Transcript Slide 1

MARKETING STRATEGY
Learning objectives:
By the end of this lesson, students should be able to understand the following key
issues:
1.
What is strategy and what is marketing strategy
2.
Why is strategy important
3.
The various different marketing strategies
4.
Strategy and planning
5.
Strategic management framework.
Jude Asongwe
MARKETING STRATEGY
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A marketing strategy serves as the foundation of a marketing plan. A marketing
plan contains a list of specific actions required to successfully implement a specific
marketing strategy
Without a sound marketing strategy, a marketing plan has no foundation
Marketing strategies serve as the fundamental underpinning of marketing plans
designed to reach marketing objectives. It is important that these objectives have
measurable results.
A good marketing strategy should integrate an organization's marketing goals,
policies, and action sequences (tactics) into a cohesive whole. The objective of a
marketing strategy is to provide a foundation from which a tactical plan is
developed. This allows the organization to carry out its mission effectively and
efficiently
Marketing strategies are partially derived from broader corporate strategies,
corporate missions, and corporate goals. They should flow from the firm's mission
statement. They are also influenced by a range of micro environmental factors.
Marketing strategies are dynamic and interactive. They are partially planned and
partially unplanned. See strategy dynamics.
Jude Asongwe
BUSINESS AND MARKETING STRATEGIES
BUSINESS STRATEGY
1. Ansoff Matrix
2. Porters generic strategy
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MARKETING STRATEGIES
PORTERS GENERIC STRATEGY MODEL
Differentiation
Stuck with no
clear strategy
Cost
leadership
Focus
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STRATEGIES
ANSOFF MATRIX
Existing
Existing MARKET
PENETRATION
MARKET
New DEVELOPMENT
New
PRODUCT
DEVELOPMENT
DIVERSIFICATION
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MARKETING Strategies
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Segment 1
MARKETING MIX
Concentrated strategy/marketing
Segment 2
Segment 3
MARKETING MIX 1
Segment 1
MARKETING MIX 2
Segment 2
MARKETING MIX 3
Differentiated strategy/marketing
Segment 3
MARKETING MIX
Undifferentiated strategy/marketing
Whole
market
CORPORATE STRATEGIES
ATTACH STRATEGIES
1. Direct challenge – differential advantage
2. Direct attack – distinctive competence
3. Direct attack – market share
4. Flank attack
5. Encirclement
6. Bypass
7. Guerrilla
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1.
2.
3.
4.
5.
6.
7.
MARKETING STRATEGY
DEFENCE STRATEGIES
Position defence
Pre-emptive defence
Counter-offensive
Mobile defence
Flanking defence
Contraction defence
By-pass
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COMPONENTS OF A MARKETING PLAN
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
EXECUTIVE SUMMARY
BUSINESS MISSION
MARKTING AUDITING
SWOT ANALYSIS
MARKETING OBJECTIVES
BUSINESS OBJECTIVES
MARKETING STRATEGIES
BUSINESS STRATEGIES
MARKETING MIX
IMPLEMENTATION
EXPECTED RESULT
MONITORING
CONTROLLING
Jude Asongwe
STRATEGY AND PLANNING
• Corporate or visionary planning that provides
a mission and structure for evaluating and
allocating resources to business
• Business planning which involves long-range
planning for positioning the company and its
products to best serve its target markets
• Functional planning including marketing
planning which is generally annual planning
involving specific goals and plans over one
year.
Jude Asongwe
CORPORATE STRATEGY
Strategies are formulated as a response to the
various
factors in the company’s environment- and these
may
come from both external and internal sources:
a) External
b) Internal
Jude Asongwe
Organizational Stance and
Positioning
• Leaders
• Followers
• Nichers
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Marketing fundamentals -
UNIT 2: MARKETING PLANNING AND
BUDGETING
THE BUSINESS MISSION
Learning Objectives
• What is a Mission Statement.
• What are the components of a mission statement.
• What is the importance of a mission
statemement.
• What are the characteristics of a Mission
Statement
• Examples of Mission Statements: M&S, Asda,
Tesco, Sainsbury, BT & Npower.
Jude Asongwe
Marketing fundamentals -
UNIT 2: MARKETING PLANNING AND
BUDGETING
The Marketing Audit
Learning Objective
• What is the marketing audit
• What are its components
• What is the importance of the marketing audit.
Jude Asongwe
Marketing fundamentals -
UNIT 2: MARKETING PLANNING AND
BUDGETING
THE SWOT ANALYSIS
Learning Objectives
• What is the SWOT Analysis
• What is the importance of carrying out a
SWOT Analysis.
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Marketing fundamentals
Marketing planning and
budgeting.
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PRODUCT PORTFOLIO PLANNING AND
ANALYSIS
Business Portfolio: The collection of businesses and products
that make up the company.
Portfolio analysis: A tool by which management
identifies and evaluates the various businesses that
make up the company
Strategic business unit (SBU): A unit of the company that has
a separate mission and objectives and that can be planned
independently from other company businesses. A SBU can be
a company division, a product line within a division, or
sometimes a single product or brand.
Jude Asongwe
PORTFOLIO ANALYSIS
Market growth
High 20
Low
BOSTON CONSULTING GROUP MATRIX
Framework of the BCG Matrix
10
0 10x
1x
Market share
0.1x
Jude Asongwe
PORTFOLIO ANALYSIS
Stars
High –growth
High market share (High-share businesses)
Products often require heavy investment to finance their rapid growth
Cash cows
Low-growth
High-share businesses or products
Established and successful units that generate cash that the company uses
to pay its bills and support other business units that need investment
Question marks
Low-share business units in high-growth markets
Dogs
Jude Asongwe
BCG MATRIX : BCG CLASSIFICATION OF
PRODUCTS
High 20
Question marks
Market growth
Stars
Low
10
Dogs
Cash cows
0
10x
1x
0.1x
Jude
Asongwe
BCG MATRIX- CASH POSITION FOR
PRODUCTS
Stars
Question marks
Revenue
+++
Investment - - 0
Revenue
+ +
Investment - - -
Cash cows
Dogs
Revenue + + +
Investment –
++
Revenue +
Investment –
0
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PORTFOLIO STRATEGIES
Build
Hold
Harvest
Divest
Jude Asongwe
PRODUCT PORTFOLIO PLANNING AND
ANALYSIS
Business Portfolio: The collection of businesses and products
that make up the company.
Portfolio analysis: A tool by which management
identifies and evaluates the various businesses that
make up the company
Strategic business unit (SBU): A unit of the company that has
a separate mission and objectives and that can be planned
independently from other company businesses. A SBU can be
a company division, a product line within a division, or
sometimes a single product or brand.
Jude Asongwe
PORTFOLIO ANALYSIS
Market growth
High 20
Low
BOSTON CONSULTING GROUP MATRIX
Framework of the BCG Matrix
10
0 10x
1x
Market share
0.1x
Jude Asongwe
PORTFOLIO ANALYSIS
Stars
High –growth
High market share (High-share businesses)
Products often require heavy investment to finance their rapid growth
Cash cows
Low-growth
High-share businesses or products
Established and successful units that generate cash that the company uses
to pay its bills and support other business units that need investment
Question marks
Low-share business units in high-growth markets
Dogs
Jude Asongwe
BCG MATRIX : BCG CLASSIFICATION OF
PRODUCTS
High 20
Question marks
Market growth
Stars
Low
10
Dogs
Cash cows
0
10x
1x
0.1x
Jude
Asongwe
PORTFOLIO STRATEGIES
Build
Hold
Harvest
Divest
Jude Asongwe
GENERAL ELECTRIC MATRIX
Jude Asongwe
THE GENERAL ELECTRIC
MATRIX BY MCKINSEY
• The GE matrix / McKinsey matrix is a model to perform a business
portfolio analysis on the Strategic Business Units of a corporation.
• A business portfolio is the collection of Strategic Business Units that make
up a corporation. The optimal business portfolio is one that fits perfectly to
the company's strengths and helps to exploit the most attractive industries or
markets.
• A Strategic Business Unit (SBU) can either be an entire mid-size company
or a division of a large corporation, that formulates its own business level
strategy and has separate objectives from the parent company.
Jude Asongwe
PRODUCT PORTFOLIO PLANNING AND
ANALYSIS
Business Portfolio: The collection of businesses and products
that make up the company.
Portfolio analysis: A tool by which management
identifies and evaluates the various businesses that
make up the company
Strategic business unit (SBU): A unit of the company that has
a separate mission and objectives and that can be planned
independently from other company businesses. A SBU can be
a company division, a product line within a division, or
sometimes a single product or brand.
Jude Asongwe
PORTFOLIO ANALYSIS
Market growth
High 20
Low
BOSTON CONSULTING GROUP MATRIX
Framework of the BCG Matrix
10
0 10x
1x
Market share
0.1x
Jude Asongwe
GENERAL ELECTRIC MATRIX
Jude Asongwe
THE GENERAL ELECTRIC
MATRIX BY MCKINSEY
• The GE matrix / McKinsey matrix is a model to perform a business
portfolio analysis on the Strategic Business Units of a corporation.
• A business portfolio is the collection of Strategic Business Units that make
up a corporation. The optimal business portfolio is one that fits perfectly to
the company's strengths and helps to exploit the most attractive industries or
markets.
• A Strategic Business Unit (SBU) can either be an entire mid-size company
or a division of a large corporation, that formulates its own business level
strategy and has separate objectives from the parent company.
Jude Asongwe
PRODUCT PORTFOLIO PLANNING AND
ANALYSIS
Business Portfolio: The collection of businesses and products
that make up the company.
Portfolio analysis: A tool by which management
identifies and evaluates the various businesses that
make up the company
Strategic business unit (SBU): A unit of the company that has
a separate mission and objectives and that can be planned
independently from other company businesses. A SBU can be
a company division, a product line within a division, or
sometimes a single product or brand.
Jude Asongwe
PORTFOLIO ANALYSIS
Market growth
High 20
Low
BOSTON CONSULTING GROUP MATRIX
Framework of the BCG Matrix
10
0 10x
1x
Market share
0.1x
Jude Asongwe
PORTFOLIO ANALYSIS
Stars
High –growth
High market share (High-share businesses)
Products often require heavy investment to finance their rapid growth
Cash cows
Low-growth
High-share businesses or products
Established and successful units that generate cash that the company uses
to pay its bills and support other business units that need investment
Question marks
Low-share business units in high-growth markets
Dogs
Jude Asongwe
BCG MATRIX : BCG CLASSIFICATION OF
PRODUCTS
High 20
Question marks
Market growth
Stars
Low
10
Dogs
Cash cows
0
10x
1x
0.1x
Jude
Asongwe
THE GENERAL ELECTRIC
MATRIX BY MCKINSEY
• The GE matrix / McKinsey matrix is a model to perform a business
portfolio analysis on the Strategic Business Units of a corporation.
• A business portfolio is the collection of Strategic Business Units that make
up a corporation. The optimal business portfolio is one that fits perfectly to
the company's strengths and helps to exploit the most attractive industries or
markets.
• A Strategic Business Unit (SBU) can either be an entire mid-size company
or a division of a large corporation, that formulates its own business level
strategy and has separate objectives from the parent company.
Jude Asongwe
THE GENERAL ELECTRIC MATRIX BY
MCKINSEY
• The aim of a portfolio analysis is to:
• 1) Analyze its current business portfolio and decide which SBU's should
receive more or less investment, and
2) Develop growth strategies for adding new products and businesses to the
portfolio
• 3) Decide which businesses or products should no longer be retained.
The BCG Matrix (Boston Consulting Group Matrix) is the best-known
portfolio planning framework. The GE / McKinsey Matrix is a later and more
advanced form of the BCG Matrix.
Jude Asongwe
THE GENERAL ELECTRIC MATRIX BY
MCKINSEY
Typical (external) factors that affect Market Attractiveness:
- Market size
- Market growth rate
- Market profitability
- Pricing trends
- Competitive intensity / rivalry
- Overall risk of returns in the industry- Entry barriers
- Opportunity to differentiate products and services- Demand variability
- Segmentation
- Distribution structure- Technology development
Typical (internal) factors that affect Competitive Strength of a Strategic Business
Unit:
- Strength of assets and competencies
- Relative brand strength (marketing)
- Market share- Market share growth
- Customer loyalty
- Relative cost position (cost structure compared with competitors)- Relative profit
margins (compared to competitors)
- Distribution strength and production capacity
- Record of technological or other innovation- Quality
- Access to financial and other investment resources- Management strength
Jude Asongwe
THE GENERAL ELECTRIC MATRIX BY
MCKINSEY
• The aim of a portfolio analysis is to:
• 1) Analyze its current business portfolio and decide which SBU's should
receive more or less investment, and
2) Develop growth strategies for adding new products and businesses to the
portfolio
• 3) Decide which businesses or products should no longer be retained.
The BCG Matrix (Boston Consulting Group Matrix) is the best-known
portfolio planning framework. The GE / McKinsey Matrix is a later and more
advanced form of the BCG Matrix.
Jude Asongwe
THE GENERAL ELECTRIC MATRIX BY
MCKINSEY
Typical (external) factors that affect Market Attractiveness:
- Market size
- Market growth rate
- Market profitability
- Pricing trends
- Competitive intensity / rivalry
- Overall risk of returns in the industry- Entry barriers
- Opportunity to differentiate products and services- Demand variability
- Segmentation
- Distribution structure- Technology development
Typical (internal) factors that affect Competitive Strength of a Strategic Business
Unit:
- Strength of assets and competencies
- Relative brand strength (marketing)
- Market share- Market share growth
- Customer loyalty
- Relative cost position (cost structure compared with competitors)- Relative profit
margins (compared to competitors)
- Distribution strength and production capacity
- Record of technological or other innovation- Quality
- Access to financial and other investment resources- Management strength
Jude Asongwe
• A six-step approach to implementation of portfolio analysis
(using the GE / McKinsey Matrix) could look like this:
1. Specify drivers of each dimension. The corporation must carefully
determine those factors that are important to its overall strategy
2. Weight drivers. The corporation must assign relative importance
weights to the drivers
3. Score SBU's each driver
4. Multiply weights times scores for each SBU
5. View resulting graph and interpret it
6. Perform a review/sensitivity analysis using adjusted other weights
(there may be no consensus) and scores.
Jude Asongwe
• Some important limitations of the GE
matrix / McKinsey Matrix are:
• - Valuation of the realization of the various
factors
• - Aggregation of the indicators is difficult
• - Core competencies are not represented
• - Interactions between Strategic Business
Units are not considered
Jude Asongwe
CHANGES IN PRODUCT/STRATEGIC
BUSINESS POSITION
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CONCLUSION
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GENERAL ELECTRIC BUSINESS
SCREEN (GE)
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Key terms and definitions
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Questions for revision
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