Marketing Strategy: Introduction
• What is strategy?
• How does marketing contribute?
- The marketing concept
- Market orientation
Marketing Strategy: Introduction
• What is strategy?
A fundamental pattern of present and
planned objectives, resource deployments,
and interactions of an organization with
markets, competitors, and other
environmental factors
“…the search for a favourable
competitive position…”
(Porter, ‘85)
Marketing Strategy: Introduction
• Corporate strategy
-organizations scope and resource deployment
• Business-level strategy
-competitive strategy of a business unit in its
industry
• Marketing strategy
-targeting, segmenting and positioning for a
product. Figuring out the marketing mix
Marketing Strategy: Introduction
• What is the marketing concept?
“…determining the needs and wants of target
markets and delivering the desired satisfactions
more effectively and efficiently than competitor’s
do.”
(Kotler et al, ‘96)
Marketing Strategy: Introduction
What do marketers mean when they say
their firms are market oriented?
Marketing Strategy: Introduction
What are advantages and disadvantages of
market orientation?
Why do some firms lack orientation towards
the market ?
Marketing Strategy: Introduction
Market oriented in not marketing oriented
- information on all important buying influences
permeates every corporate function
-Strategic/tactical decisions are made interfunctionally and inter-divisionally
-divisions and functions make well-coordinated
decisions and execute them with commitment
Marketing Strategy: Introduction
Which should come first – the customer
need or the product idea?
- Marketing myopia
Discussion questions
Q.1 : In defining their strategies, should companies
pursue broadly or narrowly defined missions?
Q. 2: What are the advantages of each approach?
Characteristics of Effective
Corporate Mission Statements
Functional
Based on
customer needs
Broad
Specific
Transportation
business
Long-distance
transportation for largevolume producers of lowvalue, low-density products
Railroad business Long-haul, coal carrying
Physical
railroad
Based on existing
products or
technology
Ansoff Strategies
Current Markets
Current Products
Market penetration
strategy
New Products
Product development
strategy
New Markets
Market development
strategy
Diversification
strategy
The BCG Growth Share Matrix
High
Stars
Question marks
5
Market
growth
rate
10%
(in
constant
dollars)
4
6
Cash cows
9
2
1
11
Dogs
12
3
7
8
10
13
Low
10
1
Relative market share
Source: Adapted from Barry Hedley, “Strategy and the Business Portfolio,” Long Range Planning 10 (February 1977).
0.1
Growth rate (cash use)
Cash Flows Across Businesses in the
BCG Portfolio Model
High
Question
marks
Stars
Cash
Flows
Low
Cash cows
High
Dogs
Relative market share
Low
Desired direction of business development
Business’s
competitive position
The GE Nine-Cell Matrix
Industry attractiveness
High
Medium
Low
High
1
1
2
Medium
1
2
3
Low
2
3
3
1 Invest/grow
2 Selective investment/ maintain position
3 Harvest/divest