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1 Chapter 14 Exam Review. Two types: 1. Business firms – serves customers in order to earn a...
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Transcript of 1 Chapter 14 Exam Review. Two types: 1. Business firms – serves customers in order to earn a...
Two types:
1. Business firms – serves customers in order to earn a profit (rev > cost)
2. Not-for-profit – serves customers but not have profit as a goal
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Three Level of strategy in an organization:1. Corporate Level – top mgt directs overall
strategy ◦ Mgt focusses on the shareholder happiness and
stock price
Strategic Business Units (SBU): a group of different businesses within one firm
2. Business Unit Level – business unit managers set the direction for products and markets
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Three Levels of strategy in an organization:
3. Functional Level – each business unit has a specialty function like ‘finance’ ◦ Name of a department is usually the specialty function
Strategy Issues in Organizations Orgs need a reason to exist and a direction This is where business, mission and goals converge
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A Look Around: Where are we Now?Answer involves ID of
Customers – strategic directions must be customer-focussed and provide genuine value and benefitsCompetencies – what does the organization do best? Special capabilities, skills, resources, technologyCompetitors – know who they are
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Business Portfolio Analysis uses quantified performance measures and market growth to analyze a firm’s strategic business units as though they were a collection of separate investmentsPosition your firm’s SBU on a “growth Share” matrixVerticle axis – market growth rateHorizontal axis – relative market share eg largest competitor 50% of market your brand 25% of market
Your brand RMS = 25%/50% = 50%
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Cash CowsGenerate lots of cashHave dominant market share of slow growth market
StarsHigh share of high-growth marketsMay need extra cash to fuel growth
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Question Marks/problem childrenLow share of high growth marketsRequire lots of cash to maintain market share
Dogs Low share of low growth marketsGenerate enough cash to sustain
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1. Situation Analysis ◦SW/OT – Next Slide
◦Porter 5 forces Industry (Rivalry) Supplier -strength Customer analysis (Buyer -strength) Competitor (Substitutes) New Companies (Entry Exit)
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Before marketing activities are defined, marketers must understand the current and potential environment internally and externally
Internal: organizational resourcesStrengths Weakenseg. Costs, skills budgetExternal: environmental scanningOpportunityThreatseg. Social, demographic, technological
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2. Market Analysis - product focus and goal setting◦ID target markets through segmentation: grouping consumers into groups or segments eg all students or all girls◦Set marketing and product goals
◦Select Target Markets
◦Determine competitive advantages
◦Position the product
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Marketing Objective: statement of what is to be accomplished through marketing
Should:1. realistic, measurable
2. Time specific
“Achieve 10% increase in market share with in 12 months”
3. Direction
“...and introduce 5 new products in the next year”
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Marketing Strategy involves selecting and describing market segments
Market Segment: group sharing characteristics with similar product needs eg. Students
A target marketing strategy involves using a market opportunity analysis which is the description and estimation of size of market and sales potential, assessment of competitors in segment
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Competitive Advantage: unique features make product superior to competitors
A. Cost Competitive Advantage – getting low cost raw materials, efficiently produce item, having easily manufactured products
Cost Competitive Advantage: being a low cost compeitor in the industry while making a profit leasing to superior customer value
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Cost advantage – getting low cost raw materials, efficiently produce item, having easily manufactured products
Costs reduced through:
1. Experience curves – costs go down as experience with a product increases
-reflect learning by doing, technological advances eg. Salad making
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Cost advantage – getting low cost raw materials, efficiently produce item, having easily manufactured products
Costs reduced through:
2. Efficient Labour – outsourceing
3. No-frills goods and services – eg WestJet no meals
4. Government Subsidies – no interest loans
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Cost advantage – getting low cost raw materials, efficiently produce item, having easily manufactured products
Costs reduced through:
5. Product Design – make product easy to produce
6. Re-engineering – rethink and redesign processes
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Cost advantage – getting low cost raw materials, efficiently produce item, having easily manufactured products
Costs reduced through:
7. Product Innovations – make production easier
8. New Methods of Service Delivery – online ordering
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Competitive Advantage: unique features make product superior to competitors
B. Product /Service Differentiation Competitive Advantage – longer lasting advantage, providing value beyond low price eg. Brand names based on quality
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Competitive Advantage: unique features make product superior to competitors
C. Niche Competitive Advantage – target and serve single market
-usually for smaller companies with limited not able to compete with larger competitorseg. Serve only certain age group, geographical area
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Competitve Advantage: unique features make product superior to competitors
A Sustainable Competitive Advantage – cannot be copied by competitors, consumers have no reason why to patronize competitors eg. Rolex
-created through:1. skills – superior customer service 2. assets – patents, superior
-imitation by competitors indicates lack of competitive advantage
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3. Marketing Programme
Marketing Mix: blend of product, place/distribution, promotion, pricing (four P’s) to bring about maximal value of exchange
-use to gain advantages over competitors
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Marketing Mix:
Product – package, warranty, after sales support, image
Place/distribution – making products available when and where customers want them
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Marketing Mix:
Promotion – advertising, public relations, sales promotion, personal selling
– informing, education and persuading
Pricing – what buyer must give up to get product
- quickest to change
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4. Implementation: turns marketing plan into action to accomplish plan’s objectives (goals)
-involves:-detailed job assignments-timelines-budgets
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5. Evaluation: gauging the extent to which marketing objectives have been achieved
Common reasons for failing to achieve objectives/goals:
1.Unrealistic objectives2.Inappropriate marketing strategies3.Poor implementation4.Changes in the environment
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Control: correcting actions that do not help organization help achieve objectives
done through...Marketing Audit: periodic
evaluation of the objectives and performance of organization
-manage marketing resources
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