Transcript File
Strategic Marketing, 3rd edition Chapter 4: Strategic marketing decisions, choices, and mistakes Structure A. INTRODUCTION 1. Overview and Strategy Blueprint 2. Marketing Strategy: Analysis & Perspectives B. WHERE ARE WE NOW? 3. Environmental & Internal Analysis: Market Information & Intelligence E. DID WE GET THERE? 14. Strategy Implementation, Control & Metrics C. WHERE DO WE WANT TO BE? 4. Strategic Marketing Decisions, Choices & Mistakes 5. Segmentation, Targeting & Positioning Strategies 6. Branding Strategies 7. Relational & Sustainability Strategies D. HOW WILL WE GET THERE? 8. Product Innovation & Development Strategies 9. Service Marketing Strategies 10. Pricing & Distribution Strategies 11. Marketing Communications Strategies 12. International Marketing Strategies 13. Social and Ethical Strategies • Functional Level Functional Level: Strategic decisions of products to offer and markets to target Diversification Ansoff’s product/market matrix • You are a manufacturer of pens. Your team and you decide that it’s time for your company to grow. Four of your teammates propose four different growth strategies as follows: – Teammate 1 says, ‘Let’s start manufacturing diaries’ – Teammate 2 says, ‘We should improve the distribution system so that the pens reach customers more easily. This will lead to more purchase and help us grow’ – Teammate 3 says ‘Why don’t we introduce a color pencil line beside the pen line? Customers who buy pens would love to buy color pencils’ – Teammate 4 says, ‘We should definitely start selling our pens in Sri Lanka. They demand a lot of pens each year!’ • What kind of strategies are each of your teammates referring to? Competitive position tactics Competitive tactics for market leader • Offensive tactics: – Expand total market: new users, new uses, more usage – Expanding market share: heavier advertising, improved distribution, price incentives and new products • Defensive tactics: – Protect the current market share Defensive tactics: Protect Market share • Position defence: involves occupying the most desirable market space in the minds of the consumers, making the brand almost impregnable. • Flanking defence: aimed at capturing market segments that are not being well-served by the firm's competitors. Flanking compels the threatened competitor to either allocate resources to the segments being attacked (and thus dilute the competitor's marketing efforts) or to lose them to the attacker. • Pre-emptive defence: the leading firm can be aggressive and strike competitors before they can make any move against it Defensive tactics: Protect Market share • Counter-offensive defence: This involves that the market leader will attack the attacker in its main territories so that the attacker will have to put back some resources for the attacked territories and will have to divert its attention from launching attack on the market leader. This may involve significantly lowering the prices of the product or aggressive marketing communications or flooding the market with the products. • Mobile defence: the leader extends itself to new markets that can serve as future bases for defence or offence • Contraction defence: when resources are spread too thinly, firm opts to withdraw from those segments in which it is most vulnerable or that which has least potential. Then it concentrates resources in other segments believed to be more valuable Competitive position tactics Competitive tactics for market challenger • Frontal attack: challenger opposes competitor directly using its own weapons and trying not to expose its weak points • Flanking attack: challenger focuses on competitor’s weaker flanks or gaps in the competitor’s market coverage • Encirclement attack: challenger encircles competitor’s position in terms of products or markets or both. It attacks rivals in as many ways as possible by stretching product lines Competitive tactics for market challenger • Bypass attacks: the challenger chooses to diversify into unrelated products, moving into new markets, technologies to replace existing products • Guerrilla attack: smaller companies with relatively limited resource base employs this Example of guerrilla marketing Example of guerrilla marketing Competitive position tactics Competitive position tactics