Marketing Strategy 2
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  • 1. Marketing Strategy
    • Hierarchy of goals and objectives
    • Porter’s Economic Theory of Profits
      • Barriers to Entry
      • Competition
      • Substitutes
      • Customers
      • Suppliers
  • 2. Marketing Strategy
    • Generic Marketing Strategies
      • Cost Leadership
        • Lower costs of production and distribution
      • Differentiation
        • Unique product or brand
      • Focus
        • Focus on customer needs in a few segments
  • 3. Marketing Strategy
    • What business are you in?
      • Statement of marketing strategy
      • Mission statement
      • Indicates product, market scope
      • Shows growth factor
      • Shows differential advantage
      • Shows management orientation
  • 4. Marketing Strategy
    • Product Mix Strategies
      • Market penetration versus market skimming
    Quality High Medium Low Price High Medium Low Premium Goods Penetra- tion Super Bargain Over- Pricing Average Quality Bargain Hit and Run Shoddy Goods Cheap Goods
  • 5. Marketing Strategy
    • Product Market Growth Strategies
    Market Penetration (increase usage)‏ Product Development (new uses)‏ Market Development (new users)‏ Diversification (new users, new uses)‏ Markets Products Old Old New New
  • 6. Marketing Strategy
    • Boston Consulting Group Strategy:
      • Relative Market Share
      • Market Growth Rate
      • Problems with BCG Approach
        • Difficult to estimate relative market share in rapidly growing markets
  • 7. Marketing Strategy
    • BCG Matrix:
    Stars Some cash use Future cash cow Cash Cows Generate cash for ?, Stars Dogs Low or no cash use When to divest ? High cash use ? Is to build or not Relative Market Share 10x 1..5x .1x (log scale)‏ Market Growth Rate 22% 10% 0%
  • 8. Marketing Strategy
    • Market Leader Strategies
      • Increase Size of Total Market
        • Product-Market Growth Strategies
      • Protect Market Share
        • Fortification
          • Assortment of brands, sizes
        • Innovation
          • Best defense is a good offense
        • Counteroffensive
  • 9. Marketing Strategy
    • Market Leader Strategies (cont.)‏
      • Increase Market Share
        • BCG
        • Antitrust constraints
    Market Share Marketing Effort ($)‏ 100%
  • 10. Marketing Strategy
    • Market Challenger Strategies
      • Frontal Attack
        • Out-innovate leader
        • Tough to do, easier to defend
      • Flanking/Bypass Attack
        • Attack where leader is not looking
        • Find a new market segment
      • Price Discount Strategy
        • Buyers are sensitive to price
        • Works if leader does not cut price
  • 11. Marketing Strategy
    • Market Challenger Strategies (cont.)‏
      • Cheaper Goods Strategy
        • Lower quality but much lower price
        • Vulnerable to still cheaper goods
      • Prestige Goods Strategy
        • Increase both quality and price
  • 12. Marketing Strategy
    • Market Follower Strategies
      • Conscious Parallelism
        • Similar products, prices
        • Avoid unprofitable segments
      • Market Niche
        • Specialize in a very small group of customers
        • Concentrated segmentation strategy……
  • 13. Marketing Strategy Attacker (smaller)‏ Defender (bigger)‏ Position Defense Preemptive Defense Counteroffensive Contraction Defense Flanking Defense Mobile Defense Flank Attack Frontal Attack Encirclement Bypass Guerilla Attack
  • 14. eMarketing Is eMarketing anything new? … or just an adaptation of existing strategy? Addressability – ability to identify customer prior to purchase Marketers could always do this. So why is web different? Is it more efficient…? … only if you do not delete your cookies…? … or they keep extensive files on you…
  • 15. eMarketing Interactivity – customers can express their needs and wants directly to the firm Marketers could always do this too. So what is new? … another efficiency argument…? Memory – ability to access individual customer profiles and purchase histories This is probably valid. Information existed before but was hard to access
  • 16. eMarketing Control – customer’s ability to control flow and sequence of information Pull versus push medium…web versus television. Who control’s the flow? Definitely an eMarketing characteristic, but a two-edged sword. Why? Customers control the flow…… Accessibility – ability to obtain information….. “ Retrieving info from the Internet is like trying to drink from a fire hose.” You could always do this, web may be easier for some users.
  • 17. eMarketing Digitilization – can the product or benefits be represented digitally? Does the media match the product’s attributes? … a problem for all media…? So, does eMarketing exist? Maybe, or maybe it is just another information flow/distribution system to use in designing a marketing strategy to meet customer needs…(and maximize profits).
  • 18. Marketing Strategy
    • Bear Theory
    • Differential versus Absolute Advantage