Strategic Marketing Management:
Strategy Development and Role of CRM
Presented by
D.M.Ravi Dissanayake
B.B.Mgt Marketing(Special) Kelaniya,,MBA (PIM;Sri J’pura) ,Dip.Mktg (SLIM)
Senior Lecturer
Department of Marketing Mgt,University of Kelnaiya
dmravidissa@gmail.com , 0716833615
MULTIDIVISIONAL – SBU STRUCTURE
Corporate Strategy
Corporate
Portfolio Strategy
Functional Strategy
07-Feb-14
SBU 1
Functions
SBU 2
Functions
Functions
Functions
2
Analysis of SBU
• What is SBU???
• Why SBU should be analyzed???
Formulate generic strategies
• Porter’s view on competitive advantages
theory
• Cost leadership and differentiation
• Base on these options , initially he suggested
the concept of 3 generic model.
3 generic options
• Cost leadership: Being the lowest cost manufacturer,
a company could maintain its strategic position
against competitors. (customer enjoys price
advantages)
• Differentiation: company could do the
differentiation for its products and service thereby
customers love the brand difference against
competitive offerings.
• Focus: Company operates in a selected market rather
focus for broad market( it may either cost ledership
approach or differentiation)
Present day practices of generic
strategies
• Discussion
The Five Competitive Strategies
There are countless variations of competitive strategies that
companies employ, because each has a different internal and
industry environment
The biggest differences can be summarized as:


Is the company’s target market broad or narrow?
Is the company trying to be a low cost provider, or is it
competing by product differentiation?
Important Note:
Role of CRM in strategy
• Relationship marketing as an integral part of holistic
marketing
• Use CRM as a tool for market penetration (
discussion of examples)
• Use CRM as a differentiation tool ( connect to 3
generic strategies)
• Use CRM as a functional strategy (connect to overall
marketing strategies: marketing mix)
• Use CRM as a tactical strategy( connect to sales
promotion)
The Five Generic Competitive Strategies
Types of Differentiation











Unique taste – Dr. Pepper
Multiple features – Microsoft Windows and Office
Wide selection and one-stop shopping – Home Depot, Amazon.com
Superior service - FedEx, Ritz-Carlton
Spare parts availability – Caterpillar
Engineering design and performance – Mercedes, BMW
Prestige – Rolex
Product reliability – Johnson & Johnson
Quality manufacture – Michelin, Toyota
Technological leadership – 3M Corporation
Top-of-line image – Ralph Lauren, Starbucks, Grey Poupon
Best-Cost Provider Strategies

Combine a strategic emphasis on low-cost with a strategic
emphasis on differentiation
• Make an upscale product at a lower cost
• Give customers more value for the money
Objectives

Be the low-cost provider of a product with good-to-excellent
product attributes, then use cost advantage to underprice
comparable brands
When Does a Best-Cost
Provider Strategy Work Best?


Where buyer diversity makes
product differentiation the norm and
Where many buyers are also
sensitive to price and value
Focus / Niche Strategies

Concentrate attention on a narrow piece of the total market
Objective

Serve niche buyers better than rivals
Keys to Success


Choose a market niche where buyers
have distinctive preferences, special
requirements, or unique needs
Develop unique capabilities to serve
needs of target buyer segment
Focus / Niche Strategies
and Competitive Advantage
Approach 1

Achieve lower costs than rivals in
serving a well-defined buyer segment –
Focused low-cost strategy
Approach 2

Offer a product appealing to unique
preferences of a well-defined buyer segment –
Focused differentiation strategy
Growth strategy formulation
ANSOFF MATRIX
Market
Existing
New
Existing
Market
Penetration
Market
Development
New
Product
Development
Diversification
Product
07-Feb-14
16
Growth strategy formulation
• Penetration
Growth strategy formulation
• NPD and Market Development
Related vs. Unrelated Diversification
Related Diversification
Involves diversifying into
businesses whose value chains
possess competitively valuable
“strategic fits” with value
chain(s) of firm’s present
business(es)
Unrelated Diversification
Involves diversifying into
businesses with no
competitively valuable value
chain match-ups or strategic
fits with firm’s present
business(es)