Transcript Lecture(Rev)

Marketing Strategies
and
Definitions
Strategy
Strategy is an organization’s
long-term course of action
designed to deliver a unique
customer experience while
achieving its goals.
2-3
Marketing Strategy
Marketing strategy is the means
by which a marketing goal is to be
achieved, usually characterized
by a specified target market and
a marketing program to reach it.
2-4
Strategic Marketing Process
The strategic marketing process
is the approach whereby an
organization allocates its
marketing mix resources to reach
its target markets.
2-6
Goals or Objectives
Goals or objectives are the
statements of an accomplishment
of a task to be achieved, often by
a specific time.
2-8
Business
A business is the clear, broad,
underlying industry or market
sector of an organization’s
offering.
2-9
Organization of a typical manufacturing firm,
showing a breakdown
of the marketing department
2-10
The board of directors oversees the three
levels of strategy in organizations:
corporate, business unit, and functional
2-11
The organization of a business unit in a
typical consumer packaged goods firm
shows two product or brand groups
2-12
Profit
Profit is the money left after a
business firm’s total expenses are
subtracted from its total revenues
and is the reward for the risk it
undertakes in marketing its
offerings.
2-13
Profits are not evil!
No company or person can stay in
business if they do not make a profit.
But we have mixed feeling about this!
Suppose a John Deere worker makes $80,000 a year.
He starts his own business.
How much would he have to make just to break even?
It would be close to $100,000
That is how much he would have to make after paying
for all his own supplies
salaries
insurance
non-personal taxes of all kinds
etc… etc..
If McDonald’s doubled its minimum wage
what would be the cost of a BigMac?
Santa Claus does not appear by magic and
give
gifts made by someone else (not like you)
from somewhere (not here) to
deserving people (like you).
Market Share
Market share is the ratio of sales
revenue of the firm to the total
sales revenue of all firms in the
industry, including the firm itself.
2-20
Core Values
Core values are the fundamental,
passionate, and enduring
principles of an organization that
guide its conduct over time.
2-22
Organizational Culture
An organizational culture
consists of the set of values,
ideas, attitudes, and norms of
behavior that is learned and
shared among the members of
an organization.
2-23
Mission
A mission is a statement of the
organization’s function in society
that often identifies its customers,
markets, products, and
technologies. The term is often
used interchangeably with vision.
2-24
Star Trek Enterprise
Why is a mission statement important?
2-25
Mission Statement:
What business are we in?
What makes you different from all others?
Mission Statement:
It should serve as an “invisible hand” that
guides people in the organization.
Mission Statement:
It must be believable
It must be something employees can buy into
Mission Statement
2-29
Marketing Dashboard
A marketing dashboard is the
visual computer display of the
essential information related to
achieving a marketing objective.
2-30
An effective marketing dashboard like
Sonatica’s helps managers assess a
business situation at a glance
2-31
Marketing Metric
A marketing metric is a measure
of the quantitative value or trend
of a marketing activity or result.
2-32
Business Portfolio Analysis
Business portfolio analysis is a
technique that managers use to
quantify performance measures and
growth targets to analyze its clients’
strategic business units (SBUs) as
though they were a collection of
separate investments.
2-33
SETTING STRATEGIC DIRECTIONS
WHERE DO WE WANT TO GO?
Business Portfolio Analysis (BCG Matrix)
High
Market Growth Rate

Stars
Question Marks
Cash Cows
Dogs
Low
High
Low
Relative Market Share
2-34
Kodak Consumer-Related Products
What SBU type in the BCG growth-share matrix?
Kodak digital camera
Kodak digital photo printer
Kodak film
Kodak Picture kiosk
2-35
BCG business portfolio analysis for
Kodak’s consumer SBUs for 2003 (red
circle) and 2012 (red arrow)
①
③
Kodak
film
Kodak digital
photo printer
②
④
Kodak digital
camera
Kodak
Picture kiosk
2-36
Market Segmentation
Market segmentation involves
aggregating prospective buyers
into groups, or segments, that
(1) have common needs and
(2) will respond similarly to a
marketing action.
2-37

Can’t Be “All Things to All People”
• Limited Resources to Market Offerings
2-38
Marketing Plan
A marketing plan is a road map
for the marketing activities of an
organization for a specified future
time period, such as one year or
five years.
2-40
Visionary organizations:
(1) establish a foundation, (2) set a direction,
and (3) create strategies to successfully
develop and market their offerings
2-41
Elements in typical marketing and business
plans targeted at different audiences
2-42
Marketing Plan Rules

Set Measurable, Achievable Goals

Use a Base of Facts and Assumptions

Use Simple, But Clear and Specific Plans

Have Complete and Feasible Plans

Make Plans Controllable and Flexible

Find the Right Person to Implement

Work Toward Consensus-Building
2-43
Competitive Advantage
1. Who is a competitor?
Levels
Same product
Same product class
Others that supply the
same service
Compete for the same
dollars
Compete with resources
touchplay machines
slot machines
casinos
entertainment
rent, etc.

Competitors
2-45
Competitive Advantage
1. Who is a competitor?
Point-of-view
Industry view
Customer view
What industry are
you in?
Coca Cola Pepsi
Coca Cola
thirst lifestyle etc.
Competitive Advantage
1. Who is a competitor?
Competitor myopia: short-sighted
Kodak
Britannica
sold film
sold hard copy encyclopedia
Competitive Advantage
2. What can competitors do?
a. What are your competitors’ objectives?
market share
cash flow
leadership
profitability
stock viability
Competitive Advantage
2. What can competitors do?
b. What are the competitors’ strategies?
c. What are competitors strengths and
weakness?
SWOT analysis
Information sources?
d. What will competitors do?
Competitive Advantage
3. Selecting the competitors to compete with.
a. Strong and weak competitors
weak: easier but less gain
strong: hard by greater gain
customer value analysis
what actions create customer value?
how do customers rate value?
Competitive Advantage
3. Selecting the competitors to compete with.
b. Close or distant competitors
close: they are like you
distant: they are unlike you
Why not just destroy close competitors?
1. They can increase total demand.
2. They can share cost and R&D
3. They can serve unattractive segments
4. They can lower threat from government
5. They can improve bargaining power with
publics (governments, unions, special interest groups, etc.
Competitive Advantage
3. Selecting the competitors to compete with.
c. Good and bad competitors
good: play be the rules
bad: do not play fair
Competitive Advantage
4. Building a system to gather information
Proctor and Gamble example.
Competitive Advantage
5. Developing competitive strategies.
a. Cost leadership
b. Differentiation
c. Focus
What do they emphasize
1. Operational excellence
2. Customer intimacy
3. Product leadership
Wal-Mart
Emirates
Apple
Competitive Advantage
5. Developing competitive strategies.
d. Market leadership
Niching
a. Low volume, high margins
b. Specialization
customer size
service
geography
end users (beds in NY)\
etc…. etc….

Diversification Analysis
• Market Penetration
• Market Development
• Product Development
• Diversification
2-56

Defining Precise Tasks,
Responsibilities, and Deadlines
• Action Item List
• Program Schedules
• Gantt Chart
2-58
Tasks and time needed to complete a
term project
2-59
Gantt chart for scheduling a term project
that distinguishes sequential and
concurrent tasks
2-60

Improving Implementation of Marketing
Programs
• Communicate Goals and The Means of
Achieving Them
• Have a Responsible Program Champion
Willing to Act
• Reward Successful Program
Implementation
2-61
The evaluation phase of the strategic
marketing process ties results and actions
to goals, often using marketing metrics and
dashboards
2-62
The evaluation phase requires that Kodak
compare actual results with goals to identify
and act on deviations to
fill in the “planning gap” by 2012
2-63