MARKETING STRATEGY Agenda Review of Hierarchy of Objectives Common Elements of Objectives The Process of Marketing Strategy Development BIO-BREAK The Evaluation of Opportunities Target Market Selection The Structure of Marketing Mix Strategies BIO-BREAK Generic Marketing Strategies Product Strategies Market Position Strategies
Marketing Strategy
Hierarchy of goals and objectives Organizational Goals and Objectives Marketing Goals and Objectives Marketing Mix Goals and Objectives Marketing Mix Element Goals and Objectives
Marketing Strategy
What business are you in? Mission statement Statement of marketing strategy Indicates product, market scope Shows growth factor Shows differential advantage Shows management orientation
Marketing Strategy
Elements of Objectives An effect Benchmark + effect = Desired Outcome Effect has to be measureable Should be realistic
Timeframe for evaluation Evaluation and effect should be related
Marketing Strategy
Marketing Strategy Development Recognize and evaluate an opportunity Market size and potential Key competitors Choose target market Develop Objectives for each opportunity Develop Marketing Mix Strategy for each opportunity Choose Marketing mix elements
Marketing Strategy
Opportunity Evaluation Review of the Rule of 3 Review of Requirements for Market Size Review of Relevant Competitive Set
Marketing Strategy
Target Market Selection Introduction to Market Segmentation Review of the Strategic Options Equivalent Behaviors as the Critical Variable
Marketing Strategy
Structure of Marketing Mix Strategies Are all Mix elements equally important? Product as the key Example using Product Life Cycle
Marketing Strategy
Generic Marketing Strategies Cost Leadership Lower costs of production and distribution Product Differentiation Unique product or brand Focus Focus on customer needs in a few segments
Marketing Strategy
Product Strategies Product Mix Strategies Market penetration versus market skimming
Premium Goods
Penetration
Medium
OverPricing
Average Quality
Bargain
Low
Hit and Run
Shoddy Goods
Cheap Goods
High
Medium
High
Super Bargain
Quality
Price
Low
Marketing Strategy
Product Strategies Product Market Growth Strategies
Old
Market Penetration Product Development (increase usage)
(new uses)
Market Development
Diversification
(new users)
(new users, new uses)
Old
New
Markets
New
Products
Marketing Strategy
Product Strategies Boston Consulting Group Strategy: Relative Market Share Market Growth Rate Problems with BCG Approach Difficult to estimate relative market share in rapidly growing markets
Marketing Strategy
BCG Matrix:
22%
Market Growth Rate
Stars
?
Some cash use Future cash cow
High cash use ? Is to build or not
Cash Cows
Dogs
Generate cash for ?, Stars
Low or no cash use When to divest
10%
0% 10x
1.5x Relative Market Share
.1x
(log scale)
Marketing Strategy
Market Position Strategies Market Follower Strategies Conscious Parallelism Similar products, prices Avoid unprofitable segments Market Niche Specialize in a very small group of customers Concentrated segmentation strategy‌‌
Marketing Strategy
Market Position Strategies 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
Increase Market Share BCG Antitrust constraints
Marketing Strategy
Market Position Strategies 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 Cheaper Goods Strategy Lower quality but much lower price Vulnerable to still cheaper goods Prestige Goods Strategy Increase both quality and price
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
Marketing Strategy
Encirclement Flanking Defense
Preemptive Defense
Attacker
Defender
Frontal
Contraction Defense
(bigger)
(smaller) Attack Counteroffensive
Position Defense
Guerilla Attack Mobile Defense Flank Attack Bypass