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- 1. MARKETING STRATEGY
- 2. Strategic Planning • Strategic Planning – The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. – It involves defining a clear company mission, setting supporting objectives, desinging a sound business portfolio, and coordinating functional strategies.
- 3. Steps in Strategic Planning Defining the company mission Setting company objectives and goals Designing the business portfolio Planning marketing and other functional strategies Corporate Level Business unit, product and market level
- 4. Steps in Strategic Planning • What is our business? • Who is our customer? • What do consumers value? • What should our business be? • Mission Statement – A statement of the organization’s purpose – what it wants to accomplish in the larger environment • Example – Hill’s Pet Nutrition does more than sell pet food. Its mission is “to help enrich and lenghten the special relationships between people and their pets”. • Missions should be realistic, be specific, fit the market environment, based on its distinctive competencies, be motivating, be market oriented. • American Online: Product oriented: We provide online auctions. • Market oriented: We create customer connectivity, anytime, anywhere
- 5. Mission • Focus on customer needs • Realistic • Specific • Fit the market environment • Base on distinctive competencies • Be motivating
- 6. Setting Company Objectives and Goals • Each manager should have objectives and be responsible for reaching them. • Possible objectives – To creat environmentally better products – To get the products to market faster at lower costs – To improve profits – To improve the market share – To enter new markets – Etc.
- 7. Desining the Business Portfolio • Business portfolio – The collection of businesses and products that make up the company – The best business portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment. – Two steps • Analyze its current business portfolio • Shape the future portfolio
- 8. Analyzing the Current Business Portfolio • Portfolio analysis – A tool by which management identifies and evaluates the various businesses making up the company • Steps to identify the key businesses – To identify the key businesses that make up the company • Stragic business : A unit of the company that a separate mission and objectives and that can be planned independently from other company business – To assess the atractiveness of various SBUS – SBU: a unit of the company that has a seperate mission and objectives and that can be planned independently from other company businesses – SBU: a company division, a product line, a single product or brand
- 9. Portfolio Planning Method • Growth-share matrix (Boston Consulting Group’s) – A portfolio-planning method that evaluates a company’s strategic business units in terms of their market growth rate and relative market share. – SBUs are classified as stars, cash cows, question marks, or dogs
- 10. STAR QUESTION MARK CASH COW DOG Growth-share matrix Market growth rate Low High Relative Market Share High Low
- 11. Growth-share matrix • Stars – High-growth, high-share business or products – Need heavy investment to finance rapid growth – Eventually their growth will slow down, and they will turn into cash cows • Cash cows – Low-growth, high-share businesses or products – Produce a lot of cash – Supports other SBUs that need investment • Question marks – Low-share business units in high-growth markets – Require a lot of cash – Management has to think hard about which question marks it should try to build into stars and which should be phased out. • Dogs – Low-growth, low-share, businesses or products – Genarate enough cash – Do not promise
- 12. The product/market expansion grid Existing products New products Existing markets Market penetration Product development New markets Market development Diversification
- 13. Possible strategies • Invest to build its share • Invest to hold • Harvest • Divest
- 14. The product/market expansion grid Existing products New products Existing markets Market penetration Product development New markets Market development Diversification
- 15. The product/market expansion grid • A portfolio planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification. • Market penetration – A strategy for company growth by increasing sales of current products to current market segments without changing the product • Market development – A strategy for company growth by identifying and developing new market segments for current company products • Product development – A strategy for company growth by offering modified or new products to current market segments • Diversification – A strategy for company through starting up or acquiring business outside the company’s current products and markets • Downsizing – Reducing the business portfolio by eliminating produtcs or business units that are not profitable or that no longer fit the company’s overall strategy
- 16. Partnership • Working closely with partners in other company departments and outside the company to jointly bring greater value to customers • Marketing provides – A guiding philisophy – Inputs to strategic planning – Strategies for reaching the unit’s objectives • Value chain – The series of departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products • A company’s value chain is only as strong as its weakest link. • A company’s different functions should work in harmony to produce value for consumers
- 17. Value-delivery network • The network made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system • Competition takes place between the entire value-delivery networks created by these competitors not between individual competitors.
- 18. Marketing Strategy and the Marketing Mix • Marketing strategy – The marketing logic by which the business unit hopes to achieve its marketing objectives – The company designs an integrated marketing mix made up of factors under its control (product, price, place, promotion) • Marketing process – The process of • (1) analyzing marketing opportunities, • (2) selecting target markets, • (3) developing the marketing mix, and • (4) managing the marketing effort • Consumers stand in the center.
- 19. Marketing Strategy and the Marketing Mix • Companies must be customer centered. • Companies know that they cannot profitably serve all consumers in a given market. • Market segment – A group of consumers who respond in a similar way to a given set of marketing efforts • Market segmentation – Dividing a market into distinct groups of buyers who have distinct needs, charecteristics, or behavior and who might require separate products or marketing mixes • Differentiation – Differentiating the marketing offering to create superior customer value • Target marketing – The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter • Market positioning – Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
- 20. Marketing Strategies for Competitive Advantage • The company must do a better job than competitors of satisfying target consumers. • Designing competitive marketing strategies begins with thorough competitor analysis. • The competitive marketing strategy a company adopts depends on its industry position. – Market leader • Microsoft – Market challenger • Aggressively attacks competitors (Kola Turka) – Market followers • Follow competitors – Market nicher • They specialize.
- 21. Marketing Mix • The set of controllable tactical marketing tools- product, price, place, and promotion- that the firm blends to produce the response it wants in the target market.
- 22. Marketing Mix (Four P’S) PRODUCT Variety Quality Design Features Brand name Packaging services PROMOTION Advertising Personal selling Sales promotion Public relations PLACE Channels Coverage Assortments Locations Inventory Transportation logistics PRICE List price Discounts Allowances Payment period Credit terms Target customers Intended positioning
- 23. Managing the Marketing Effort • Marketing Analysis – Managing the marketing function begins with a complete analysis of the company’s situation. – SWOT analysis • Marketing Planning – The marketing logic by which the business unit hopes to achieve its marketing objectives • Marketing Implementation – The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives • Marketing Control – The process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved.
Is company growth by increasing sales of current products to current market segments without changing the product?
Market penetration is a growth strategy increasing sales to current market segments without changing the product.
Is a growth strategy that offers new or modified products to existing market segments?
Product Development – Focuses on introducing new products to an existing market. Diversification – The concept of entering a new market with altogether new products.
What is a strategy for company growth by identifying and developing new market segments for current company products?
A market development strategy is a growth strategy that a business adopts to help introduce its existing products in a new market. This strategy is usually used by companies when identifying and developing new opportunities to help sell their products in the markets they had not previously explored.
What is term for a business activity done by companies offering modified or new products to current market segments?
Product Development – Company growth by offering modified or new products to current market segments. Diversification – Company growth through starting up or acquiring businesses outside of the company's current products and markets.