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Basic Marketing Strategies—

Basic Marketing Strategies—. A basic model of strategic planning. SBU. SBU. Corporate Strategy. SBU. SBU. Marketing. Marketing Implications of Corporate Strategic Planning. Define the Corporate Mission Evaluate Environment (last lecture) Set Organizational Goals and Objectives

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Basic Marketing Strategies—

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  1. Basic Marketing Strategies—

  2. A basic model of strategic planning SBU SBU Corporate Strategy SBU SBU Marketing

  3. Marketing Implications of Corporate Strategic Planning • Define the Corporate Mission • Evaluate Environment (last lecture) • Set Organizational Goals and Objectives • Establish the Business Portfolio • Grow the Business

  4. MISSION STATEMENT • Broad Statement of Purpose: • What is your organization’s mission statement? • Reason for existence • Scope of services • Current and potential customers • Areas of specialization/differentiation

  5. Narrow soft drinks videos toys life insurance computers Broad Defining a Company’s Present Business

  6. Establishing the Structure of the Business A PORTFOLIO APPROACH GOALS: 1. Classify strategic business units (SBU) 2. Maintain a “balanced” portfolio 3. Allocation of resources 4. Directions for growth

  7. PORTFOLIO APPROACHES BCG MATRIX: Classify SBU on 2 variables: 1. market attractiveness 2. company strength

  8. BCG MATRIX RELATIVE MARKET SHARE Question Marks Stars ? Market Growth Rate Cash Cows Dogs

  9. CRITIQUE OF BCG • LITTLE USE IN IDENTIFYING AREAS OF FUTURE INVESTMENT • ONLY CONSIDERS CASH FLOW RELATIONSHIPS BETWEEN BUSINESSES • TOO SIMPLISTIC

  10. GE MODEL INDUSTRY ATTRACTIVENESS High Low Medium High Adopt Investment and Growth Strategies Manage Selectively Medium Sell or Reposition Low BUSINESS STRENGTH

  11. Critique of GE • Advantages • More factors considered • More guidance on allocations of resources • More useful for evaluating new product-markets • Disadvantages • Subjective and ambiguous

  12. GROWTH STRATEGIES Current Markets New Markets Current Products MARKET PENETRATION MARKET PENETRATION MARKET DEVELOPMENT MARKET DEVELOPMENT PRODUCT DEVELOPMENT DIVERSIFICATION New Products PRODUCT DEVELOPMENT DIVERSIFICATION

  13. GROWTH STRATEGIES: Market Penetration: Sell more existing product/ service to existing customers 1. Increase Usage 2. Introduce Intermediaries 3. Mandatory Consumption Market Development: Tap new segments for existing/service products

  14. GROWTH STRATEGIES: Product Development: -New products/services developed for existing customers -utilizing strengths Diversification: New products/services to new target markets Horizontal Vertical Concentric

  15. What are you doing if not growing? • Sustain current level • Retrench

  16. Marketing Implications of Business Level Strategies • How will the SBU compete to gain a sustainable competitive advantage within its industry: • What is the competitive domain/scope • Which market segments can it target • What needs can it satisfy • How can it distinguish itself from competition

  17. Gaining Competitive Advantage 1)Increase the willingness to buy • Better demonstrate benefits that consumers already value • Develop new products with more important benefits • Focus on neglected benefits • Make sure necessary complementary products/ services exist • Produce/service perceived to solve consumer problems • Ensure compatibility with values • Reduce perceived risk

  18. 2) Increase the ability to buy • Initial and maintenance costs • Innovative financing, smaller minimum sizes • Distribution at time and place that meets needs • fewer stockouts, different outlets, easier procedures for delivery/discarding • Improve package/product size to improve storage issues

  19. 3) Increase demand for your brand by: • Increase number of situations in which the product/service is used • Increase amount used at one time • Package size, volume discounts • Emphasize neglected benefits • Encourage replacement • By providing improved products

  20. 4) More basic strategies • Differentiation strategy • Unique benefit or attribute highly desired by market • Niching • Focus Strategy: narrow focus in the marketplace • Niche • Cost leadership strategy • Head-to-head—same benefits—lower cost • Wisdom???

  21. More Basic Strategies cont’d • Prospector • First mover in new product and market areas • Responds quickly to new opportunities • Defender • Maintain a secure position in relatively stable product/service areas • Protects domain by offering lower prices, higher quality,better service • Tends to ignore industry changes • Analyzer • Somewhere between prospector and defender • Seldom a first mover but often a second or third • Reactor • No consistent product or mkt development • Not as aggressive as established products • Responds primarily when forced to

  22. 5) Retaining existing customers • Good for large market-share holders or niche holders • Satisfaction programs • Meeting competitions’ strategies • Relationship marketing Much more on this in a few days

  23. Exercise: • Bring in two products from the same product category that would be used by different “types” of people • Describe the person who buys this product • Describe the Marketing Mix for this Product • Email me a brief write-up of your example • We will discuss this next class

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