Class 1 and 2 Slides

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Marketing Strategy Marketing Strategy and Managementand Management

Asif ShahzadAsif ShahzadEmail: [email protected]

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Sessions Outline� Course Structure

� Processes in Strategic Marketing Management� Defining the Organization’s Business, Mission,

and Goals� Formulating Product-Market Strategies� Drafting a Marketing Plan� Marketing Ethics and Social Responsibility

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Teaching Philosophy

� The teaching philosophy is guided by the following quote from Benjamin Franklin;

� “Tell me and I forget. � Teach me and I remember.

�Involve me and I learn.”

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Course Focus

� Content:� Current research� Current examples� Recent cases

� Delivery:� Case analysis � Class discussion� Lectures

**Your Experiences**

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Class Preparation

� Readings� Chapters and handouts

� Case studies� Preparation questions

� Lecture notes� Slides on subject website

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Assessment� Class Prep & Participation (10%)

� Attendance� Presentation of reasoned arguments� Relevance of comments� Respect and acknowledgement of other students’

contributions� Individual Assignment (10%)

� Assignment on Analysis – 5%� Surprise Quiz – 5%

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Assessment

� Group Presentation & project (15%)� A proposal outlining a new business, brand,

product or service in Pakistan � Written report and presentation� Due in Second Last Week

� Exams (65%)� Mid term – 25% (In week 8 / 9)� Final term – 40%

Contact DetailEmail: [email protected]

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What is strategy?

• A definition of long term goals (Chandler 1962)

• A definition of competitive domain (Andrews et al 1965)

• A continuous and adaptive response to changing capabilities and environment (Mintzberg 1979)

• A search for competitive advantage (Porter 1985)

• A means of focusing the resources of the business (Andrews 1980)

• A motivating and directing force for stakeholders (Chaffee 1985)

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Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.

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Marketing Strategy Should

� Be part of the over all strategy

� Be based on the clear understanding of the market, and its analysis

� Be based on a firm's strengths

� Address a firm's weaknesses

� React to threats

� Be integrated and coherent

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Introduction to

Foundations of Marketing

Strategy and Management

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Contrasting OrientationsContrasting Orientations

Market Integratedmarketing

Profits throughcustomer

satisfactionCustomer

needs

(b) The marketing orientation

FactoryExistingproducts

Selling andpromotion

Profits throughsales volume

Startingpoint Focus Means Ends

(a) The selling orientation

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In this session, you will learn about…

1. Defining the Organization’s Business, Mission, and Goals

Business Definition

Business Mission

Business Goals

2. Identifying and Framing Organizational Growth Opportunities

Converting Environmental Opportunities into

Organizational Opportunities

SWOT Analysis

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In this session, you will learn about…

3. Formulating Product-Market Strategies

Market-Penetration Strategy

Market-Development Strategy

Product-Development Strategy

Diversification

Strategy Selection

The Marketing Mix

4. Budgeting Marketing, Financial, and Production Resources

5. Developing Reformulation and Recovery Strategies

6. Drafting a Marketing Plan

7. Marketing Ethics and Social Responsibility

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The Primary Purpose of

Marketing

To create long-term and mutually

beneficial exchange relationships between

an entity and the publics (individuals and

organizations) with which it interacts.

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Expanding Responsibilities of Marketing Managers

Expanded responsibilities include:

Charting the direction of the organization

Contributing to decisions that will create

and sustain a competitive advantage and

affect long-term organizational

performance

They no longer function solely to direct day-to-day operations. They must make strategic decisions as well.

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Evolution of the Marketing Manager

This has prompted the emergence of

marketing strategy and management marketing strategy and management

as a course of study and practice.

From being only an implementer….

to being a maker of organization

strategy.

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Processes in Strategic Marketing Management

1. Defining the organization’s business, mission, and goals

2. Identifying and framing organizational growth opportunities

3. Formulating product-market strategies

4. Budgeting marketing, financial, and production resources

5. Developing reformulation and recovery strategies

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Defining the

Organization’s Business,

Mission, and Goals

Process One

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Business Definition

By defining a business from a

customer or market perspective…

an organization is appropriately

viewed as:

a customer - satisfying endeavor

a product-producing or service delivery enterprise.

not

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An organization should define a

business by:

The type of customers it wishes to serve

The particular needs of those customer

groups it wishes to satisfy

The means or technology by which the

organization will satisfy the customer

needs

“What business are we in?”

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Most statements describe:

the organization’s purpose

customers, products/services,

markets, philosophy, and technology

Business Mission

Underscores the scope of an

organization’s operations apparent in

its business definition

Reflects management’s vision of

what the organization seeks to do

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Benefits of Mission Statements

1. Crystallizes management’s vision of the

organization’s long-term direction and

character

2. Provides guidance in identifying, pursuing,

and evaluating market and product

opportunities

3. Inspires and challenges employees to do

those things that are valued by the

organization and its customers

4. Provides direction for setting business goals

or objectives

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Business Goals

Goals or objectives convert the organization’s mission into tangible actions and results that are to be achieved, often within a specified time frame.

Three major categories of goals:

1. Production

2. Financial

3. Marketing

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Production Goals

Apply to the use of manufacturing and service capacity and to product and

service quality.

Financial Goals

Focus on return on investment, return on sales, profit, cash flow, and

shareholder wealth.

Marketing Goals

market share

marketing productivitysales volumeprofitcustomer satisfactioncustomer value creation

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Identifying and Framing

Organizational Growth

Opportunities

Process Two

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Sources of environmental opportunity:

Unmet or changing customer needs

Unsatisfied buyer groups

New means or technology for delivering

value to prospective buyers

What might we do?

Converting Environmental

Opportunities into


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What do we do best?

Distinctive Competency describes an

organization’s unique strengths or qualities

including:

Skills

Technologies

Resources

…that distinguish it from other organizations.


Opportunities into


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What must we do?

Success Requirements are basic tasks

that an organization must perform in a

market or industry to compete

successfully.

If what must be doneis inconsistent with what can be doneto capitalize on an environmental

opportunity, an organizational growth opportunity

will fail to materialize.


Opportunities into Organizational

Opportunities

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SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

internal

external

A formal framework for identifying and framing organizational growth opportunities

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SWOT Analysis

Framework for focusing attention on the fact that an

organizational growth opportunity results from…

a good fit between an organization’s

INTERNAL CAPABILITIES

(Strengths & Weaknesses)

and

its EXTERNAL ENVIRONMENT

(Opportunities & Threats)

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Pose dangers to the welfare of the organization

Threats

Developments or conditions in the environment that have favorable implications for the organization

Opportunities

What an organization lacks or does poorly relative to competitors

Weakness

What the organization is good at doing or a characteristic that gives it an important capability

Strength

SWOT Analysis

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Questions to be asked once

SWOT has been identified

1. Which internal strengths represent

distinctive competencies? Do these

strengths compare favorably with what are

believed to be market or industry success

requirements?

2. Which internal weaknesses disqualify the

organization from pursuing certain

opportunities?

3. Does a pattern emerge from the SWOT?

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Formulating

Product-Market Strategies

Process Three

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DiversificationMarket

Development

MarketPenetration

ProductDevelopment

Existingproducts

Newproducts

Existingmarkets

Newmarkets

Product-Market Strategies

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Seeking a larger market share in a market in

which organization already has an offering

This strategy involves:

Attempts to increase present buyer’s

usage or consumption rates of the

offering

Attracting buyers of competing offerings

Stimulating product trial among potential

consumers

Market Penetration Strategy

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Introducing its existing offerings to markets other than those that the organization is

currently serving.

Reaching new markets requires:

Carefully considering competitor strengths

and weaknesses and competitor retaliation

potential

Modification of the basic offering

Different distribution outlets

Change in sales effort and advertising

Market Development Strategy

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LicensingExporting

Joint Venture or Strategic Alliance

Direct Investment

Market Development in the International Arena

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Creating new offerings for existing markets.

This approach may be taken for:

Product Innovation – develop totally new

offerings

Product Augmentation – enhance the

value to customers of existing offerings

Product line extension – broaden the

existing line of offerings by adding different

sizes, forms, flavors, etc.

Product Development Strategy

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Development or acquisition of offerings new to the organization and introducing those offerings

to publics not previously served by the organization.

Growing trend in recent years

High-risk strategy because both the

offering and market served are new to

the organization

Diversification Strategy

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Market-penetrationstrategy

Market-developmentstrategy

Estimated profit of$1 million


Action Response Outcome

Aggressivecompetition

Passivecompetition

Aggressivecompetition

Passivecompetition

Strategy Selection – Sample Decision Tree



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The Marketing Mix

Customer

ChannelStrategy

ProductStrategy

PriceStrategy

Communications Strategy

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Budgeting Marketing,

Financial, and Production

Resources

Process Four

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A formal, quantitative expression of an organization’s planning and strategy

initiatives expressed in financial terms

A well-prepared budget meshes and

balances an organization’s

Financial,

Production, and

Marketing Resources

so that overall organizational goals or

objectives are attained.

The Budget

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1. Operating Budget

Also referred to as a pro forma

Income Statement

Focuses on an organization’s income

statement

2. Financial Budget

Focuses on the effect that the

operating budget and other initiatives

will have on the organization’s cash

position

Components of a Budget

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Developing Reformulation

and Recovery Strategies

Process Five

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Comprehensive, systematic, independent, and

periodic examination of a company’s marketing

environment, objectives, strategies, and activities to

recommend a plan of action to improve the

company’s marketing performance.

The Marketing Audit

Helps answer the questions:

Are we doing the right things?

Are we doing things right?

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Focus can be on a business, product, or brand

Time Dimension can be short-run (typically one

year) or long-run (multi-year)

A formal written document that describes the context and scope of an organization’s marketing effort to

achieve defined goals or objectives within a specified future time period.

The Marketing Plan

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Marketing Ethics and

Social Responsibility

Marketing decisions reflect an

organization’s orientation toward the

publics with which it interacts

The marketplace is populated by

individuals with diverse value systems

Their actions will be judged publicly

by others with different values

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Sessions Take Away

Marketing strategy and management is the cap-stone coursefor most marketing degrees. In this course we will furtherdevelop theory and concepts that have been covered inprevious marketing courses and apply them to a real lifebusiness situation. You will be introduced to the principlesof strategy and learn how to take advantage of marketopportunities to generate sustainable business growth.Additionally, you will be exposed to cutting-edgeknowledge that will allow you to understand how toformulate and assess strategies and business models withregards to relevant organizational contexts.

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Next Sessions…

Cases studies

Aldi in Australia

Additional readings

The seven questions of marketing strategy

Innovation from the inside out – BOP

The right game: Use game theory to shape

strategy

Class 1 and 2 Slides

Documents

Transcript of Class 1 and 2 Slides