Marketing Strategy

MKTG350

Marketing Strategy

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Generic business strategy frameworks Segmentation Targeting Positioning Generic marketing strategies

Generic Business Strategy Frameworks
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Growth strategies Portfolio strategies—BCG GrowthShare Matrix

Diversification . Product Development 4. Market Development New Products 3.Growth Strategies Product/ Market Expansion Grid Existing Products Existing Markets New Markets 1. Market Penetration 2.

Product/ Market Expansion Grid  Market Penetration  Market Development .

Product/ Market Expansion Grid  Product Development  Diversification .

low share • Build into Stars or phase out • Build into Stars or phase out • Require cash to hold • Require cash to hold market share market share ? Cash Cows Cash Cows Dogs Dogs • Low growth. successful SBU’s SBU’s •Produce cash •Produce cash Low . high share • Low growth & share • Established. successful •Low profit potential Low profit potential • Established. high share • Low growth & share • • Low growth.Boston Consulting Group Growth-Share Matrix Framework Relative Market Share Market Growth Rate High High Stars • High growth & share • Profit potential • May need heavy investment to grow Low Question Marks Question Marks • High growth. low share • High growth.

Cash Cows support Question Marks. Maintain Stars. Build Question Marks. Attractiveness of growing markets. Divest/harvest Dogs. Value of increasing market share. .BCG Framework Implications        Dynamic nature of SBUs—importance of a portfolio.

Market Segmentation Market Segmentation .

Steps in Market Segmentation. Identify bases for segmenting the market Market 2. Develop positioning for target segments 6. Develop measure of profiles segment attractiveness 4. and Positioning Market Segmentation 1. Select target segments Market positioning 5. Targeting. Develop segment Targeting 3. Develop a marketing .

Target Segment Size mass niche micro customized .

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.

Step 1. Market Segmentation Psychographic Segmentation Divides Buyers Into Different Groups Based on: .

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 .Step 1.

unwind Provide nutrition Good taste Quench thirst ++ + +++ + +++ +++ + +++ tea +++ +++ +++ ++ milk beer cola un-cola .Benefit segmentation of the beverage market Which product would you choose for which benefit? coffee Relieve throat irritation Settle upset stomach Provide energy and pep Help relax.

Model of Segmentation values needs benefits beliefs/evaluations Situation differences: •Physical •Social •Psychological User differences: •Demographics •Life cycle •Lifestyle Brand attitudes Choice rules Price sensitivity Choice Brand loyalty Use level Use situation .

purchasing power. • Segments are large or • Size. profitable enough to serve. . • Effective programs can be designed to attract and serve the segments. Market Segmentation Requirements for Effective Segmentation Measurable Measurable Accessible Accessible Substantial Substantial Differential Differential Actionable Actionable profiles of segments can be measured. • Segments must respond differently to different marketing mix elements & programs. • Segments can be effectively reached and served.Step 1.

Advantages and disadvantages of segmentation     guides marketing research improves satisfaction improves forecasting identifies competition and opportunities     increases marketing costs proliferation of products consumer backlash limits general popularity Segmentation is a trade-off of efficiency for effectiveness. .

Market Targeting  Segment Size and Growth  Segment Structural Attractiveness  Company Objectives and Resources .Step 2.

Step 2. Market Targeting Market Coverage Strategies Company Company Marketing Marketing Mix Mix A. Undifferentiated Marketing Market Market Company Company Marketing Mix 1 Marketing Mix 1 Company Company Marketing Mix 2 Marketing Mix 2 Company Company Marketing Mix 3 Marketing Mix 3 Segment 1 Segment 1 Segment 2 Segment 2 Segment 3 Segment 3 B. Differentiated Marketing Company Company Marketing Marketing Mix Mix C. Concentrated Marketing Segment 1 Segment 1 Segment 2 Segment 2 Segment 3 Segment 3 .

Market Targeting Choosing a Market-Coverage Strategy Company Resources Company Resources Product Variability Product Variability Product’s Stage in the Life Cycle Product’s Stage in the Life Cycle Market Variability Market Variability Competitor’s Marketing Strategies Competitor’s Marketing Strategies .Step 2.

Socially Responsible Target Marketing  Smart targeting helps companies and consumers alike.  . Target marketing sometimes generates controversy and concern.

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

Step 3. Communicating and Delivering the Chosen Position . Choosing a Positioning Strategy Step 1. Identifying Possible Competitive Advantages Step 2. Selecting the Right Competitive Advantage Step 3.

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. either through lower prices or by providing more benefits. that justify competitive advantage. Competitive advantage is an advantage over competitors gained by offering consumers greater value.  .

Generic Marketing Strategy  Michael Porter’s basic strategic options:    Cost leadership Differentiation Focus Focus implies segmentation and positioning. .

Basic Competitive Strategies Overall Cost Overall Cost Leadership Leadership Focus Focus Differentiation Differentiation Middle of Middle of the Road the Road .

Performance.e. Installation.e.e. or Attributes Image Differentiation i. Features.Identifying Possible Competitive Advantages Product Differentiation i. Training Better People Than Competitors Do . Customer Training Services Personnel Differentiation i. Repair Services. Delivery. Atmospheres. Symbols. Events Services Differentiation i. Hiring.e. Style & Design.

Competitive Strategies: Value Disciplines Companies Gain Leadership Positions by Delivering Superior Value to their Customers Through These Strategies: Operational Excellence Customer Intimacy Product Leadership .

Analyzing Competitors Identifying the company’s competitors Assessing competitor’s objectives. strengths and weaknesses. strategies. 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: .

Firm With the Largest Market Firm With the Largest Market Share Share Expand the Expand the Total Market Total Market Protecting Protecting Market Share Market Share Runner-Up Firms that Fight Runner-Up Firms that Fight to Increase Market Share to Increase Market Share Attack the Attack the Market Leader Market Leader Attack Other Attack Other Firms Firms Avoid the Avoid the Market Leader Market Leader Acquire Smaller Acquire Smaller Firms Firms Expanding Expanding Market Share Market Share .Market Leader Competitive Marketing Strategies Motorola. is looking to expand total market. a market leader. so it emphasizes the overall need for pagers. while making it clear that its product can fulfill that need.

then appealing to customers t o buy these domestic cars.Here. Competitive Marketing Strategies Runner-Up Firms that Want Runner-Up Firms that Want to Hold Their Share Without to Hold Their Share Without Rocking the Boat Rocking the Boat Follow Follow Closely Closely Follow at a Follow at a Distance Distance Firms that Serve Small Segments Firms that Serve Small Segments Not Pursued by Other Firms Not Pursued by Other Firms End-User End-User Specialist Specialist Geographic Geographic Market Market Specialist Specialist Customer-Size Customer-Size Specialist Specialist Service Service Specialist Specialist QualityQualityPrice Price Specialist Specialist . Oldsmobile is making cars that resemble its foreign c ompetitors.