these basic needs are satisfied； higher needs such as self…esteem will not be
considered。
You can read more about Maslow’s needs hierarchy and how to take it
into account in understanding customers on the Net MBA website （
netmba 》 Management 》 Maslow’s Hierarchy of Needs）。
Features； benefits and proofs
While understanding customer needs is vital； it is not sufficient on its own
to help put together a saleable proposition。 Before you can do that； you
have to understand the benefits that customers will get when they purchase。
Features are what a product or service has or is； and benefits are
what the product does for the customer。 When Nigel Apperley founded his
business Internet Cameras Direct； now Internet Direct （internetdirect。
co。uk） and part of the AIM…listed eXpansy plc； while a student at business
school； he knew there was no point in telling customers about SLRs or
shu。。er speeds。 These are not the end product that customers want； they are
looking for the convenience and economy of buying direct； so he planned
to follow the Dell puter direct sales model and show good pictures。
Within three years Apperley had annual turnover in excess of ￡20m and
had moved a long way from his home…based beginnings。
Look at the example of product features and benefits （Table 3。1）； which
has been extended to include proofs showing how the benefits will be
Table 3。1 Example showing product features； benefits and proofs
Features Benefits Proofs
Our maternity clothes are
designed by fashion experts
You get to look
and feel great
See the press ments in fashion
magazines
Our bookkeeping system is
approved by HM Revenue
and Customs
You can sleep
at night
Our system is rated No1 by
the Evaluation centre （
evaluationcenter》accounting
so。。ware）
Marketing 89
delivered。 The essential element to remember here is that the customer only
wants to pay for benefits while the seller has to pick up the tab for all the
features whether the customers sees them as valuable or not。 Benefits will
provide the ‘copy’ for a business’s advertising and promotional activities。
Product/service adoption cycle – who will
buy first？
Customers do not sit and wait for a new business to open its doors。 Word
spreads slowly as the message is diffused throughout the various customer
groups。 Even then it is noticeable that generally it is the more adventurous
types who first buy from a new business。 Only a。。er these people have given
their seal of approval do the ‘followers’ e along。 Research shows that
this adoption process； as it is known； moves through five distinct customer
characteristics； from innovators to laggards； with the overall population
being different for each group。 （See Table 3。2。）
Table 3。2 The product/service adoption cycle
Innovators 2。5％ of the overall market
Early adopters 13。5％ of the overall market
Early majority 34。0％ of the overall market
Late majority 34。0％ of the overall market
Laggards 16。0％ of the overall market
Total market 100％
Let’s suppose you have identified the market for your internet gi。。 service。
Initially your market has been constrained to affluent professionals within
5 miles of your home to keep delivery costs low。 So if market research
shows that there are 100；000 people that meet the profile of your ideal
customer and they have regular access to the internet； the market open for
exploitation at the outset may be as low as 2；500； which is the 2。5 per cent
of innovators。
This adoption process； from the 2。5 per cent of innovators who make
up a new business’s first customers through to the laggards who won’t
buy from anyone until they have been in business for 20 years； is most
noticeable with truly innovative and relatively costly goods and services；
but the general trend is true for all businesses。 Until you have sold to the
innovators； significant sales cannot be achieved。 So； an important first task
is to identify these customers。 The moral is： the more you know about your
potential customers at the outset； the be。。er your chances of success。
90 The Thirty…Day MBA
One further issue to keep in mind when shaping your marketing strategy
is that innova