BUSS3 Chapter 9 Selecting Marketing Strategies

Views:
 
Category: Education
     
 

Presentation Description

Teacher presentation AQA Unit 3

Comments

Presentation Transcript

Chapter 9 Selecting Marketing Strategies:

Chapter 9 Selecting Marketing Strategies Learning Objectives At the end of this chapter you will be able to Describe in detail a range of marketing strategies available to a business Use Ansoff’s matrix to assess marketing strategies in a given context Analyse the risks and benefits involved in entering international markets Assess the effectiveness of marketing strategies

PowerPoint Presentation:

Marketing Strategies In this chapter we look at the marketing strategy At AS we looked at niche and mass marketing (the decision as to which type of market to aim for) This is an important decision but there are other things that also have to be considered Low cost strategy and undercut the rivals or differentiate and add value Should the strategy be national or international? Marketing strategy – a plan of how the marketing objectives are going to be achieved

PowerPoint Presentation:

Low cost or differentiation? Low cost means going for the cheaper end of the market (both mass and niche) Offer products at a lower prices than competitors e.g. Easy Group To do this the business has to reduce its costs E.g. through economies of scale Finding low cost suppliers Moving to a low cost location Differentiation is again for both mass and niche e.g. Morgan cars Make one product appear different and somehow superior Encourage consumers to choose that product rather than the competitors because it is better Includes Patenting Developing a USP or strong brand image Pricing will reflect exclusivity and superiority Distribution will be strictly controlled (if possible) to maintain image Economies of scale – where the unit costs of a business fall as the scale of output increases

PowerPoint Presentation:

National or International? With e-commerce there is likely to be an international aspect to most marketing strategies Also with the expansion of the European Union UK companies may be encouraged to think internationally Activity – looking at ‘setting the scene’ how might a new web presence help Marks & Spencer develop its international marketing strategy?

PowerPoint Presentation:

Ansoff’s competitive strategies Igor Ansoff (1959) developed a matrix which presents the product and market choices available to a business It gives 4 combinations each shown by a different quadrant in the matrix Each of these combinations represents a choice that the marketing department can make that will form the basis of the marketing strategy Each choice has different risks Ansoff’s matrix – a way of classifying marketing strategies in terms of existing and new products in existing and new markets. The degree of risk involved in each strategy is an important element of the analysis

PowerPoint Presentation:

Quadrant 1 – Market Penetration Existing products in existing markets The largest companies may consider their market to be global This strategy involves using the elements of the marketing mix more effectively Reduce pricing to encourage customers to buy more or entice customers away from competitor brands Increase promotional spending Launch a loyalty scheme Market Penetration – when a firm increases the sales of its current products to existing customers or attracts new customers from its competitors in the market Increase sales force activity Make small changes to products (e.g. sizes) Increase the number of places where the product is sold This is the lowest risk strategy Experience of the market Know the characteristics of customers Evaluation : if the market is large assuming that customers share characteristics may be dangerous Market research must be kept up to date

PowerPoint Presentation:

Quadrant 2 – Market Development Finding new markets for existing products More risky because stepping into the unknown For Cadbury to sell chocolate in Chile they would need to understand the Chilean consumer It could fail even if they do the research as customer psychology is complex and ever changing Two ways to do it Repositioning – new segment e.g. Land Rover’s traditional market was farming and military and has moved to town dwellers Market Development – finding new markets for existing products Move into a new market e.g. Tesco and Laura Ashley have set up their own outlets. Others have entered into joint ventures Market research should tell them what they know but not always reliable Surveys need to know the right questions which means some understanding of the market Ford set up factory and offices in Britain to get to know the consumers instead of exporting from the US Sony budgeted for a 15-year payback period when it started in Britain

PowerPoint Presentation:

Quadrant 3 – Product Development New products to existing markets E.g. Loreal launching a new hair product Hard because only one in five new products succeeds Spend a lot of money investing on R&D, marketing, Birds Eye, Walls, Loreal and McVities suffer four flops for every success Highly competitive markets use product development to keep ahead of the competition Product Development – offering new and improved products to existing markets Strategies are Change an existing product e.g. washing powder or shampoo (add new ingredients, change packaging) Develop new products Apple the computer business created the iPod and moved into the music business

PowerPoint Presentation:

Quadrant 4 – Diversification New product and new market This is the ultimate challenge and the most risky Virgin totally flopped with cosmetics and clothing WHSmith failed in the DIY market with Do It All Heinz failed to market a vinegar based household cleaning product It can also lead to the most extraordinary business successes Product Development – offering new and improved products to existing markets Nintendo used to produce playing cards Nokia once made car tyres and toilet rolls Ansoff emphasises the risks of diversification He never intended firms to shy away from those risks Risks are worth taking as long as the potential rewards are high enough

PowerPoint Presentation:

Marketing Strategy in international markets This adds further risk to market development The risk will depend on how different the market is to the home country Green & Black’s may not have a problem moving into France Although French tastes are different and distribution systems are different Affluence and climate is similar to the UK This would not be so if they were to sell to Saudi Arabia or China The product may need to be modified Many fail due to Language problems Misunderstanding the culture Mistiming – economic or political Careful research can minimise the risks Some of the most successful ventures into international marks involve working in partnership with existing firms in those markets

PowerPoint Presentation:

Marketing Strategy: a continual process Once a strategy is developed it needs to be reviewed Market research and monitoring make sure the strategies are working and producing the desired results Markets are dynamic (ever changing) and so strategies need to be too The strategy may provoke responses from competitors Market opportunities change constantly Company must be responsive to changes to succeed Heinz found that its approach to global marketing was ineffective Only in the UK were baked beans an important seller so the baked bean pizza was only developed there In Korea people love to pour ketchup on their pizza so a deal with Pizza Hut put a bottle on every table

PowerPoint Presentation:

Marketing Strategy: a continual process A strategy has to be reviewed and evaluated If it is not successful changes need to be made This is an ongoing process

PowerPoint Presentation:

Assessing the effectiveness Magners is an example of how a strategy can be too good

PowerPoint Presentation:

Assessing the effectiveness of marketing strategies Consumers go through the following process before they purchase Awareness – in July 2007 57% of adults had heard of the still quite new Moneysupermarket.com By September awareness had risen to 74% Interest – ‘perhaps I’ll have a look at the site’ Desire – (could be conscious) you purposely go and buy it or (could be unconscious) you find yourself buying it without planning Action – the actual moment of purchase (and more importantly repeat purchase To assess the effectiveness of marketing a business should measure at each of these stages The single most important factor is conversion rate – from product trial to product loyalty If the figure is low the strategy has failed

PowerPoint Presentation:

Assessing the effectiveness of marketing strategies Reasons for marketing strategy failing Objective may have been unrealistic Budget may have been inadequate Competitors reacted unexpectedly fiercely One element of the marketing mix may not have worked Some are within the firm’s control but others are out of their control (external factors) Rupert Murdoch launched the free thelondonnewspaper and the owners of the 50p evening standard launched the free London Lite to stop Murdoch’s paper taking a grip on the capital. They will both lose tens of millions before one give way

PowerPoint Presentation:

Analysis and Evaluation Themes for analysis could include: Examining the risks and benefits of particular marketing strategies Explaining why some marketing strategies are riskier than others Evaluation Assessing whether a business should adopt a given marketing strategy Making a judgement about the best marketing strategy in particular circumstances Assessing the value of a particular marketing strategy when entering a given market, including international markets

authorStream Live Help