BUAD 307 —MARKETING FUNDAMENTALS

• Identify
– The scope of strategic decisions
– Tradeoffs that firms must make in their decisions
– Cumulative and “spillover” effects of strategic decisions and the need for consistency
– The need for industry balance and firm unit cash flow balance
OVERVIEW AND STRATEGY
BUAD 307 Perner
2

• Plan
– To achieve desired objectives (e.g., profit, market share)
– Based on available resources (e.g., financial, patents, trademarks, people, brand name/image , distribution channels)
– Subject to choices made
(e.g., willingness to take risk, short run vs. long run goals)
OVERVIEW AND STRATEGY
BUAD 307 Perner
3

MARKETING STRATEGY
RESOURCES ENVIRONMENT
EXPERIMENTATION/
EXPRIENCE
BUAD 307
STRATEGY
OVERVIEW AND STRATEGY
PRIORITIES/
OPPORTUNITY
COSTS
Perner
4

Market Balance
• Different firms should attempt to offer different forms of value, appealing to different customer segments — otherwise, competition is likely to degenerate into price competition
BUAD 307
A WELL BALANCED
GADGET INDUSTRY
EASYTECH, LTD.
EASE OF
USE
TROJAN CREATIONS,
INC.
PERFORMANCE
MICROGEEKS, LTD.
SMALL
SIZE
OVERVIEW AND STRATEGY
BRUIN PRIDE, INC.
LOW
PRICE
PATIENCE-IS-STUPID,
INC.
SPEED
Perner
5

• Broad, fundamental capabilities—not readily imitated by competitors — in which an organization excels
• Deployable across a variety of products and situations
– E.g., stylish design of electronics (Apple)
– E.g., economies of scale and broad assortment of online merchandise
(Amazon)
OVERVIEW AND STRATEGY
BUAD 307 Perner
6

Examples of Objectives
• Profit level
• Profit growth
• Total unit sales
• Growth in unit sales
• Growth in dollar sales
• Total dollar sales
• Brand perception by customers
– Value
– Quality
– Innovativeness
– Reliability
OVERVIEW AND STRATEGY
BUAD 307
• Brand name recognition
• Brand name recognition by product category
• Product availability
– Availability across retailers and other distributors
– Store placement
•
Percentage of products sold at full price
• Percentage of revenue from new products
• Affordability of product
• Elimination of unsafe product ingredients
Perner
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Strengths, Weaknesses, Opportunities, and
Threats (SWOT) Analysis
INTERNAL
TO FIRM
STRENGTHS
WEAKNESSES
EXTERNAL
TO FIRM
OPPORTUNITIES
THREATS
OVERVIEW AND STRATEGY
BUAD 307
STRATEGY
Perner
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• Deciding where to concentrate resources
• Using strengths and opportunities to compensate for weaknesses and threats
BUAD 307
OVERVIEW AND STRATEGY
Perner
9

• Strengths
– Market leading/dominating position
– Strong R&D
– Strong demand for iPhone
• Opportunities
– New product introductions
– Increasing global demand for smart phones
• Weaknesses
– Legal problems (loss of several patent lawsuits)
– Large debt
– Dependence on the legacy of
Steve Jobs for brand image
Source: “Apple,” Global Markets Direct SWOT
Reports (from Business Essentials), June 1,
2015
• Threats
– Android devices (free operating system)
– Counterfeiting and industrial espionage
– Competition—both on low cost and on innovative features
– Declining desktop and laptop markets in developed countries
OVERVIEW AND STRATEGY
BUAD 307 Perner
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