Advantage over competition that is not easily copied and can be maintained over long periods of time.
Sustainable Competitive Advantage
What are the Macro strategies for developing customer value?
– Customer service, loyal customers
– Efficient operations, supply chain & human resource management
– High perceived value, effective branding
– Physical/Internet presence
What identifies a firm’s target market, related marketing mix (4 P’s), & bases on which the firm plans to build a sustainable competitive advantage?
How many steps are there in a marketing plan? What are they?
1. Business mission/objectives
2. SWOT Analysis; Evaluate how players will affect org success.
3. Identify opportunities with STP (segmentation, targeting, positioning).
4. Implement Marketing Mix (4 P’s)
5. Evaluate performance using marketing metrics
What questions does a mission statement aim to answer?
“What type of business are we?” & “What do we need to do to accomplish our goals and objectives?”
What is a SWOT Analysis?
Assesses org int/ext environment. (Strengths vs. Weaknesses & Opportunities vs. Threats)
What is CDSTEP?
Part of situational analysis; assesses Cultural, Demographic, Social, Technological, Economic, & Political forces.
Why are SWOT and CDSTEP important?
So firms can anticipate & interpret changes to allocate appropriate resources.
What does STP stand for?
Segmentation, Targeting, and Positioning
What is STP used for?
To evaluate opportunities to increase sales/profit.
1. Firm divides marketplace into segments
2. Determines which segments to target
3. Determines how to position product/service to best meet needs of the target
What is Portfolio Analysis?
Management evaluates its products/businesses (their “portfolio”) & allocates resources where products are expected to be the most profitable.
Where is portfolio analysis performed?
SBU or product level line of the firm.
Boston Consulting Group Matrix
– 2×2 matrix that firms classify products/services.
– Compares relative market share & market growth rate.
– Used to compare product’s strength to market growth rate!
– “Dogs,” “Stars,” “Cash Cows,” “Problem Children”
What are “dogs?” “Stars?” “Cash Cows?” “Problem Children?”
– Low GM, Low MS. (Growth Market, Market Share)
– Phased out unless needed to boost sales of another product OR for competitive purposes
– High GM, High MS
– Heavy resource user, rapid growth
– Become cash cows = heavy resource generator
3. Cash Cows
– Low GM, High MS
– Were once “Stars”
– Excess resources may go to “Problem Children”
4. Problem Children
– High GM, Low MS
– Require most resources to maintain MS
– Can either become a “Star” with help of Cash Cow or phase out
What are the 4 major growth strategies?
1. Market Penetration
2. Market Development
3. Product Development
What is a market penetration strategy?
Current products/services, current market.
– New consumers to current target market or existing customers might buy more things/shop more often.
– Requires more advertising, sales, & promotions.
What is a market development strategy?
Current product, new market (domestic or international).
T/F: Domestic expansion is riskier than international expansion.
What is a product development strategy?
New product, current market.
Ex.: MTV always developing new shows.
What is a diversification strategy?
New product, new market.
– Can be related or unrelated!
Related vs. Unrelated Diversification
– Current market/marketing mix has something in common with new opportunity.
– Does not have common elements w/ present business.
– Very risky b/c you don’t capitalize on core strengths associated with markets/products.