MARKETING STRATEGY

Agenda
Review of Hierarchy of Objectives
Common Elements of Objectives
The Process of Marketing Strategy Development
BIO-BREAK
The Evaluation of Opportunities
Target Market Selection
The Structure of Marketing Mix Strategies
BIO-BREAK
Generic Marketing Strategies
Product Strategies
Market Position Strategies

Marketing Strategy

Hierarchy of goals and objectives

Organizational Goals and Objectives
Marketing Goals and Objectives
Marketing Mix Goals and Objectives
Marketing Mix Element Goals and Objectives

Marketing Strategy

What business are you in?

Mission statement
Statement of marketing strategy
Indicates product, market scope
Shows growth factor
Shows differential advantage
Shows management orientation

Marketing Strategy

Elements of Objectives
An effect
Benchmark + effect = Desired Outcome
Effect has to be measureable
Should be realistic

Timeframe for evaluation

Evaluation and effect should be related

Marketing Strategy

Marketing Strategy Development

Recognize and evaluate an opportunity
Market size and potential
Key competitors
Choose target market
Develop Objectives for each opportunity
Develop Marketing Mix Strategy for each
opportunity
Choose Marketing mix elements

Marketing Strategy

Opportunity Evaluation
Review of the Rule of 3
Review of Requirements for Market Size
Review of Relevant Competitive Set

Marketing Strategy

Target Market Selection

Introduction to Market Segmentation
Review of the Strategic Options
Equivalent Behaviors as the Critical Variable

Marketing Strategy

Structure of Marketing Mix

Strategies
Are all Mix elements equally important?
Product as the key
Example using Product Life Cycle

Marketing Strategy

Generic Marketing Strategies

Cost Leadership
Lower costs of production and distribution
Product Differentiation
Unique product or brand
Focus
Focus on customer needs in a few segments

Marketing Strategy

Product Strategies
Product Mix Strategies
Market penetration versus market skimming

Premium
Goods

Penetration

Medium

OverPricing

Average
Quality

Bargain

Low

Hit and
Run

Shoddy
Goods

Cheap
Goods

High

Medium

High

Super
Bargain

Quality

Price

Low

Marketing Strategy

Product Strategies
Product Market Growth Strategies

Old

Market Penetration Product Development

(increase usage)

(new uses)

Market Development

Diversification

(new users)

(new users, new uses)

Old

New

Markets

New

Products

Marketing Strategy

Product Strategies
Boston Consulting Group Strategy:
Relative Market Share
Market Growth Rate
Problems with BCG Approach
Difficult to estimate relative market share in rapidly growing markets

Marketing Strategy

BCG Matrix:

22%

Market Growth
Rate

Stars

Some cash use

Future cash cow

High cash use

? Is to build or not

Cash Cows

Dogs

Generate cash for

?, Stars

Low or no cash use

When to divest

10%

0%
10x

1.5x
Relative Market Share

.1x

(log scale)

Marketing Strategy

Market Position Strategies

Market Follower Strategies
Conscious Parallelism
Similar products, prices
Avoid unprofitable segments
Market Niche
Specialize in a very small group of customers
Concentrated segmentation strategy

Marketing Strategy

Market Position Strategies

Market Leader Strategies
Increase Size of Total Market
Product-Market Growth Strategies
Protect Market Share

Fortification
Assortment of brands, sizes
Innovation

Best defense is a good offense

Counteroffensive

Increase Market Share

BCG
Antitrust constraints

Marketing Strategy

Market Position Strategies

Market Challenger Strategies
Frontal Attack
Out-innovate leader
Tough to do, easier to defend
Flanking/Bypass Attack
Attack where leader is not looking
Find a new market segment
Price Discount Strategy

Buyers are sensitive to price

Works if leader does not cut price
Cheaper Goods Strategy
Lower quality but much lower price
Vulnerable to still cheaper goods
Prestige Goods Strategy
Increase both quality and price

Marketing Strategy

Market Challenger Strategies (cont.)

Cheaper Goods Strategy
Lower quality but much lower price
Vulnerable to still cheaper goods
Prestige Goods Strategy
Increase both quality and price

Marketing Strategy

Encirclement
Flanking Defense

Preemptive
Defense

Attacker

Defender

Frontal

Contraction
Defense

(bigger)

(smaller)
Attack
Counteroffensive

Position
Defense

Guerilla Attack
Mobile Defense
Flank Attack
Bypass