Marketing Strategy 2


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Marketing Strategy 2

  1. 1. Marketing Strategy <ul><li>Hierarchy of goals and objectives </li></ul><ul><li>Porter’s Economic Theory of Profits </li></ul><ul><ul><li>Barriers to Entry </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><ul><li>Substitutes </li></ul></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul>
  2. 2. Marketing Strategy <ul><li>Generic Marketing Strategies </li></ul><ul><ul><li>Cost Leadership </li></ul></ul><ul><ul><ul><li>Lower costs of production and distribution </li></ul></ul></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><ul><li>Unique product or brand </li></ul></ul></ul><ul><ul><li>Focus </li></ul></ul><ul><ul><ul><li>Focus on customer needs in a few segments </li></ul></ul></ul>
  3. 3. Marketing Strategy <ul><li>What business are you in? </li></ul><ul><ul><li>Statement of marketing strategy </li></ul></ul><ul><ul><li>Mission statement </li></ul></ul><ul><ul><li>Indicates product, market scope </li></ul></ul><ul><ul><li>Shows growth factor </li></ul></ul><ul><ul><li>Shows differential advantage </li></ul></ul><ul><ul><li>Shows management orientation </li></ul></ul>
  4. 4. Marketing Strategy <ul><li>Product Mix Strategies </li></ul><ul><ul><li>Market penetration versus market skimming </li></ul></ul>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. 5. Marketing Strategy <ul><li>Product Market Growth Strategies </li></ul>Market Penetration (increase usage)‏ Product Development (new uses)‏ Market Development (new users)‏ Diversification (new users, new uses)‏ Markets Products Old Old New New
  6. 6. Marketing Strategy <ul><li>Boston Consulting Group Strategy: </li></ul><ul><ul><li>Relative Market Share </li></ul></ul><ul><ul><li>Market Growth Rate </li></ul></ul><ul><ul><li>Problems with BCG Approach </li></ul></ul><ul><ul><ul><li>Difficult to estimate relative market share in rapidly growing markets </li></ul></ul></ul>
  7. 7. Marketing Strategy <ul><li>BCG Matrix: </li></ul>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. 8. Marketing Strategy <ul><li>Market Leader Strategies </li></ul><ul><ul><li>Increase Size of Total Market </li></ul></ul><ul><ul><ul><li>Product-Market Growth Strategies </li></ul></ul></ul><ul><ul><li>Protect Market Share </li></ul></ul><ul><ul><ul><li>Fortification </li></ul></ul></ul><ul><ul><ul><ul><li>Assortment of brands, sizes </li></ul></ul></ul></ul><ul><ul><ul><li>Innovation </li></ul></ul></ul><ul><ul><ul><ul><li>Best defense is a good offense </li></ul></ul></ul></ul><ul><ul><ul><li>Counteroffensive </li></ul></ul></ul>
  9. 9. Marketing Strategy <ul><li>Market Leader Strategies (cont.)‏ </li></ul><ul><ul><li>Increase Market Share </li></ul></ul><ul><ul><ul><li>BCG </li></ul></ul></ul><ul><ul><ul><li>Antitrust constraints </li></ul></ul></ul>Market Share Marketing Effort ($)‏ 100%
  10. 10. Marketing Strategy <ul><li>Market Challenger Strategies </li></ul><ul><ul><li>Frontal Attack </li></ul></ul><ul><ul><ul><li>Out-innovate leader </li></ul></ul></ul><ul><ul><ul><li>Tough to do, easier to defend </li></ul></ul></ul><ul><ul><li>Flanking/Bypass Attack </li></ul></ul><ul><ul><ul><li>Attack where leader is not looking </li></ul></ul></ul><ul><ul><ul><li>Find a new market segment </li></ul></ul></ul><ul><ul><li>Price Discount Strategy </li></ul></ul><ul><ul><ul><li>Buyers are sensitive to price </li></ul></ul></ul><ul><ul><ul><li>Works if leader does not cut price </li></ul></ul></ul>
  11. 11. Marketing Strategy <ul><li>Market Challenger Strategies (cont.)‏ </li></ul><ul><ul><li>Cheaper Goods Strategy </li></ul></ul><ul><ul><ul><li>Lower quality but much lower price </li></ul></ul></ul><ul><ul><ul><li>Vulnerable to still cheaper goods </li></ul></ul></ul><ul><ul><li>Prestige Goods Strategy </li></ul></ul><ul><ul><ul><li>Increase both quality and price </li></ul></ul></ul>
  12. 12. Marketing Strategy <ul><li>Market Follower Strategies </li></ul><ul><ul><li>Conscious Parallelism </li></ul></ul><ul><ul><ul><li>Similar products, prices </li></ul></ul></ul><ul><ul><ul><li>Avoid unprofitable segments </li></ul></ul></ul><ul><ul><li>Market Niche </li></ul></ul><ul><ul><ul><li>Specialize in a very small group of customers </li></ul></ul></ul><ul><ul><ul><li>Concentrated segmentation strategy…… </li></ul></ul></ul>
  13. 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. 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. 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. 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. 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. 18. Marketing Strategy <ul><li>Bear Theory </li></ul><ul><li>Differential versus Absolute Advantage </li></ul>