BUAD 307—MARKETING FUNDAMENTALS

MARKETING STRATEGY

Perner 2BUAD 307OVERVIEW AND STRATEGY

Learning Objectives

• Appreciate– The scope of strategic

decisions– Tradeoffs that firms

must make in their decisions

– Cumulative and “spill-over” effects of strategic decisions and the need for consistency

– The need for industry balance and firm unit cash flow balance

Perner 3BUAD 307OVERVIEW AND STRATEGY

Strategy

• Plan – To achieve desired

objectives (e.g., profit, market share)

– Based on available resources (e.g., financial, patents, trademarks, people, brand name/image , distribution channels)

– Subject to choices made (e.g., willingness to take risk, short run vs. long run goals)

Perner 4BUAD 307OVERVIEW AND STRATEGY

MARKETING STRATEGY

EXPERIMENTATION/EXPRIENCE

RESOURCES ENVIRONMENT

PRIORITIES/ OPPORTUNITY

COSTS

STRATEGY

Perner 5BUAD 307OVERVIEW AND STRATEGY

Market Balance

• Different firms should attempt to offer different forms of value, appealing to different customer segments—otherwise, competition is likely to degenerate into price competition

EASYTECH, LTD.

EASE OFUSE

BRUIN PRIDE, INC.

LOW PRICE

TROJAN CREATIONS, INC.

PERFORMANCE

PATIENCE-IS-STUPID,INC.

SPEED

MICROGEEKS, LTD. SMALLSIZE

A WELL BALANCED GADGET INDUSTRY

Perner 6BUAD 307OVERVIEW AND STRATEGY

Core Competencies

• Broad, fundamental capabilities—not readily imitated by competitors— in which an organization excels

• Deployable across a variety of products and situations– E.g., stylish design of electronics (Apple)– E.g., economies of scale and broad

assortment of online merchandise (Amazon)

Perner 7BUAD 307OVERVIEW AND STRATEGY

Examples of Objectives

• Profit level• Profit growth• Total unit

sales• Growth in unit

sales• Growth in

dollar sales• Total dollar

sales• Brand

perception by customers

– Value– Quality– Innovativene

ss– Reliability

• Brand name recognition

• Brand name recognition by product category

• Product availability– Availability across

retailers and other distributors

– Store placement• Percentage of products

sold at full price• Percentage of revenue

from new products• Affordability of product• Elimination of unsafe

product ingredients

Perner 8BUAD 307OVERVIEW AND STRATEGY

Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis

STRATEGY

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

INTERNALTO FIRM

EXTERNALTO FIRM

Perner 9BUAD 307OVERVIEW AND STRATEGY

SWOT

• Deciding where to concentrate resources

• Using strengths and opportunities to compensate for weaknesses and threats

Perner 10BUAD 307OVERVIEW AND STRATEGY

SWOT—Apple

• Strengths– Strong brand name– Highly regarded products– Wide mix of products

(computers, cell phones, tablets, entertainment devices)

• Weaknesses– Dependence on cell phone

service providers– Limited cell phone variations– Dependence on the legacy of

Steve Jobs for brand image

• Opportunities– Growth in tablet market– Growing demand in emerging

markets– New products

• Threats– Amazon Fire phone– Android devices (free operating

system)– Counterfeiting and industrial

espionage– Competition—both on low cost

and on innovative features– Declining desktop and laptop

markets in developed countriesSource: “Apple,” Global Markets Direct SWOT Reports (from Business Essentials), August 1 2014