Strat Mktg Basic Slides Fall 2012-1

7/29/2019 Strat Mktg Basic Slides Fall 2012-1

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Shift from Consumer Behaviorto Strategic Marketing

Level of analysis?

Consumer behavior: micro level

Strategic marketing: macro level

Focus?

Consumer behavior: customer Strategic marketing: competitor

Duration?

Consumer behavior: short-term

Strategic marketing: long-term

Organizational level

Consumer behavior: front-line marketers

Strategic marketing: top-level marketers


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STRATEGIC MARKETING

Basic Goal of StrategicMarketing

Environmental Analysis (SWOT)

Generic Competitive Strategies Portfolio Analysis Product/Market Expansion Grid


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BASIC GOALS OF STRATEGICMARKETING

Identifying a core competency

Developing a sustainable competitive

advantage

Focusing on a long-term strategy

Being proactive rather than reactive


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CEOs top priorities

Of these following 10 issues, which should be the toppriority for a CEO?

Talent acquisition

Innovation

Corporate brand and reputation

Sustainability

Investor relations

Business growth

Cost optimization

Government regulation Customer relationships

International expansion


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Marketers must analyze

strengths and weaknesses for

their company and their key

competitors.

Goal is to identify distinctivecompetencies that can be used

for competitive advantage.

ENVIRONMENTAL ANALYSIS(SWOT)


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Fortunes methodology

Survey of executives

Evaluate companies in their industry,but not their own company

Fortune focuses on 8 key attributes

Fortunes Annual List of Most AdmiredCompanies


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Innovation

Financial soundness

Use of corporate assets

Long-term investment

People management

Quality of management

Social responsibility

Quality of products/services

Fortunes 8 attributes


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Marketers must also analyzeenvironmental opportunities andthreats that could impact

company Political/Legal/Regulatory

Economic

Technological

Societal

Competitive

ENVIRONMENTAL ANALYSIS(SWOT)


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GENERIC COMPETITIVESTRATEGIES: Prof. Porter

Cost Leadership: lowestprice in a broad market

Differentiation: superiorfeatures in a broad market

Niche or Focus: superiorcustomer satisfaction in anarrow market

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Which strategy will work?

Each of these 3 genericcompetitive strategies can beeffective.

In most industries you will find all3 strategies represented byvarious competitors.

If you dont, this might signal amarket entry opportunity.

Beware! Getting caught in themiddle can be a recipe for

failure.


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THE NEED TO DIFFERENTIATE BRANDEDPRODUCTS FROM PRIVATE-LABELS OR

GENERICS

Companies that pursue adifferentiation strategy oftenhave to explain to consumers

why their products are betterthan lower priced or genericcompetitors.


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Linking Promotional Strategyand Competitive Strategy

Companies that follow adifferentiation strategy usually investheavily in promotional efforts (often

advertising) to drive home theirsuperior features and benefits.


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THE LINK BETWEEN BRANDEQUITY AND DIFFERENTIATION

MOST COMPANIES THAT PURSUEA DIFFERENTIATION STRATEGYARE ALSO ATTEMPTING TO BUILDBRAND EQUITY.

BRAND EQUITY REPRESENTS THEINTRINSIC VALUE OF A BRAND.

BRANDS WITH A HIGH DEGREE OF

BRAND EQUITY USUALLY AREWIDELY RECOGNIZED AND HAVEHIGHLY LOYAL CUSTOMERS.

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PORTFOLIO ANALYSIS

Most corporations have multipleproduct lines and strategicbusiness units (SBUs).

Challenge: How can youeffectively manage these variousunits?

Answer: You must manage these

diverse units as a portfolio. Portfolio theory was first

developed in finance.

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15

e os on onsu nge os on onsu ngGroups Growth-ShareGroups Growth-Share

MatrixMatrix

3

?

10x 4x 2x 1.5x 1x10x 4x 2x 1.5x 1x

20%-20%-

18%-18%-

16%-16%-

14%-14%-12%-12%-

10%-10%-

8%-8%-

6%-6%-4%-4%-

2%-2%-

00Marketgrowt

hrate

Relative market share

Stars

Cash cow

Question marks

Dogs? ??5

4

2

1

68

7.5x .4x .3x .2x .1x.5x .4x .3x .2x .1x


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MARKET SHARE RELATED TORETURN ON INVESTMENT

16


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17

FunctionFunctionof Accumulatedof Accumulated

ProductionProduction

$10

$8

$6

$4

$2

-

-

-

-

-Costperu

nit

Costperunit

- - - -100,000100,000 800,000800,000400,000400,000200,000200,000

Accumulated productionAccumulated production

T1Experience

curve

Current price

B

A


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Product /Market Expansion GridProduct /Market Expansion Grid

1. MarketPenetration

2. MarketDevelopment

3. ProductDevelopment

4. Diversification

Existing

Markets

NewMarkets

ExistingProducts

NewProducts


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STRATEGIC MARKETING

Basic Goal of StrategicMarketing

Environmental Analysis(SWOT)

Generic CompetitiveStrategies

Portfolio Analysis Product/Market Expansion

Grid

Strat Mktg Basic Slides Fall 2012-1

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