Situational Analysis in Marketing: Examples, Definition & Format

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  • 0:00 What Is Situational Analysis?
  • 0:11 Why Do a Situational Analysis?
  • 0:28 What Should Be Included?
  • 1:55 Formatting Your Analysis
  • 2:43 Lesson Summary
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Lesson Transcript
Instructor: Carol Woods

Carol has taught college Finance, Accounting, Management and Business courses and has a MBA in Finance.

What is a situational analysis? Why would you prepare one? In this lesson, we'll discuss what a situational analysis is, what it does, and how to prepare one.

What Is Situational Analysis in Marketing?

A situational analysis is a critical review of your current business situation. It serves as a starting point for your marketing plan.

Why Do a Situational Analysis?

Any worthwhile project begins with a careful analysis of your starting point, and marketing is no exception. You need to be clear and realistic about your current product, market, opportunities, and challenges so that you can devise a clear path from your current to your desired situation.

What Should Be Included?

To put together a situational analysis, you'll need to gather information about your product and the market you sell it in, including its size, the competitors, and the customers who purchase it. There are some questions you can ask to help you organize your information.

Questions to ask related to your product include:

  • What is your company's current product(s)?
  • What is their price point relative to competitors?
  • What is your product's market share?
  • What position in the market does your product take? High quality? Lowest price?
  • Where do you purchase your product or its components? Are there other options for sourcing?
  • How do you get your product to the buyer?

Questions to ask related to your market include:

  • What is the market for your product? Define it in terms of size in dollars.
  • What growth do you anticipate in the market?
  • What factors do you see impacting your market? Are there anticipated changes in where people live, average age of the population, environmental regulations, political climate, or other factors that may lead to a change in the size of your market?

Questions to ask related to your customer include:

  • Who buys your products now? Give a detailed picture of your customer, including demographics like age, sex, race, income, and reason they are purchasing the product.

Questions to ask related to your competition include:

  • What other options do your customers have to meet their need?
  • How do those companies compare to yours in terms of their size, age, product range, or quality of product?

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