Marketing Strategy1

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MARKETING STRATEGY Ilan Bijaoui 2007 ibii@netivision.net.il

MISSION VERSUS VISION : 

MISSION VERSUS VISION Mission: What business are we in? Vision: What do we want to become? Fedex Mission: higher financial returns by providing high value added logistics, transportation and related information services Fedex vision: Leading the way Lexmark vision: Customers for life Boeing: People working together, as a global enterprise for aerospace leadership

ELEMENTS OF MISSION STATMENTS : 

ELEMENTS OF MISSION STATMENTS Who are we? Who are our customers? What is our operating philosophy? What are our core competencies? What are our concerns and interests?

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FIVE P’S FOR STRATEGYHenry Mintzberg Strategos: Art of the Army General

STRATEGY FOR CHANGEJames Brian Quinn : 

STRATEGY FOR CHANGEJames Brian Quinn A Strategy is a Pattern/Plan that Integrates an Organization’s Major Goals, Policies and Actions Sequences to a Cohesive whole

CRITERIA FOR EFFECTIVE STRATEGY-Quinn : 

CRITERIA FOR EFFECTIVE STRATEGY-Quinn

THE CONCEPT OF CORPORATE STRATEGYKenneth R. Andrews : 

THE CONCEPT OF CORPORATE STRATEGYKenneth R. Andrews Formulation Implementation Corporate Strategy Pattern Opportunity & Risk Resources Values Responsibility Structure/ Relationship Processes/Behaviour Top Leadership

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MARKETING DEFINITIONThe American Marketing Association The Process of Planning & Executing The Conception, Pricing, Promotion & Distribution of Ideas, Goods & Services To Create Exchange, that Satisfy Individuals & Organizational Goals

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Kotler: Marketing managers seek to influence the level, the timing, and composition of demand to meet the organization’s objectives Peter Drucker: The aim of marketing is to know and understand the customer so well that the product fits him and sells

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VALUE BRIDGE FIRM VALUE CUSTOMER PRODUCT-PRICE MARKETING VALUE Psychological Bridge Physical Bridge

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MARKET ORIENTED DEFINITIONS

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Distinctive Competence

RESOURCES : 

RESOURCES Tangible Intangible Hall R.1992 The strategic analysis of intangible resources Strategic Management Journal 13-136-139 Cambridge

THE CORE COMPETENCE OF THE CORPORATION CK Perahalad G/ Hamel : 

THE CORE COMPETENCE OF THE CORPORATION CK Perahalad G/ Hamel COMPETENCIES CORE PRODUCTS BUSINESS UNITS END PRODUCTS

NEC STRATEGYComputing & Communication Convergence : 

NEC STRATEGYComputing & Communication Convergence From Mainframe to Processing Components Semiconductors Alliances END PRODUCTS From Mechanical to Digital Communication New Markets

SELECTED CORE COMPETENCIES/PRODUCTS : 

SELECTED CORE COMPETENCIES/PRODUCTS

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CORE COMPETENCY IDENTIFICATION IDENTIFY Access to wide variety of markets Contribution to perceived customer benefits Difficult to imitate Outsourcing and Core Competency (GE-GTE-Motorola TV Color) STRATEGIC ARCHITECTURE How long could preserve technology How central is the core competence for customers Future opportunities in other core competencies

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PM 4.4 Natural and technological environments NATURAL ENVIRONMENT Energy costs Geography TECHNOLOGICAL ENVIRONMENT Raw materials Pollution R&D spending, Patent protection, New development, Internet, Telecom. Regulatory

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Economic PM 4.3 Demographic and economic environments ECONOMIC ENVIRONMENT Age DEMOGRAPHIC ENVIRONMENT Population Family Education GDP Interest Inflation , Unemployment Wages, Energy availability

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PM 6.5 Family and lifestyle Activities LIFESTYLE DIMENSIONS Interests Demographics FAMILY LIFE-CYCLE STAGES Older Middle-aged Young Opinions

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PM 4.5 Political and cultural environments POLITICAL ENVIRONMENT CULTURAL ENVIRONMENT Antitrust, Environment, Tax, Incentives, Foreign trade, Stability Career expectations, consumer activism, Lifestyle

SOURCES OF INFORMATION : 

SOURCES OF INFORMATION Secondary Data Government Periodicals Commercial Primary Data Direct Observation Focus Group Survey Experiment

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SWOT ANALYSIS

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THE STRUCTURING OF ORGANIZATIONSH. Mintzberg Strategic Apex Operating Core Middle Line Support Staff Techno Structure Ideology

THE STRUCTURING OF ORGANIZATIONSH. Mintzberg Basic Parts : 

THE STRUCTURING OF ORGANIZATIONSH. Mintzberg Basic Parts

Coordinating Mechanisms : 

Coordinating Mechanisms

Configurations : 

Configurations

THE STRATEGIST H. Mintsberg : 

THE STRATEGIST H. Mintsberg Frame of the Job Perspectives Positions Agenda Issues Scheduling Values Style Experience Knowledge Competencies Model Inside Outside Within Core in Context

MANAGING LEVELS : 

MANAGING LEVELS Action People Information Controlling System, Structure Directive Communicating Leading Individual Group Unit Linking Gate Keeper Doing Inside Doing Outside Conceiving

MARKETING’S ROLES & GOALS : 

MARKETING’S ROLES & GOALS Corporate Business Unit Products/markets Corporate strategy Strategic Marketing Marketing Management Roles Goals Market Share Growth Profitability Customer, Competitive Perspective

MARKETING STRATEGY –THREE C’s : 

MARKETING STRATEGY –THREE C’s Customers Competition Corporation Where to Compete? How to Compete? When to Compete? Business Environment Differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer’s needs in a given environmental setting

GILETTE’S MACH3 MARKET STRATEGY : 

GILETTE’S MACH3 MARKET STRATEGY Where (Market): All USA How (Means): Premium Product 35% more expensive than SensorExcel When (Timing): before Mr Zein (CEO) retires Competition: Atra, SensorExcel, Shick Customer: MUS$ 750 in research, 35 patents Global product Philip Morris and Miller Beer (Corporate strength) TI and digital watches (Competition strength) Goodyear: focus on tire (strategic decision)

FUTURE OF STRATEGIC MARKETING : 

FUTURE OF STRATEGIC MARKETING Market Share Deregulation Acquisitions, mergers Columbia, Coca Cola Channel Structure Overseas companies Fragmentation of Markets: : cars – segments Early entrants Customer’s requests: Quality and Price not enough Demographic Shifts

STRATEGIC MARKET PLAN-MARKETING PLAN : 

STRATEGIC MARKET PLAN-MARKETING PLAN A Strategic Market Plan is a plan of all aspects of an organization’s strategy in the market place A Marketing Plan deals with the delineation of target segments and the four P’s Source: Abell D F Hammond J. Strategic Market Planning Englewood Cliffs NJ Prentice Hall 1979. p9

STRATEGIC MARKETING -MARKETING MANAGEMENT : 

STRATEGIC MARKETING -MARKETING MANAGEMENT Source: Subhash C. Jain Marketing Planning & Strategy South Western College Publishing 2000

DEFINITION OF COMPETITION : 

DEFINITION OF COMPETITION Natural Competition: Evolution by Adaptation Strategic Competition: Understand competitive interaction, predict consequences, available resources, predict risk and return, make the commitment

SOURCES OF COMPETITION : 

SOURCES OF COMPETITION Customer Need Existing Industry New Industry Product line Type of the Firm

COMPETITIVE INTELLIGENCE : 

COMPETITIVE INTELLIGENCE Defensive Intelligence: protect business Passive Intelligence: Ad hoc information for a specific purpose Offensive Intelligence: identify new opportunities Sources: Public (advertising, publications, speeches)Trade Professionals(Customers, Patents), Government, Investors

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FORCES DRIVING INDUSTRY COMPETITION Potential Entrants Suppliers Industry Buyers Competitors Substitutes Threats Threats Bargaining Power Bargaining Power

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PM 12.6 Market challenger strategies ATTACK STRATEGIES Bypass Flanking Guerrilla Encirclement Frontal

HOW TO DEFINE A MARKET? : 

HOW TO DEFINE A MARKET? Product characteristics Needs characteristics (Use) Private/Owner brand Regional sales Boundaries: technology (material, energy); customer function, customer group (category)

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DEFINING MARKET BOUNDARIES Personal Financial Transactions Customer Groups: Airports, Stores Gas stations, saving associations, banks Customer Functions: cash, deposit,bill, check, transactions Technologies: ATM, System, Teller Source: Abell D F Hammond J. Strategic Market Planning Englewood Cliffs NJ Prentice Hall 1979. p9

SEGMENTATION : 

SEGMENTATION

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PM 10.4 Positioning strategies POSITIONING STRATEGIES Users Against competition Brands Activities Personalities Origin Usage Benefits Product attributes Product class Not competition

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Disaster Success

BCG STRATEGY IMPLICATIONS : 

BCG STRATEGY IMPLICATIONS

MARKET COVERAGE : 

MARKET COVERAGE M1 M2 M3 M1 M2 M3 M1 M2 M3 P1 P2 P3 P1 P2 P3 X X X X X X X X X X X X X X X X X X X X

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GENERAL ELECTRIC GRID Industry Attractiveness Low Medium High Business Strength Strong Average Weak Question marks Profit Producers Winners Losers

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Porter’s generic strategies approach: Overall cost leadership, differentiation, focus Market share Steel Industry Restaurant Specialized machinery