Marketing Strategy STRATEGIC MARKETING STRATEGIC MARKETING. Top Down Market Planning. Learning Objectives. Strategic Marketing

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1 ing Strategy STRATEGIC MARKETING Learning Objectives 1) Strategic Planning 2) Portfolio /-Share matrix BCG Model/Strategic Planning Institute 3) Product/ or Expansion Grid 4) 4 P s of marketing 5) Steps In Planning a Strategy Strategic ing Sometimes Called Top Down ing Business Planning SBU Investment Planning Strategic Resource Planning by Dr. Ted Mitchell Conduct Situation Assessment Establish Mission Establish Organizations Objectives Develop Organizational Strategies Conduct ing Audit Establish ing Objectives Select ing Strategies Select Target s Develop ing Mixes Develop ing Plans Develop ing Program Implement and Control Top Down Planning Harvard Business School Model Of How To Invest How to Choose Good Companies How to Sell Stock STRATEGIC MARKETING by Dr. Ted Mitchell

2 ing Strategy Strategic Planning Defining Corporate Mission Establish Strategic Business Units (SBUs) Allocating Resources To SBUs Planning New Businesses Mission Statements Define The Industrial Scope The Scope of Products Competencies Scope Scope Vertical System Scope Geographic Scope Strategic Business Units (SBU s) It can be treated as single business or a collection of related businesses for planning Own Customers (Target s) Own Competitive Set Own Resource Set Own CEO Profit Center Attractiveness Annual Size Profit Margin Competitive Intensity Technological Requirements Vulnerability Impact Social/Political/Legal Business Strength Share Share Product Quality Brand Reputation Distribution Effectiveness Promotional Effectiveness Unit Costs Material Supplies R & D performance SBU #1 SBU #2 SBU #4 SBU #5 Share

3 ing Strategy % of Total Corp Sales Share Share Share? Share?? Share Share

4 ing Strategy Foreign Home Domestic It is hard to define SBU s that are comparable to the competitions definitions It is difficult to establish the Share when the competition is difficult to define from the customer s point of view It has a growth bias (i.e., there is no opportunity for negative growth) They are static. There is no time dimension. Not all firms want to use R.O.I. as the primary goal. Foreign Home Domestic Bidding Problems With BCG? Bidding Share STRATEGIC MARKETING Share Strategic Planning Defining Corporate Mission Establish Strategic Business Units (SBUs) Allocating Resources To SBUs Planning New Business by Dr. Ted Mitchell Planned Is Intensive Integrative Diversification

5 ing Strategy Intensive Diversification Integrative Current Products Current NEW Penetration Product Development Current Products Current New Penetration Product Development Backward Integration Forward Integration s s NEW Development Diversification NEW Development Diversification Introduction To ing Strategy 4 P s Dr. Ted Mitchell MARKETING STRATEGY SOMETIMES CALLED BOTTOM UP STRATEGY STRATEGY FOR SBU MANAGERS BRAND MANAGEMENT STRATEGIES PRODUCT MANAGER STRATEGIES SMALL BUSINESS MARKETING STRATEGY 4P STRATEGIES A MARKETING MIX STRATEGY INCLUDES CHOICES ABOUT A TARGET MARKET PRODUCT PLACE PROMOTION PRICE GOALS OBJECTIVES CONTROL

6 ing Strategy Customer Centered Planning Controllable Non-controllable Variables Political Demographics Product Place Product Place Social Customer Customer Suppliers Customer Promotion Price Promotion Price Legal Cultural Technology Competitors UNCONTROLLABLE CONSUMER VALUES & TASTES DEMOGRAPHICS CULTURE AND SOCIAL INFLUENCES COMPETITION CHANNEL RELATIONSHIPS INFLATION UNEMPLOYMENT GNP GROWTH VALUE OF DOLLAR PATENTS RAW MATERIAL SHORTAGES Non-controllable Variables??? Suppliers Political Product Promotion Cultural Demographics Customer Place Price Technology Competitors Social Legal Blending of Variables SUGGESTIONS FOR THE FIFTH P PACKAGING POLITICS POWER PUBLICS

7 ing Strategy THE CHOICE OF TARGET MARKET IMPLIES MEASURED DEMAND OF ALTERNATIVE SEGMENTS SEGMENTED THE MASS MARKET DID MARKET RESEARCH STUDIED BUYER BEHAVIOR ADOPTED A CUSTOMER ORIENTATION PRODUCT NEW PRODUCT DEVELOPMENT PRODUCT LIFE CYCLE STRATEGIES PRODUCT LINE MANAGEMENT BRAND MANAGEMENT COST OF PRODUCTS FEATURES & QUALITY WARRANTY INSTALLATION SERVICE... PLACE CHANNEL DESIGN VMS MANAGEMENT LOGISTICS Supply Chain Management RETAILING COST OF DISTRIBUTION MARKET EXPOSURE PUSH OR PULL PROMOTION AUDIENCE RESPONSE BEHAVIOR SALESFORCE MANAGEMENT ADVERTISING MANAGEMENT PUBLIC RELATIONS PROMOTIONS & SPECIALS TARGET AUDIENCE OBJECTIVES COST OF ADVERTISING PRICE DEMAND BASED COST BASED COMPETITIVE BASED OBJECTIVES POLICY ON LEVEL, FLEXIBILITY DISCOUNTS & ALLOWANCES LIFE CYCLE CHANGES Alternative GOALS PROFIT GROWTH DIVERSIFICATION LEADERSHIP

8 ing Strategy Goals Have Two Aspects 1 A Goal is a statement that tells us how to evaluate alternative strategies 2 We can choose which goals we wish to pursue. That is to say, a goal is also an element of choice. Objectives An objective is a statement that operationalizes your goals. Objectives Tells Us What To Measure Objectives Tells Us How Much Is To be Expected OBJECTIVES IF THE GOAL IS PROFIT THEN OBJECTIVES MIGHT BE 15% RETURN ON INVESTMENT 20% RETURN ON SALES $3.00 EARNINGS PER SHARE 32% MARKET SHARE Different Ways to measure Profit Different Amounts of Profit To Be Expected CONTROL EVALUATE PROGRESS are we achieving our objectives FEED BACK SYSTEM are the objectives and goals still appropriate IF A MARKETING STRATEGY INCLUDES CHOICES ABOUT TARGET MARKET PRODUCT PROMOTION PRICE GOALS OBJECTIVES CONTROL CONSIDER TWO CHOICES UNDER EACH COMPONENT THEN HOW MANY STRATEGIES ARE THERE?

9 ing Strategy TARGET MARKET OLD VERSUS NEW PRODUCT HIGH VERSUS LOW QUALITY PROMOTION MASS ADV. VERSUS DIRECT MAIL PRICE HIGH VERSUS LOW PRICE GOALS PROFIT VERSUS GROWTH OBJECTIVES ROI VERSUS SALES CONTROL CENTRALIZED VERSUS LOCAL 2X2X2X2X2X2X2X2= STRATEGIES PEOPLE HAVE TO SIMPLIFY THE DESCRIPTION OF STRATEGIES!! CONSIDER THE TWO CHOICES GO INTO A NEW MARKET OR NOT INTRODUCE A NEW PRODUCT OR NOT COMBINING CHOICES INTO STRATEGY STATEMENTS CURRENT MARKET NEW MARKET WHEN A STRATEGY IS MENTIONED IT IS A SHORTHAND FOR A MULTITUDE OF CHOICE SELECTIONS MARKETING TEXTBOOKS PROVIDE DESCRIPTIONS OF MANY DIFFERENT STRATEGIES CURRENT PRODUCT NEW PRODUCT PENETRATION STRATEGY PRODUCT DEVELOPMENT STRATEGY MARKET DEVELOPMENT STRATEGY DIVERSIFICATION STRATEGY MARKET LEADER STRATEGY FAMILY BRANDING STRATEGY MARKET CHALLENGER STRATEGY FULL-LINE STRATEGY MULTIPLE NICHING STRATEGY ETC... QUESTIONS A N S W E R S

10 ing Strategy DESCRIPTION VS PRESCRIPTION There is the problem of learning a strategy. We need a Normative or Prescriptive framework as well as a descriptive framework.