CHAPTER 1

What You'll Need to Know, Part 1

What can we learn? The insights portion of the business review provides aninformation decision-making base for the subsequent marketing plan and therationale for all strategic marketing decisions within the plan. Most important,it provides for a consumer and customer orientation to your marketingcommunications.

FROM THIS CHAPTER YOU WILL LEARN

• Suggestions for preparing a business review

• How to develop an outline to use as a road map for completing your businessreview

• The steps necessary to complete a business review

• How to utilize primary data (developed through your own company's research anddatabases) and secondary data (existing data from trade journals, governmentpublications, syndicated research) in the development of your business review

• Where to find the information necessary to complete the charts and answer thequestions in each step of the business review

OVERVIEW

This chapter explores why marketing information is not a nice-to-have but amust-have. It also introduces some basic business review terms and the keyelements of developing a business review.

WHY MARKET INFORMATION IS IMPORTANT

Today, consumers have more product choices than ever before. They also have moreinformation about the choices. The combination of more competition, from smallniche marketers to large dominant category killers, and a bombardment ofcommunication from many competitive alternatives means that marketers have towork much harder to affect target market behavior. Thus, it is more importantnow than at any time in the history of marketing to really understand yourtarget market and to let this understanding drive not only the marketingdecisions but impact the entire decision-making framework of your company.

It is our opinion that many of the business successes of the past 30 years havecome about not because of great business management but because of individualslike Sam Walton who have had tremendous consumer insight—insight developedthrough their deep understanding of the target market, the business environment,and the competition. Walton realized that the rural consumer was underservedfrom a retail standpoint. He consequently built his business on a uniqueconcept: while the standard doctrine of the day said that there had to be100,000 people within a 10-mile trading area to support large generalmerchandise stores such as Walmart, Walton put his stores in small towns such asViroqua, Wisconsin. He succeeded because consumers in rural areas were willingto drive much greater distances to avail themselves of the deep selection ofmerchandise and reasonable prices that in the past had been found only in thelarger cities.

Many industry leaders such as Best Buy, Famous Footwear, Apple, Starbucks, andNike have similar stories, stories based on consumer insights that were thefoundation for dominating success.

Much of the marketing innovation in today's environment is coming fromretailers, service firms, packaged-goods companies, and business-to-businessfirms that are interacting with their target markets with a new level ofurgency. Technological innovations in the retail industry, such as "smart" cashregisters and customer databases, have increased the use of customer insightsand have provided marketers with a wealth of behavioral information. Inaddition, firms like Networked Insights and MotiveQuest are mining socialnetworking websites on the Internet to track and interpret the millions andmillions of unbiased consumer conversations that are happening daily.

The more successful business-to-business firms are spending less time sellingwhat they have and more time defining their customers' needs in order to sellwhat their customers really want. And packaged-goods companies, facing productparity issues and a sales promotion environment, are exploring ways to buildbrand equity and add value to their products. Marketers who are on the frontlines, engaging in dialogue with the consumer on a daily basis, are the ones whoare often closest to the consumers and target market demands. This "closeness"is bringing about a change in the way many marketing-oriented companies aredoing business.

These marketing-oriented companies are now in a position to define specificmarket segments based on the segment's unique needs or consumption behavior,which in turn allows them to set realistic marketing objectives to affect thesegment's behavior. Companies today have the ability to know whether productrepurchase rates are different for new versus old customers or for customers ofdifferent ages. They have the ability to determine exactly how many customersthere are for each unique purchasing segment, and they know what the averageexpenditure per purchase and the average number of purchases are for thesegments. More important, they know what each segment of customers is buying,when and, often times, why. With this type of target and customer information,the marketing-oriented company is able to set objectives that have a morerealistic chance of positively affecting consumer behavior. Marketers writingthe plan know they have a good chance of achieving the goals because theseobjectives...