Marketing Strategy

Raymond Ro
Note On Marketing Strategy

Prof. Robert Dolan

 Nikes Customer Driven
Marketing
To build image and market share, Nike:
Outspent competitors on big endorsements.
Conducted splashy promotional events.
Started big-budget ads.
Nike sales slipped in the late 1990s.
Turnaroundnew product innovation
and a focus on customer relationships.
 Strategic Planning
Strategic planning involves adapting the
firm to take advantage of opportunities in its
constantly changing environment.
Strategic planning helps a firm to maintain a
strategic fit between its goals and
capabilities and its changing marketing
opportunities.
The Mission Statement
 Mission Statement
Statement of the organizations purpose.
What it wants to accomplish in the larger
environment.
Market oriented and defined in terms of
satisfying basic customer needs.
Emphasizes the companys strengths.
Focuses on customers and the customer
experience the company seeks to create.
 Google
To organize the worlds information
and make it universally accessible and
useful.
 Walmart
We save people money so they can
live better.
 Toyota
Create vehicles that are popular with
consumers.
 Ford
One Team. One Plan. One Goal.
Apple (Steve Jobs Version)
To make a contribution to the world by
making tools for the mind that advance
humankind.
 Apple (Current Version)
Apple designs Macs, the best personal
computers in the world, along with OS X,
iLife, iWork and professional software.
Apple leads the digital music revolution
with its iPods and iTunes online store.
Apple has reinvented the mobile phone with
its revolutionary iPhone and App store,
and is defining the future of mobile media
and computing devices with iPad.
 Starbucks
To inspire and nurture the human
spirit one person, one cup and one
neighborhood at a time.
SWOT Analysis
 Formulating Strategy
Need to understand the circumstances, forces,
events, and issues that shape the organizations
competitive situation.
Requires managers to conduct an audit of both
internal and external factors that influence the
companys ability to compete.
SWOT analysis includes a careful assessment
of strengths, weaknesses, opportunities, and
threats that affect organizational performance.
SWOT Analysis
Business Portfolio Analysis

Boston Consulting Group

 Business Portfolio
Collection of businesses and products that
make up the company.
Steps in business portfolio planning:
Analyze the firms current business portfolio.
Develop strategies for growth and downsizing
to shape the future portfolio.
 Portfolio Analysis
Evaluation of the products and businesses that
make up the company by the management.
Steps:
Identifying the strategic business units (SBUs).
Assessing the attractiveness of its various SBUs
and deciding the support each SBU deserves.
The purpose is to direct resources toward more
profitable businesses while phasing out or
dropping weaker ones.
Where do we want to go?
High
Stars Question Marks
Market Growth Rate

Cash Cows Dogs

Low
High Low

Relative Market Share

Kodaks Consumer Products

Kodak digital camera Kodak digital photo printer

Kodak film Kodak digital picture frame

 Business portfolio analysis for Kodaks
consumer SBUs for 2003 (red circle) and
2012 (white circle)

Kodak digital Kodak digital

picture frame photo printer

Kodak digital
Kodak film sales: US,
camera
Canada, & W. Europe
 Problems With Portfolio
Analysis
Difficult, time consuming, and costly
to implement.
Difficult to define SBUs and measure
market share and growth.
Focuses on classifying current
businesses but provide little advice for
future planning.
Strategies for Growth and
Downsizing
 Starbucks
From a small Seattle coffee shop to a $13.3
billion powerhouse.
More than 18,000 stores in 62 countries.
In the U.S., serves more than 70 million cups of
coffeeeach week.
Home away from work and home.
Stiff competition: McCafe, Costa, Caribou, etc.
Starbucks needs a growth strategy.
 Market Development
Company growth by developing and
expanding current market segments for
existing products.
Could target seniors. Encourage them to
visit the coffee shop for the first time.
Expand swiftly in high-growth markets
such as Asia: 1,000 stores in Japan; 1,500
stores in China; 700 stores in Korea.
 Product Development
Company growth by offering modified or new
products to current market segments.
Starbucks developed Via instant coffee.
Sells its coffee and Tazo teas in K-Cup packs
that fit Keurig at-home brewers.
Introduced a lighter-roast coffee called
Blonde.
Entered the energy drink market.
Mooncakes and green tea here in China.
 Diversification
Company growth through starting-up or
acquiring businesses outside the
companys current products and markets.
Starbucks acquired Evolution Fresh,
which provides premium fresh-squeezed
juices.
 Downsizing
Not only develop strategies for growth, but also
strategies fro downsizing.
Many reasons for abandoning products or markets.
Firm may have grown too fast or entered areas where it
lacks experience. Market environment might have
changed.
When products or markets become unprofitable or
no longer fits its overall strategy, a firm must
carefully prune or divest them.
 Downsizing
P&G recently sold off the last of its food
brands, Pringles (to Kellogg), allowing the
company to focus on household care and
beauty/grooming products.
GM has pruned several underperforming
brands in its portfolio: Oldsmobile, Pontiac,
Saturn, Hummer, and Saab.
Positioning Strategy
 Positioning
Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers.
Begins with differentiation
Differentiation: Differentiating the market
offering to create superior customer value.
The entire marketing program should support
the chosen positioning strategy.
 Differentiation
Involves uniqueness along some dimension
that is sufficiently valued by customers to
allow a price premium.
In cars, competitors may differentiate by
safety, style, or fuel efficiency.
Even at the same top end of the car market,
BMW and Mercedes Benz differentiate in
different ways.
 Perceptual Mapping
Marketing managers can identify potential
for differentiation by using perceptual
mapping of their products or services
against those of competitors.
However, the attributes on which to
differentiate need to be chosen carefully.
 Considerations
It is very easy for a differentiator to draw
the boundaries for comparison too tightly,
concentrating on a particular niche.
Apple originally had a strong position with
their iPhone smartphones. However, it lost
significant market share because it did not
anticipate the introduction of the Android
platform.
 A Word of Caution on
Differentiation
Differentiation allows higher prices, but usually
comes at a cost.
E.g., R&D, branding, staff quality, etc.
The differentiator can expect that its costs will be
higher than those of the average competitor.
But, the differentiator needs to ensure that the
additional costs of differentiation do not exceed
the gains in price.
It is easy to pile on additional costs in ways that are not
valued sufficiently by customers.
Positioning and the Mix
The Marketing Plan
 The Marketing Plan
Implementation of the marketing
strategy is outlined in a marketing plan.
A marketing plan is a road map for the
marketing activities of an organization
for a specified future period of time,
such as one year or five years.
Marketing Within an
Organization