Intro. to Marketing Strategies

Foundations of

Strategic Marketing

ManagementNicole Howatt

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The Primary Purpose of Marketing

To create long-term and mutually

beneficial exchange relationships

between an entity and the publics

with which it interacts.

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Expanding Responsibilities of Marketing Managers

Expanded responsibilities include:

Charting the direction of the organization

Contributing to decisions that will create and sustain a competitive advantage & affect long-term organizational performance

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Evolution of the Marketing Manager

This has prompted the emergence of

strategic marketing management as

a course of study and practice.

From being only an

to being a

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Processes in Strategic Marketing Management

1. Defining the organization’s business, mission, and goals

2. Identifying and framing organizational growth opportunities

3. Formulating product-market strategies

4. Budgeting marketing, financial, and production resources

5. Developing reformulation and recovery strategies

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1. Business Definition

By defining a business from a customer or market perspective…

What Business are we in?An organization should define a business by:

•The type of customers it wishes to serve•The needs of those customer groups •The means or technology by which the organization will satisfy the customer needs

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Most statements describe:

Benefits:1. Crystallizes management’s vision 2. Provides guidance 3. Inspires and challenges employees 4. Provides direction

Business Mission

Management’s vision of what the organization seeks to do

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Business GoalsGoals or objectives convert the organization’s mission into tangible actions and results that are to be achieved, often within a specified time frame.

Three major categories of goals:

Production GoalsFinancial Goals

Marketing Goalsmarket share

marketing productivitysales volumeprofitcustomer satisfactioncustomer value creation

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Identifying and Framing

Organizational Growth

Opportunities

Process Two

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Sources of environmental opportunity:

Unmet or changing customer needs

Unsatisfied buyer groups

New means or technology for delivering

value to prospective buyers

Converting Environmental Opportunities into

Organizational Opportunities

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What do we do best?

Distinctive Competency describes an

organization’s unique strengths or qualities

including:

Skills

Technologies

Resources

Converting Environmental Opportunities into

Organizational Opportunities

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The 5 C Strategic Analysis Framework

• Customers

• Company

• Competitors

• Context

• Collaborators

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Consumer Behavior Analysis

• Identify decision making unit.– Who is involved in the purchase?– What role does each play?

• Possible roles:

User

Decider

Initiator

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Consumer Behavior Analysis• Decision Making Process

– Information search– Criteria of evaluation– Importance of attributes

• Purchase and Consumption patterns– Where does the consumer buy?– How is the product used?

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Consumer Behavior Analysis

• Answer questions like:– What are the benefits sought?– Likes and dislikes about current offers?– Image and perceptions of available brands?– Price sensitivity?

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Company Analysis: SWOT• Internal

– Strength– Weaknesses

• External– Opportunities– Threats

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SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

A formal framework for identifying and framing organizational growth opportunities

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Company Analysis: Goals

• Business goals should be– specific– actionable– measurable– time-bound

• What is problematic with the following goals?

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Competitor Analysis: Basics

• Comparison of costs, capabilities, methods and strategies.

• Do SWOT on your competitors

• Analyze the competition!

• Objective factors:– Size of sales force– Plant capacity– Price and Performance

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Competitor Analysis:Strategic

• Strategic analysis– Future Goals: What drives the competition?– Assumptions: What do competitors believe

about the market?– Current Strategy: What are the competitors

doing?– Capabilities: What can the competitors do?

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Context: Macro Economic, Technology, Industry Analysis

• Traditional industry analysis– Size, growth, profitability, concentration,

business cycles, technology etc.

• Historical trend analysis

• Demographics and economic trends

• Technology discontinuities and market turbulence

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Industry Attractiveness:Porter’s Five Forces Model

Threat of New Entrants

High or low barriers

High or low threats

Industry Competition

Numerous?

Slow or fast growth?

Low or high differentiantion

High or low exit barriers

Intense treat?

Buyer Power

Plentiful alternatives

Low switching costs

Intense threat?

Supplier Power

Switching costs?

Threat of forward

Integration

High or low threat

Threat of Substitutes

Similar function

Shifting preferences

Intense threat?

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Collaborator

• Downstream channels

• Upstream suppliers

• Industry level alliances

• Technology alliances

• Market alliances

• Financial linkages

• International linkages

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Formulating

Product-Market Strategies

Process Three

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Existingproducts

Newproducts

Existingmarkets

Newmarkets

Product-Market Strategies

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Seeking a larger market share in a market in

which organization already has an offeringhttp://video.msn.com/v/us/v.htm?f=msn-l

This strategy involves:

Attempts to increase present buyer’s usage or consumption rates of the offering

Attracting buyers of competing offerings

Stimulating product trial among potential consumers

Consider??

Market Penetration Strategy

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Introducing its existing offerings to markets other than those that the organization is

currently serving.

Reaching new markets requires:

Carefully considering competitor strengths and weaknesses and competitor retaliation potential

Modification of the basic offering

Consider?

Market Development Strategy

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This approach may be taken for:

Product Innovation – develop totally new offerings

Product Augmentation – enhance the value to customers of existing offerings

Product line extension – broaden the existing line of offerings by adding different sizes, forms, flavors, etc.

Product Development Strategy

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Development or acquisition of offerings new to the organization and introducing those offerings to publics not previously

served by the organization.

Diversification Strategy