Ch.2: Marketing Strategy

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?
COPL Excellence:

Customer:
– Customer service, loyal customers
Operational:
– Efficient operations, supply chain & human resource management
Product:
– High perceived value, effective branding
Locational:
– 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?
Marketing strategy.
How many steps are there in a marketing plan? What are they?
5! 🙂
PLANNING PHASE:
1. Business mission/objectives
2. SWOT Analysis; Evaluate how players will affect org success.

IMPLEMENTATION PHASE:
3. Identify opportunities with STP (segmentation, targeting, positioning).
4. Implement Marketing Mix (4 P’s)

CONTROL PHASE:
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.
BCG Matrix
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?”
1. Dogs:
– Low GM, Low MS. (Growth Market, Market Share)
– Phased out unless needed to boost sales of another product OR for competitive purposes

2. Stars
– 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
4. Diversification
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.
F
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
Related:
– Current market/marketing mix has something in common with new opportunity.

Unrelated:
– Does not have common elements w/ present business.
– Very risky b/c you don’t capitalize on core strengths associated with markets/products.