Marketing Strategy: Marketing Strategy Hierarchy of goals and objectives
Porter’s Economic Theory of Profits
Barriers to Entry
Suppliers Marketing Strategy: Marketing Strategy Generic Marketing Strategies
Lower costs of production and distribution
Unique product or brand
Focus on customer needs in a few segments
Marketing Strategy: Marketing Strategy What business are you in?
Statement of marketing strategy
Indicates product, market scope
Shows growth factor
Shows differential advantage
Shows management orientation Marketing Strategy: Marketing Strategy Product Mix Strategies
Market penetration versus market skimming
Quality High Medium Low Price High Medium Low Premium
Quality Bargain Hit and
Goods Marketing Strategy: Marketing Strategy 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: Marketing Strategy Boston Consulting Group Strategy:
Relative Market Share
Market Growth Rate
Problems with BCG Approach
Difficult to estimate relative market share in rapidly growing markets Marketing Strategy: Marketing Strategy BCG Matrix: Stars
Some cash use
Future cash cow Cash Cows
Generate cash for
?, Stars Dogs
Low or no cash use
When to divest ?
High cash use
? Is to build or not Relative Market Share 10x 1..5x .1x (log scale) Market Growth
Rate 22% 10% 0% Marketing Strategy: Marketing Strategy Market Leader Strategies
Increase Size of Total Market
Product-Market Growth Strategies
Protect Market Share
Assortment of brands, sizes
Best defense is a good offense
Counteroffensive Marketing Strategy: Marketing Strategy Market Leader Strategies (cont.)
Increase Market Share
Market Share Marketing Effort ($) 100% Marketing Strategy: Marketing Strategy Market Challenger Strategies
Tough to do, easier to defend
Attack where leader is not looking
Find a new market segment
Price Discount Strategy
Buyers are sensitive to price
Works if leader does not cut price Marketing Strategy: Marketing Strategy Market Challenger Strategies (cont.)
Cheaper Goods Strategy
Lower quality but much lower price
Vulnerable to still cheaper goods
Prestige Goods Strategy
Increase both quality and price
Marketing Strategy: Marketing Strategy Market Follower Strategies
Similar products, prices
Avoid unprofitable segments
Specialize in a very small group of customers
Concentrated segmentation strategy…… Marketing Strategy: Marketing Strategy Attacker
Defense Counteroffensive Contraction
Defense Flanking Defense Mobile Defense Flank Attack Frontal Attack Encirclement Bypass Guerilla Attack eMarketing: eMarketing Is eMarketing anything new?
…or just an adaptation of existing strategy?
Addressability – ability to identify customer prior to purchase
Marketers could always do this.
So why is web different? Is it more efficient…?
…only if you do not delete your cookies…?
…or they keep extensive files on you…
eMarketing: eMarketing Interactivity – customers can express their needs and wants
directly to the firm
Marketers could always do this too. So what is new?
…another efficiency argument…?
Memory – ability to access individual customer profiles
and purchase histories
This is probably valid. Information existed before but
was hard to access eMarketing: eMarketing Control – customer’s ability to control flow and sequence of information
Pull versus push medium…web versus television.
Who control’s the flow?
Definitely an eMarketing characteristic, but a two-edged sword.
Why? Customers control the flow……
Accessibility – ability to obtain information…..
“Retrieving info from the Internet is like trying to drink from a
fire hose.” You could always do this, web may be easier
for some users.
eMarketing: eMarketing Digitilization – can the product or benefits be represented digitally?
Does the media match the product’s attributes?
…a problem for all media…?
So, does eMarketing exist? Maybe, or maybe it is just
another information flow/distribution system to
use in designing a marketing strategy to meet
customer needs…(and maximize profits).
Marketing Strategy: Marketing Strategy Bear Theory
Differential versus Absolute Advantage