Marketing Strategy

MKTG350
Marketing Strategy
 Generic business strategy
frameworks
 Segmentation
 Targeting
 Positioning
 Generic marketing strategies
Generic Business Strategy
Frameworks
 Growth strategies
 Portfolio strategies—BCG Growth-
Share Matrix
 Growth Strategies
Product/ Market Expansion Grid

Existing New
Products Products
Existing 1. Market 3. Product
Markets Penetration Development

New 2. Market
4. Diversification
Markets Development
Product/ Market Expansion
Grid
 Market Penetration

 Market Development
Product/ Market Expansion
Grid
 Product Development

 Diversification
 Boston Consulting Group
Growth-Share Matrix Framework
Relative Market Share
High Low
Market Growth Rate

Stars Question
Question Marks ?
High

Marks
• High growth & share ••High
Highgrowth,
growth,low
lowshare
share
• Profit potential ••Build
Buildinto
intoStars
Starsor
orphase
phaseout
out
• May need heavy ••Require cash to hold
Require cash to hold
investment to grow market
marketshare
share
Cash
Cash Cows
Cows Dogs
Dogs
••Low • Low
Lowgrowth
growth&&share
Lowgrowth,
growth,high
highshare
share ••Low share
Low

••Established, profit potential

Established,successful
successful • Low profit potential
SBU’s
SBU’s
••Produce
Producecash
cash
BCG Framework
Implications
 Dynamic nature of SBUs—importance of
a portfolio.
 Attractiveness of growing markets.
 Value of increasing market share.
 Cash Cows support Question Marks.
 Maintain Stars.
 Build Question Marks.
 Divest/harvest Dogs.
Market Segmentation
Market Segmentation
 Steps in Market Segmentation,
Targeting, and Positioning
Market
Segmentation
1. Identify bases for
segmenting the
market
Market Targeting
2. Develop segment
profiles 3. Develop measure of
segment attractiveness
4. Select target segments

Market positioning
5. Develop positioning
for
target segments
6. Develop a
marketing
Target Segment Size

mass niche micro customized

Step 1. Market Segmentation
Demographic Segmentation
 Dividing the market into groups
based on variables such as:
 Age

 Gender

 Family size or life cycle

 Income

 Occupation

 Education

 Religion

 Race

 Generation

 Nationality
 Step 1. Market Segmentation
Psychographic Segmentation
Divides Buyers Into Different Groups Based on:
 Step 1. Market Segmentation
Behavioral Segmentation
 Dividing the market into groups
based on variables such as:
 Occasions

 Benefits

 User status

 Usage rate

 Loyalty status

 Readiness stage

 Attitude toward product

 Benefit segmentation of
the beverage market
Which product would you choose for which benefit?

coffee tea milk beer cola un-cola

Relieve throat +++

irritation
Settle upset stomach +++ ++
Provide energy and ++ +++
pep
Help relax, unwind + +++
Provide nutrition +++
Good taste + +++
Quench thirst +++ +
 Model of Segmentation
values User differences:
•Demographics
needs •Life cycle
•Lifestyle
benefits
Situation differences:
beliefs/evaluations •Physical
•Social
Brand attitudes •Psychological
Choice rules
Price sensitivity
Choice
Brand loyalty
Use level
Use situation
Step 1. Market Segmentation
Requirements for Effective
Segmentation
• Size, purchasing power,
Measurable
Measurable profiles
of segments can be
measured.
Accessible
Accessible • Segments can be effectively
reached and served.

Substantial • Segments are large or

Substantial profitable enough to serve.
• Segments must respond
Differential
Differential differently to different
marketing mix elements &
programs.
• Effective programs can be
Actionable
Actionable designed to attract and serve
the segments.
 Advantages and
disadvantages of
segmentation
 guides marketing  increases
research marketing costs
 improves satisfaction  proliferation of
 improves forecasting products
 identifies  consumer backlash
competition and
opportunities
 limits general
popularity

Segmentation is a trade-off of efficiency for effectiveness.

Step 2. Market Targeting
 Segment Size and Growth

 Segment Structural Attractiveness

 Company Objectives and Resources

Step 2. Market Targeting
Market Coverage Strategies
Company
Company
Marketing
Marketing Market
Market
Mix
Mix
A. Undifferentiated Marketing
Company
Company
Marketing Segment
Segment11
MarketingMix
Mix11
Company
Company Segment
Segment22
Marketing
MarketingMix
Mix22
Company
Company Segment
Segment33
Marketing
MarketingMix
Mix33
B. Differentiated Marketing

Segment
Segment11
Company
Company
Marketing Segment
Marketing Segment22
Mix
Mix
Segment
Segment33
C. Concentrated Marketing
Step 2. Market Targeting
Choosing a Market-Coverage
Strategy

Company
Company Resources
Resources

Product
Product Variability
Variability

Product’s
Product’s Stage
Stage in
in the
the Life
Life Cycle
Cycle

Market
Market Variability
Variability

Competitor’s
Competitor’s Marketing
Marketing Strategies
Strategies
 Socially Responsible
Target Marketing
 Smart targeting helps companies and
consumers alike.

 Target marketing sometimes generates

controversy and concern.
Step 3. Positioning
Strategy
 Product’s Position - the way the
product is defined by consumers on
important attributes - the place the
product occupies in consumers’
minds relative to competing
products.

 Marketers must:
 Step 3. Choosing a
Positioning Strategy
Step 1. Identifying
Possible
Competitive
Advantages
Step 2. Selecting
the Right
Competitive
Advantage
Step 3.
Communicating and
Delivering the
Chosen Position
 Identifying Possible
Competitive Advantages
 Key to winning and keeping customers is to
understand their needs and buying processes
better than competitors do and deliver more
value.

 Competitive advantage is an advantage

over competitors gained by offering
consumers greater value, either through
lower prices or by providing more benefits,
that justify competitive advantage,
Generic Marketing
Strategy
 Michael Porter’s basic strategic
options:
 Cost leadership
 Differentiation
 Focus

Focus implies segmentation and

positioning.
Basic Competitive
Strategies

Overall
Overall Cost
Cost Focus
Focus
Leadership
Leadership

Middle
Middle of
of
Differentiation
Differentiation the
the Road
Road
 Identifying Possible
Competitive Advantages
Product Services
Differentiation Differentiation
i.e. Features, i.e. Delivery,
Performance, Style & Installation,
Design, or Attributes Repair Services,
Customer
Training Services
Image Personnel
Differentiation Differentiation
i.e. Symbols, i.e. Hiring, Training
Atmospheres, Better People Than
Events Competitors Do
 Competitive Strategies:
Value Disciplines
Companies Gain
Leadership Positions Operational
by Delivering Superior Excellence
Value to their
Customers Through
These Strategies: Customer
Intimacy

Product
Leadership
 Analyzing Competitors
Identifying the
company’s
competitors

Assessing competitor’s
objectives, strategies,
strengths and weaknesses,
and reaction patterns

Selecting which
competitors to
attack or avoid
 Strategies Relative to
Competitors
Firms Competing in a Given Target Market Differ in
their Objectives and Resources so May Choose the
Following Forms:
 Market
Leader
Motorola, a market
leader, is looking to

Competitive Marketing
expand total market, so it
emphasizes the overall
need for pagers, while
making it clear that
its product can fulfill that
need.

Strategies

Firm
Firm With
With the
the Largest
Largest Market
Market Runner-Up
Runner-Up Firms
Firms that
that Fight
Fight
Share
Share to
to Increase
Increase Market
Market Share
Share

Expand
Expand the
the Protecting
Protecting Attack
Attack the
the Avoid
Avoid the
the
Total
Total Market
Market Market
Market Share
Share Market
Market Leader
Leader Market
Market Leader
Leader

Expanding
Expanding Attack
Attack Other
Other Acquire
Acquire Smaller
Smaller
Market
Market Share
Share Firms Firms
Firms Firms
 Here, Oldsmobile is making cars that resemble its
foreign c ompetitors, then appealing to customers t o
buy these domestic cars.

Competitive Marketing
Strategies

Runner-Up Firms
Firms that
that Serve
Serve Small
Small Segments
Segments
Runner-Up Firms
Firms that
that Want
Want
to Not
Not Pursued
Pursued by
by Other
Other Firms
Firms
to Hold
Hold Their
Their Share
Share Without
Without
Rocking
Rocking the
the Boat
Boat
End-User
End-User Customer-Size
Customer-Size
Specialist
Specialist Specialist
Specialist
Follow
Follow Follow
Follow at
at aa
Closely
Closely Distance
Distance
Geographic
Geographic Quality-
Quality- Service
Service
Market
Market Price
Price Specialist
Specialist
Specialist
Specialist Specialist
Specialist