The situational analysis section is one of the most important parts of a marketing plan. It outlines your company goals, strengths and weaknesses; describes your target customers; identifies your important partners and distributors; and provides an analysis of the competitive environment. The situation analysis is not an easy section to write and can take several months of research and planning. If you take the time to do it correctly, however, it can help differentiate your product or service in the marketplace.
In the first part of the situation analysis section of your business plan, start by describing your company's marketing goals and objectives. An example of a well-written objective statement is: "Use direct marketing to increase sales of our new training manual by 10 percent by August 30." In the company analysis, you should also provide a description of your company's mission and culture. Briefly describe your strengths, weaknesses, product offering and market share.
Target Market Analysis
The next part of the situation analysis is the target market analysis. First, describe the demographic characteristics of your target customers. Demographic characteristics are things like age, education level, nationality, and occupation of your target customers. If you do not know these characteristics, hire a market research company or conduct your own online research. Next, go into more detail and describe the "psychographic" characteristics of your target market, which are things like personality and lifestyle traits. Finally, include any knowledge you have about your target customers' market behaviors, such as their usage rates of your product, loyalty trends and attitude toward your product or service.
Next, your situational analysis should include a section that describes the key collaborators for your business. Describe any subsidiary, joint venture or partnership strategies you have in place. Then outline your distribution strategy, which defines how you get your products to market. For example, you may have a warehouse operation at your company's headquarters that distributes your product to retail locations via trucks. Or you may produce your product in several locations and sell it entirely online.
The final part of the situation analysis of your marketing plan is the competitive analysis. This is where you list each of your competitors; describe their product or service offering; communicate their key features and benefits; discuss their position and share in the marketplace; and outline their competitive strengths and weaknesses. A competitive analysis is an important part of your marketing plan. It can provide key insights into growth opportunities for your company.