MARKETING STRATEGY

1
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

2
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

3
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

4
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

5
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

6
Marketing Strategy

• Opportunity Evaluation
• Review of the Rule of 3
• Review of Requirements for Market Size
• Review of Relevant Competitive Set

7
Marketing Strategy

• Target Market Selection
• Introduction to Market Segmentation
• Review of the Strategic Options
• Equivalent Behaviors as the Critical Variable

8
Marketing Strategy

• Structure of Marketing Mix Strategies
• Are all Mix elements equally important?
• Product as the key
• Example using Product Life Cycle

9
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

10
Marketing Strategy

• Product Strategies
• Product Mix Strategies
• Market penetration versus market skimming

Premium Goods
Penetra- tion
Super Bargain
High
Quality
Over- Pricing
Average Quality
Bargain
Medium
Hit and Run
Shoddy Goods
Cheap Goods
Low
High
Medium
Low
Price
11
Marketing Strategy

• Product Strategies
• Product Market Growth Strategies

Market Penetration (increase usage)
Product Development (new uses)
Old
Markets
Market Development (new users)
Diversification (new users, new uses)
New
Old
New
Products
12
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

13
Marketing Strategy

• BCG Matrix

22
Stars Some cash use Future cash cow
? High cash use ? Is to build or not
Market Growth Rate
10
Cash Cows Generate cash for ?, Stars
Dogs Low or no cash use When to divest
0
10x
1.5x
.1x
(log scale)
Relative Market Share
14
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

15
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

16
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

17
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

18
Marketing Strategy
Encirclement
Flanking Defense
Preemptive Defense
Attacker (smaller)
Contraction Defense
Defender (bigger)
Frontal
Attack
Position Defense
Counteroffensive
Guerilla Attack
Mobile Defense
Flank Attack
Bypass
19
Marketing Strategy

• Next time
• MARKETING STRATEGY CASE
• For Barco Projection, please prepare, by team,
  the case discussion for class on 2/12. The
  deadline for receipt of the PowerPoint
  presentation is noon 2/12.
• Market Segmentation
• Please read chapter 6