MARKETING 673

Spring Semester, 1999Module 1

OUTLINE

Marketing Strategy: An Overview Developing Marketing Strategy Competitive Advantage

STRATEGY What is “strategy”?

- ...the fundamental means or scheme for reaching objectives.

MARKETING STRATEGY What is “marketing strategy”?

- ...the selection of target markets and the creation and maintenance of an appropriate marketing mix.

DEVELOPING A MARKETING STRATEGY

SWOT Analysis Mission Statement / Goals and

Objectives Marketing Strategy

SWOT Strengths Weaknesses Opportunities Threats Also called a “Situational Analysis”

STRENGTHS AND WEAKNESSES

Strengths and Weaknesses focus on the internal (corporate) environment

Strengths: Competitive advantages that a company can exert in the marketplace (Text, pg. 154)

Weaknesses: Constraints that hinder movements in certain directions (Text, pg. 154)

STRENGTHS AND WEAKNESSES

Sample Attributes to be Examined:- Organizational Structure- Managerial Expertise- Training Programs- Cash Flow- Distribution Networks- See Exhibit 7.1 (page 156)

OPPORTUNITIES AND THREATS

Opportunities and Threats are derived from an analysis of the environment external to the firm- Competitive Environment- Macro Environment

COMPETITIVE ENVIRONMENT

The competitive environment consists of an analysis of major competitors, their plans, products, and suppliers as well as an analysis of the industry structure.

COMPETITIVE ENVIRONMENT--Major

Competitors Competitor’s Objectives Competitor’s Strategy Competitor’s Success to Date Competitor’s Strengths/Weaknesses Competitor’s Future Behavior

COMPETITIVE ENVIRONMENT--Industry

Structure Industry structure concerns a review

of the dynamics within a particular industry.

MACRO ENVIRONMENT The macro environment concerns all

other factors over which the marketer has no or little control- Physical- Political/Legal- Technological- Sociocultural- Demographic/Economic

PHYSICAL ENVIRONMENT Special conditions can create

opportunities Depletion/degradation of resources

also creates opportunity

POLITICAL/LEGAL ENVIRONMENT

Includes all factors controlled by public authorities

Vary from country to country Most important question is

POLITICAL STABILITY when marketing abroad

POLITICAL/LEGAL ENVIRONMENT

Political risk to foreign firms- Confiscation- Domestication- Import Restrictions- Taxes- Price Controls

POLITICAL/LEGAL ENVIRONMENT

Governments encourage foreign investment through:- tax concessions- relaxation of tariffs- streamlining policies and procedures- government deregulation

TECHNOLOGICAL ENVIRONMENT

Impact on:- New product development- Existing industries - Other marketing operations such as

communications, distribution, and marketing research

SOCIOCULTURAL ENVIRONMENT

...represents the values, attitudes, and general behavior of individuals in a given society

slow to change Changes in individual values and

shifts in family structure have impacted US markets

DEMOGRAPHIC/ECONOMIC ENVIRONMENT

In uncertain times, variables most likely to impact marketing strategies are:- population demographics- rate of economic growth- interest rates and currency exchange

rates

TODAY’S MARKETING ENVIRONMENT

TODAY’S MARKETING ENVIRONMENT

Mass markets to market segments Changing demographics Internationalization of marketing Expanding role of government Increasing pace of change Focus on the environment Focus on the customer The internet!!

DEVELOPING A MARKETING STRATEGY

SWOT Analysis Mission Statement / Goals and

Objectives Marketing Strategy

MISSION STATEMENT Mission Statement (Text, Page 177)

- “The conception of the organization’s raison d’être, or what it should work toward, in light of long range opportunity”

FROM THE INTERNET Mission Statements = Profits

<http://www.smartbiz.com/sbs/arts/ hph4.htm>

GOALS AND OBJECTIVES Goals: long-range purpose that is

not necessarily quantified or limited to a time period

Objectives: flow from goals, they are measurable and deemed to be attainable at some future date through planned actions

SLU’s MISSION, GOALS AND OBJECTIVES

Mission: http://www.selu.edu/Administration/ Inst-Research/Planning/vision.htm

Goals and Objectives: http://www.selu.edu/Administration/ Inst-Research/Planning/goals.htm

DEVELOPING A MARKETING STRATEGY

SWOT Analysis Mission Statement / Goals and

Objectives Marketing Strategy

THE MARKETING PLAN Your marketing strategy!! …a written document containing the

guidelines for the business unit’s marketing programs and allocations over the planning period.

THE MARKETING PLAN ACTIVITIES: It outlines tasks and

timing of activities PEOPLE: It informs participants of

their role and function RESOURCES: It specifies how

resources are to be allocated

A MARKETING PLAN WILL... act as a road map help in the prediction of problems,

opportunities, and threats assist in helping to obtain resources

for implementation stimulate thinking and better use of

resources

TYPES OF MARKETING PLANS

New Product Plans Annual Marketing Plans (for existing

products)

THE MARKETING PLAN Title Page and Table of Contents Executive Summary Situational Analysis Target Market(s) Goals/Objectives Marketing Strategy Implementation and Control Summary/Conclusion Appendices

The key to a successful strategy…..

COMPETITIVE ADVANTAGE

COMPETITIVE ADVANTAGE “Superior or favorable difference from

competitors along some dimension important to the market” (Zikmund & d’Amico, 1997)

...a firm has a marketing mix that the target market sees as better than a competitor’s mix

Without competitive advantage(s), you do not succeed!

CHARACTERISTICS They must be real They must be important to the client They must be specific They must be promotable

ELEMENTS OF COMPETITIVE ADVANTAGE

PERFORMANCE OUTCO MES

P O S IT IO N A L A D V A N T A G ES

S O U R C E S O F A D V A N TA G E

SOURCES OF ADVANTAGE Skills

- people, operational capabilities Resources

- strong distribution networks, marketing power

Controls- feedback mechanisms

POSITIONAL ADVANTAGES Positioning: “placing a brand in that

part of the market where it will receive a favorable reception compared to competing products” (Text, page 345)

Low Cost Superior Customer Value

PERFORMANCE OUTCOMES

Satisfaction Loyalty Market Share Profitability

ASSESSING COMPETITIVE ADVANTAGE

Portfolio Analysis- BCG Matrix- GE / Industry Attractiveness-Business

Position Matrix

PORTFOLIO ANALYSIS It combines the assessment of

business position and market attractiveness.

It enables managers to classify and review current and prospective SBU’s

THE BCG MATRIX Growth Market Share

BCG MATRIX

Growth is used because it is an approximation of the PLC

Market Share is the ratio of the firm’s market share to the market share of its largest competitor

BCG MATRIX Stars

- Hi Growth/Hi Market Share Cash Cows

- Lo Growth/Hi Market Share Dogs

- Lo Growth/Lo Market Share Question Marks / Problem Children

- Hi Growth/Lo Market Share

STRATEGIC IMPLICATIONS Divest dogs or pursue a “focus”

segmentation policy Use cash from cash cows to fund

other operations Manage stars to maintain market share Try to move “Question Marks” to

“Stars”

INDUSTRY ATTRACTIVENESS MATRIX

Market Attractiveness Business Position

STRATEGIC IMPLICATIONS Invest / Grow Selective Investment Harvest / Divest

FROM YOUR TEXT... Chapter One (Pages 1-18) Chapter Two (Pages 21-40) Chapter Six (Pages 123-151) Chapter Ten (Pages 238-258)