Transcript The Strategic Marketing Process

The Strategic Marketing Process
S itu a tio n a l A n a lys is
G o al S etting
M a rke tin g P lan
Im ple m e n tation P ha se
R e su lts
C o n tro l P h a se
M a rketin g P ro g ram
Four market-product strategies: Alternative ways to
expand marketing opportunities, using Coca-Cola
Company products as examples
Market Penetration
Product Development
Selling more Coca-Cola
to Americans
Selling a new product
like PowerAde to
Americans
Diversification
Market Development
Selling Coca-Cola to the Selling a new product
Chinese for the first time like movies and home
videos to Europeans
Markets
Present
A. Market
Penetration
Present
+: Know products & market
segments well
-: Growth limited to this
segment
C. Market
Development
New
+: Can gain R&D and
manufacturing economies
-: Need new sales training
and distribution
New
B. Product
Development
+: Can gain marketing
economies of scale
-: Need new R&D and
mfg., can cannibalize
sales
D. Diversification
+: Can mitigate swings
in core business by
products in new
markets
-: No economies of scale
in R&D, mfg., or mktg
SWOT
Internal
Management
Marketing
Manufacturing
Research & Dev.
Finance
Product Mix
Personnel
External
Economy
Competition
Consumer Trends
Technology
Industry/ Market
Legal/Regulatory
Channels
S
W
O
T
STRATEGIC PLANNING TOOLS
(O’s &T’s)
a) How Attractive?
b) Do we have the right
business strength?
Attractiveness
Opportunities:
Success Probability
High
Low
High
1
2
Low
3
4
Probability
High
Low
a) How serious?
b) How probable?
Seriousness
Threats:
High
1
2
Low
3
4
SWOT ANATOMY
Selected Factors
A. Internal
1 Management
2 Marketing
*Price
*Product
*Place
*Promotion
*Salesforce
3 Manufacturing
Experienced
No Depth
Quality; New Product
Development Process
Good Retail Relationship
Effective Advertising
Effective
Limited Product Line on
Regional Distribution
Lack of Mass Media Channels
Lack of Publicity
Limited Size
Excess Capacity
High Costs
4 Research & Development Well Applied
Basic
5 Finance
Significant Cash Reserves, Relatively Low Price/
Low Debt
Effectiveness
6 Personnel
Good Morale/Skilled
Understaffed
7 Offerings
High Quality
Limited Line
SWOT ANATOMY
Selected Factors
B. External
O
T
1
Economic
Expansion; Low Inflation
Optimism
Adverse Currency Exchange
Rate
2
Competition
Complacent; Few Full Line
Competitors
Entry of Low Cost Competitors
3
Consumer Trends
Brand Preference; Growing
Demand for High End of
Product Line
Growing Preference for Private
Brand Label
4
Technology
Significant Development in
Complementary Product
Technology, More Effective
Delivery Terms
Never Substitutes Technology
5
Industry/Market Structure
Exit
Low Debt
Entry: New vs. Established
Firms from Other Industries
6
Legal/Regulatory
Patents Protects Entry;
Understaffed
Good Relations with
Regulatory Agency; Foreign
Countries Relaxing Restrictions
7
Channels
Growth in Retail Outlets
Increase in Bargain Power
Dictation of Terms
Generic Marketing Strategies for
Increasing a Firm’s Profits
Present Markets, present products
(market penetration)
Increase
Revenues
Present markets, new products
(product development)
New markets, present products
(market development)
Goal
Increase
Profits
New markets, new products
(diversification)
Decrease
Expenses
Scale or experience curve economies
through larger unit volume
Non-scale economies
Three Generic Growth Strategies
• I. Intensive
– MP
– MD
– PD
• II. Integrative
– Backward
– Forward
– Horizontal
• III. Diversification
– Concentric
– Horizontal
– Conglomerate
GE MULTIFACTOR MATRIX
• Market Attractiveness
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Market Size
Growth Rate
Profit Margins
Number of Competitors and Their Strength
Technological Conditions
Seasonality and Cyclicality
• Business Strength
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Market Share
Marketing Enterprise
R&D Skills
Manufacturing Efficiency
Quality of Products
New Product Planning
Unit Costs
Profit Impact of Marketing Strategy (PIMS)
• DATA:
– 3,000+ SBUs from 450+ member business firms
contributing 100+ data items – characteristics of market
environment, competitor’s environment, strategies used by
SBUs.
• Best Predictors of ROI and Cash Flow
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Market Share
Industry Growth Rate
PLC Position
Ratio of Marketing Expenses to Sales
• 1. Market Penetration
•
2. Market Development
How?
How?
>Greater Usage
>Competitor’s Competition
>Noncustomers
> New Locations
>New Channels
>New Customers
Tactics?
>Lower Prices
>Expanded Distribution
>Greater Promotion
International Markets
>Exporting
>Licensing
>Joint Ventures
>Direct Investment
>Strategic Alliance
When Effective?
>Growth Market
• 3. Product Development
How?
>Product Innovation
(Augmentation)
>Product Line Extension
Success Factors
>Sufficient Market Size
>Firm’s Resources
>Cannabalism
>Competitive Response
>Significant Point Of
Difference
•
4. Diversification
Risky!!!
Failures:
> Anheuser-Busch
>Eagle Snacks
>Rohr and Grumman
>Coca Cola
>IBM
>Holiday Inn