MARKETING STRATEGY

Agenda

Review of Hierarchy of ObjectivesCommon Elements of ObjectivesThe Process of Marketing Strategy DevelopmentBIO-BREAKThe Evaluation of OpportunitiesTarget Market SelectionThe Structure of Marketing Mix StrategiesBIO-BREAKGeneric Marketing StrategiesProduct StrategiesMarket Position Strategies

Marketing Strategy

Hierarchy of goals and objectives

Organizational Goals and ObjectivesMarketing Goals and Objectives

Marketing Mix Goals and ObjectivesMarketing Mix Element Goals and Objectives

Marketing Strategy

What business are you in?Mission statement

Statement of marketing strategy

Indicates product, market scope

Shows growth factor

Shows differential advantage

Shows management orientation

Marketing Strategy

Elements of Objectives

An effectBenchmark + effect = Desired Outcome

Effect has to be measureableShould be realistic

Timeframe for evaluationEvaluation and effect should be related

Marketing Strategy

Marketing Strategy DevelopmentRecognize and evaluate an opportunity

Market size and potentialKey competitors

Choose target marketDevelop Objectives for each opportunityDevelop Marketing Mix Strategy for each

opportunityChoose Marketing mix elements

Marketing Strategy

Opportunity EvaluationReview of the Rule of 3Review of Requirements for Market SizeReview of Relevant Competitive Set

Marketing Strategy

Target Market Selection

Introduction to Market SegmentationReview of the Strategic OptionsEquivalent Behaviors as the Critical Variable

Marketing Strategy

Structure of Marketing Mix Strategies

Are all Mix elements equally important?Product as the keyExample using Product Life Cycle

Marketing Strategy

Generic Marketing Strategies

Cost LeadershipLower costs of production and distribution

Product DifferentiationUnique product or brand

FocusFocus on customer needs in a few segments

Marketing Strategy

Product StrategiesProduct Mix Strategies

Market penetration versus market skimming

QualityHigh

Medium

Low

Price

High Medium Low

PremiumGoods

Penetra-tion

SuperBargain

Over-Pricing

AverageQuality

Bargain

Hit andRun

ShoddyGoods

CheapGoods

Marketing Strategy

Product Strategies

Product Market Growth Strategies

Market Penetration(increase usage)

Product Development(new uses)

Market Development(new users)

Diversification(new users, new uses)

Markets

Products

Old

Old

New

New

Marketing Strategy

Product StrategiesBoston Consulting Group Strategy:

Relative Market Share

Market Growth Rate

Problems with BCG ApproachDifficult to estimate relative market share in rapidly growing markets

Marketing Strategy

BCG Matrix:

StarsSome cash use

Future cash cow

Cash CowsGenerate cash for

?, Stars

DogsLow or no cash use

When to divest

?High cash use

? Is to build or not

Relative Market Share10x 1.5x .1x (log scale)

Market GrowthRate

22%

10%

0%

Marketing Strategy

Market Position StrategiesMarket Follower Strategies

Conscious ParallelismSimilar products, pricesAvoid unprofitable segments

Market NicheSpecialize in a very small group of customersConcentrated segmentation strategy……

Marketing Strategy

Market Position StrategiesMarket Leader Strategies

Increase Size of Total MarketProduct-Market Growth Strategies

Protect Market Share

FortificationAssortment of brands, sizes

Innovation

Best defense is a good offenseCounteroffensive

Increase Market ShareBCGAntitrust constraints

Marketing Strategy

Market Position StrategiesMarket Challenger Strategies

Frontal AttackOut-innovate leaderTough to do, easier to defend

Flanking/Bypass AttackAttack where leader is not lookingFind a new market segment

Price Discount Strategy

Buyers are sensitive to priceWorks if leader does not cut price

Cheaper Goods StrategyLower quality but much lower priceVulnerable to still cheaper goods

Prestige Goods StrategyIncrease both quality and price

Marketing Strategy

Market Challenger Strategies (cont.)Cheaper Goods Strategy

Lower quality but much lower priceVulnerable to still cheaper goods

Prestige Goods StrategyIncrease both quality and price

Marketing Strategy

Attacker(smaller)

Defender(bigger)

PositionDefense

PreemptiveDefense

Counteroffensive

ContractionDefense

Flanking Defense

Mobile Defense

Flank Attack

Frontal

Attack

Encirclement

Bypass

Guerilla Attack

Marketing Strategy

Next time

MARKETING STRATEGY CASE

For Barco Projection, please prepare, by team, the case discussion for class on 2/12. The deadline for receipt of the

PowerPoint presentation is noon 2/12.

Market SegmentationPlease read chapter 6