Basic Marketing Strategy

7/30/2019 Basic Marketing Strategy

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Basic Marketing Strategies


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A basic model of strategic

planning

Corporate Strategy

SBUSBU

SBU SBU

Marketing


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Marketing Implications of

Corporate Strategic Planning Define the Corporate Mission

Evaluate Environment (last lecture) Set Organizational Goals and Objectives

Establish the Business Portfolio

Grow the Business


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MISSION STATEMENT

Broad Statement of Purpose:

What is your organizations mission

statement?

Reason for existence

Scope of services Current and potential customers

Areas of specialization/differentiation


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Defining a Companys Present

Business Narrow

soft drinks

videos

toys

life insurancecomputers

Broad


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Establishing the Structure of

the BusinessA PORTFOLIO APPROACH

GOALS:

1. Classify strategic business units (SBU)

2. Maintain a balanced portfolio

3. Allocation of resources

4. Directions for growth


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PORTFOLIO APPROACHES

BCG MATRIX:

Classify SBU on 2 variables:

1. market attractiveness

2. company strength


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BCG MATRIX

Stars Question Marks

Cash Cows Dogs

RELATIVE MARKET SHARE

Market

Growth

Rate

?


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CRITIQUE OF BCG

LITTLE USE IN IDENTIFYING AREAS OFFUTURE INVESTMENT

ONLY CONSIDERS CASH FLOWRELATIONSHIPS BETWEEN

BUSINESSES

TOO SIMPLISTIC


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GE MODEL

Medium

High

Medium

Low

High Low

BUSINESS STRENGTH

INDUSTRY ATTRACTIVENESS


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Critique of GE

Advantages

More factors considered

More guidance on allocations of resources More useful for evaluating new product-markets

Disadvantages Subjective and ambiguous


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GROWTH STRATEGIES

MARKET

PENETRATION

MARKET

DEVELOPMENT

PRODUCT

DEVELOPMENT

DIVERSIFICATION

Current Markets New Markets

Current

Products

New

Products

MARKET

PENETRATION MARKETDEVELOPMENT

PRODUCT

DEVELOPMENTDIVERSIFICATION


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GROWTH STRATEGIES:

Market Penetration: Sell more existing product/service to existing customers

1. Increase Usage2. Introduce Intermediaries

3. Mandatory Consumption

Market Development:

Tap new segments for existing/serviceproducts


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GROWTH STRATEGIES:

Product Development:

-New products/services developed for existing

customers-utilizing strengths

Diversification: New products/services to newtarget markets

Horizontal

Vertical

Concentric


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What are you doing if not

growing? Sustain current level

Retrench


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Marketing Implications of

Business Level Strategies How will the SBU compete to gain a

sustainable competitive advantagewithin its industry: What is the competitive domain/scope

Which market segments can it target

What needs can it satisfy How can it distinguish itself from competition


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Gaining Competitive

Advantage1)Increase the willingness to buy

Better demonstrate benefits that consumers already

value Develop new products with more important benefits

Focus on neglected benefits

Make sure necessary complementary products/ servicesexist

Produce/service perceived to solve consumer problems

Ensure compatibility with values

Reduce perceived risk


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2) Increase the ability to buy Initial and maintenance costs

Innovative financing, smaller minimum sizes

Distribution at time and place that meets needs fewer stockouts, different outlets, easier procedures for

delivery/discarding

Improve package/product size to improve storageissues


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3) Increase demand for your brand

by: Increase number of situations in which the

product/service is used

Increase amount used at one time Package size, volume discounts

Emphasize neglected benefits

Encourage replacement By providing improved products


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4) More basic strategies Differentiation strategy

Unique benefit or attribute highly desired by market

Niching

Focus Strategy: narrow focus in the marketplace Niche

Cost leadership strategy Head-to-headsame benefitslower cost

Wisdom???


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More Basic Strategies contd Prospector

First mover in new product and market areas

Responds quickly to new opportunities

Defender

Maintain a secure position in relatively stable product/service areas Protects domain by offering lower prices, higher quality,better

service

Tends to ignore industry changes

Analyzer Somewhere between prospector and defender

Seldom a first mover but often a second or third

Reactor No consistent product or mkt development

Not as aggressive as established products

Responds primarily when forced to


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5) Retaining existing customers Good for large market-share holders or

niche holders

Satisfaction programs

Meeting competitions strategies

Relationship marketing Much more on thisin a few days


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Exercise:

Bring in two products from the same productcategory that would be used by different

types of people Describe the person who buys this product

Describe the Marketing Mix for this Product

Email me a brief write-up of your example We will discuss this next class

Documents

Basic Marketing Strategy