Marketing Chapter 2 (Strategic Planning for Competitive Advantage)

Strategic Planning for Competitive Advantage
A critical factor in long term business
Strategic Planning
the managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities.
The goal is typically
long-term profitability an growth.
Strategy
a road map that shows you where you are, and where you are tying to get to and a general notion of how you’re planning to get from here to there.
The shorter the plan
the more specific
To develop long term relationships (CRM)
…you need to provide consistently higher value.
Market Plan Development Guidelines:
Use common sense, Be creative, and Communicate.
Use common sense:
Don’t fall into the “in a perfect world” this would work scenario.
Be Creative
this takes time…but often separates great performance from mediocre.
Communicate
You will need many other functions to support the implementation…get them on board.
80/20 Rule
20% of your customers make up 80% of your sales.
Conditions to win continually change:
– Competitors actions (expected and unexpected) will impact your ability to grow.
– Market trends are constantly changing
– Consumer needs will change over time
– Technology will impact many industries
Customer Relationship Management
a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups.
Business/product lines succeed because of…
…the full support of all departments/function.
Segment (group)
customers who are similar in meaningful ways and ones you choose to actively pursue.
Marketing Penetration
Increase market share among exiting customers.
Market Development
Attract new customers to existing products or expand into new markets.
Product Development
Create new products for present markets.
Diversification
Introduce new products into new markets. (can be difficult to mange)
Product Development Focus
Our success stems from leveraging insights from our customers, shoppers, and users in the innovations we bring to market. (This has led to us to the development of entirely new products and categories, and improved performance in existing brands.)
Strategic Fit
Sources of Sustainable Competitive Advantage
Skills and Assets of an Organization: (Patents, Copyrights, Locations, Equipment, Technology, Customer Service, and Promotion)
Define your marketing mix (4Ps) so that
customers understand what makes you superior.
STP
Segmentation, Targeting, Positioning
The Four Actions Framework
1. Which factors that the industry takes for granted should be eliminated?
2. Which factors should be reduced well before the industry’s standard?
3. Which factors should be related well above the industry’s standard?
4. Which factors should be created that the industry has never offered?
SWOT Analysis
Strengths and Weaknesses
Internal SWOT
Opportunities and Threats
External SWOT
Strengths
Things the company does well…better than your competition.
Weaknesses
Thing the company does not so well.
Opportunities
Conditions in the external environment that favor strengths.
Threats
Conditions in the external environment that do not relate to existing strengths of favor areas or current weaknesses.
A sustainable competitive advantage is
not easily copied.
Types of Competitive Advantage
Cost, Product/Service/Brand Differentiation, Niche Strategies
The company with the largest market share is almost never the company with the …
cheapest products.
Cutting your price is rarely…
beneficial
Only 1 company in a market can have the…
low cost competitive advantage.
The vast majorities of companies strive for…
niche strategies
Marketing Objectives
– Realistic (intellectually honest, yet challenging)
– Measurable
– Time specific
– Consistent (with and indicating the priorities of the organization)
– Controllable and flexible
Largest Market Share
Producing and selling more than anyone else!
Portfolio Matrix Strategies
Build, Hold, Harvest, and Divest
Build
Invest for growth
Hold
Retain position and share (often with no new investments)
Harvest
Milk to minimize ST cash (limited support)
Divest
Dogs (If cash flow is negative)