A (1)____ strategy focuses on reducing expenses and, in turn, lowers product prices while targeting a broad array of market segments. One way is by securing raw materials from lower-cost suppliers. Also, significant investments in capital equipment may be necessary to improve the production or distribution process and achieve these lower unit costs. The cost leader still must have adequate quality levels. Campbell Soup’s sophisticated product development and supply chain systems have led to huge cost savings. So its cost leadership strategy has resulted in lower prices for customers—causing its market share to increase in the current recession.
ex: walmart tries to reduce expenses over everything they sell.
A (2)_____ strategy (cell 2) requires products to have significant points of difference in product offerings, brand image, higher quality, advanced technology, or superior service to charge a higher price while targeting a broad array of market segments. This allows the firm to charge a price premium. General Mills uses this strategy in stressing its nutritious, high-quality brands in reaching a diverse array of customer segments.
(diverse range of products) (emphasis setting apart theirs from another)
A (3)____focus (narrow range) strategy (cell 3) involves controlling expenses and, in turn, lowering product prices targeted at a narrow range of market segments. Retail chains targeting only a few market segments in a restricted group of products often use a cost focus strategy successfully. IKEA is now the world’s largest furniture retailer by selling flat-pack, self-assembly furniture, accessories, and bathroom and kitchen items to cost-conscious consumers. ( go after people w/ specific purpose)
Finally, a (4)_____ focus strategy (cell 4) requires products to have significant points of difference to target one or only a few market segments. The average age of today’s Toyota owner is 47. So a concerned Toyota product planning group visited cities where young people are buying and renting loft apartments. The planners discovered these young city dwellers need smaller cars they can park in cramped spaces. This suggests offering a new Toyota model with an important point of difference for a narrow segment of buyers—a differentiation focus strategy.
(2)_____Marketing Plans Usually developed by a marketing or product manager (discussed later in the chapter) in a consumer products firm such as General Mills, annual marketing plans deal with marketing goals and strategies for a product, product line, or entire firm for a single year.
Communicate (1)____ and the Means of Achieving Them Those called on to implement plans need to understand both the goals sought and how they are to be accomplished.
Have a Responsible (2)____ Willing to Act Successful programs almost always have a product or program champion who is able and willing to cut red tape and move the program forward. Such a person often has the uncanny ability to move back and forth between big-picture strategy questions and specific details when the situation calls for it. Program champions are notoriously brash in overcoming organizational hurdles. (always gonna have someone behind it to make it happen and have one person who can cut red tape)
Reward Successful (3)_____: When an individual or a team is rewarded for achieving the organization’s goal, they have maximum incentive to see a program implemented successfully because they have personal ownership and a stake in that success.
Take Action and Avoid (4)_______ Management experts warn against “paralysis by analysis,” the tendency to excessively analyze a problem instead of taking action. To overcome this pitfall, they call for a “bias for action” and recommend a “do it, fix it, try it” approach. Don’t let the pursuit of perfection stand in the way of the very good. Do something!
4. Paralysis by Analysis
4 generic business strategies: involve combinations of…
1) Competitive scope or the breadth of the target markets
2) Stress on (2)_____ versus product (2)___.
o Diversification analysis: diversification (selling new product to new markets). To reduce expenses, marketers can
o (a) generate additional economics of scale in marketing and production costs and
o (b) reduce personnel and other non marketing costs, product rejects through improved quality, and so forth.
o Synergy analysis:
o Marketing synergies (efficiencies), which run (3)_____across the row of the various products offered by the firm to a single market segment;
o R&D-manufacturing synergies (efficiencies), which run (4)_____ down a column of the various market segments targeted for a given product or product class.
o The interactions or synergy effects of these marketing and production efficiencies result in five alternative combinations: market-product concentration, market specialization, product specialization, selective specialization, and full coverage.