Marketing Strategy & Marketing Environment (2)

Why is planning so important?
1. Enables company to speak in a clear voice in the marketplace: customers understand what they have to offer, what’s different to competitors, activities to be integrated
(ex: replacing home phones)
2. Prepares the business for: New products, new competitors, shrinking or developing markets, changes in life cycle
(ex: Kodak didn’t see digital market)
What are the different types of marketing strategies?
Corporate, business, and functional
Corporate Strategy
Highest level of strategic hierarchy that deals with overall direction of the organization
Business Strategy
Second level of strategic hierarchy
Deals with overall direction of strategic business unit (subgroup of single business or collection of related business within larger organization)
Functional Strategy
Third level of strategic hierarchy that deals with implementation of the strategic direction at the operational level
Marketing Strategy
Activites of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target market
Marketing Planning
Designing activities relating to marketing objectives and changing marketing environments
Focuses on developing detailed plans for day-to-day activities that carry out an organization’s functional plans
Marketing Plan
Written document that acts as a guidebook of marketing activities for the marketing manager
Marketing Process
1. Environmental scanning
2. Develop a marketing strategy
3. Market opportunity analysis
4. Target market strategy
5. Marketing mix
Mission Statement
Firm’s long term vision based on
-analysis of benefits sought by present and potential customers
-analysis of existing and anticipated environmental conditions
SMART Framework
Used for goal setting
Statement of what is to be accomplished through marketing activites
-Specific
-Measurable
-Attainable / achievable
-Realistic/result oriented
-Timely
Environmental Scanning
Collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan
Situation Analysis
SWOT – used to evaluate overall state of a company or strategic business unit
Internal: Strengths, Weaknesses [company analysis]
External: Opportunities, Threats [market analysis]
S in SWOT
Strengths (internal)
Identify capabilities to accomplish goals
Identify distinctive compences
Sustained competitive advantage emerges where competitors cannot imitate distinctive compentences
(is there something your company has that isn’t easily replicable?)
Strengths Checklist
-Distribution channels
-Market share
-Advertising efficiency
-Customer satisfaction
-Service reputation
-Sales force turnover
W in SWOT
Weaknesses (internal)
Identify characteristics that may inhibit or restrict the organizations performance
Neutralize shortcomings (correct, minimize, or avoid)
(does company undertake annual review of mission statement?)
O in SWOT
Opportunities (External)
What markets provide opportunity for growth?
Which allow the best opportunity to increase revenue?
T in SWOT
Threats (external)
Are there any new products that offer better benefits?
Are key markets shrinking?
External environment analysis
PESTEL analysis
Political, Economic, sociocultural, technology, environment, legal

Circle diagram – around target market

Pestel
Political
Affects us because of taxes we pay
How stable is gvt?
Is gvt favourable towards business?
pEstel
Economic
Distribution of consumer income (disposable income)
Inflation
Recession cycle
Interest rates
Exchange rates
peStel
Socio-cultural
Influenced by age, generation, country culture
Attitudes, values, lifestyles
pesTel
Technological
Growth of internet
Convergence of technology
Speed of change
Rate of innovation
Adoption of populations high-speed broadband available?
pestEl
Is there an eco/green social opinion to be considered?
pesteL
What federal, state, or global laws & regulations may affect the business?

Laws and regulation in relation to: product, price, distribution, promotion

ex: product labelling, food regulations

Competitive Environment
Knowledge of competitive pressure within an industry provides basis for strategy formulation
Factors: how many competitors? how big are they? how interdependent?
Types of Competition
Global competition: provide same product in all markets around the world

International competition: modified products for different countries

Competitive Advantage
The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition
Types of Competitive Advantage
Cost
Product/Service Differentiation
Niche Strategies
Cost Competitive Advantage
Being the low-cost competitor in an industry while maintaining satisfactory profit margins

Lower costs = lower prices & higher numbers sold OR
Same price as competitors & higher profit margin

Sources of Cost Reduction
Experience curves
Efficient labor
No-frills goods and services
Government subsidies
Inexpensive raw materials
Product design
Avoid marginal customers
Production innovations/efficient plan operations
New service delivery methods
Control overhead costs
Product/Service Differentiation
The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competitions
1. Image
2. Support
3. Quality
4. Design
Image Differentiation
Use image to create perception of difference
ex: BMW, Gucci, Hermes, Ferrari
Support differentiation
Use superior support to differentiate products which are similar
ex: Singapore Airlines, Ritz Carlton
Quality differentiation
Improve features to create a better product
ex: Peugeot – rain sensing wipers
Design Differentiation
Offer something that is truly different
ex: iphone
Niche Competitive Advantage
The advantage when a firm seeks to get and effectively serve a single segment of the market

Used by small companies with limited resources
May be used in a limited geographic market
Product line may be focused on a specific product category

Ansoff’s matrix:
Product-Market Growth Framework
Strategic opportunity identifies 4 alternatives:
Market penetration
Market development
Product development
Diversification

Consider organization as a whole
Consider the portfolio matrix for resource allocation

Market Penetration
Selling existing products to existing markets
Increase quality, productivity, marketing
Consider collaboration

ex: McDonald’s sell more Happy meals with Disney movie promotions (present market, present product)

Market Development
Extending existing products to new markets
New sales areas, segments, uses: consider exporting, buying competitors, or licensing

ex: McDonald’s opens restaurants in China (new market, present product)

Product Development
Developing new products for existing markets
Invest in R&D, modifications or extensions
Buy-in products

ex: McDonald’s introduces premium salads and McWater (present market, new product)

Diversification
Developing new products for new markets
Switch internal focus
Create new business units
Buy subsidaries
Technology shares

ex: McDonald’s introduces line of children’s clothing (new market, new product)