Contemporary Strategic Marketing
Chapter 7: Marketing Strategy Formulation
Tools for marketing strategy formulation
Market segmentation Targeting and positioning The product life cycle The Boston Consulting Group growth/share matrix PIMS (profit impact of marketing strategy) Porter’s generic competitive strategies Ansoff’s growth vector matrix Customer portfolio analysis
Market segmentation
Market segmentation
Segmentation in the newspaper industry
Figure 7.1: Target segment selection
Figure 7.2: Generic positioning map
Figure 7.3: The product life cycle
Figure 7.4: The BCG growth/share matrix
Relative market share
Profit Impact of Marketing Strategy (PIMS)
In the long run, the most important single factor affecting a business unit’s performance is the quality of its products and services, relative to those of competitors
Market share and profitability are strongly related High investment intensity acts as a powerful drag on profitability Many so-called ‘dog’ or ‘question mark’ businesses generate cash,
while many ‘cash cows’ are dry Vertical integration (that is, operating business units at consecutive
stages of the production process, such as an integrated circuit factory and a personal computer manufacturer) is a profitable strategy for some kinds of business, but not for others
Most of the strategic factors that boost return on investment (that is, profit measured as a percentage of capital employed) also contribute to long-term value.
Porter’s generic strategies
Basis for competitive advantage– Differentiation– Cost leadership
Applied across– An entire market – A sub-market or market segment (focus strategy)
Hence four possibilities– Differentiation, cost leadership, differentiation focus, cost
focus– Not doing any of the above = ‘stuck in the middle’
Figure 7.5 Ansoff growth vector matrix
Figure 7.6: Customer portfolio analysis
Contemporary Strategic Marketing
Chapter 8: Relationship marketing strategies
Chapter 8Learning Objectives
The distinction between discrete transactions and relational exchange
The nature of the relationship life cycle What is meant by relationship marketing Methods of implementing relationship marketing The application of relationship marketing in
consumer goods markets, consumer services markets and business-to-business markets
A range of criticisms that have been levelled at relationship marketing
The scope of relationship marketing
Figure 8.1: Business loyalty
The customer volume effect
Figure 8.2: The profit per customer effect
B2B buyer criteria for relational or transactional approach
Contemporary Strategic Marketing
Chapter 9: E-marketing strategies
Chapter 9Learning Objectives
The context in which e-marketing operates The relative advantages and disadvantages of using
different interactive tools The impact of information and communication
technologies (ICTs) upon the business-to-consumer (B2C) and business-to-business (B2B) marketing mixes
The qualities of an effective webpage The most appropriate business model for a
traditional retailer wishing to go online
E-marketing
Interactive tools provide marketers with a number of distinct advantages such as:
– Global reach. As the Net grows and grows it allows marketers to access marketspaces just about anywhere.
– Speed and flexibility. Although the Internet is not (yet) an instantaneous medium it provides the opportunity for buyers and sellers to interact swiftly, around the clock, 365 days a year.
– Low cost. After the initial costs required to put the necessary technology in place (computers, modems, software, training and so on), the actual cost of each virtual interaction is typically a fraction of what it would be in the physical world.
– Interactivity. By its very nature, the Net allows every user to engage in a two-way ‘multimedia’ exchange process.
Successful e-marketing
Some B2C e-marketing tools
E-consumer data
Some B2B e-marketing tools
E-business models
Bricks and mortar only (strictly conventional trading, nothing digital)
Bricks and some clicks (many online activities but no online transactions)
True bricks and clicks (complete range of commercial activities both offline and online)
Clicks only (trading is 100 per cent digital, no conventional or physical business)
Some e-marketing challenges
Limited consumer exposure and buying (the issue of limited access)
Skewed user demographics and psychographics (although this is changing rapidly)
Chaos and clutter Online security/trust Ethical concerns (privacy, disclosure and access
limitation issues, for example).
Contemporary Strategic Marketing
Chapter 10: Marketing strategy for services
Chapter 10Learning Objectives
How the nature of services affects how they are marketed
How to outline the extended marketing mix for services
What service quality is and how it is measured How to segment business and consumer markets for
service providers using customer-related and product-related approaches
The relative importance of customer acquisition and retention
Key questions for services strategy
1. What is the nature of the service act? 2. What type of relationship does the service
organisation have with its customers? 3. How much room is there for customisation and
judgement on the part of the service provider? 4. What is the nature of demand and supply for the
service? 5. How is the service to be delivered?
Characteristics of services
Intangibility Inseparability Variability Perishability Non-ownership
Seven Ps for services marketing
Product Price Promotion PlacePhysical evidencePeopleProcess
Five service quality gaps
Gap 1: the gap between customers’ expected service and management beliefs about consumer expectations (‘not knowing what customers expect’)
Gap 2: between management beliefs about consumer expectations and translation of perceptions into service quality expectations (‘not selecting the right service designs and standards’)
Gap 3: between translation of perceptions into service quality specifications and service delivery, including pre- and post-service contacts (‘not delivering to service standards’)
Gap 4: between service delivery and external communications to customers (‘not matching performance to promises’)
Gap 5: between perceived service and expected service (‘the customer gap’).
Five dimensions of SERVQUAL
1. Tangibles (the appearance of physical components of the service)
2. Reliability (how dependable and accurate the performance of the service is)
3. Responsiveness (how prompt and helpful the service provider is)
4. Assurance (how competent, courteous and credible the service provider is)
5. Empathy (the ease of access, level of communication and customer understanding offered).
SERVQUAL sample questions
Segmenting service markets
Figure 10.3: Yield management
Figure 10.4: Relationship pyramid for a major charity
Contemporary Strategic Marketing
Chapter 11: International marketing strategy
Chapter 11Learning Objectives
Reasons why companies seek opportunities in international markets
Ways in which companies approach strategic marketing at the international level
How and why companies choose particular markets abroad to invest in
The risk factors involved with international marketing and how to assess them
The additional complexity and challenges that international markets pose for companies
World trade growth
Exporters & importers
Going international
The reactive approach and the proactive approach
Which markets to enter– Where your customers are– Where your competitors are– Lead market for innovation/R&D– Government incentives– Foreign buyer requests
Risk analysis in international markets
Political risks Economic, commercial and infrastructural
risks Demand-level risks Distributor/partner risks
Political risks
Degree of protection for foreign assets such as patents (intellectual property)
Strength, efficiency and integrity of the judicial system Corruption and bribery Industrial policy and government interference in the economy
(for example price controls) Potential for expropriation or nationalisation of foreign assets Barriers to trade – non-tariff barriers (quotas, embargoes,
delays, local content laws, import restrictions, exchange controls)
Political instability – internal or regional
Distributor/partner risks
Due diligence– Due diligence is a legal term that means that before
entering into any form of buyer/seller, producer/manufacturer contract, each party should have a full understanding of the obligations of the partner, such as their outstanding debts, pending and potential lawsuits, supplier arrangements, long-term customer agreements, employment contracts, distribution agreements, compensation arrangements and so on.
Contemporary Strategic Marketing
Chapter 12: Analysing strategic marketing case studies
Chapter 12Learning Objectives
The role of case studies in studying strategic marketing
The importance of clear problem identification to successful case analysis
A series of steps that can be adopted to make case analysis effective
How to prepare successful oral presentations and written reports on case studies.
Students taking strategic marketing courses believe that case studies …
Illustrate how marketing strategy works in the real world
Are a good way to practise using analytical tools Are a useful way to discuss business problems in
class Are helpful in understanding complex problems Help to develop team-working skills, where a team-
based approach to case study analysis is used
Case study analysis
Case studies are descriptions of business situations that require the student to identify a business problem, usually with the aim of conducting relevant analysis and suggesting a solution
The underlying problem in the case studies will not be defined; it is up to you to identify the problem
Just as in real life, you should expect the information to be incomplete in some areas, irrelevant in others, and perhaps excessive in still other areas
Learning from case studies
What can we learn from this case study? What generalisations emerge from the case
that can be carried forward to other cases? Was the approach we adopted to this case
productive? Could it have been improved? What marketing concepts and techniques
helped us to understand and analyse this case?
Case study analysis process
Understanding the situation & diagnosing the problem
Who is the decision-maker? What are the key facts? What are the symptoms? What is the underlying problem that is
causing the symptoms? What solutions come to mind? What are the case questions?
Generating solutions and predicting outcomes
Tools for strategic marketing analysis– PEST, 5-forces, SWOT, Customer value analysis
Gap analysis, etc. Tools for marketing strategy formulation
– Segmentation, positioning, BCG analysis, customer portfolio analysis etc.
Brainstorming– Postpone judgement, freewheel, hitchhike,
quantity breeds quality
Evaluate alternatives
To what extent will this alternative enable the firm to meet its goals?
What are the direct and indirect costs of this alternative?
How quickly will this solution take effect? How likely is it that this solution will work? How acceptable is the solution to the various
stakeholders identified in the case study?
Presenting your results
1. Your recommended decision must be presented clearly and succinctly.
2. The logic by which you arrived at your recommendation must be made clear.
3. The recommendation should be supported by facts developed from the case.
– You must do more than simply list the case study facts after each element of the problem. The data must be intelligently manipulated. Calculations, tables, graphs and diagrams should be used to bring out the significance of the facts.