Marketing Strategy & Marketing Environment (2)

1. Enables company to speak in a clear voice in the marketplace: customers understand what they have to offer, what’s different to competitors, activities to be integrated
(ex: replacing home phones)
2. Prepares the business for: New products, new competitors, shrinking or developing markets, changes in life cycle
(ex: Kodak didn’t see digital market)

Corporate, business, and functional

Highest level of strategic hierarchy that deals with overall direction of the organization

Second level of strategic hierarchy
Deals with overall direction of strategic business unit (subgroup of single business or collection of related business within larger organization)

Third level of strategic hierarchy that deals with implementation of the strategic direction at the operational level

Activites of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target market

Designing activities relating to marketing objectives and changing marketing environments
Focuses on developing detailed plans for day-to-day activities that carry out an organization’s functional plans

Written document that acts as a guidebook of marketing activities for the marketing manager

1. Environmental scanning
2. Develop a marketing strategy
3. Market opportunity analysis
4. Target market strategy
5. Marketing mix

Firm’s long term vision based on
-analysis of benefits sought by present and potential customers
-analysis of existing and anticipated environmental conditions

Used for goal setting
Statement of what is to be accomplished through marketing activites
-Specific
-Measurable
-Attainable / achievable
-Realistic/result oriented
-Timely

Collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan

SWOT – used to evaluate overall state of a company or strategic business unit
Internal: Strengths, Weaknesses [company analysis]
External: Opportunities, Threats [market analysis]

Strengths (internal)
Identify capabilities to accomplish goals
Identify distinctive compences
Sustained competitive advantage emerges where competitors cannot imitate distinctive compentences
(is there something your company has that isn’t easily replicable?)

-Distribution channels
-Market share
-Advertising efficiency
-Customer satisfaction
-Service reputation
-Sales force turnover

Weaknesses (internal)
Identify characteristics that may inhibit or restrict the organizations performance
Neutralize shortcomings (correct, minimize, or avoid)
(does company undertake annual review of mission statement?)

Opportunities (External)
What markets provide opportunity for growth?
Which allow the best opportunity to increase revenue?

Threats (external)
Are there any new products that offer better benefits?
Are key markets shrinking?

PESTEL analysis
Political, Economic, sociocultural, technology, environment, legal

Circle diagram – around target market

Political
Affects us because of taxes we pay
How stable is gvt?
Is gvt favourable towards business?

Economic
Distribution of consumer income (disposable income)
Inflation
Recession cycle
Interest rates
Exchange rates

Socio-cultural
Influenced by age, generation, country culture
Attitudes, values, lifestyles

Technological
Growth of internet
Convergence of technology
Speed of change
Rate of innovation
Adoption of populations high-speed broadband available?

Is there an eco/green social opinion to be considered?

What federal, state, or global laws & regulations may affect the business?

Laws and regulation in relation to: product, price, distribution, promotion

ex: product labelling, food regulations

Knowledge of competitive pressure within an industry provides basis for strategy formulation
Factors: how many competitors? how big are they? how interdependent?

Global competition: provide same product in all markets around the world

International competition: modified products for different countries

The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition

Cost
Product/Service Differentiation
Niche Strategies

Being the low-cost competitor in an industry while maintaining satisfactory profit margins

Lower costs = lower prices & higher numbers sold OR
Same price as competitors & higher profit margin

Experience curves
Efficient labor
No-frills goods and services
Government subsidies
Inexpensive raw materials
Product design
Avoid marginal customers
Production innovations/efficient plan operations
New service delivery methods
Control overhead costs

The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competitions
1. Image
2. Support
3. Quality
4. Design

Use image to create perception of difference
ex: BMW, Gucci, Hermes, Ferrari

Use superior support to differentiate products which are similar
ex: Singapore Airlines, Ritz Carlton

Improve features to create a better product
ex: Peugeot – rain sensing wipers

Offer something that is truly different
ex: iphone

The advantage when a firm seeks to get and effectively serve a single segment of the market

Used by small companies with limited resources
May be used in a limited geographic market
Product line may be focused on a specific product category

Strategic opportunity identifies 4 alternatives:
Market penetration
Market development
Product development
Diversification

Consider organization as a whole
Consider the portfolio matrix for resource allocation

Selling existing products to existing markets
Increase quality, productivity, marketing
Consider collaboration

ex: McDonald’s sell more Happy meals with Disney movie promotions (present market, present product)

Extending existing products to new markets
New sales areas, segments, uses: consider exporting, buying competitors, or licensing

ex: McDonald’s opens restaurants in China (new market, present product)

Developing new products for existing markets
Invest in R&D, modifications or extensions
Buy-in products

ex: McDonald’s introduces premium salads and McWater (present market, new product)

Developing new products for new markets
Switch internal focus
Create new business units
Buy subsidaries
Technology shares

ex: McDonald’s introduces line of children’s clothing (new market, new product)