Strategic Marketing Contents Chapter 1 – Introduction ......................................................................................................................... 2 1.1 Strategic Marketing ....................................................................................................................... 2 1.2 Strategic Marketing Planning ........................................................................................................ 2 Chapter 2 – Mission, Vision & Market Definition .................................................................................... 3 2.1 Mission & Vision ............................................................................................................................ 3 2.2 Market Definition .......................................................................................................................... 3 Chapter 3 - Internal Analysis ................................................................................................................... 4 3.1 Value Strategy ............................................................................................................................... 4 3.2 Functional Analysis ........................................................................................................................ 6 3.3 Marketing Analysis ........................................................................................................................ 6 Chapter 4 - External Analysis ................................................................................................................... 6 4.1 Buyers Analysis .............................................................................................................................. 6 4.1.1 Buyers’ goals analysis ............................................................................................................. 6 4.1.2 Segmentation ......................................................................................................................... 6 4.1.3 Customer needs & perceptions .............................................................................................. 7 4.1.4 Brand equity ........................................................................................................................... 7 4.2 Industry Analysis............................................................................................................................ 8 4.2.1 Macro-economic factors ........................................................................................................ 8 4.2.2 Aggregate market factors ....................................................................................................... 8 4.2.3 Industry factors ...................................................................................................................... 9 4.2.4 Market attractiveness .......................................................................................................... 10 4.3 Competitor Analysis .................................................................................................................... 10 4.4 Distribution Analysis .................................................................................................................... 12 4.4.1 Macro level ........................................................................................................................... 12 4.4.2 Meso level ............................................................................................................................ 12 4.4.3 Micro level ............................................................................................................................ 12 4.5 Supplier Analysis.......................................................................................................................... 12 Chapter 5 – SWOT ................................................................................................................................. 13 Chapter 6 – Goals & Strategies.............................................................................................................. 13 6.1 Organisational Goals & Strategies ............................................................................................... 13 6.2 Marketing Goals & Strategies ...................................................................................................... 14 6.3 Market Strategies ........................................................................................................................ 14 Chapter 1 – Introduction 1.1 Strategic Marketing Key questions in strategic marketing: o Where are we now? (= analysis) o Where do we want to go? (= ambition or BHAG = Big Hairy Audacious Goal) o How do we get there? (= strategy) Goal = create return on business Key components: o Vision & mission: who are we and what do we do? o Goals/objectives: what do we want to achieve on the long term? o Strategies: how can we achieve these goals/objectives? o Policies: in which way do we want to realise these strategies? Strategic processes: Long term Strategic Market Positioning Strategic Effectiveness External Internal Tactical Marketing Efforts Tactical Resource Management Short term 1.2 Strategic Marketing Planning Marketing planning process: Organisational planning levels: 1. Corporate level 2. Strategic Business Unit (SBU)/Market level 3. Product level 4. Marketing mix level (product, place, price, promotion) Chapter 2 – Mission, Vision & Market Definition = indicates the organisation’s position in its working field & its directions for the future 2.1 Mission & Vision Mission statement: your reason for existence; what you do (= products & services), how you do it (= differentiation) and for whom (= target markets) o E.g. Harley Davidson: We fulfil dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments. o Social mission: shows the organisation’s values & relationship with all stakeholders Vision: what the organisation wants to be on the long term (= source of inspiration) o E.g. Avon cosmetics: To be the company that best understands and satisfies the product, service and self-fulfilment needs of women – globally. 2.2 Market Definition Abell diagram: which markets are we in? o Customer needs: WHAT customers need it for (e.g. people transport) o Technologies: HOW those needs can be fulfilled; products & services (e.g. sedan car) o Customer segment: WHO uses the technologies to fulfil the needs (e.g. youngsters) Ansoff matrix (with links to the Abell diagram above): Current products New products Current markets Market penetration strategy Product development strategy (link customer needs) (link technologies) New markets Market development strategy Diversification strategy (link customer segments) Market definition: o Analyse existing market (internal & external analysis) o Analyse desired market o Define competitive set of the company (different levels of competition): Product type competition (e.g. Pepsi Max vs. Coke Zero) Product category competition (e.g. soft drinks) Generic competition (e.g. drinks) Budget competition (e.g. food, drinks, amusement…) Chapter 3 - Internal Analysis 3.1 Value Strategy Value strategy: o Porter’s generic strategies: Overall cost leadership strategy: lower price than competitors, high market share, economies of scale, cheap infrastructure, efficiency (outsourcing, justin-time management…) (e.g. IKEA) Differentiation strategy: differentiated product with superior performance, quality leadership, customer perceptions are important, innovation, brand management, high service levels (e.g. Apple) Focus strategy: specialise in one or more market segments (geographical, technological, demographical…), differentiation (e.g. Rolex, Amazon) Competitive advantage Competitive scope o Differentiation Low cost Broad (Industry) Differentiation strategy Overall cost leadership strategy Narrow (Segments) Focused differentiation Focused cost leadership Treacy & Wiersema: Operational excellence (link to overall cost leadership strategy) Product leadership (link to differentiation strategy) Customer intimacy (link to focus strategy) Balanced scorecard (BSC): to evaluate the implementation of strategies 1. Define critical success factors to follow up the strategies in 4 fields: Financial perspective (link operational excellence) Customer perspective (link customer intimacy & product leadership) Internal processes (link operational excellence) Innovation & learning (link product leadership) 2. Choose measurements for these success factors 3. Evaluate the scores & take conclusions Example: Critical success factors Measurements Financial perspective Market leadership Market share Shareholders Value Creation EVA Attracting new customers Turnover new customers Customer loyalty Turnover existing customers Customer perspective Customer satisfaction Number of complaints One step solutions % turnover one-step solutions Quality of service % orders delivered on time Internal processes Account management % turnover from account management Efficiency of production Variable costs/fixed costs Commercial power Number of new prospects Number of offers made Success ratio offers Innovation and learning Knowledge and experience Employee seniority Employee satisfaction Staff turnover Product innovation % turnover of products younger than 3 years R&D investments Budget R&D/total budget o Evaluation of the scores of different aspects can show which levels the company has for the different value strategies (0 = no effect; + = some effect; ++ = high effect Value strategy Financial perspective Customer perspective Internal processes Innovation and learning Product + ++ 0 ++ leadership Operational ++ + ++ 0 excellence Customer + ++ 0 + intimacy Value strategy model: 3 arrows indicate on which level a company is for the 3 different strategies (Leadership level = best in the industry; threshold level = average): Elevator pitch/speech/statement = summary to quickly define a product/organisation/… and its value proposition (should be possible to say during an elevator ride)