MARKETING  STRATEGY
Eight M’s of Management <ul><ul><ul><ul><ul><li>Men  </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Money </li></ul...
<ul><li>“ Optimum Utilization  </li></ul><ul><li>of these resources (8 M)  </li></ul><ul><li>is  </li></ul><ul><li>Managem...
Marketing Strategy <ul><li>STRATEGY </li></ul><ul><li>A strategy is a fundamental pattern of present and planned objective...
Components of Strategy <ul><li>Components or Sets of issues: </li></ul><ul><li>Scope </li></ul><ul><li>Goals and Objective...
Hierarchy of Strategy Corporate Mission Corporate goals  & Objectives Corporate Development  Strategy Deployment of resour...
Porter Model of Competitive  Industry Structure Industry  Competition Intensity of  Rivalry Suppliers Buyers New Entrants ...
Threat of New Entrants <ul><li>Economies of Scale. </li></ul><ul><li>Capital requirements </li></ul><ul><li>Switching cost...
Bargaining Power  of Suppliers <ul><li>Many buyers and few sellers </li></ul><ul><li>Differentiated supplies </li></ul><ul...
Bargaining Power  of Customers <ul><li>Few dominant customers </li></ul><ul><li>Non-differentiated products </li></ul><ul>...
Threat of Substitutes <ul><li>Buyer’s willingness to substitute </li></ul><ul><li>Relative price and performance of substi...
Industry competitors <ul><li>Structure of Competition </li></ul><ul><li>Structure of costs </li></ul><ul><li>Degree of dif...
COMPETITOR ANALYSIS
Answer five key question <ul><li>Who are the competitors? </li></ul><ul><li>What are their strengths and weakness? </li></...
Answer five key question <ul><li>What are the strategic objectives and  thrusts of competitors? </li></ul><ul><li>What are...
COMPETITIVE ADVANTAGE by COMPETITIVE STRATEGY
Creating A  Differential Advantage <ul><li>Product </li></ul><ul><li>Distribution </li></ul><ul><li>Promotion </li></ul><u...
<ul><li>Hierarchy of goals and objectives  </li></ul><ul><li>Porter’s Economic Theory of Profits   </li></ul><ul><ul><li>B...
<ul><li>Generic Marketing Strategies </li></ul><ul><ul><li>Cost Leadership </li></ul></ul><ul><ul><ul><li>Lower costs of p...
<ul><li>Product Mix Strategies </li></ul><ul><ul><li>Market penetration versus market skimming </li></ul></ul>Quality High...
<ul><li>Product Market Growth Strategies </li></ul>Market Penetration (increase usage) Product Development (new uses) Mark...
<ul><li>Boston Consulting Group Strategy: </li></ul><ul><ul><li>Relative Market Share  </li></ul></ul><ul><ul><li>Market G...
<ul><li>BCG Matrix:  </li></ul>Stars Some cash use Future cash cow Cash Cows Generate cash for ?, Stars Dogs Low or no cas...
<ul><li>Market Leader Strategies </li></ul><ul><ul><li>Increase Size of Total Market </li></ul></ul><ul><ul><ul><li>Produc...
<ul><li>Market Leader Strategies (cont.) </li></ul><ul><ul><li>Increase Market Share </li></ul></ul><ul><ul><ul><li>BCG </...
<ul><li>Market Challenger Strategies </li></ul><ul><ul><li>Frontal Attack </li></ul></ul><ul><ul><ul><li>Out-innovate lead...
<ul><li>Market Challenger Strategies (cont.) </li></ul><ul><ul><li>Cheaper Goods Strategy </li></ul></ul><ul><ul><ul><li>L...
<ul><li>Market Follower Strategies </li></ul><ul><ul><li>Conscious Parallelism </li></ul></ul><ul><ul><ul><li>Similar prod...
Attacker (smaller) Defender (bigger) Position Defense Preemptive Defense Counteroffensive Contraction Defense Flanking Def...
eMarketing Is eMarketing anything new? … or just an adaptation of existing strategy? Addressability –  ability to identify...
eMarketing Interactivity –  customers can express their needs and wants  directly to the firm Marketers could always do th...
eMarketing Control –  customer’s ability to control flow and sequence of information Pull versus push medium…web versus te...
eMarketing Digitilization –  can the product or benefits be represented digitally? Does the media match the product’s attr...
Marketing Strategy <ul><li>Bear Theory </li></ul><ul><li>Differential versus Absolute Advantage </li></ul>
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Mktstrtgy

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Mktstrtgy

  1. 1. MARKETING STRATEGY
  2. 2. Eight M’s of Management <ul><ul><ul><ul><ul><li>Men </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Money </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Materials </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Machines </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Methods </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Market </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Milieu </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Minutes </li></ul></ul></ul></ul></ul>
  3. 3. <ul><li>“ Optimum Utilization </li></ul><ul><li>of these resources (8 M) </li></ul><ul><li>is </li></ul><ul><li>Management .” </li></ul>
  4. 4. Marketing Strategy <ul><li>STRATEGY </li></ul><ul><li>A strategy is a fundamental pattern of present and planned objectives, resource deployments and interactions of an organization with markets, competitors and other environmental factors. </li></ul><ul><li>Strategy should specify </li></ul><ul><ul><li>What </li></ul></ul><ul><ul><li>Where </li></ul></ul><ul><ul><li>How </li></ul></ul>
  5. 5. Components of Strategy <ul><li>Components or Sets of issues: </li></ul><ul><li>Scope </li></ul><ul><li>Goals and Objectives </li></ul><ul><li>Resource deployments </li></ul><ul><li>Identification of sustainable competitive advantage. </li></ul><ul><li>Synergy. </li></ul>
  6. 6. Hierarchy of Strategy Corporate Mission Corporate goals & Objectives Corporate Development Strategy Deployment of resources SBU – I SBU - n SBU – II Business Unit’s Objectives Deployment of Resources Across product-markets And functions Competitive Strategy Marketing strategy For product Market entry R&D Strategy & Plans Tactical marketing Plan for product Market entry HRM Strategy & Plans Operation Strategy & plans Environmental factors Corporate Strategy Business Strategy Functional Strategy
  7. 7. Porter Model of Competitive Industry Structure Industry Competition Intensity of Rivalry Suppliers Buyers New Entrants Substitute Power of Suppliers Power of Buyers Threat of Substitutes Threat of New Entrants Bargaining Bargaining
  8. 8. Threat of New Entrants <ul><li>Economies of Scale. </li></ul><ul><li>Capital requirements </li></ul><ul><li>Switching costs </li></ul><ul><li>Access to distribution </li></ul><ul><li>Expected retaliation </li></ul><ul><li>Brand equity </li></ul>
  9. 9. Bargaining Power of Suppliers <ul><li>Many buyers and few sellers </li></ul><ul><li>Differentiated supplies </li></ul><ul><li>Crucial supplies </li></ul><ul><li>Forward Integration </li></ul><ul><li>Backward Integration </li></ul><ul><li>Level of dependence </li></ul>
  10. 10. Bargaining Power of Customers <ul><li>Few dominant customers </li></ul><ul><li>Non-differentiated products </li></ul><ul><li>Small portion of customer’s total purchase </li></ul><ul><li>Backward integration </li></ul><ul><li>Forward integration </li></ul><ul><li>Key supplies </li></ul>
  11. 11. Threat of Substitutes <ul><li>Buyer’s willingness to substitute </li></ul><ul><li>Relative price and performance of substitutes </li></ul><ul><li>Cost of switching over to substitutes </li></ul>
  12. 12. Industry competitors <ul><li>Structure of Competition </li></ul><ul><li>Structure of costs </li></ul><ul><li>Degree of differentiation </li></ul><ul><li>Switching Costs </li></ul><ul><li>Strategic objectives </li></ul><ul><li>Exit barriers </li></ul>
  13. 13. COMPETITOR ANALYSIS
  14. 14. Answer five key question <ul><li>Who are the competitors? </li></ul><ul><li>What are their strengths and weakness? </li></ul><ul><ul><li>Identify key factors for success in the industry </li></ul></ul><ul><ul><li>Rate one’s company and competitors on each key success factor using a rating scale </li></ul></ul><ul><ul><li>Consumer implications for competitive strategy </li></ul></ul>
  15. 15. Answer five key question <ul><li>What are the strategic objectives and thrusts of competitors? </li></ul><ul><li>What are their strengths? </li></ul><ul><li>What are their response patterns? </li></ul>
  16. 16. COMPETITIVE ADVANTAGE by COMPETITIVE STRATEGY
  17. 17. Creating A Differential Advantage <ul><li>Product </li></ul><ul><li>Distribution </li></ul><ul><li>Promotion </li></ul><ul><li>Price </li></ul>
  18. 18. <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>
  19. 19. <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>
  20. 20. <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
  21. 21. <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
  22. 22. <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>
  23. 23. <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%
  24. 24. <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>
  25. 25. <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%
  26. 26. <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>
  27. 27. <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>
  28. 28. <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>
  29. 29. Attacker (smaller) Defender (bigger) Position Defense Preemptive Defense Counteroffensive Contraction Defense Flanking Defense Mobile Defense Flank Attack Frontal Attack Encirclement Bypass Guerilla Attack
  30. 30. 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…
  31. 31. 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
  32. 32. 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.
  33. 33. 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).
  34. 34. Marketing Strategy <ul><li>Bear Theory </li></ul><ul><li>Differential versus Absolute Advantage </li></ul>

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