Combined Topics - Strategic Marketing & Management

*[email protected], +255-784-455 499*STRATEGIC MARKETINGTOPICSTrends & OverviewPilot LectureMacroenvironment Factors (+ SLEEPTIN)Customers AnalysisIndustry Analysis: competitors & Markets (Porters Five Forces Framework).Internal Vs. External AnalysisManaging the Marketing StrategyMarket Driven Strategy (A case of South West Airline)

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*[email protected], +255-784-455 499*Topics Continue 9. Porters Generic Strategies10. Pricing Strategies and Selling Process11. Product Decisions (Ansoffs Matrix)12. Any current issues in Strategic Marketing, in Tanzanian Business Environment.


*[email protected], +255-784-455 499*DETAILED PPT SLIDESBy

Prof. Elisante Gabriel (MCIM)PhD (Finland), MSc (UK), PgD (CIM), ADBA, Mech. Eng. (MTC)

[email protected] Tel. +255-784-455499www.olegabriel.com


*[email protected], +255-784-455 499*TRENDS & OVERVIEWWhat is Strategic Marketing Mgt?This is a system approach of facilitating the timely exchange of values within the business relations while coping with a network of complexities (Gabriel, 2006)

It is imperative for strategists to understand that the heterogeneity of customers should be managed carefully while striving for SCA


*[email protected], +255-784-455 499*SIX COMMANDMENTS OF STRATEGIC MARKETING (By Gabriel E. ,2003)Create Superior performanceSustain Superior performanceUnderstand your core business (Value NW)Know your Competitor as you know yourselfMake sure you are sophisticatedUnderstand your Internal and External Target market and react to the feedback


*[email protected], +255-784-455 499*(A): BASIC CONCEPTSWhat is Marketing ?This is a social and managerial process by which individuals and groups obtain their needs through creating and exchanging products and values with others.There is always a consideration connected to this exchange, which can be in a material/kind form.


*[email protected], +255-784-455 499*WHAT IS BUSINESS?This is a specific activity for specific objectives, for specific people, to be performed by specific people within a specified period of TIME.


*[email protected], +255-784-455 499*Business ScopeBusiness is beyond just Creating, Promoting, and delivering goods & Services to consumers and Business.Nowadays, Marketers are involved in marketing ten types of entities:goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.


*[email protected], +255-784-455 499*What is Management ?This is an art of coping with complexitiesIf compared to Leadership, they differ in the sense that leadership tends to cope with changes.Leadership can either be: Autocratic, Bureaucratic or ParticipatorySometimes a combination is the way forward: no one is superior to another


*[email protected], +255-784-455 499*Why studying Strategic Marketing Management ?Changes in Market structureCompetitionCultural dynamicsMicro & Macro FactorsImpact of TechnologyMarginal Propensity to Save/ConsumeChanges in Buyers Behavior Heterogeinity


*[email protected], +255-784-455 499*Generic philosophies (Concepts) in MarketingThe Production Concept (the oldest)Consumers will prefer products that are widely available and affordable

The Product Concept:Consumers will favour those products that offer the most quality, performance, or innovative features (Fallacy & Myopia) eg: GM:how can they know until they see?..


*[email protected], +255-784-455 499*Selling Concept Consumers and business if left alone, will normally buy a small quantity of Organizations products. For this very reason, the Organization must undertake an aggressive selling and promotion effort- Buying inertia (resistance)- The battery for effective selling to stimulate more buying


*[email protected], +255-784-455 499*The Marketing ConceptThe Organizational goals could be achieved if the Company will be more effective than competitors in creating, delivering, and communicating customer value to its chosen target markets- Start and end with the customer- Love the customer not the product- Profits through customer satisfaction


*[email protected], +255-784-455 499*Four Pillars of the Marketing ConceptTarget MarketCustomer needsIntegrated MarketingProfitability


*[email protected], +255-784-455 499*Selling Vs Marketing ConceptTheodore Levitt of Harvard University gave this perceptive contrast:

Selling focuses on the needs of the seller; Marketing on the needs of the buyer. Selling is preoccupied with the sellers need to convert his product in to cash; Marketing with the idea of satisfying the needs of the customer using synergy


*[email protected], +255-784-455 499*Societal Marketing ConceptThe Organization should determine the needs and interests of target markets and serve them while maintaining Consumers and society well-beingThis philosophy considers the aspects of; environment, resources, demographic factors,Worldwide economic problems, neglected Social services, etc


*[email protected], +255-784-455 499*TWO ADDITIONAL CONCEPTSRelationship MarketingThere is a need to maintain a good relationship with your customers than just saving them with products. Mutual relationship will increase success in business than transactional.


*[email protected], +255-784-455 499*.One-to-one MarketingWith the power of TECHNOLOGY in the market, marketer can now serve him and not them. A customer can be served exactly according to his demand and convenience (eg UPS & FEDEX). Find More customers for products and more products for customers (Ref. Don Peppers Video Cassette)


*[email protected], +255-784-455 499*Analytical ModelsBCG: Boston Consulting Group (USA)This model has been developed by students of Boston College in USA. The Company classifies all its SBUs according to the growth-Share Matrix. The BCG Matrix has two axes. The vertical one represents Market Growth rate (market attractiveness) whereas the Horizontal one represents Relative Market share (Market strength)


*[email protected], +255-784-455 499*Components of BCGProblem Children/ Question MarksThese are low-share SBUs in high Growth Markets. Management should think with due care, which SBU to build and which to phase outStarsThese are both of High Growth rate and Market share. They should be held carefully


*[email protected], +255-784-455 499*Cash CowsThese are of Low-growth with high Market share. They need less investment to retain them in the Market. The Management should harvest cash from these SBUs and pay for bills and support other SBUsDogs These SBUs are of Low-growth and Low Market-share. Low cash generation


*[email protected], +255-784-455 499*PROBLEM CHILD(Build)STAR(Hold)CASH COW(Harvest)DOG(Divest)BCG MODEL Market Growth RateLOW HIGHHIGH LOW Relative Market Share (% Competitor)


*[email protected], +255-784-455 499*Micro & Macro EnvironmentMicroThis is an internal environment. It entails dynamic forces within the industry. These factors include: Vendors, Competitors, Customers MacroThis is the general environment, which sometimes is referred as external. It includes the following factors; (SLEEP-TIN)


*[email protected], +255-784-455 499*SWOT AnalysisSW = Strength and Weakness (INTERNAL)OT = Opportunities and Threats (EXTERNAL)This analysis is also useful in assessing the position of a product or SBU/SBA/SME. The internal assessment deals with the Organizational capability of the SBU, including managerial competence. OT deals with external variables (Eg. Mobile Vs Ear disease, Alcohol/Pork Vs Faith)


*[email protected], +255-784-455 499*SYNERGY This is a concept in Marketing management, which outlines that, system approach is more effective for higher performance. The concept claims that, the result of the combined efforts of individuals (as a system) is greater than when they perform the same separately.Mathematically: 1+1 > 2. (TEAM WORK)


*[email protected], +255-784-455 499*Customer Vs ConsumerCustomerThis is the one whom you interact with for the service encounter, Moment of truth, Closing the sale. This can be an individual or an Organization (Eg Wholesalers are .)ConsumerThe one who uses/consumes the product in the real sense (Eg a of a bar of chocolate)


*[email protected], +255-784-455 499*TYPES OF CUSTOMERSCustomers can be categorized in different forms. They can;Person Vs Non-Person = Consumer Vs Organizational/Industrial/InstitutionalNew Vs ExistingIn Consumer Market, for instance, Individuals can represent nine types of customers. These to include; Snobbish, timid, nervous, . Finally


[email protected], +255-784-455 499**MODULE 2 PILOT LECTURE ONSTRATEGIC MARKETING..


*[email protected], +255-784-455 499*OBJECTIVESThe Primary objective is to acquire a strategic knowledge about the dynamics of the marketsTo enable participants to make strategic choices among the available optionsTo enable participants to improve their decision making process for business growth and survival.


*[email protected], +255-784-455 499*The Concept & TrendsWhat is Strategic Marketing Management?Characteristics of markets and structuresWhy studying Strategic Marketing Management?Challenges facing Strategists in the marketing fieldHow does Strategic Marketing differs from Marketing?


*[email protected], +255-784-455 499*An OverviewExternal Analysis (Outside the firm)Internal analysis (Strengths & Weaknesses). Any impact on strategy?Mission Statement (Espirit de corp) and Shared sense of mission for synergy.Strategic Choices Vs. General choices


*[email protected], +255-784-455 499*Competitors AnalysisKnowing your competitors as you know yourselfAnalysis of competitors: Strengths & WeaknessesIs there any loose brick in the value chain of your competitor? Make sure you do not have one on your side


*[email protected], +255-784-455 499*Market & Industry AnalysisThe impact of Market size & PotentialPareto effect (By Alfredo Pareto of Italy)Market growth and attractiveness: The link with BCGCost structure (CoGs) = Material, Labour, OH; Fixed and Variable costs. How to manageCore competencies for success (Hamel & Prahalad)Porters Five Forces & Generic Strategies + Video show


*[email protected], +255-784-455 499*Macro Environmental FactorsLooking beyond the wall not just acrossDo not be myopic, recall the mouse-trap fallacy.From PEST to SLEEPTIN.Do not be complacent. Manage the dynamics of the market which are always changing in a fascinating speed.


*[email protected], +255-784-455 499*Strategic Marketing ChoicesMake a strategic Strategy choiceThe new dimension of the definition of Marketing (By Prof. ole Gabriel) MNCsThe concept of Sustainable Competitive AdvantageAlternative growth Strategies (By Igor Ansoff)Corporate Strategic Choice (Does it know that choices exist?)


*[email protected], +255-784-455 499*Managing the Marketing StrategyImplementation depends on; people, structures, systems and more important, culture!!!Strategic evaluations and control; determine the variances and take the corrective measure immediately (Do not be like Africa bottling company). AndSales Analysis, CBA and Marketing audit.


*[email protected], +255-784-455 499*ConclusionStrategic Marketing is important in order to avoid generalisability. Customers are different and their differences are different (Gabriel, 2004).Companies which will ignore strategic Marketing are destined to fail, the question is when and not whetherStrategic marketing will enhance TQM.


*[email protected], +255-784-455 499*THE END!

Think Strategically, act strategically, smile strategically and walk strategically!!!


*[email protected], +255-784-455 499*MODULE 3MACRO-ENVIRONMENTAL FACTORS3-1


*[email protected], +255-784-455 499*Environmental AnalysisAny effort at environmental analysis must be well-organized, systematic, and supported by sufficient resources (e.g., people, financial, information).Environmental analysis should be an ongoing effort.Environmental analysis empowers the marketing manager because it encourages both analysis and synthesis of information.3-2


*[email protected], +255-784-455 499*Data Versus InformationManagers are more likely to be overwhelmed with data rather than face a shortage.Data does not become informative until it is transformed in a manner that makes it useful to decision makers.Environmental analysis is valuable only to the extent that it improves the quality of the resulting plans and decisions.Perpetually analyzing data without making any decisions is usually not worth the added expense.3-3


*[email protected], +255-784-455 499*Three Key EnvironmentsAnalysis of the external environment (macroenvironmental) should include all the external factors competitive, economic, political, legal/ regulatory, technological, and socioculturalthat can exert direct and indirect pressures on both domestic and international marketing activities.The marketing manager should examine the customer environment (5 Ws) to assess the current and future situation with respect to customers in the firm's target markets.Finally, a critical evaluation of the firm's current and anticipated internal environment (microenvironmental) with respect to its objectives and performance, allocation of resources, structural characteristics, and political and power struggles.3-4


*[email protected], +255-784-455 499*Four Basic Types of CompetitionBrand Competitors: market products that are similar in features and benefits to the same customers at similar prices

Product Competitors: compete in the same product class, but with products that are different in features, benefits, and price

Generic Competitors: market very different products that solve the same problem or satisfy the same basic need

Total Budget Competitors: compete for the limited financial resources of the same customers3-5


*[email protected], +255-784-455 499*Stages of Competitive Analysis1) Identify all current and potential brand, product, generic, and total budget competitors

2) Assess each key competitor in terms of relevant characteristics, such as size, profitability, growth, objectives, strategies, etc.

3) Assess each key competitors strengths and weaknesses, as well as the major competencies that each competitor possesses

4) Focus on each competitors marketing capabilities in terms of their products, pricing, distribution, and promotion

5) Estimate each competitors most likely strategies and responses under different environmental situations, as well as their reactions to the organizations own marketing efforts3-6


*[email protected], +255-784-455 499*Economic ConditionsA thorough examination of economic factors requires marketing managers to gauge and anticipate the general economic conditions of the nation, region, state, and local area in which they operate.

Economic factors to consider include inflation, employment and income levels, interest rates, taxes, trade restrictions and tariffs, current and future stages of the business cycle (prosperity, stagnation, recession, depression, and recovery), consumers' overall impressions of the economy and their ability and willingness to spend, and current and anticipated spending patterns of consumers in the firm's target market.3-7


*[email protected], +255-784-455 499*Political TrendsMany marketers view political factors as being beyond their control and do little more than adjust the firm's strategies to accommodate changes in those factors.

Other firms take a more proactive stance by seeking to influence elected officials.

3-8


*[email protected], +255-784-455 499*Legal and Regulatory FactorsThe marketing manager should carefully examine recent court decisions and recent rulings of federal, state, local and self-regulatory trade agencies to determine their effects on marketing activities.

Companies that engage in international marketing activities should also consider changes in the trade agreements between nations.3-9


*[email protected], +255-784-455 499*Changes in TechnologyMany changes in technology assume a frontstage presence in that they are most noticeable to customers.

Technological changes can also assume a backstage presence when their advantages are not necessarily apparent to consumers.3-11


*[email protected], +255-784-455 499*Sociocultural FactorsSociocultural factors are those social and cultural influences can cause changes in attitudes, beliefs, norms, customs, and lifestyles.There are many changes taking place in the demographic makeup of the U.S. population.Changes in cultural values can also create challenges and opportunities for marketers.3-12


*[email protected], +255-784-455 499*The Customer EnvironmentInformation should be collected that identifiesThe firm's current and potential customersThe prevailing needs of current and potential customersThe basic features of the firm's and competitors' products that are perceived as meeting customers' needsAnticipated changes in customers' needs

In assessing the firm's target markets, the marketing manager should attempt to understand all relevant buyer behavior and product usage statistics. 3-13


*[email protected], +255-784-455 499*5-W ModelWho Are Our Current and Potential Customers? What Do Our Customers Do with Our Products? Where Do Our Customers Purchase Our Products?When Do Our Customers Purchase Our Products? Why (and How) Do Our Customers Select Our Products? Why Do Potential Customers Not Purchase Our Products? 3-14


*[email protected], +255-784-455 499*Who Are Our Current and Potential Customers?The manager should considerdemographic characteristics (gender, age, income, occupation, education, ethnic background, family life cycle, etc.)geographic characteristics (where customers live, density of the target market, etc.)psychographic characteristics (attitudes, opinions, interests, motives, lifestyles, etc.) in defining the firm's target markets.Depending on the type of products sold by the firm, purchase influencers, such as children or spouses, may be important as well. For business-to-business marketers, the analysis should focus on the decision-making unit (DMU).

3-15


*[email protected], +255-784-455 499*What Do Our Customers Do with Our Products?The "what" question entails an assessment of how customers consume and dispose of the firm's products.

Here the marketing manager might be interested inidentifying how often products are consumed (sometimes called the usage rate)differences between heavy and light users of productswhether complementary products are used during consumptionwhat customers do with the firm's products after consumption3-16


*[email protected], +255-784-455 499*Where Do Our Customers Purchase Our Products?Until recently, most firms looked solely at traditional channels of distribution, such as brokers, wholesalers, and retailers.

Many other forms of distribution are available today, most notably nonstore retailing, which includesvending machinesdoor-to-door sellingdirect marketing through catalogs or infomercialselectronic merchandising through computers and interactive television3-17


*[email protected], +255-784-455 499*When Do Our Customers Purchase Our Products?The "when" question refers to any situational influences that may cause customer purchasing activity to vary over time, including the seasonality of the firm's products and the variability in purchasing activity caused by promotional events.The "when" question also includes more subtle influences that can affect purchasing behavior, such asphysical and social surroundingstime perceptionsthe purchase tasktime of daytime available to search for alternativeswhat the purchase is intended to accomplish.3-18


*[email protected], +255-784-455 499*Why (and How) Do Our Customers Select Our Products?The "why" question involves identifying the basic need-satisfying benefits provided by the firm's products. The potential benefits provided by the features of competing products should also be analyzed.It is also important to identify potential changes in customers' current needs and the needs that customers may have in the future. The "how" part of this question refers to the means of payment that customers use when making a purchase.How can we practice CRM3-19


*[email protected], +255-784-455 499*Why Do Potential Customers Not Purchase the Organizations Products? Noncustomers have a basic need that the product does not fulfill

The product does not match noncustomers lifestyles or image

Competing products have better features or benefits

The product is too expensive for some customers

Noncustomers may have high switching costs

Noncustomers are simply unaware of the products existence

Noncustomers have misconceptions about the product

Poor distribution makes the product hard to find3-20


*[email protected], +255-784-455 499*Internal EnvironmentFirst, the marketing manager must periodically assess the firm's current marketing goals, objectives, and performance.

Second, the marketing manager should review the current and anticipated levels of organizational resources that can be used for marketing purposes.

Finally, the marketing manager should review current and anticipated structural issues that could affect marketing activities.3-21


*[email protected], +255-784-455 499*Collecting Environmental Data & InformationThe marketing manager should invest time and money to perform research to uncover data that is pertinent to the development of the marketing plan. This effort will always involve the collection of secondary data, which is compiled inside or outside the organization for some purpose other than the current analysis. If the required data or information is not available, primary data may have to be collected through marketing research.Accessing secondary data sources is usually preferable as a first option because they can be obtained more quickly and at less cost than collecting primary data.3-22


*[email protected], +255-784-455 499*Sources of Environmental DataInternal sources may also be a good source of data on customer needs, attitudes, and behavior. The organization's own records are the best source of data on current objectives, performance, and available resources. The sheer volume of available information on the economy, our population, and business activities is the major strength of most government data sources. The articles and research reports that are available in periodicals and books provide a gamut of information about many organizations, industries, and nations. Commercial sources are almost always relevant to a specific issue because they deal with the actual behaviors of customers in the marketplace.The best approach to secondary data collection is one that blends data and information from a variety of sources.If needed secondary data is not available, out of date, inaccurate or unreliable, or irrelevant to the specific problem at hand, the manager may have little choice but to collect primary data through marketing research. 3-23


*[email protected], +255-784-455 499*Overcoming Problems in Data CollectionOne of the most common problems is an incomplete or inaccurate assessment of the situation for which data is being gathered to address.Another common difficulty is the expense of collecting environmental data.A third issue is the time it takes to collect environmental data.A final challenge is finding a way to organize the vast amount of data and information that are collected during the environmental analysis. 3-24


*[email protected], +255-784-455 499*CONCLUSIONThe need of the correct information for scanning the environment is vital

The need of SLEEP-TIN is necessary

The externalities are never static by dynamic AND

The Macro environmental components need to be interlinked.


*[email protected], +255-784-455 499*MODULE 4:CUSTOMERS ANALYSISUnderstand Who are your customers?How to make value for them?How to communicate the value to them?Motivate them and meet their unmet needs to delight themWho affect and effect the buying decision?How to retein your costomers?


*[email protected], +255-784-455 499*What We Need to Know about Current and Potential CustomersWho buys and uses the productWhat customers buy and how they use itWhere customers buyWhen customers buyHow customers chooseWhy they prefer a productHow they respond to marketing programsWill they buy it (again)?


*[email protected], +255-784-455 499*Who Buys and Uses the ProductsInitiator -who identifies the need for productInfluencer -who has informational or preference input to the decisionDecider who makes the final decision through budget authorizationPurchaser who makes the actual purchaseUser


*[email protected], +255-784-455 499*Buying Roles and Needs/Benefits Sought


*[email protected], +255-784-455 499*Categories for Describing Consumers(SEGMENTATION)DemographicSocioeconomicPersonalityPsychographics and values


*[email protected], +255-784-455 499*Major Segmentation Variables for Business Markets Demographic Operating variables Purchasing approaches Situational factors Personal characteristics


*[email protected], +255-784-455 499*Major Segmentation Variables for Business Markets: DemographicIndustry: Which industries should we focus on?Company size: What size companies should we focus on?Location: What geographic areas should we focus on?


*[email protected], +255-784-455 499*Major Segmentation Variables for Business Markets: Operating VariablesTechnology: What customer technologies should we focus on?User/Nonuser status: Should we focus on heavy, medium, light users or nonusers?Customer capabilities: Should we focus on customers needing many or few services?


*[email protected], +255-784-455 499*Major Segmentation Variables for Business Markets: Purchasing ApproachesPurchasing-function organizations: Should we focus on companies with highly centralized or decentralized purchasing organizations?Power structure: Should we focus on companies that are engineering dominated, financially dominated, etc.?Nature of existing relationships: Should we focus on companies with which we have strong relationships or simply go after the most desirable companies?General purchase policies: Should we focus on companies that prefer leasing? Service contracts? Systems purchases? Sealed bidding?Purchasing criteria: Should we focus on companies that are seeking quality? Service? Price?


*[email protected], +255-784-455 499*Major Segmentation Variables for Business Markets: Situational FactorsUrgency: Should we focus on companies that need quick and sudden delivery or service?Specific application: Should we focus on certain applications of our product rather than all applications?Size of order: Should we focus on large or small orders?


*[email protected], +255-784-455 499*Major Segmentation Variables for Business Markets: Personal CharacteristicsBuyer-Seller similarity: Should we focus on companies whose people and values are similar to ours?Attitudes toward risk: Should we focus on risk-taking or risk avoiding customers?Loyalty: Should we focus on companies that show high loyalty to their suppliers?


*[email protected], +255-784-455 499*Sources of Customer Value Economic:The economic benefit a customer derives from using a product Functional:Those aspects of a product that provide functional or utilitarian benefits to customersPsychological: The image of the product, including how the product feels and whether that feeling matches the image the customer wants to project


*[email protected], +255-784-455 499*Measuring Brand EquityAwareness: Being aware of a brand is usually a requirement for its purchase and tends to lead to more favorable opinions by reducing the risk associated with a familiar option.Associations: Images related to overall quality as well as specific product attributes and user characteristics affect the reaction to a brand.Attitude: Overall favorability toward a brand is a critical part of brand equity.Attachment: Loyalty to a brand is the strongest type of equity, and most beneficial for sellers. Activity: The strongest fans of a brand become advocates.


*[email protected], +255-784-455 499*Manifestations of Customer ValuePrice. Price is the companys assessment of the products value. Price sensitivity. A product with constant sales when prices increase generally is of greater value than one for which demand slumps. Satisfaction. Survey-based satisfaction measures are standard practice in my business. Complaints and compliments. The number of complaints or compliments the company receives indicates the products value. Word-of-mouth. Although often difficult to track, spoken and written comments provide a useful subjective assessment of a products value.


*[email protected], +255-784-455 499*Manifestations of Customer Value cont.Margin/profit contribution. Generally, higher margins indicates partially monopolistic positions due to greater communicated value. Dollar sales. Total dollar sales provide an aggregate measure of the value of a product as assessed by the market. Competitive activity. Competitive activity such as new-product introductions indicates that the total gap between customer value and company costs is sufficiently large to allow for profits even when more companies divide the market. Repeat purchase rate. High loyalty indicates high brand value.


*[email protected], +255-784-455 499*Assessing the Value of the Product CategoryDetermine the uses of the productEstimate the importance of the usesList competing products for the usesDetermine the relative effectiveness of the product category in each usage situation


*[email protected], +255-784-455 499*Desirable Criteria for Segments Sizeable Identifiable Reachable Respond differently Coherent Stable


*[email protected], +255-784-455 499*Major Uses of Potential EstimatesTo make entry / exit decisionsTo make resource level decisionsTo make location and other resource allocation decisionsTo set objectives and evaluate performanceAs an input to forecasts


*[email protected], +255-784-455 499*Useful Sources for Potential EstimatesGovernment Sources Trade AssociationsPrivate CompaniesFinancial and Industry AnalystsPopular PressThe Internet


*[email protected], +255-784-455 499*New or Growing Product PotentialRelative AdvantageIs the new product superior in key benefits?To what degree?CompatibilityWhat level of change is required to understand and use a new product?For customers? Intermediaries? The company?RiskHow great is the risk involved?What is the probability someone will buy a new product?


*[email protected], +255-784-455 499*Methods of Estimating Market and Sales PotentialAnalysis-Based EstimatesDetermine the potential buyers or users of the productDetermine how many are in each potential group of buyers defined by step 1Estimate the purchasing or usage rate


*[email protected], +255-784-455 499*How Are Sales Forecasts Used?To answer what if questionsTo help set budgetsTo provide a basis for a monitoring systemTo aid in production planningBy financial analysts to value a company


*[email protected], +255-784-455 499*ConclusionThe knowledge of customers is paramountUnderstand what customers are buying Why do they buy from you?How do they make the buying decisionMake customers your part time marketersRetain the customers as it is cheaper thank new..ANDIntegrate Technology in managing your customers.


[email protected], +255-784-455 499**COMPETITORS ANDMARKET ANAYSIS Module 5Opportunities, Threats, Industry Competition, and Competitor Analysis.


*[email protected], +255-784-455 499*Components of the General Environment


*[email protected], +255-784-455 499*SWOT AnalysisStrengthsWeaknessesOpportunities Threats


*[email protected], +255-784-455 499*The purpose of SWOT AnalysisIt is an easy-to-use tool for developing an overview of a companys strategic situationIt forms a basis for matching your companys strategy to its situation


*[email protected], +255-784-455 499*SWOT is the starting pointIt provides an overview of the strategic situation.It provides the raw material to do more extensive internal and external analysis.


*[email protected], +255-784-455 499*OpportunitiesAn OPPORTUNITY is a chance for firm growth or progress due to a favorable juncture of circumstances in the business environment.Possible Opportunities:Emerging customer needsQuality ImprovementsExpanding global marketsVertical Integration


*[email protected], +255-784-455 499*ThreatsA THREAT is a factor in your companys external environment that poses a danger to its well-being.Possible Threats:New entry by competitorsChanging demographics/shifting demandEmergence of cheaper technologiesRegulatory requirements


*[email protected], +255-784-455 499*Opportunities and Threats form a basis for EXTERNAL analysisBy examining opportunities, you can discover untapped markets, and new products or technologies, or identify potential avenues for diversification.By examining threats, you can identify unfavorable market shifts or changes in technology, and create a defensive posture aimed at preserving your competitive position.


*[email protected], +255-784-455 499*The purpose of Five-Forces AnalysisThe five forces are environmental forces that impact on a companys ability to compete in a given market.The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.


*[email protected], +255-784-455 499*Porters Five Forces Model of Competition


*[email protected], +255-784-455 499*Threat of New EntrantsExpected Retaliation


*[email protected], +255-784-455 499*Threat of New EntrantsThreat of New EntrantsPorters Five Forces Model of Competition


*[email protected], +255-784-455 499*Bargaining Power of SuppliersSuppliers are likely to be powerful if:


*[email protected], +255-784-455 499*Threat of New EntrantsThreat of New EntrantsBargaining Power of SuppliersPorters Five Forces Model of Competition


*[email protected], +255-784-455 499*Bargaining Power of BuyersBuyer groups are likely to be powerful if:


*[email protected], +255-784-455 499*Threat of New EntrantsThreat of New EntrantsBargaining Power of BuyersBargaining Power of SuppliersPorters Five Forces Model of Competition


*[email protected], +255-784-455 499*Threat of Substitute ProductsKeys to evaluate substitute products:


*[email protected], +255-784-455 499*Threat of Substitute ProductsThreat of New EntrantsThreat of New EntrantsBargaining Power of BuyersBargaining Power of SuppliersPorters Five Forces Model of Competition


*[email protected], +255-784-455 499*Rivalry Among Existing Competitors


*[email protected], +255-784-455 499*Cutthroat competition is more likely to occur when:Rivalry Among Existing Competitors


*[email protected], +255-784-455 499*The Five Forces are Unique to Your IndustryFive-Forces Analysis is a framework for analyzing a particular industry.Yet, the five forces affect all the other businesses in that industry.


*[email protected], +255-784-455 499*Competitor AnalysisThe follow-up to Industry Analysis is effective analysis of a firms Competitors


*[email protected], +255-784-455 499*Competitor Analysis


*[email protected], +255-784-455 499*Future ObjectivesHow do our goals compare to our competitors goals?Where will emphasis be placed in the future?What is the attitude toward risk?What Drives the competitor?Competitor Analysis


*[email protected], +255-784-455 499*What is the competitor doing?What can the competitor do?Future ObjectivesHow do our goals compare to our competitors goals?Where will emphasis be placed in the future?What is the attitude toward risk?Current StrategyHow are we currently competing?Does this strategy support changes in the competitive structure?Competitor Analysis


*[email protected], +255-784-455 499*What does the competitor believe about itself and the industry?Do we assume the future will be volatile?Are we assuming stable competitive conditions?What assumptions do our competitors hold about the industry and themselves?AssumptionsCompetitor Analysis


*[email protected], +255-784-455 499*What are the competitors capabilities?What are my competitors strengths and weaknesses?How do our capabilities compare to our competitors?CapabilitiesCompetitor Analysis


*[email protected], +255-784-455 499*ResponseWhat will our competitors do in the future?Where do we have a competitive advantage?How will this change our relationship with our competition?Competitor Analysis


*[email protected], +255-784-455 499*ConclusionKnow your competitors as you know yourselfCreate and sustain your competitive AdvantageThe Market size matters! Take the advantage of it. ANDThe Key success Factors will give you the core competencies hence a competitive Advantage


*[email protected], +255-784-455 499*Module 6INTERNAL Vs. External Analysis MissionVisionValuesSWOT AnalysisStrategic Planning

Does it work? Is it worth it?


*[email protected], +255-784-455 499*Sustainability of a Competitive AdvantageSustainability of a competitive advantage is a function of:the rate of core-competence obsolescence due to environmental changesthe availability of substitutes for the core competencethe imitability of the core competence


*[email protected], +255-784-455 499*External and Internal AnalysesBy studying the external environment, firms identify what they might choose to doOpportunities and threats


*[email protected], +255-784-455 499*External and Internal AnalysesBy studying the internal environment, firms identify what they can doUnique resources, capabilities, and core competencies(sustainable competitive advantage)External and Internal Analyses


*[email protected], +255-784-455 499*Challenge of Internal AnalysisHow do we effectively manage current core competencies while simultaneously developing new ones?How do we assemble bundles of resources, capabilities and core competencies to create value for customers?How do we learn to change rapidly?


*[email protected], +255-784-455 499*Three Conditions Affecting Managerial Decisions About Resources, Capabilities, and Core CompetenciesUncertainty regarding characteristics of the general and the industry environments, competitors actions, and customers preferencesComplexity regarding the interrelated causes shaping a firms environments and perceptions of the environmentsIntraorganizational Conflicts among people making managerial decisions and those affected by them


*[email protected], +255-784-455 499*Components ofInternal Analysis


*[email protected], +255-784-455 499*Resources are what a firm has to work with--its assets--including its people and the value of its brand nameResources represent inputs into a firms production process... such as capital equipment, skills of employees, brand names, finances and talented managers


*[email protected], +255-784-455 499*Tangible ResourcesFinancialPhysicalHuman resourcesOrganizationalIntangible ResourcesTechnologicalInnovationReputation


*[email protected], +255-784-455 499*Capabilities become important when they are combined in unique combinations which create core competencies which have strategic value and can lead to competitive advantage


*[email protected], +255-784-455 499*Capabilities are what a firm does, and represent the firms capacity or ability to integrate individual firm resources to achieve a desired objective


*[email protected], +255-784-455 499*Core competencies are resources and capabilities that serve as a source of competitive advantage over rivalsCore competencies distinguish a company competitively and make it distinctiveMcKinsey and Co. recommends using three to four competencies when framing strategic actions


*[email protected], +255-784-455 499*Valuable: Capabilities that help a firm neutralize threats or exploit opportunities


*[email protected], +255-784-455 499*Rare: Capabilities that are not possessed by many others


*[email protected], +255-784-455 499*Costly to imitate: capabilities that other firms cannot develop easily, usually due toUnique historical conditionsCausal ambiguitySocial complexity


*[email protected], +255-784-455 499*Nonsubstitutable: capabilities that do not have strategic equivalentsInvisible to competitorsFirm specific knowledgeTrust-based working relationships between managers and nonmanagerial personnel


*[email protected], +255-784-455 499*Core Competence as a Strategic CapabilityThe source ofDoes it satisfy the criteria of sustainable competitive advantage?YesNo


*[email protected], +255-784-455 499*ServiceMarketing & SalesOutbound LogisticsOperationsInbound LogisticsFirm InfrastructureHuman Resource Mgmt.Technological DevelopmentProcurementMarginMarginPrimary ActivitiesSupport ActivitiesThe BasicValue Chain


*[email protected], +255-784-455 499*OutsourcingOutsourcing is the purchase of some or all of a value-creating activity from an external supplierUsually this is because the specialty supplier can provide these functions more efficiently


*[email protected], +255-784-455 499*Strategic Rationales for OutsourcingImprove Business Focuslets company focus on broader business issues by having outside experts handle various operational detailsProvide Access to World-Class Capabilitiesthe specialized resources of outsourcing providers makes world-class capabilities available to firms in a wide range of applications


*[email protected], +255-784-455 499*Strategic Rationales for OutsourcingAccelerate Business Re-Engineering Benefitsachieves re-engineering benefits more quickly by having outsiders--who have already achieved world-class standards--take over processShare Risksreduces investment requirements and makes firm more flexible, dynamic and better able to adapt to changing opportunities


*[email protected], +255-784-455 499*Core Competencies: Cautions and RemindersNever take for granted that core competencies will continue to provide a source of competitive advantageAll core competencies have the potential to become core rigiditiesCore rigidities are former core competencies that now generate inertia and stifle innovation


*[email protected], +255-784-455 499*Applying it to your Career/OrganizationWhat is your core competence?Where does leadership fit?Is it really as complicated as theory makes it sound e.g., small business?Where do core competences originate?


*[email protected], +255-784-455 499*CONCLUSIONInternal analysis and External are somehow interrelatedResource base and capabilities are necessary for a stable internal environment, ANDGood management team is the best starting point to give a signal of internal capability/core compenetcies


[email protected], +255-784-455 499**Module 7MANAGING THE MARKETING STRATEGIESDr. Elisante ole Gabriel


*[email protected], +255-784-455 499*CORPORATE STRATEGYDeciding the Scopeand Purpose ofthe BusinessBusiness ObjectivesActions and Resources for Achieving Objectives


*[email protected], +255-784-455 499*CHARACTERISTICS OF SUCCESSFUL STRATEGYUnique competitive position for the company.Activities tailored to strategy.Clear trade-offs and choices vis--vis competitors.Competitive advantage arises from fit across activities.Sustainability comes from the activity system not the parts.Operational effectiveness a given.


*[email protected], +255-784-455 499*ORGANIZATIONAL CHANGEVertical DisaggregationInternal RedesignNew Organizational Forms


*[email protected], +255-784-455 499*CORPORATE STRATEGY COMPONENTSManagements long-term vision for the corporationObjectivesAssets, skills, and capabilitiesBusinesses in which the corporation competesStructure, systems, and processesCreation of value


*[email protected], +255-784-455 499*MARKETING STRATEGY PROCESSSituationAnalysisMarketingProgramDevelopmentImplementingand ManagingMarketingStrategyDesigningMarketingStrategy


*[email protected], +255-784-455 499*SITUATION ANALYSISMarketVision, Structure,and AnalysisContinuousLearningAboutMarketsSegmentingMarkets


*[email protected], +255-784-455 499*Designing Market-Driven StrategiesRelationshipStrategiesMarket Targetingand StrategicPositioningPlanningfor NewProducts


*[email protected], +255-784-455 499*Positioning Strategy DevelopmentProductstrategyDistributionstrategyPromotionstrategyPricestrategyMarkettargetPositioning strategy


*[email protected], +255-784-455 499*Implementing andManaging Market-DrivenStrategyDesigning Effective Market-Driven OrganizationsStrategy Implementation and Control


[email protected], +255-784-455 499**MARKETING PLAN OUTLINEI. Strategic Situation SummarySummarize the key points from your situation analysis (marketanalysis, segments, industry/competition) in order to recount themajor events and provide information to better understand thestrategies outlined in the marketing plan.


*[email protected], +255-784-455 499*II. Market-Targets and Objectives

The market target may be defined demographically (key characteristics only), geographically, or in social/economic terms. Each market target should have needs and wants that differ to some degree from other targets. These differences may be with respect to types of products purchased, use situation, frequency of purchase, and other variations that indicate a need to alter the positioning strategy to fit the needs and wants of each target. An objective is a quantified goal identifying what is expected when. It specifies the end results expected. The objectives should be written for each target market. Objectives should also be included for the following program components: (1) product, (2) price, (3) distribution, (4) promotion (salesforce, advertising,sales promotion, and public relations), and (5) technical services.


*[email protected], +255-784-455 499*III. Positioning Statements

Write statements that describe how you want each market target to perceive each product relative to competition. State the core concept used to position the product (brand) in the eyes and mind of the targeted buyer. The positioning statement should describe: (1) What criteria or benefits the customer considers when buying a product along with the level of importance, (2) What we offer that differentiates our product from competition, and (3) The limitations of competitive products.


*[email protected], +255-784-455 499*IV. Market Mix Strategy for Each Market TargetA.Product Strategy

Identify how each product fits the market target. Other issues that may be addressed would be new product suggestions, adjustments in the mix of existing products, and productdeletion candidates.

B.Price Strategy

The overall pricing strategy (I.e., competitive, premium-priced,etc.) should be identified along with a cost/benefit analysis ifapplicable. Identify what role you want price to play, i.e.,increase share, maintenance, etc.


*[email protected], +255-784-455 499*C.Distribution Strategy

Describe specific distribution strategies for each market target. Issues to be addressed are intensity of distribution (market coverage), how distribution will be accomplished, and assistance provided to distributors. The role of the sales force in distribution strategy should also be considered.


*[email protected], +255-784-455 499*D.Promotion Strategy

Promotion strategy is used to initiate and maintain a flow of communication between the company and the market target. To assist in developing the communications program, the attributes or benefits of our product should be identified for each market target. How our product differs from competition (competitive advantage) should be listed. The sales forces responsibilities in fulfilling the market plan must be integrated into the promotion strategy. Strategies should be listed for(1) personal selling, (2) advertising, (3) sales promotion, and(4) public relations.


*[email protected], +255-784-455 499*

E.Marketing Research

Describe the market research problem and the kind of information needed. Include a statement which addresseswhy this information is needed. The specific market research strategies can be written once the above two steps have been followed.

V.Coordination with Other Business Functions

Indicate other departments/functions that have responsibilities for implementing the marketing plan.

VI.Sales Forecasts and Budgets

VII.Contingency PlansIndicate how your plans should be modified if events should occur that are different from those assumed in the plan.


[email protected], +255-784-455 499**Module 8Market Driven StrategyA Case of SWA)Dr. Elisante ole Gabriel


*[email protected], +255-784-455 499*SOUTHWEST AIRLINESPoint-to-Point StrategyOn-Time ServiceHigh Aircraft UtilizationMarket-Oriented CultureLow Operating ExpensesLowest debt to capital ration of the major airlines.Low FaresNo Connections with other airlines.


*[email protected], +255-784-455 499*Characteristics of Market-Driven Strategies Market-OrientationSuperiorPerformanceLeveraging ofDistinctiveCapabilitiesCustomerValue/CapabilitiesMatch


*[email protected], +255-784-455 499*BECOMING MARKET ORIENTEDEffective Market Sensing ProcessesCross-Functional Analysis of InformationShared Diagnosis and Coordinated ActionDelivery of Superior Customer Value


*[email protected], +255-784-455 499*Components of Organizational CapabilitiesSkills(cross-functional teams)Accumulatedknowledge(new product experience)OrganizationalProcessesSuperior Customer Value(new product development)Coordinationof Activities(communication) Assets(brand image)


*[email protected], +255-784-455 499*CompellingLogic of DistinctiveCapabilitiesDisproportionate (higher)contribution to superiorcustomer valueProvides value tocustomers on a morecost-effective basis


*[email protected], +255-784-455 499*DESIRABLECAPABILITIESSuperior totheCompetitionDifficult toDuplicateApplicable toMultipleCompetitiveSituations


*[email protected], +255-784-455 499*TYPES OF CAPABILITIESOutside-InProcessesInside-OutProcessesSpanningProcesses


*[email protected], +255-784-455 499* Benefits CostsCustomerDelivered Value


*[email protected], +255-784-455 499*Creating Value for Customers


*[email protected], +255-784-455 499*MARKET-DRIVENSTRATEGIESMarket SensingCapabilitiesCustomer LinkingCapabilitiesFinally


*[email protected], +255-784-455 499*In pursuing competitive advantage, a company also has to choose its scope whether it will target a particular segment or go for a broad market. These choices define four basic approaches to competitive advantage choices a company makes determines ,generic strategies as Porter calls them.Module 9: GENERIC STRATEGIESSTRATEGIC CHOICE


*[email protected], +255-784-455 499*Strategic Advantage Ivory Soap American Airlines Broad Broad Cost Differentiation

Focus Focus Cost Differentiation La Quinta Inns Cray Research, Inc GENERIC STRATEGIES (By M Porter)Strategic Target (Scope)


*[email protected], +255-784-455 499*Failure to make a choice means that a company is stuck - in - the middle, with no advantage. The result is poor performance.In illustrating the concept of Generic strategies, Porter used four superior performing companies that follow each of the generic strategies. Ivory Soap is a broadly targeted, low cost producer, La Quinta Inns is a cost focuser; American Airlines is a broad differentiator, and Cray Research, Inc., is a focused differentiator. The Companies and the strategies are indicated on the Fig. above.STUCK-IN-THE MIDDLE


*[email protected], +255-784-455 499*Cost Leadership(First dimension) A cost strategy begins with a good product that is acceptable in quality and features. Instead of a unique product, the company following the cost strategy seeks advantage by opening up a sustainable cost gap over its competitors. It does so by managing the areas in the business that are critical to cost. This leads to superior margins, provided prices are at or near the industry average.


*[email protected], +255-784-455 499*Porter uses Procter & Gambles Ivory Soap to illustrate the basic principles of positioning and to discuss the overall cost leadership strategy. Ivorys strategies changed since it was first introduced. Porter shows how Ivory moved from being a differentiator to being a basic soap providing good value. Ivorys shift in strategy illustrates both why a strategy may have to change as well as some principles of competing as a cost leader.


*[email protected], +255-784-455 499*Cost Leadership(2nd Dimension)

Companies can also achieve cost advantage by focusing on a particular target segment where they can be more efficient than broadly targeted competitions. Companies in this position achieve advantage by dedicating themselves to serving the needs of a particular segment, and no more. Porter shows how La Quinta Inns has created a strategy around a particular target customer the traveling salesperson and how this dedication satisfies the customers needs but allows La Quinta to be very low cost.


*[email protected], +255-784-455 499*Lessons from La Quinta1. A focused strategy begins with choosing a particular target segment with unusual or distinctive needs.2. A focused strategy dedicates everything to serving the target segment exclusively.3. Despite temptations, a focused strategy forgoes the opportunity to serve other segments, or offer other products or services.


*[email protected], +255-784-455 499*4. A cost focus strategy depends on finding a target segment that has a lower level of needs than most of the market.

5.Cost advantage requires investment.

6. Low cost must become part of the companys culture if this strategy is to be successfully implemented.


*[email protected], +255-784-455 499*Porter interviewed Mr. Chuck Knight, CEO of Emerson Electric Company, Emerson is the company most identified in the United States with being a low-cost competitor. They discuss how Emerson goes about succeeding as the best-cost producer.Chuck Knight lists six points that have been critical to Emersons success:


*[email protected], +255-784-455 499*1. You cant be the best-cost producer without having a high-quality product.

2. Know the competitors costs.

3. Be receptive to change and be willing to go after productivity in your plants.


*[email protected], +255-784-455 499*4. Devise a formalized cost-reduction program.

5. Make all employees a part of the cost-reduction plan by communicating the plan to them strongly.

6. Commit capital to reduce long-run costs.


*[email protected], +255-784-455 499*Summary of: Cost Leadership1.Cost leadership starts with a good product.2.A cost leader is willing to make some choices to be low cost.3.Successful cost leaders draw their advantage from many sources throughout the business.


*[email protected], +255-784-455 499*4. Cost leaders pay intense regular attention to their competitors cost positions.

5. Cost leaders build low cost into the culture of their organizations.

6. Cost leaders constantly manage costs down.


*[email protected], +255-784-455 499*Differentiation (1st Dimension)

The differentiation strategy starts by identifying needs that the buyer thinks are valuable. The differentiator then sets out to meet these needs better than any other competitor, and is willing to bear extra costs if necessary to do so. The differentiator seeks to command premium price, which leads to superior performance


*[email protected], +255-784-455 499*Provided the premium exceeds the extra costs of being unique. To illustrate his points, Porter discusses two companies American Airline and Cray Research, Inc that successfully use differentiation strategies.American Airline serves a wide range of travelers (business vacation, personal) and seeks to be the differentiated airline.


*[email protected], +255-784-455 499*Lessons from American Airlines1. Any differentiator starts with the problem of creating value for buyers successful. Differentiators find areas of value that the buyer views as most important.2.Successful differentiators not only create value, they also communicate their uniqueness to consumers through incredible ways.


*[email protected], +255-784-455 499*3.Differentiators must be willing to bear the cost of being unique. Differentiators must, however, minimize the added costs of uniqueness.


*[email protected], +255-784-455 499*4. In the pursuit of differentiation there is a trade-off between cost and differentiation. Successful air differentiators are clear about how theyre going to make it.

5. To sustain differentiation, a company must be a moving target and constantly invent new buyer value.


*[email protected], +255-784-455 499*Differentiation (2nd Dimension)

Another route to differentiation is through a focus strategy; that is, choosing a narrow target and concentrating on serving its needs better than more broadly targeted competitors.Cray Research, Inc, which manufactures only supercomputers, is a good example of a company that targets a specific product segment dedicates itself to providing uniquely high performance.


*[email protected], +255-784-455 499*Lessons from Cray Research1. Differentiation starts with creating value for the customer that justifies a premium price.

2. Differentiation involves more than just a physical product. Helping the customer to use the product is as important as selling it.

3. To be successful, a differentiation strategy must be communicated both internally and externally.


*[email protected], +255-784-455 499*4.To sustain differentiation, a company must become a moving target by improving performance and constantly seeking innovation.

5. The differentiation focus strategy requires that the company isolate a segment that has more extensive needs in market.


*[email protected], +255-784-455 499*6. The focuser dedicates itself to (and bets everything on) its particular target segment(s).

7. A focused differentiator, like a focused low-cost competitor, must avoid the tendency to blur its focus in pursuit of incremental business.


*[email protected], +255-784-455 499*Overall Lessons about positioning This is based on several examples of the Companies which Porter visited in connection to this lesson.

1. Successful strategy must concern itself with industry structure as well as positioning.

2. Successful strategists select positions that are different from their competitors.


*[email protected], +255-784-455 499*3. Strategy involves making choices and trade-offs, and taking risks. These are the flip-slides of advantage.


*[email protected], +255-784-455 499*The Process of Developing StrategyIn this final segment Porter discusses some of the practical problems of developing and carrying out a strategy. Important issues are how to organize an effective planning process, how to communicate its results, and how to measure performance.


*[email protected], +255-784-455 499*Lessons for Effective Strategy Development1. To develop strategy effectively, a company needs a formal strategic planning process.

2. A multi-functional team is the best unit to develop a strategy. It can take the holistic approach and make the complex trade-offs essential in formulating effective strategies


*[email protected], +255-784-455 499*3. To be successful, a strategy needs to be communicated, both internally and externally.

4. It takes time to change and communicate a strategy. A strategy should be changed infrequently and must be followed consistently.


*[email protected], +255-784-455 499*5. Financial results are a misleading indication of strategic health.

6.To gauge strategic health, companies have to create measure of underlying advantage, such as customer surveys, studies of cost position, and studies of how products are performing relative to competition. Customer satisfaction ought to be the best yardstick.


*[email protected], +255-784-455 499*7. A strategist must continually probe and test a strategy for the need to change.FINALLY


*[email protected], +255-784-455 499*The endCreate, Communicate and Sustain your superior performance for PREMIUM PRICES!!!!


[email protected], +255-784-455 499**Module 10PRICING STRATEGIES & SALES.


*[email protected], +255-784-455 499*How Price Fits into Marketing Program Positioning StrategyMarketing programpositioning strategyProductstrategyTargetmarket andobjectivesDistributionstrategyPricestrategyPromotionstrategy


*[email protected], +255-784-455 499*PRICING SITUATIONSNew product pricing

Life cycle pricing

Positioning strategy change

Countering competitive threats


*[email protected], +255-784-455 499*Pricing Strategy for New and Existing Products Set PricingObjectivesAnalyze thePricing SituationSelect PricingStrategyDetermine SpecificPrices and Policies


*[email protected], +255-784-455 499*Factors Impacting the Pricing SituationCustomer Price SensitivityLegal and Ethical ConstraintsCompetitors Likely ResponsesAnalyzing the Pricing SituationProduct Costs


*[email protected], +255-784-455 499*Buyers Perceptions of Value Offerings of Brands A-EPerceivedValuePerceived PriceSuperior Value ZoneDACEBInferior Value Zone


*[email protected], +255-784-455 499*Guide to Cost AnalysisDetermine coststructureAAnalyze cost andvolume relationshipsBAnalyze competitiveadvantageCEstimate the effectof experience on costsDDetermine the extentof control over costsE


*[email protected], +255-784-455 499*Determinants of Pricing FlexibilityCostsDemandDemand-Cost GapCompetitionLegal and Ethical Influences


*[email protected], +255-784-455 499*AboveCompetitionBelowCompetitionSkim strategy

Neutral strategy(same as competition)

Penetration strategy

STRATEGIC APPROACHES


*[email protected], +255-784-455 499*Illustrative Price Strategies

Low-activestrategy

High-activestrategy

Low-passivestrategy

High-passivestrategy

ActivestrategyPassivestrategyHighrelativepriceLowrelativeprice


*[email protected], +255-784-455 499*Basis of Determining Specific Prices Cost CompetitionDemandFinally


*[email protected], +255-784-455 499*Module 11PRODUCT DECISIONS(Ansoffs Matrix)Product and Service Classification SystemThe Product Life CycleIntroduction to product matricesBoston Matrix (Growth/Share)Ansoffs Matrix (Product/Market)


*[email protected], +255-784-455 499*Product and Service Classification SystemConvenience goods - little effort, relatively inexpensiveShopping goods - e.g white goods, equipment, more expensive, infrequentSpeciality goods - extensive search e.g Jewellery, gourmet foodUnsought goods - e.g. Buying a shirt just after seeing it.


*[email protected], +255-784-455 499*Few:Few: trial of trial of early earlyadoptersadoptersGrowing adopters:Growing adopters: trial of trial of product/service product/service Entry of Entry of competitorscompetitorsGrowing selectivityGrowing selectivity of purchase of purchaseMay be manyMay be manySaturation ofSaturation of users usersRepeat purchaseRepeat purchase reliance relianceFight to maintainFight to maintain share shareDrop-offDrop-offin usagein usageExit of someExit of somecompetitorscompetitorsDevelopmentGrowthMaturityDeclineDeclineThe Product Life Cycle (PLC) Model


*[email protected], +255-784-455 499*Market ShareMarketGrowthHighLowHighLow1. Stars3. QuestionMark (ProblemChild)2. Cash Cows4. DogsThe Boston Matrix (Growth/Share Matrix)


*[email protected], +255-784-455 499*Market ShareMarketGrowthHighLowHighLowFUSEMaverickMiniature HeroesKIT KATMARS BARTOPICBOUNTYThe Boston Matrix - Chocolate Bars


*[email protected], +255-784-455 499*DiversificationMarket PenetrationMarket DevelopmentProduct DevelopmentExisting MarketsNew MarketsExisting ProductsNew ProductsAnsoffs Matrix (Product/Market Matrix)


*[email protected], +255-784-455 499*Diversification -related or unrelatedE.g. Realignments of the marketing mixE.g. Geographical expansionSame outlets and sales strategy - new productExisting MarketsNew MarketsExisting ProductsNew ProductsAnsoffs Matrix (Product/Market Matrix)


*[email protected], +255-784-455 499*Products DecisionsProduct and Service Classification System?The Product Life Cycle stages?Growth/Share?Product/Market? Ansoffs Matrix


*[email protected], +255-784-455 499*Module 12STRATEGY IMPLEMENTATION & CONTROLImplementation is the process that turns a marketing plan into specific tasks to be performed and ensures that they ultimately accomplish the plans objectives.If the implementation process is not well thought-out and managed, the plan will not succeed.


*[email protected], +255-784-455 499*Factors in ImplementationOn-time and accurate performance by marketing staff, agencies and vendors (the organization staff must deliver their services according to the specifications in the plan)Clear delineation of responsibilities of various elements of the implementation process (each task must be accomplished and naming the individual responsible)


*[email protected], +255-784-455 499*Factors Cont Communication of the plans objectives, strategies, and tactics throughout the bank (it is important that all areas of the bank be aware of the banks marketing efforts).Cooperation of all areas affected by implementation (the individual who chairs the task force must effectively steer the group toward the desired end).


*[email protected], +255-784-455 499*Factors Cont Monitoring of results (having a system in place for monitoring the implementation process and its progress toward achievement of the plans goals) = PROGRESSIVE EVALUATION


*[email protected], +255-784-455 499*STRATEGY CONTROLThe control process involves continuous monitoring and evaluation of the strategic plan as well as feedback necessary to ensure that the plan has been assigned and communicated to the right people in the right way.Adequate monitoring system will help to trace the causes of problems and take corrective actions.


*[email protected], +255-784-455 499*STRATEGY CONTROLPlans may derail because of the changes in the operational environment (competition, technology, social, economic, political or legal factors)Or some situation within the firm (lack of cooperation at the operating level): ThereforeProblems should be viewed as opportunities for learning, growth, and improvement.

FINALLY


*[email protected], +255-784-455 499*Total Concluding SummaryIt is imperative for any marketer to understand the role of strategy in BusinessStrategy is se of unified Coherent and integrated set of ideasThere are long and short term strategiesCustomer are not and will never buy products but valuesUnderstand the mission of an organisation


*[email protected], +255-784-455 499*Summary Cont..You need to analyse your customers in order to be customer drivenIndustry analysis is important to determine the attractiveness of an industryMarket driven strategies are more sustainable .. ANDProduct decision are necessary in order to make proper choice of the strategy


*[email protected], +255-784-455 499*THE END !!!Companies which will ignore strategic Marketing have no room in competitionAlways understand your competitors as you understand yourself.THANK YOU!!


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