Marketing Strategy - Subhash C.

8/14/2019 Marketing Strategy - Subhash C.

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MARKETING STRATEGY

Ilan Bijaoui

2007

[email protected]



MISSION VERSUS VISION

• Mission: What business are we in?

• Vision: What do we want to become?

• Fedex Mission: higher financial returns by providing high value added logistics,transportation and related information services

• Fedex vision: Leading the way

• Lexmark vision: Customers for life• Boeing: People working together, as a global

enterprise for aerospace leadership



ELEMENTS OF MISSION STATMENTS

• Who are we?

• Who are our customers?

• What is our operating philosophy?

• What are our core competencies?

• What are our concerns and interests?







FIVE P’S FOR STRATEGY

Henry Mintzberg

PERSPECTIVE

Way of Perceiving the WorldMc Donald: quality,service,

cleanliness & value

Candle night dining P change

POSITION

Match Organization &Environment

Egg McMuffin P change

PATTERN

Consistency in Behavior Realized

PLAN-PLOY

Intended Course of ActionsPurpose

Strategos: Art of the Army General



STRATEGY FOR CHANGE

James Brian Quinn

Strategic Decisions

True Goals

Programmes

How, Sequences of Actions

Resources-Goals

Policies

Rules or Guidelines

Goals (ROI)-Objectives (Sales)

What & When

Strategic Goals-Viability

A Strategy is a Pattern/Plan that Integrates an

Organization’s Major Goals, Policies and Actions Sequences

to a Cohesive whole



CRITERIA FOR EFFECTIVE

STRATEGY-Quinn

Secure Operating

Points

Secure Resources

Bases

Surprise

Speed, Secrecy

Intelligence

Committed

Leadership

Coordination

Flexibility

Concentration

Decisive

Initiative

Maintained

Clear Objectives

Understood, Attainable



THE CONCEPT OF CORPORATE STRATEGYKenneth R. Andrews

Formulation Implementation

Corporate

Strategy

Pattern

Opportunity& Risk

Resources

Values

Responsibility

Structure/Relationship

Processes/Behaviour

Top

Leadership



MARKETING DEFINITION

The American Marketing Association

The Process of Planning & Executing

The Conception, Pricing, Promotion &Distribution of Ideas, Goods & Services

To Create Exchange,that Satisfy Individuals & Organizational

Goals



Kotler: Marketing managers seek to influence thelevel, the timing, and composition of demand to

meet the organization’s objectives

Peter Drucker: The aim of marketing is to knowand understand the customer so well that the

product fits him and sells





VALUE BRIDGE

FIRM VALUE CUSTOMER

PRODUCT-PRICE

MARKETING VALUE

Psychological Bridge

Physical Bridge



MARKET ORIENTED

DEFINITIONS

Sportive LeisureSportive shoesNike

Business more

Productive

Office MachinesXerox

Fantasies

Entertainment

Movies, ParksWalt Disney

Lifestyle,Self-expressionCosmeticsRevlon

Market OrientedProduct Oriented









D E V E L O P M E N T O F E C O N O M I C S T R A T E G Y

O P P O R T U N I T I E S & R I S K SI d e n t i f i c a t i o n

I n q u i r y

A s s e s s m e n t o f R i s k

E N V I R O N M E N T A L

C O N D I T I O N S - T R E N D S

G e o g r a p h y , D e m o g r a p h y , C u l t u r e ,E c o n o m y , T e c h n o l o g y P o l i t i c , L e g a l

C H O I C E O F

P R O D U C T S & M A R K E T S

E c o n o m i c S t r a t e g yP r o d u c t / C u s t o m e r / P r o m o t i o n / P l a c e / P r i c e

C O R P O R A T ER E S O U R C E S

S t r e n g t h s & W e a k n e s s e s

I n c r e a s i n g C a p a b i l i t y

D I S T I N C T I V E

C O M P E T E N C E

F u n c t i o n a l , F i n a n c i a l , O r g a n i z a t i o n a lR e p u t a t i o n , H i s t o r y



Distinctive Competence







RESOURCES

Technological resources:

patents, trademark

Reputational resources: with

customers, brand name,

perception of products,

reputation with suppliers

Physical resources: firm’s

plant, equipment

Innovation resources: ideas,

scientific capabilities,

Organizational resources :

planning, reporting,

controlling, coordinating

Human resources; knowledge,

trust, managerial capabilities

Financial resources

Tangible Intangible

Hall R.1992 The strategic analysis of intangible resources Strategic Management Journal 13-136-139 Cambridge



THE CORE COMPETENCE OF THE

CORPORATIONCK Perahalad G/ Hamel

COMPETENCIES

CORE PRODUCTS

BUSINESS UNITS

END PRODUCTS



NEC STRATEGY

Computing & Communication Convergence

From Mainframe to

Processing Components

Semiconductors

Alliances

END PRODUCTS

From Mechanical to

Digital

Communication

New Markets



SELECTED CORE COMPETENCIES/PRODUCTS

HONDA

CP: Engines

EP: Scooters, Cars

CANON

Comp.: Optics, Precision

Mech.fine Chemicals

CP:Laser printer engine

EP: Laser Printer

3M• Sticky Tape

Magnetic tape, photographic

film, coated abrasives

SONY• Miniaturization

CP: Elect. Components

EP: Television



CORE COMPETENCY IDENTIFICATION

IDENTIFY

• Access to wide variety of

markets

• Contribution to perceived

customer benefits

• Difficult to imitate

• Outsourcing and CoreCompetency (GE-GTE-

Motorola TV Color)

STRATEGIC

ARCHITECTURE

• How long could preserve

technology

• How central is the core

competence for customers

• Future opportunities inother core competencies



PM 4.4 Natural and technological environments

NATURAL ENVIRONMENT

Energy costs Geography

TECHNOLOGICAL ENVIRONMENT

Rawmaterials Pollution

R&D spending, Patent protection, New development, Internet, Telecom.

Regulatory



Economic

PM 4.3 Demographic and economic environments

ECONOMIC ENVIRONMENT

Age

DEMOGRAPHIC ENVIRONMENT

PopulationFamily Education

GDP Interest Inflation , Unemployment Wages, Energy availability



PM 6.5 Family and lifestyle

Activities

LIFESTYLE DIMENSIONS

Interests Demographics

FAMILY LIFE-CYCLE STAGES

Older Middle-aged Young

Opinions



PM 4.5 Political and cultural environments

POLITICAL ENVIRONMENT

CULTURAL ENVIRONMENT

Antitrust, Environment, Tax, Incentives, Foreign trade, Stability

Career expectations, consumer activism, Lifestyle





SOURCES OF INFORMATION

Secondary Data

• Government

• Periodicals• Commercial

Primary Data

• Direct Observation

• Focus Group• Survey

• Experiment



SWOT ANALYSIS







THE STRUCTURING OF ORGANIZATIONS




H. Mintzberg

Strategic Apex

Operating Core

Middle

LineSupport

Staff

Techno

Structure

Ideology





H. Mintzberg

Basic Parts

IdeologySupport staff

Internal services

Techno structure

Analysts

Middle line

Between Apex and

Operating

Strategy Apex

Manager

Operating Core

Producing



Coordinating Mechanisms

Standardization of

Norms

Set of beliefs

Standardization of

Skills

Body of knowledge

Standardization of

Outputs

Standardization of

Work Process

Programs Assembly

Instructions

Direct SupervisionMutual Adjustment

Coordination

between operator



Configurations

Missionary

S. of Norms

Ideology: sharing of

values and beliefs

Mass of non

specialized members

Innovation

Mutual Adjustment-

dominated by experts

Adhocracy

Projects structure

Fuse experts

Diversified

Standardization of

Outputs. Independent

entities Middle Line

Balkanize

Professional

Standardization of skills Operating core

Horizontal structure

(hospitals universities)

Machine

Highly specialized Larger Middle Line

Techno structure +

Support Staff

Entrepreneurial

Direct supervision

Apex + Operating

core



THE STRATEGIST H. Mintsberg

Frame of the Job

Perspectives PositionsAgenda

Issues Scheduling

Values

Style

Experience K nowledge

Competencies Model

Inside

OutsideWithin

Core in Context



MANAGING LEVELS

Action

People

InformationControlling

System,

Structure

DirectiveCommunicating

Leading

Individual

Group

UnitLinking

Gate Keeper

Doing Inside

Doing Outside

Conceiving



MARKETING’S ROLES & GOALS

Corporate

Business Unit

Products/markets

Corporate strategy

Strategic Marketing

Marketing Management

Roles Goals

Market Share

Growth

Profitability

Customer, CompetitivePerspective



MARKETING STRATEGY –THREE C’s

Customers

Competition Corporation

Where to Compete?How to Compete?

When to Compete?

Business Environment

Differentiate itself positively from its competitors, using its

relative corporate strengths to better satisfy customer’s needs

in a given environmental setting



GILETTE’S MACH3 MARKET STRATEGY

• Where (Market): All USA• How (Means): Premium Product 35% moreexpensive than SensorExcel

• When (Timing): before Mr Zein (CEO) retires

• Competition: Atra, SensorExcel, Shick • Customer: MUS$ 750 in research, 35 patents Global

product

• Philip Morris and Miller Beer (Corporate strength)

• TI and digital watches (Competition strength)

• Goodyear: focus on tire (strategic decision)



FUTURE OF STRATEGIC MARKETING

• Market Share• Deregulation

• Acquisitions, mergers Columbia, Coca Cola

•Channel Structure• Overseas companies

• Fragmentation of Markets: : cars – segments

• Early entrants

• Customer’s requests: Quality and Price not enough• Demographic Shifts



STRATEGIC MARKET PLAN-

MARKETING PLANA Strategic Market Plan is a plan of all

aspects of an organization’s strategy in the

market place

A Marketing Plan deals with the delineationof target segments and the four P’s

Source: Abell D F Hammond J. Strategic Market Planning Englewood Cliffs NJ Prentice Hall

1979. p9



STRATEGIC MARKETING -MARKETING

MANAGEMENT

CurrentDeductive analytical

Top down

Experience maturity

Reactive

Deterministic

Optimize within constraints

Long RangeInductive-Intuitive

Bottom up

Creativity

Proactive

Opportunistic

Throw constraints

TimeOrientation

Decision process

Nature of job

Leadership

Orientation

Marketing Management

Stresses running a business

Strategic Marketing

The business to be in

Source: Subhash C. Jain Marketing Planning & Strategy South Western CollegePublishing 2000





DEFINITION OF COMPETITION

• Natural Competition: Evolution by Adaptation

• Strategic Competition: Understand competitiveinteraction, predict consequences, available

resources, predict risk and return, make the

commitment



SOURCES OF COMPETITION

• Customer Need

• Existing Industry

• New Industry• Product line

• Type of the Firm



COMPETITIVE INTELLIGENCE

• Defensive Intelligence: protect business

• Passive Intelligence: Ad hoc information for a

specific purpose• Offensive Intelligence: identify new opportunities

• Sources: Public (advertising, publications,

speeches)Trade Professionals(Customers, Patents),

Government, Investors



FORCES DRIVING INDUSTRY COMPETITION

PotentialEntrants

Suppliers Industry Buyers

Competitors

Substitutes

Threats

Threats

Bargaining Power Bargaining Power









PM 12.6 Market challenger strategies

ATTACK STRATEGIES

BypassFlanking

Guerrilla

Encirclement

Frontal





?HOW TO DEFINE A MARKET

• Product characteristics

• Needs characteristics (Use)

• Private/Owner brand• Regional sales

• Boundaries: technology (material, energy);

customer function, customer group (category)

DEFINING MARKET BOUNDARIES



DEFINING MARKET BOUNDARIESPersonal Financial Transactions

Customer Groups:

Airports, Stores

Gas stations, saving

associations, banks

Customer Functions:

cash, deposit,bill,

check, transactionsTechnologies:

ATM, System,

Teller

Source: Abell D F Hammond J. Strategic Market Planning Englewood Cliffs NJ Prentice Hall

1979. p9



SEGMENTATION

Behavior:

• Benefit• User

• Usage

•Brand loyalty

Impact Factors:• Geography

• Demography, Cycle

• Culture, Life style• Economy

Category• Private

• Professional/Industry

• Public

















PM 10.4 Positioning strategies

POSITIONING STRATEGIES UsersAgainst

competition

Brands Activities

PersonalitiesOrigin

Usage

Benefits

Productattributes

Product class

Not competition











BCG STRATEGY IMPLICATIONS

WithdrawPositive

CF

High to

low

Deplete

capacity

Dogs

Share or

withdraw

Negative

CF

Negative

to low

High R&DQuestion

Marks

Maintain

share

Positive

CF

HighCapacity

maintenance

Cash Cows

Increase

Mkt Share

Negative

CF

Low to

High

Capacity

expansion

Stars

StrategyCash FlowEarningInvestment



MARKET COVERAGE

M1 M2 M3 M1 M2 M3 M1 M2 M3

P1

P2

P3

P1

P2

P3

X X

X

X

X X X

X X X

X X X

X X X

X X X

X



GENERAL ELECTRIC GRID

Industry

Attractiveness

Low

Medium

High

Business Strength

Strong Average Weak

Question

marks

Profit

Producers

Winners

Losers



Porter’s generic strategies approach:

Overall cost leadership, differentiation, focus

Market

share

Steel

Industry

RestaurantSpecialized machinery

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Marketing Strategy - Subhash C.

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