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Intro to Marketing Strategy
- 2. What is STRATEGY? A campaign to win in a competitive situation, taking into account your resources, your competition’s resources and the nature of the battlefield to obtain a sustainable competitive advantage.
- 3. What is Marketing Strategy? It means deliberately choosing a different set of activities to deliver a unique mix of value to the target market. Two components of marketing strategy – Target market selection (STP) – Selection of marketing mix variables
- 4. “if you don’t know where you are going, all roads will take you there!” Strategy provides the directions!
- 5. The Essence of Strategy! Choosing to perform activities differently than rivals do to create a sustainable competitive advantage!! What does Southwest Airlines do?
- 6. Example: Southwest Airlines If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.
- 7. Activity Map of Southwest Low prices Frequent Departures Lean and productive crew Point-to-Point flights Limited Passenger Amenities High aircraft utilization No meals No assign. seats No transfers No connections Standard fleets Limited use of travel agents Automatic Ticketing machines High employee compensation Emply. Stock ownership Flexible Union contracts 15 min. turnaround
- 8. What is Strategy? A game plan to win in a competitive situation. – Know yourself - your resources, your abilities, your strengths, your weaknesses – Know your competition - how will they react to you, their strengths, weaknesses – Identify a plan that leads to SUSTAINABLE COMPETITIVE ADVANTAGE. – To win - look at both the big picture as well as execution details.
- 9. Marketing: A Brief History Production Era (Ended in the 1920s) – Can we produce enough of the product Sales Era (ended in the late 1940s) – Find a way to sell what we produce Marketing Era (today, but ever changing) – What do customers want and how do we provide it for them at a price to make a profit.
- 10. “The business enterprise has only two basic functions — marketing and innovation.” Peter Drucker
- 11. Internal vs. Market Orientation Internal View External View Persuade customer to buy what company produces Focus Produce what customer wants to buy Generic product, production process, and delivery system Augmented product, customer benefits, and market segments Lowest deliverable cost Competitive Advantage Superior customer value Volume, cost, profit margins Objectives Profitable use of resources, market position, customer satisfaction, and loyalty Short-term, reactive Time Horizon Medium and long-run view of threats and opportunities
- 12. What is marketing? Gathering, monitoring, analyzing information – Environment – Customers – Competitors Interacting with all areas of organization, sharing information Developing, implementing, and controlling strategic marketing plan, based on information Creating satisfying exchanges
- 13. Marketing Manager Marketing & Sales R & D Other internal information sources Finance & Accounting Production Consultants & Advisors Competition Consumers Other Organizations Other Publics Suppliers Retailers & Wholesalers Marketing Role
- 14. What is Market Orientation? Superior ability to understand, attract, and keep valuable customers. Externally oriented culture Capabilities in market sensing, market relating, and anticipatory strategic thinking Adaptable and coherent organizational configuration of culture, capabilities, and processes
- 15. Elements of Market Orientation Shared Knowledge Base Configuration Focus on superior customer value Coherence of structure & systems Adaptability Culture is externally oriented Capabilities Market sensing Market relating Strategic thinking Superior Ability to Understand, Attract, and Keep Valuable Customers Customers Competitors Channels Collaborators
- 16. Advantages of Market Orientation Market Orientation Market-Based Strategy Customer Satisfaction & Retention $ $
- 17. Why does market orientation lead to greater profits? Cost and investment efficiency Employee satisfaction Price premium Revenue growth Competitive preemption
- 18. But…. Have to be truly market driven!! Superior ability to understand markets Sense emerging opportunities Anticipate competitors’ moves Make fact-based decisions Superior ability to attract and keep customers Deliver superior value Encourage loyalty Leverage market investments
- 19. Impediments to Being Market Driven Being oblivious to market Becoming compelled by the market Feeling superior to the market
- 20. Market Driven Culture Market-Driven Organization Self-Centered Organization All decision start with the customer and opportunities for advantage We’ll sell to whoever will buy Quality is defined by customers Quality is conformance to internal standards The best ideas come from living with customers Customers don’t know what they want Employees are customer advocates Customer relations are problems for the marketing dept Customer loyalty is key to profitability Customer data are a control mechanism and channels are conduits Customer knowledge is a valuable asset and channels are value adding partners New accounts (conquests) are what matters
- 21. Market Driven Culture Market-Driven Organization Self-Centered Organization No sacred cows—cannibalize yourself Protect the existing revenue stream Learn from mistakes Avoid mistakes Market research is decision insurance Market research is a justification tool Paranoia about competitors is healthy We can live with our competitors The behavior of competitors can be anticipated and influenced Competitors are unpredictable We know more than the competitors If competition does it, it must be good
- 22. Strategic AnalysisStrategic Analysis The 5C framework
- 23. Customers What needs do we satisfy? Company What special competence do we possess to meet those needs? Competitors Who competes with us in meeting those needs? Context What environmental factors limit us? Collaborators Who should we enlist to help us? The 5 C Strategic Analysis Framework
- 24. Schematic of the Marketing Process Based on Robert Dolan’s Note on Strategy, HBR Press CollaboratorsCustomers ContextCompany Competitors Segmentation Target Mkt Selection Positioning Product Place Promotion Price Acquisition Retention PROFITS
Editor's Notes
- How does SWA achieve this mission? Low fares through cost control: standard fleet, point to point flights, limited amenities, no middlemen On time departures: no connecting hassles, quick turnaround time, no seat assignments, un-congested airports (small cities or smaller airports of large cities) Good time: employee morale, personalities given importance, informal dress code, recruiting policies; internal promotion schemes; employee stock ownership, flexible work schedule
- A few main activities that link together, and others that feed into the main activities to reinforce them. The extent of sustainable competitive advantage lies in the number of linkages across different activities, since the more coherent the strategy (the better the fit), the more difficult it will be for competitors to imitate the strategy.