B A 303 SP09 EX2
MARKETING STRATEGY
Strategic Planning
Internal: Organization’s own goals and capabilities
External: Marketing opportunity o Strategy: “A MATCHING PROCESS” between internal and external
Steps in Strategic Planning (ABC Corporate, D Business unit / production / marketing level)
A.
Defining company mission
Mission Statement: statement of org’s purpose o What’s our business, customer, customer values, competitors, and what SHOULD our business become? o Must FIT TO the strategy (ex: Nike/Under Armor differentiation) o Good ones are: market-oriented, realistic, specific, motivating, illustrative of distinctive competencies (like Nike/UA or Target’s
Fun / Walmart’s Value)
B.
Setting Company Objectives & Goals
- Mission statement calls for MEASURABLE GOALS to implement
C.
Designing portfolio
Choose which businesses (“line”) to enter/exit/to what extent
Businesses may be called: Strategic Business Units (SBU’s), divisions, markets, product lines, etc.
BCG Growth-Share Matrix (draw from p40, book here:) o Relative market share = strength by definition (how much of
“the pie” is yours?) o Get the $$$ from the “cash cow”
 Invest to “?” because low market share now but high potential o As market matures, starts  $$$ o Get rid of your dogs
 Criticism: Disney KEEPS its dogs (old movies other products depend on)
Product/Market Expansion Grid (aka ANSOFT Matrix)
Existing Products New Products
Existing Markets Market penetration
New Markets Market development
Product development
Diversification
*** Used to identify GROWTH opportunities ***

Market Penetration o Strategy: sell more to current customers with current products o Use: any of the 4 P’s
 Ex: Starbucks uses promotions like free coffee on election day
Market Development o Strategy: New markets (geographically or demographically) for current products
Product Development o Strategy: Modified/new products to current markets
 Ex: Starbucks sells instant coffee
Diversification o New businesses in new markets with new products
 Ex: NASCAR expanding to breakfast cereal
D.
Formulation of Strategies for Marketing/Other Functions o Steps: What do we know? What do we want to accomplish? How will we do it?
Marketing Plan
Executive Summary (condensed for upper mgt)
Current Marketing Situation (product, competitors, SCM)
SWOT Analysis (Strengths / Weakness / Opportunities / Threats)
Objectives
Marketing Strategy o STP: Segmentation, Targeting, Positioning o 4 P’s of Marketing Mix
Action Programs
Budgets
Controls
4 P’s / 4 C’s
Product  Solution
Price
Place


Cost
Convenience
Promotion
SWOT Analysis
 Communication
Positive
Internal
External
Strengths
Internal capabilities to reach objectives
Opportunities
External factors to use to advantage
Negative
Weaknesses
Internal limitations that hinder objectives
Diversification
External factors that are challenges

Marketing Control
Evaluate results of marketing strategy/plan
Measurable goals
Corrective action to close gap in goal/performance
Marketing audits from a 3 rd party
Marketing Implementation
Execution is MOST DIFFICULT PART
Successful execution dependent on o Company culture o Employee’s shared beliefs/values o Org. structure o Reward system
Implementation often ends up being about RELATIONSHIPS/LUCK rather than the PLANS
SEGMENTATION, TARGETTING & POSITIONING
Segmentation: divide into groups that are similar to itself
Targeting: Pick segment that makes sense for your product
Positioning: Move your company to strike, develop marketing mix (4 P’s), create
IMPRESSION TO CONSUMERS
Segmentation
Divide into distinct groups… o With similar but distinct needs, characteristics, and behaviors o That respond similarly to marketing efforts
 So they each have their own marketing mix (4 P’s)
Geographic Segmentation o Divide a market into different geographic units
 Ex: McDonald’s is different across the world
Demographic Segmentation o Divide a market based on demographics (race, age, gender, family size, family life cyle, race, generation) o COMMON because EASY TO MEASURE!
 Ex: Gap (baby, maternity, kids, regular)
Psychographic Segmentation o Dividing a market based on social class, lifestyle, or personality
 Based on aspirations, things you want to show off
 Ex: American Express “My life, my card” with celebrities
Behavioral Segmentation o Based on behaviors like:
 Benefits sought (feel good about myself/taste great)
 Usage occasion
 User status (new? Longtime user?)
 Usage rate (how often used?)
 Loyalty status

o Segmentation on how you ACT o Ex: Diet Coke as morning drink
*** Be able to take an example and name the type of segmentation ***
Intermarket Segmentation o Finds similarities BETWEEN markets (a little counter-intuitive) o Ex: Ikea finds the same “kind of consumer” across the entire world
Requirements for successful segmentation o Measurable o Accessible (can be reached and served) o Substantial (profitable) o Differentiable segments o Actionable (our company can market to these segments)
Targetting (picking the segment that works for your company)
Evaluating segments o Internal: does this segment work for our capabilities o External: how big is it/growth potential? Competitive climate?
Undifferentiated  Differentiated (segmented)  Concentrated (niche) 
Micromarketing (local/indiv)
Undifferentiated: bad idea except commodities
Differentiated: Separate designs for several separate segments (ex: GAP lines)
Concentrated (niche): Dominate your “small pond”
Micromarketing: Custom marketed to individual locations (state college restaurants have football themes)
Be able to recognize a good positioning statement
Positioning
“Products are created in a factory but BRANDS ARE CREATED IN THE MIND”
Competitive Advantage
Ex: Sears leveraged competitive advantage to sell clothes as hardware
Product
Services
Channels
People
Image
Differentiation
Vertical: Ritz Carlton and Marriot Courtyard both from Marriot
Horizontal: just different preferences
Positioning Statement: summarizes company/brand position
Slogans come FROM p.s. o “Just do it” is a SLOGAN not a p.s.
“To [target segment/need] our [brand] is [concept] that [differentiation]” o TO / OUR / IS / THAT

Internal statement to unify marketing department
*** Position Statement  Slogan  4 P’s to implement it ***
PRODUCT
Core Benefit: tangible/intangible benefits driven by CONSUMER BEHAVIOR
Actual Product: Brand, features, packaging
Augmented Product: Service, warranty, installation
*** Products must fulfill a Maslow need ***
Types of Consumer Products (by what drives purchase)
Convenience: groceries
Shopping: you’d compare prices (jackets)
Specialty: rolex watch, fine china
Unsought: blood donation, charities
Other “Products” – factory tours, organizations, people, places, ideas
Convenience Shopping Specialty Unsought
Low product awareness
Buying
Behavior
Frequent Less frequently, some comparison
Price
Distribution
Low price
Selective
Promotion Ads
P214 criteria for brand name selection
Three Levels of Product Decisions
High price
Salesman
Varies
Varies
1.
Individual product decisions
2.
Product line decisions a.
Length: Number of ITEMS PER LINE
3.
Product mix decisions (all of the lines = mix) a.
Width: number of LINES b.
Depth: number of VERSIONS within a line
Performance (quality – Ferrari) vs Conformance (consistency – McD, Toyota)
BRANDING
Law of the Word – own a word in consumer’s mind
Brand: identity, promise, TRUST
Brand Equity: positive effect that brand has on consumer (why they pay more)
Brand Positioning (based on product attributes, benefits, beliefs and values)
Must PROTECT your brand name (band-aids)
-

Law of Shape: best shape is HORIZONTAL
Brand Development
Existing Prod
Existing
Brand
New Brand
Line extension
Multibrands
Line Extension
new items WITHIN CURRENT product category
ex: new flavors , colors (Vanilla coke)
Brand Extension
New Product
Brand extension
New brands
Use OLD BRAND to launch NEW PRODUCT
ex: Snoop Dog pet products
Multibranding
NEW BRAND for SAME PRODUCT
Ex : Tide has brands for each purpose (white, colors, etc.)
New Brands
NEW BRAND for NEW PRODUCT
DIVORCE your old brand
Ex: Toyota uses Scion to enter luxury market
(((New brand is for a new category, but multibranding is same category, very confusing, NOT ON EXAM)))
Cobranding – Use two different companies in different fields to leverage brand equity together (ex: Nike and Apple iPod sport kit)
Goods-Services Continuum
Pure Goods: Tangible (timber)
Mixed: Restaurant meal
Pure Services: Intangible (investment management)
Four Service Characteristics
Intangibility: can’t use any sense on product before purchase
Inseparability: can’t be separated from provider
Variability: quality depends on who, what, when, where
Perishability: can’t be stored
NEW PRODUCT DEVELOPMENT (NPD) – narrow down ideas exponentially
1. Idea Generation: SYSTEMATIC search
Internal: company employees at ALL levels
External: EVERYONE in supply chain
2. Idea Screening: reduce number of ideas

- Look at product, target market, competition
- Estimate costs/returns
3a. Concept Development: put it in the CONSUMER’S TERMS
A [describe product] that provides [benefit]
3b. Concept Testing
Do consumers get it?
4. Marketing Strategy Development
- Target market, ST & LT objectives, launch tactics
- We’re just doing everything we talked about in B A 303
5. Business Analysis
- Look at risks, costs, profit projections  VIABLE??
6. Product Development
- PROTOTYPE mockup
- Heavier INVESTMENT, make it work, test it
7. Test Marketing
8. Commercialization
- LAUNCH IT! When and where?
- Market rollout plan – where are we going next
PRODUCT LIFE CYCLE
exception: niches can help avoid decline
1.
Introduction – product launched a.
Negative profits b.
OBJ – awareness
2.
Growth – selling more a.
Getting profitable b.
OBJ – market share
3.
Maturity – sales level off a.
Costs low, profitable b.
OBJ – DEFEND market share c.
How to grow? i.
Modify market (Sudoku to videogamers), product (Gilette’s extra blades), or mix (promotions)
4.
Decline – sales fall a.
Demand, sales, price falls b.
OBJ – reduce costs, milk it, look to restart PLC or get out
Trajectories
Styles – basic style (rap, rock), 2 humps
Fashion – popular style (J Crew, big hair in 80’s), 1 hump
Fad – flash-in-the-pan (pogs), spike
PLC is not really that clean IRL, hard to define stages, forecast length of stages, etc.
Strategy (ch2), STP (ch6), Product (intro and branding ch7), NPD & PLC (ch8)