Transcript 2 buad 307 marketing strategy

BUAD 307—MARKETING FUNDAMENTALS
MARKETING STRATEGY
Learning Objectives
• Identify
– The scope of strategic
decisions
– Tradeoffs that firms
must make in their
decisions
– Cumulative and “spillover” effects of strategic
decisions and the need
for consistency
– The need for industry
balance and firm unit
cash flow balance
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MARKETING STRATEGY
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Strategy
• Plan
– To achieve desired
objectives (e.g., profit,
market share)
– Based on available
resources (e.g., financial,
patents, trademarks,
people, brand name/image
, distribution channels)
– Subject to choices made
(e.g., willingness to take
risk, short run vs. long run
goals)
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MARKETING STRATEGY
RESOURCES
ENVIRONMENT
STRATEGY
PRIORITIES/
OPPORTUNITY
COSTS
EXPERIMENTATION/
EXPRIENCE
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Market Balance
• Different firms
should attempt
to offer different
forms of value,
appealing to
different
customer
segments—
otherwise,
competition is
likely to
degenerate into
price competition
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A WELL BALANCED
GADGET INDUSTRY
EASYTECH, LTD.
EASE OF
USE
TROJAN CREATIONS,
INC.
PERFORMANCE
MICROGEEKS, LTD.
SMALL
SIZE
MARKETING STRATEGY
BRUIN PRIDE, INC.
LOW
PRICE
PATIENCE-IS-STUPID,
INC.
SPEED
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Core Competencies
• Broad, fundamental capabilities—not
readily imitated by competitors— in which
an organization excels
• Deployable across a variety of products
and situations
– E.g., stylish design of electronics (Apple)
– E.g., economies of scale and broad assortment
of online merchandise (Amazon)
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Examples of Objectives
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Profit level
Profit growth
Total unit sales
Growth in unit
sales
• Growth in dollar
sales
• Total dollar sales
• Brand perception
by customers
–
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•
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Value
Quality
Innovativeness
Reliability
Certain objectives must be
accomplished (e.g., brand
awareness, distribution
coverage) before others can be
effectively attempted (e.g., sales
volumes).
• Brand name
recognition
• Brand name
recognition by
product category
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Product availability
– Availability across
retailers and other
distributors
– Store placement
Percentage of products
sold at full price
Percentage of revenue
from new products
Affordability of product
Elimination of unsafe
product ingredients
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Strengths, Weaknesses, Opportunities, and Threats
(SWOT) Analysis
STRENGTHS
INTERNAL
TO FIRM
OPPORTUNITIES
EXTERNAL
TO FIRM
STRATEGY
WEAKNESSES
Note that merely listing each
factor has limited use. We need to
analyze:
•
THREATS
•
•
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MARKETING STRATEGY
How to take advantage of strengths
and opportunities
How to address weaknesses and
threats
How to use strengths and
opportunities to counter weaknesses
and threats
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Compensating for Weaknesses and Threats
WEAKNESSES
STRENGTHS
OPPORTUNITIES
PERFORMANCE
STRENGTHS
THREATS
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OPPORTUNITIES
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SWOT
• Deciding where to concentrate resources
• Taking advantage of strengths and
opportunities
• Addressing weaknesses and threats
• Using strengths and opportunities to
compensate for weaknesses and threats
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SWOT—Apple
• Strengths
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• Opportunities
Market leading/dominating position
Strong brand name
Financial strength
Strong R&D
Strong demand for iPhone
• Weaknesses
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Source: “Apple,” Global Markets Direct SWOT
Reports (from Business Essentials), June 1,
2016
ApplePay
New product introductions
Increasing global demand for smart
phones
• Threats
–
Legal problems (loss of several patent
lawsuits)
Product recalls
Dependence on the legacy of Steve
Jobs for brand image
No major recent new product types
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Android devices (free operating
system)
Counterfeiting and industrial
espionage
Competition—both on low cost and
on innovative features
Declining desktop and laptop
markets in developed countries
Unstable world economy
Increased import tariffs
Foreign trade barriers placed in
retaliation for possible U.S. barriers
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