Page 72 - Marketing Management

DEVELOPING MARKETING STRATEGIES AND PLANS | CHAPTER 2 49

(a) Opportunity Matrix |Fig. 2.4|
Success Probability
Opportunity and
High Low
1. Company develops more powerful Threat Matrices
lighting system
2. Company develops device to
Attractiveness 3. Company develops device to
2
1
High
measure energy efficiency
of any lighting system
measure illumination level
3
4
Low
4. Company develops software program
to teach lighting fundamentals to
TV studio personnel
(b) Threat Matrix
Probability of Occurrence
High Low
1. Competitor develops superior
lighting system
2
1
High
2. Major prolonged economic
Seriousness 3. Higher costs
depression
4. Legislation to reduce number
3
4
Low
of TV studio licenses
To evaluate opportunities, companies can use market opportunity analysis (MOA) to ask
questions like:
1. Can we articulate the benefits convincingly to a defined target market(s)?
2. Can we locate the target market(s) and reach them with cost-effective media and trade channels?
3. Does our company possess or have access to the critical capabilities and resources we need to
deliver the customer benefits?
4. Can we deliver the benefits better than any actual or potential competitors?
5. Will the financial rate of return meet or exceed our required threshold for investment?

In the opportunity matrix in Figure 2.4 (a), the best marketing opportunities facing
the TV-lighting-equipment company appear in the upper-left cell (#1). The opportunities in
the lower-right cell (#4) are too minor to consider. The opportunities in the upper-right cell (#2)
and the lower-left cell (#3) are worth monitoring in the event that any improve in attrac-
tiveness and potential.
An environmental threat is a challenge posed by an unfavorable trend or development that, in
the absence of defensive marketing action, would lead to lower sales or profit. Figure 2.4 (b) illus-
trates the threat matrix facing the TV-lighting-equipment company. The threats in the upper-left cell
are major, because they have a high probability of occurrence and can seriously hurt the company.
To deal with them, the company needs contingency plans. The threats in the lower-right cell are
minor and can be ignored. The firm will want to carefully monitor threats in the upper-right and
lower-left cells in the event they grow more serious.

INTERNAL ENVIRONMENT (STRENGTHS AND WEAKNESSES) ANALYSIS It’s one
thing to find attractive opportunities, and another to be able to take advantage of them. Each busi-
ness needs to evaluate its internal strengths and weaknesses.

Loan Bright At the Web site of Loan Bright, an online mortgage company,
potential homebuyers can get a personalized list of lenders and available terms. At first, Loan
Bright made its money by selling the homebuyer data to high-end mortgage lenders, including
Wells Fargo Home Mortgage, Bank of America Mortgage, and Chase Home Mortgage. These
firms turned the data into leads for their sales teams. But worrisome internal issues arose. For