A Little Marketing

PESTLE Analysis
August 13, 2008, 8:08 pm
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The PESTLE (LESTEP, PEST, SLEPT whatever you prefer to call it) is a misused tool in marketing. To be precise, the mistake is to think that PESTLE is even a tool to begin with. Because many people (especially students) will thoroughly describe all of these factors, whether they are important or not. Don’t get me wrong, I do not think that PESTLE is useless, but a lot of time can be saved if people would stop taking it literally. For example: you sell kitchen appliances and your short term goal for this year is to sell 1500 products in November and December; normally there won’t be any ecological developments that will influence your strategic plan. (Keep in mind that we have a very short term goal.) So in this case, we can completely forget about the ecological part of the analysis. Now, if there are important ecological developments that might change the outcome of your strategy, then you most certainly should include them in your analysis. My point is that PESTLE is not a necessity, and it is certainly not fixed. So don’t waste the readers time with pointless information.

There are several ways to determine whether the information you’ve found is useful or not. One is by using common sense, but that only solves the obvious. When you’re in doubt, think about the problem definition and product market combination. If the information does not relate to any of the two, then you should probably let it go. In other words, you use the problem definition and product market combination in the filtering process.

By the end of the process, you will be left with information that is relevant to your strategic plan. And that is what you will use, so if political and economical factors are the only ones worth considering in forming your plan, then that’s all you’ll include in your analysis. However, you will usually end up with three or four factors that appear to be important.

To close, I’d like to, again, add that you should mention the organisation as little as possible in your external analysis (which the PESTLE is a part of). And that’s it. PESTLE can over complicate everything with irrelevant information. By using it selectively, your external analysis and overall plan will remain clear as day.


Confrontation Matrix
August 12, 2008, 9:44 am
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What I did not mention in the SWOT article is that I always try to find an equal number of strengths, weaknesses, opportunities and threats. Specifically, I try to have a minimum of three points each, but no more than five. While it obviously is not a total disaster if you find one or two more strengths than weaknesses, I still try to equalize. It’s just the way I prefer it, and it makes certain things easier.

Even though the number of statements can vary, I recommend that you do not go totally crazy. Besides being an ineffective way of working, you’ll end up with a large number of possible strategies, which is not what you necessarily want.

Anyway, let’s move on.

First of all, there are many ways to fill in the matrix. I will not go through all of them, but I will touch on one particular method and then I’ll explain the method that I prefer.

Some marketers (even very experienced ones) use plus and minus signs to fill in the matrix, and I do not recommend this method. They will, for instance, rate Strength 1 against Opportunity 1 and give it either plus or minus signs. Obviously, the more plus signs the better. So their matrix may look something like this:

O 1 O 2
S 1 + + + – – –
S 2 +/-
S 3 + – –
W 1 – – +

The problem with this method is that people tend to give their weaknesses and threats minus signs, because they represent something that is not so good for the organisation. If this is the case, then you’ll end up focussing on strategic options that might not be best at all. In other words, weaknesses weighed against threats could also produce very useful results.

I (and many others) prefer using numbers. Given that the total number of strengths and weaknesses can vary, you cannot just stick to one system. For example, my SWOT shows three statements each. If that is the case, I’ll give the best option three points, the second best option two points and the third one point. The remaining ones get zero point. So my matrix might end up looking like this:

O 1 O 2 O 3 T 1 T 2 T 3
S 1 0 3 1 2 3 0
S 2 0 2 2 0 0 0
S 3 2 0 3 0 1 3
W 1 0 0 0 3 2 1
W 2 3 0 0 1 0 2
W 3 1 1 0 0 0 0

But in reality, my matrix will never end up looking like this, because I will not be the only one assigning points to each combination. And unless you’re a super marketing genius, I don’t recommend that you fill in this matrix by yourself; you should always consider the opinion of others. I usually work in a project group, so when we get to the confrontation matrix, we’ll just all give our opinions and assign points to the combinations and at the end we’ll count the scores. Our attentions goes out to which ever scores best. For example, in a group of four, each column will always have 24 point in total; the toal points per row can vary:

O 1 O 2 O 3 T 1 T 2 T 3
S 1 0 11 4 3 6 0
S 2 1 10 8 4 9 10
S 3 10 1 12 5 3 1
W 1 3 0 0 7 4 11
W 2 6 0 0 5 1 2
W 3 4 2 0 0 1 0

I just did this randomly, but here is my point; according to the former matrix, we should pay attention to O 1 – W 2. However, the latter tells us that we should focus on O 1 – S 3. This is the result of involving more people in the process. As I mentioned, I usually work in a group, but if you are not in that situation you can simply ask some of the employees of the organisation (which you are writing the plan for) to help you out. Which is actually something that I wish I would’ve done more often, simply because they know the organisation very well.

In this example, there are six scores of 10 and above, which leaves us with six options (though you could also choose to not count the 10’s). Usually, you’ll want to see 3 -5 options come out of your matrix. If you get more than five options you should probably go back to you internal and external analysis, and seriously consider doing it all over again. Very rarely will you get more than five options that can lead to something good.

Presumably, you know that the actual matrix goes into the enclosure. So in the chapter of the confrontation matrix, you’ll simple describe the options that you’ve found to be useful.

When you’ve done all of this, you can move on to yet another matrix, which is the strategic options matrix in the Strategic Options chapter.

SWOT Analysis
July 11, 2008, 2:11 pm
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Many people seem to believe that the SWOT analysis is something that is easy and simple to understand. However, it is misused quite often and as the SWOT and confrontation matrix are closely related, you should understand how both work.

SWOT, as you presumably know, stands for Strengths, Weaknesses, Opportunities and Threats. It is a concept that is actually relatively easy to understand. However, the application of the SWOT analysis is where most people make their mistake. When filling in the blanks, you should always remember that the strengths and weaknesses of the organisation relate to the internal analysis; opportunities and threats relate to the external analysis. Also, the statements you make in your SWOT matrix, should be backed-up by your internal and external analysis. For instance, if you claim that the wide product range of the organisation is one of its strengths, but don’t mention anything about their product range in your internal analysis, your statement will become invalid. So make sure you can always make a reference to your analysis, or you’ll be destroyed with questions your cannot answer.

Now comes an important part of this article; in relation to the confrontation matrix, you should follow these two guidelines when making any statements in your SWOT:

  1. It must relate to your product market combination
  2. It must relate to the problem definition

It makes sense when you think about it. If you sell kitchen appliances and your goal is to sell 1500 products in November and December, you can’t name global warming as one of your threats. At least not without making it sound far-fetched. In reality, if you have done proper research and your analysis is on point, you will rarely come across any problems. The reason for this is that if your research is done properly, you should have only gathered (or at least used) the information that is relative to the organisation. Similarly, if you have analyzed everything correctly, the statements you make in you SWOT will almost automatically follow the two guidelines.

One common mistake is that people tend to jump to conclusions in their SWOT analysis. For instance, if I list unnecessary high production costs as a weakness, I will naturally think of ways to lower the production costs and I might even include these solutions in my SWOT. While this seems like an obvious and harmless thing to do, we are not supposed to include possible solutions and stratety in an analysis. That is why it is called an analysis. However, if you are like me, you may find it helpful to write down your conclusions anyway but excluding them from the analysis. You could even enter an additional chapter called SWOT Conclusion and get everything of your chest. However, you will soon find out that your SWOT Conclusion is very similar to Strategic Advice or Strategic Options (depending on what you have to say). In other words, the conclusions you draw from your analysis will eventually show up in some other part of you plan, so you’ll just be repeating yourself.

So a solid SWOT analysisis based on good market research and a sound internal and external analysis. That much is obvious. Actually, a SWOT analysis should not bring any trouble to even a novice marketer. However, you should always evaluate your findings before you continue; you don’t want to start all over again near the end of your plan because your SWOT isn’t good enough. Also, I cannot stress enough about he importance of following the two guidelines when compiling your SWOT. The SWOT plays an important role in the confrontation matrix and thus, your marketing strategy and the implementation of it.

The Components of a Marketing Plan
July 11, 2008, 1:42 pm
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Many books and sites feature an outline of the components of a marketing plan. Usually they are only slighty different from one another and basically come down to the same thing. And since I’d be wasting your time if I listed every single possibility, I’ll give you a good default list to start with. It is simple and basic, and if you’d like, you can add or remove certain chapters. But if you are totally new to writing marketing plans, it is probably best to stick to this formula.

1. Foreword

2. Introduction

3. Business Domain

→ Business definition

→ Mission and Vision

→ Business objectives

4. Analysis

→ Internal analysis

→ External analysis


→ SWOT analysis

→ SWOT conclusion – optional

6. Confrontation matrix

7. Strategic Options

→ Options matrix

→ Competitive strategy

8. Cross Cultural Management – optional

9. Strategic Advice

10. Marketing Mix

11. Implementation and monitoring

12. Conclusion (and final word)