Transcript Selecting Marketing Strategies

Selecting Marketing
Strategies
- Learning Outcomes
•To be able to describe a range of marketing strategies
•Explain the meaning and significance of Ansoff’s matrix
•Evaluate the suitability of Ansoff’s competitive strategies
•Analyse the risks and benefits involved in entering international
markets
Selecting Marketing
Strategies
What evidence is there that Tesco are aiming to sell new
products to its existing customers?
Is there any evidence to suggest that Tesco is hoping to sell
more of its current portfolio to new customers?
Why might it be more risky to develop overseas business in
new locations rather than in markets where Tesco already
operate?
Selecting Marketing
Strategies
Marketing objectives come from corporate goals and they
are influence by internal and external factors. It is essential
to analyse the market before attempting to devise the
marketing strategy.
As well as niche and mass marketing we need to look at
other strategies:
1
Low cost strategy
(to undercut rivals)
2
Vs
Product Differentiation
(added value)
Does the strategy have a national or international context
Selecting Marketing
Strategies
Low cost (applies to niche & Mass market):
•Offer products at lower price than competitors.
•Business must reduce its own costs using
•economies of scale,
•Finding low cost supplier
•Moving operations to a low cost location
Selecting Marketing
Strategies
Differentiation (applies to niche & Mass market):
•Make product appear different and ‘superior’ to others
•Encourages consumers to choose that particular model
•Involves all elements of marketing mix and includes:
• patenting
•Developing USP
•Building strong brand image
•Pricing reflects exclusivity/superiority
•Distribution is strictly controlled to maintain image
Selecting Marketing
Strategies
For the pictures, can you decide which businesses
have adopted a low cost strategy and which have
decided for a differentiation strategy.
Ensure you are able to explain your choice.
Selecting Marketing
Strategies
National or International
Growth of e-commerce means small to medium sized firms can
attract customer from around the world
Expansion of European Union encourages UK firms to trade
abroad
Selecting Marketing
Strategies
Ansoff’s competitive strategies
Igor Ansoff developed the Ansoff’s matrix- A way of classifying
marketing strategies interims of existing and new products in
existing and new markets.
The degree of risk is involved in each strategy is an important
element of the analysis
Selecting Marketing
Strategies
Selecting Marketing
Strategies
Ansoff’s Matrix
Market Penetration:When a firm increases the sales of its current products to
existing customers from its competitors in the market.
Product development: Offering new and improved products to existing
markets. Often used by confectionary manufacturers.
Market development: Finding new markets for existing products either by
selling abroad or by identifying a new segment of the domestic market
Diversification: Offering a new product in a new market. This spreads the risk
and increase safety. However this does take the business out of its area of
expertise.
Selecting Marketing
Strategies
Ansoff’s Matrix Activity
Using your knowledge of Coca-Cola explain where
their products fit on the Ansoff’s matrix.
Ext – Which is the best strategy to adopt for a business
such as Coca-Cola? Justify your view.
Selecting Marketing
Strategies
Factors affecting marketing strategies
The objectives of the business – Marketing Strategy must reflect
objectives of the business ie A growing market for ethical
customers means businesses may follow ethical principles
Strategies of competitor business – one business may follow
another
Structure of the market – level of competition and degree of
change within different markets. Dynamic markets need changing
regularly.
Size of the business – small businesses find strategic decision
making more difficult
Selecting Marketing
Strategies
Entering international markets
Usually appeals when:
UK market is saturated
UK market is competitive & drives prices down
Opportunities to achieve economies of scale
The firm has excess capacity
The additional costs involved are relatively small
Selecting Marketing
Strategies
Rewards of entering international markets
Profit – costs may be lower, sales and selling price may be
higher
Spreading the risk – less vulnerable to downturns in the
economy
Poor conditions in the domestic market – use it as an
extension strategy
Legal differences – developing countries have fewer
restrictions
Selecting Marketing
Strategies
International Markets: Question
Do you think businesses should be focusing on localisation
or globalisation? Justify your views
Selecting Marketing
Strategies
Assessing the effectiveness of marketing strategies
Has the strategy helped the business to achieve its marketing (and
corporate) objectives.
Assess in terms of Ansoff’s matrix. Has it achieved Market
Penetration, Product development, Market development,
Diversification?
Selecting Marketing
Strategies - PORTER
The most influential analytical model for assessing the nature of
competition in an industry is Michael Porter's Five Forces Model,
which is described below:
Selecting Marketing
Strategies - PORTER
Porter explains that there are five forces that determine
industry attractiveness and long-run industry profitability. These
five "competitive forces" are
- The threat of entry of new competitors (new entrants)
- The threat of substitutes
- The bargaining power of buyers
- The bargaining power of suppliers
- The degree of rivalry between existing competitors
Selecting Marketing
Strategies - PORTER
Porters 5 Forces ACTIVITY
For an industry of your choice, use Porter’s 5 Forces to analyse
the market and recommend if it is worth a business to develop
a product within that industry. (You must analyse each of the 5
forces)
HOMEWORK
Please complete homework 3 from the homework booklet.