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 inter-functionally 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

Broad SpecificFunctional

Based on customer needs

Transportation business

Long-distance transportation for large-volume producers of low-value, low-density products

Physical

Based on existing products or technology

Railroad business Long-haul, coal carrying railroad

Ansoff Strategies

Current Products New Products Current Markets

Market penetration strategy

Product development strategy

New Markets

Market development strategy

Diversification strategy

The BCG Growth Share Matrix

High

Low

Stars

Dogs

Question marks

10 0.1Relative market share

Marketgrowthrate(inconstantdollars)

10%

1

Source: Adapted from Barry Hedley, “Strategy and the Business Portfolio,” Long Range Planning 10 (February 1977).

5

6

9

87Cash cows

4

10 13

12

3

11 12

Cash Flows Across Businesses in the BCG Portfolio Model

Gro

wth

rat

e (c

ash

use

)

High

Low

Stars

Cash cows Dogs

Questionmarks

High LowRelative market share

Desired direction of business development

CashFlows

The GE Nine-Cell MatrixB

usi

nes

s’s

com

pet

itiv

e p

osi

tio

n

High

Low

Medium

Industry attractivenessHigh Medium Low

1 1 2

1 2 3

2 3 3

1 Invest/grow2 Selective investment/ maintain position3 Harvest/divest