Lecture 1. What is a Strategy?

Transcription

1 Lecture 1 What is a Strategy? A strategy is a fundamental pattern of present and planned objectives (e.g. sales, profit, awareness), resource deployments (sales people, advertising, distribution systems, new products), and interactions of an organisation with markets, competitors and other environmental factors Definition suggests that a strategy should specify: o What (objectives to accomplish) o Where (industries and product markets under focus) o With Whom (suppliers, buyers, competitors, other) o How (which resources and activities to allocate) Components of Strategy 1. Scope A strategy must have a boundary e.g. market segments, time period Breadth of the strategic domain Geographic (e.g. Australia only) or market and time 2. Goals and objectives What is to be accomplished what is firm trying to achieve? Market share? Maintaining market leadership? Strategy gives purpose 3. Resource deployments Allocation of limited resources Putting distribution and advertising in place ahead of time 4. Identification of sustainable competitive advantage How the organisation will compete It s not about the competitor, it s about the customer 5. Synergy Whole greater than the sum of parts (having different parts working together) The Hierarchy of Strategies Three major levels of strategy are: 1. Corporate strategy o Decisions about the organisation s scope and resource deployments across its divisions or businesses 2. Business- level strategy (SBU) o How a business unit competes within its industry 3. Marketing strategy (Functional)

2 o Effective allocation and coordination of marketing resources and activities o E.g. promotion, distribution Marketing s Role in Formulating and Implementing Strategy Primary strategic responsibility of managers is to look outwards and forwards identify threats and opportunities Marketing managers are on the boundary between the firm and its customers, distributors and competitors Marketing managers therefore play a significant role in formulating and implementing overall strategy Market Strategy vs. Marketing Tactics 1. Market Strategy is long- term, but long term is relative to industry 2. Market strategy encompasses customers (i.e. segment choices) 3. Market strategy is all 4 Ps 4. Tactics is short term, relative to the industry 5. Tactics focuses on one of the 4 Ps. Tactics can be changed quickly but strategy cannot 6. Business Strategy is wider in focus than Market Strategy encompassing also the Financial Strategy, the HR Strategy, and the Network Strategy. 7. Marketing opportunities are not the same thing as Business opportunities. Marketing opportunities are always about customers. Interaction between firm and customer

3 Firm has inputs and outputs Marketing concept is about dynamics/interaction between customers Marketing strategy is about maintaining customer satisfaction so that firm remains profitable Firms sell to customers, make profit Customers control the resources (the money that the firm needs) More complex Clients don t pay or pay reduced amount. The organisation achieves social objective/achievement Sponsor gets satisfaction

4 Customer in middle, surrounded by marketing strategy variables (4 Ps), surrounded by environment Independent variables on left Dependent variables on right It s a stimulus/response model

5 Put evidence and theory together to solve the problem e.g. brand B needs to encourage trial, maybe be increasing awareness through advertising Marketing system on right is from a few slides back Formulating and Implementing Marketing Strategy Process Decision- making focus Analysis of the four Cs company, context, competitors and customers Integrating marketing strategy with the firm s other strategies and resources Market opportunity analysis o Understanding market opportunities o Measuring market opportunities o Market segmentation, targeting and positioning decisions Formulating strategies for specific market situations

6 Implementation and control Why is a Marketing Plan Important? Roadmap Management control Update new employees Obtain resources or financing Stimulates thinking so as to make better use of resources Assign responsibilities and tasks Identification of problem/opportunity/threat

7 Lecture 2 Marketing Plan 1.1 Introduction 1.2 Generic market 1.3 Environmental scan (incl. competitive analysis) This slide shows factors that influence how competitors behave Competitors are always changing Current and past strategies tell us what their future strategies may be Culture: some organisations are more competitive 1.4 Trade (cooperation analysis) 1.5 Customer behaviour by segment purpose is to locate opportunity 1.6 SWOT opportunities are about a customer group (market segment) and are strategic (all 4 Ps) 2.1 Strategy in the broad Section 2.2 Benefits (From buyer/user perspective) Benefits create value for the buyer. Clear articulation of benefits provides ways to determine promotion in section five. Attributes are not benefits. People buy benefits, not products. Benefits are psychological or sociological advantages. Benefits are made tangible through attributes. The attributes may be ideas/concepts. Section 2.3 Traits Traits are how we identify people, families, and firms. Trait info is required to identify the target market. Trait info allows operationalisation. Operationalisation means being able to identify, communicate, distribute, price, and design a product.

8 Section 2.4 Market Size Knowing market size allows management to set objectives and so manage resources and activities through time Market size is not fixed or knowable. Assumptions must be made to measure MS Section 3.1 Financial Objectives Profit, ROI, or for a non- profit it is balancing revenue and expenses Section 3.2 Marketing Objectives Revenue financial or marketing objective? Revenue=Price times Quantity. Marketers set the price and get the sales (through promotion and distribution) Revenue, sales units, awareness, market share Value of Preparing the Marketing Plan Communicate: if the result of the thinking and research can t be effectively communicated or used by the client, the project is unsuccessful. Design and communication: effectively designed and developing the market plan is one way to assure that the time and effort that has gone into the project, will be realised Research Projects Environmental scan Strategic decision Buyer analysis and research Benefit analysis and research Competitor analysis Collaborator analysis Market size analysis and research Define Decision Problem Understand the complete problem situation conduct a situational analysis Identify measurable symptoms separate the root problem from the observable symptoms Determine the relevant variables identify the different independent and dependent variables

9 Level of involvement for consumer decisions Consumer Decision Making Process 1. Problem recognition 2. Information search 3. Evaluation of alternatives (and selection) 4. Store choice and purchase 5. Post- purchase processes