MKT 2

Strategic Planning
the managerial process of creating and maintaining a fit between the organization objectives and resources and the evolving market oppurtunities
Three Primary Levels of Strategy
Corporate, Business Unit, & Functional
Strategic business unit (SBU)
a subgroup of single business or collection of related businesses within the larger organization
SBU Characteristics
-A single business or a collection of related business
-A distinct mission and specific target market
-Control over its resources
-Its own competitors
-Plans independent of other SBUs in the larger organization
Market penetration
a marketing strategy that tries to increase market share among existing customers
Market Development
a marketing strategy that entails attracting new customers to existing products
Product Development
a marketing strategy that entails the creation of new products for present markets
Diversification
a strategy of increasing sales by introducing new products into new markets
Present Market, Present Product
Market Penetration
Present Market, New Product
Product Development
New Market, Present Product
Market Development
New Market, New Product
Diversification
Increase market share among existing customers
Market Penetration
Attract new customers to existing products
Market Development
Create new products for present markets
Product Development
[Innovation Matrix]
Add related products, Enter adjacent markets
Adjacent Innovation
Innovation Matrix – Axes
x: How to win
y: Where to play
Introduce new products into new markets
Diversification
[Innovation Matrix]
Use existing products, Serve existing markets
Core Innovation
[Innovation Matrix]
Develop new products, Create new markets
Transformational Innovation
BCG Portfolio Matrix
a tool for allocating resources among products or strategic business units on the basis of relative market share (x) and market growth (y)
Star
[BCG Portfolio Matrix]
-profit potential
-attracts competition
-may need heavy investment
Cash cow
[BCG Portfolio Matrix]
-established, successful SBUs
-competition weakened
-no serious investments
-produce cash
Problem child (question mark)
[BCG Portfolio Matrix]
-build into stars or phase out
-requires cash to build market share
Dog
[BCG Portfolio Matrix]
-low profit potential
-usually discontinued
Planning
the process of anticipating future events and determining strategies to achieve organizational objectives in the future
[BCG Portfolio Matrix]
Market Growth Rate: high
Relative Market Share: high
star
[BCG Portfolio Matrix]
Market Growth Rate: low
Relative Market Share: high
cash cows
[BCG Portfolio Matrix]
Market Growth Rate: high
Relative Market Share: low
question marks / problem children
[BCG Portfolio Matrix]
Market Growth Rate: low
Relative Market Share: low
dogs
Portfolio Management Strategies: BUILD
SBUs with potential to be stars
Portfolio Management Strategies: HOLD
successful cash cows
Portfolio Management Strategies: HARVEST
all SBUs except stars
Portfolio Management Strategies: DIVEST
dogs
GE Strategy Model – Axes
x: Business Position
y: Market Attractiveness
GE Strategy Model
similar to BCG Portfolio Matrix — how to invest in the BCG models (harvest/divest, cautiously invest, invest/grow)
The Marketing Plan
a written document that acts as a guidebook of marketing activities for organization
-examines the marketing environment
-creates common awareness of marketplace factors
-establishes strategies and activities that work towards stated objectives
-basis for comparison of actual and expected performance
Marketing Planning
designing activities relating to marketing objectives and the changing marketing environment
Mission Statement
a statement of the firm’s business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions
Business Mission Statement
-what business are we in
-focus on the market and consumer benefits, not the good or service
-limited # of goals
-stresses major policies & values
-defines major competitive spheres
-LT view
-short, memorable, & meaningful
Marketing Myopia
defining a business in terms of goods and services rather in terms of the benefits customers seek
SWOT analysis
identifying internal strengths (S) and weaknesses (W), and also examining external opportunities (O) and threats (T)
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
Competitive Advantage
a set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition
Cost competitive advantage
being the low-cost competitor in an industry while maintaining satisfactory profit margins
Experience curves
curves that show costs declining at a predictable rate as experience with a product increases
Product/ services differentiation competitive advantage
the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition
Niche competitive advantage
the advantage achieved when a firm seeks to target and effectively serve a small segment of the market
Competitive Advantage:
-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
Niche
Sustainable competitive advantage
an advantage that cannot be copied by that competition
Sources of Sustainable competitive advantage
-patents
-copyrights
-locations
-equipment
-technology
-customer service
-promotion
Marketing objective
a statement of what is to be accomplished through marketing activities
Marketing objectives should be:
-realistic
-measurable
-time specific
-consistent with the priorities of the organization
Purpose of good marketing objectives
1. Communicate marketing management philosophy
2. Provide management direction
3. Motivate employees
4. Force executives to clarify their thinking
5. Allow for better evaluation of results
Marketing Strategy
the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets
Target Market(s) + Marketing Mix =
Desired Results
Market Opportunity Analysis (MOA)
the description and estimation of the size and sales potential of market segments that are of interest to the firm AND the assessment of key competitors in these market segments
Target Market Strategy
-Appeal to the entire market with one marketing mix?
-Concentrated on one marketing segment?
-Appeal to multiple markets with multiple mixes?
Marketing mix (four Ps)
a unique blend on product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market
Can be tangible goods, ideas, or services
Ex. physical unit, package, warranty, service, brand, image, value
Product
-Product availability where and when customers want them
-All activities from raw materials to finished products
-Ensure products arrive in usable condition at designated places when needed
Place
Role is to bring about exchanges with target markets by:
-> informing, educating, persuading, and reminding
Includes integration of:
-> personal selling, advertising, sales promotion, & public relations
Promotion
-What a buyer must give up to obtain a product
-The most flexible of the Four Ps (quickest to change)
-Competitive weapon
Price x Units Sold = Total Revenue
Price
Implementation
the process that turns a marketing place into action assignments and ensures that these assignments are executed in a way that accomplishes the plans objectives
Evaluation
gauging the extent to which the marketing objectives have been achieved during the specified time period
Control
provides the mechanisms for evaluating marketing results in light of the plan’s objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines
Marketing Audit
a thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organziation
4 Characteristics of Marketing Audit
Comprehensive, systematic, independent, and periodic
Of the four Ps, the marketing mix typically starts with the
product
___ involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.
marketing strategy
____ means attracting new customers to existing products
market development
Market penetration is best defined as a marketing strategy that aims to:
increase market share among existing customers
___ component of the marketing mix includes after-sale service.
product
Use of experience curves supports which type of competitive advantage?
Cost