Marketing Strategy
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ROAD MAP: Previewing the Concepts
• Companywide strategic planning:
– Four steps.
• business portfolios and growth strategies.
– How marketing works with its partners to create and deliver
customer value: Customer Relationships.
• Marketing strategy and mix:
– Forces that influence it.
• Marketing management functions:
– Elements of a marketing plan.
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ROAD MAP:
• Companywide strategic planning:
– Four steps.
• business portfolios and growth strategies.
– How marketing works with its partners to create and
deliver customer value: Customer Relationships.
• Marketing strategy and mix:
– Forces that influence it.
• Marketing management functions:
– Elements of a marketing plan.
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2-3
Strategic Planning
Process of Developing and Maintaining a Strategic Fit Between
the Organization’s Goals and Capabilities and Its Changing
Marketing Opportunities.
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Step 1
The Mission Statement
• A statement of the organization’s purpose
– What it wants to accomplish in the larger environment
• Should be market oriented and defined in terms of customer needs.
What is our Business?
Who is the Customer?
What do Consumers Value?
What Should our Business Be?
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Mission Statements Should:
Be Realistic
Be Specific
Fit the Market Environment
Be Based on Distinctive Competencies
Be Motivating
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Good Mission Statements
Focus on limited number of goals
Stress major policies and values
Define major competitive spheres
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GE’s breakthroughs in the process of desalination
crosses multiple competitive spheres
By 2015, twothirds of the
world will be
water-stressed.
Desalination
plants like this
one help to relieve
water shortages.
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Motorola
“The purpose of Motorola is to honorably
serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees and
shareholders to achieve their personal
objectives.”
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Product Orientation vs. Market Orientation
Company
Product
Market
Missouri-Pacific
Railroad
We run a railroad
We are a peopleand-goods mover
Xerox
We make copying
equipment
We improve office
productivity
Standard Oil
We sell gasoline
We supply energy
Columbia Pictures
We make movies
We entertain
people
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Step 2
Setting Company Objectives and Goals
Company’s Mission -> Objectives
Business Objectives
Marketing Objectives:
Marketing Strategies and Programs
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Step 3
Business Portfolio
• Collection of businesses and products that
make up the company.
• The company must:
– analyze its current business portfolio:
• Strategic Business Units (SBUs),
– decide which SBUs should receive more, less,
or no investment,
– develop growth strategies for growth or
downsizing.
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Characteristics of SBUs
• It is a single business or collection of
related businesses
• It has its own set of competitors
• It has a leader responsible for
– Strategic planning
– Profitability
– Efficiency
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Analyzing Current SBU’s:
BCG Growth-Share Matrix
Relative Market Share
High
Low
Question Marks
Low
Market Growth Rate
High
Stars
• High growth & share
• May need heavy
investment to grow
• Eventually, growth will slow
Cash Cows
• Low growth, high share
• Established, successful
SBU’s
• Produce cash
?
• Low share SBUs in high growth
markets
• Require cash to hold
market share
• Build into Stars or phase out
Dogs
• Low growth & share
• Generate cash to sustain self
• Do not promise to be cash
sources
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Problems With Matrix Approaches
Can be Difficult, Time Consuming, Costly to Implement
Difficult to Define SBUs & Measure Market Share/Growth
Focus on Current Businesses, Not Future Planning
Can Place too Much Emphasis on Growth
Can Lead to Poorly Planned Diversification
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Ansoff’s Product-Market Expansion Grid
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Growth at Starbucks
To maintain its phenomenal growth in an increasingly overcaffeinated marketplace, Starbucks has brewed up an ambitious,
multi-pronged growth strategy.
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Starbucks Product/Market Expansion Grid
• Market Penetration: make more sales to current customers without
changing products.
– How? Add new stores in current market areas; improve advertising, prices,
menu, service.
• Market Development: identify and develop new markets for current
products.
– How? Review new demographic (seniors/ethnic consumers) or geographic
(Asian, European, Australian, & South American) markets.
• Product Development: offering modified or new products to current
markets.
– How? Add food offerings, sell coffee in supermarkets, co-brand products.
• Diversification: start up or buy businesses outside current products and
markets.
– How? Making and selling CDs, testing restaurant concepts, or branding casual
clothing.
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Marketing’s Role in Strategic Planning
Provide a Guiding Philosophy
Provide Inputs to Strategic Planners
Design Strategies to Reach Objectives
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The Business Unit Strategic Planning Process
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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Market Opportunity Analysis (MOA)
• Can the benefits involved in the opportunity be
•
•
articulated convincingly to a defined target
market?
Can the target market be located and reached
with cost-effective media and trade channels?
Does the company possess or have access to
the critical capabilities and resources needed to
deliver the customer benefits?
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Market Opportunity Analysis
(MOA)_2
• Can the company deliver the benefits
better than any actual or potential
competitors?
• Will the financial rate of return meet or
exceed the company’s required threshold
for investment?
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FedEx
FedEx added
Sunday deliveries
based on customer
requests and
market demand
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Opportunity Matrix
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Threat Matrix
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Porter’s Generic Strategies
Overall Cost Leadership
Differentiation
Focus
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The Star Alliance
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Categories of Marketing Alliances
Product or Service Alliances
Promotional Alliances
Logistics Alliances
Pricing Collaborations
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Feedback and Control
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Value Delivery Network
Company’s Value Chain
Distributors
Suppliers
Customers
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The Value Chain
Wal-Mart’s ability to offer the right products at low prices depends on the
contributions from people in all of the company’s departments—marketing,
purchasing, information systems, and operations.
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The Value Delivery Process
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Nike Creates Value
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Improving Value Delivery the Japanese Way
0 customer
feedback time
0 product
improvement time
0 setup time
0
purchasing time
0 defects
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3 V’s Approach to Marketing
Define the value segment
Define the value proposition
Define the value network
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Porter’s Value Chain
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Benchmarks
Organizational
costs
and
performance
measures
Competitor
costs
and
performance
measures
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Core Business Processes
Market
sensing
Customer
relationship
management
New offering
realization
Fulfillment
management
Customer
acquisition
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Wal-Mart’s stock replenishment
process is legendary
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Characteristics of Core Competencies
• A source of competitive advantage
• Applications in a wide variety of markets
• Difficult to imitate
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Netflix’s Distinctive Capabilities
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Challenges Facing CMO’s
Doing more with less
Driving new business
development
Becoming a
full business partner
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ROAD MAP:
• Companywide strategic planning:
– Four steps.
• business portfolios and growth strategies.
– How marketing works with its partners to create and deliver customer
value: Customer Relationships.
• Marketing strategy and mix:
– Forces that influence it.
• Marketing management functions:
– Elements of a marketing plan.
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Managing Marketing Strategy
and Marketing Mix
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Market Segmentation
• The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.
• A market segment consists of consumers
who respond in a similar way to a given
set of marketing efforts.
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Target Marketing
• Involves evaluating each market segment’s
attractiveness and selecting one or more
segments to enter.
• Target segments that can sustain profitability.
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Market Positioning
• Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers.
• Process begins with differentiating the
company’s marketing offer so it gives
consumers more value.
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The Marketing Mix
• The set of
controllable,
tactical marketing
tools that the
firm blends to
produce the
response it wants
in the target
market.
• Consists of the 4 P’s
1.
2.
3.
4.
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Product
Price
Place
Promotion
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The 4 P’s of the Marketing Mix
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The 4 P’s & 4 C’s of the
Marketing Mix
• 4 P’s - Seller’s View
• 4 C’s - Buyer’s View
– Product
– Price
– Place
– Promotion
– Customer Solution
– Customer Cost
– Convenience
– Communication
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Managing the Marketing Effort
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Major Sections of Product/Brand Plan
Executive Summary
Current Marketing Situation
Analysis of Threats and Opportunities
Objectives for the Brand
Marketing Strategy
Action Programs
Marketing Budget
Controls
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Evaluating a Marketing Plan
 Is the plan simple?
 Is the plan specific?
 Is the plan realistic?
 Is the plan complete?
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Marketing Department Organization
Functional
Organization
Market or Customer
Organization
Geographic
Organization
Product Management
Organization
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Marketing Control Process
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Rest Stop: Reviewing the Concepts
• Explain companywide strategic planning and its four
•
•
•
•
steps.
Discuss how to design business portfolios and
develop strategies growth and downsizing.
Assess marketing’s role in strategic planning and
explain how marketers partner with others inside and
outside the firm to build profitable customer
relationships.
Describe the elements of a customer-driven
marketing strategy and mix, and the forces that
influence it.
List the marketing management functions, including
the elements of a marketing plan.
Professor Takada
2-57