MARKETING STRATEGY

1
MARKETING STRATEGY

• Learning objectives
• By the end of this lesson, students should be
  able to understand the following key issues
• What is strategy and what is marketing strategy
• Why is strategy important
• The various different marketing strategies
• Strategy and planning
• Strategic management framework.

2
MARKETING STRATEGY

• A marketing strategy serves as the foundation of
  a marketing plan. A marketing plan contains a
  list of specific actions required to successfully
  implement a specific marketing strategy
• Without a sound marketing strategy, a marketing
  plan has no foundation
• Marketing strategies serve as the fundamental
  underpinning of marketing plans designed to reach
  marketing objectives. It is important that these
  objectives have measurable results.
• A good marketing strategy should integrate an
  organization's marketing goals, policies, and
  action sequences (tactics) into a cohesive whole.
  The objective of a marketing strategy is to
  provide a foundation from which a tactical plan
  is developed. This allows the organization to
  carry out its mission effectively and efficiently
• Marketing strategies are partially derived from
  broader corporate strategies, corporate missions,
  and corporate goals. They should flow from the
  firm's mission statement. They are also
  influenced by a range of micro environmental
  factors.
• Marketing strategies are dynamic and interactive.
  They are partially planned and partially
  unplanned. See strategy dynamics.

3
BUSINESS AND MARKETING STRATEGIES

• BUSINESS STRATEGY
• Ansoff Matrix
• Porters generic strategy

4
MARKETING STRATEGIES

• PORTERS GENERIC STRATEGY MODEL

Differentiation
Stuck with no clear strategy
Cost leadership
Focus
5
STRATEGIES

• ANSOFF MATRIX

Existing
New
MARKET PENETRATION PRODUCT DEVELOPMENT
MARKET DEVELOPMENT DIVERSIFICATION
Existing
New
6
MARKETING Strategies
Segment 1
MARKETING MIX
Segment 2
Concentrated strategy/marketing
Segment 3
Segment 1
MARKETING MIX 1
Segment 2
MARKETING MIX 2
Segment 3
MARKETING MIX 3
Differentiated strategy/marketing
Whole market
MARKETING MIX
Undifferentiated strategy/marketing
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CORPORATE STRATEGIES

• ATTACH STRATEGIES
• Direct challenge differential advantage
• Direct attack distinctive competence
• Direct attack market share
• Flank attack
• Encirclement
• Bypass
• Guerrilla

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DEFENCE STRATEGIES
MARKETING STRATEGY

1. Position defence
2. Pre-emptive defence
3. Counter-offensive
4. Mobile defence
5. Flanking defence
6. Contraction defence
7. By-pass

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COMPONENTS OF A MARKETING PLAN

• EXECUTIVE SUMMARY
• BUSINESS MISSION
• MARKTING AUDITING
• SWOT ANALYSIS
• MARKETING OBJECTIVES
• BUSINESS OBJECTIVES
• MARKETING STRATEGIES
• BUSINESS STRATEGIES
• MARKETING MIX
• IMPLEMENTATION
• EXPECTED RESULT
• MONITORING
• CONTROLLING

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STRATEGY AND PLANNING

• Corporate or visionary planning that provides a
  mission and structure for evaluating and
  allocating resources to business
• Business planning which involves long-range
  planning for positioning the company and its
  products to best serve its target markets
• Functional planning including marketing planning
  which is generally annual planning involving
  specific goals and plans over one year.

11
CORPORATE STRATEGY

• Strategies are formulated as a response to the
  various
• factors in the companys environment- and these
  may
• come from both external and internal sources
• External
• Internal

12
Organizational Stance and Positioning

• Leaders
• Followers
• Nichers

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Marketing fundamentals - UNIT 2 MARKETING
PLANNING AND BUDGETINGTHE BUSINESS
MISSIONLearning Objectives

• What is a Mission Statement.
• What are the components of a mission statement.
• What is the importance of a mission statemement.
• What are the characteristics of a Mission
  Statement
• Examples of Mission Statements MS, Asda, Tesco,
  Sainsbury, BT Npower.

14
Marketing fundamentals - UNIT 2 MARKETING
PLANNING AND BUDGETINGThe Marketing
AuditLearning Objective

• What is the marketing audit
• What are its components
• What is the importance of the marketing audit.

15
Marketing fundamentals - UNIT 2 MARKETING
PLANNING AND BUDGETINGTHE SWOT
ANALYSISLearning Objectives

• What is the SWOT Analysis
• What is the importance of carrying out a SWOT
  Analysis.

16
Marketing fundamentalsMarketing planning and
budgeting.
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PRODUCT PORTFOLIO PLANNING AND ANALYSIS

• Business Portfolio The collection of businesses
  and products that make up the company.
• Portfolio analysis A tool by which management
• identifies and evaluates the various businesses
  that
• make up the company
• Strategic business unit (SBU) A unit of the
  company that has
• a separate mission and objectives and that can be
  planned
• independently from other company businesses. A
  SBU can be
• a company division, a product line within a
  division, or
• sometimes a single product or brand.

18
PORTFOLIO ANALYSIS

• BOSTON CONSULTING GROUP MATRIX
• Framework of the BCG Matrix

High
20


10
Market growth
0.1x
Low
1x
10x
0
Market share
19
PORTFOLIO ANALYSIS

• Stars
• Cash cows
• Low-growth
• High-share businesses or products
• Established and successful units that generate
  cash that the company uses
• to pay its bills and support other business units
  that need investment
• Question marks
• Low-share business units in high-growth markets
• Dogs

High growth High market share (High-share
businesses) Products often require heavy
investment to finance their rapid growth
20
BCG MATRIX BCG CLASSIFICATION OF PRODUCTS
High
20

Dogs
Question marks
Stars
10
Market growth
Cash cows
Low
0
1x
0.1x
10x
Market share
21
BCG MATRIX- CASH POSITION FOR PRODUCTS
Stars Revenue Investment - - - 0 Question marks Revenue Investment - - - -
Cash cows Revenue Investment Dogs Revenue Investment 0
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PORTFOLIO STRATEGIES

• Build
• Hold
• Harvest
• Divest

23
PRODUCT PORTFOLIO PLANNING AND ANALYSIS

• Business Portfolio The collection of businesses
  and products that make up the company.
• Portfolio analysis A tool by which management
• identifies and evaluates the various businesses
  that
• make up the company
• Strategic business unit (SBU) A unit of the
  company that has
• a separate mission and objectives and that can be
  planned
• independently from other company businesses. A
  SBU can be
• a company division, a product line within a
  division, or
• sometimes a single product or brand.

24
PORTFOLIO ANALYSIS

• BOSTON CONSULTING GROUP MATRIX
• Framework of the BCG Matrix

High
20


10
Market growth
0.1x
Low
1x
10x
0
Market share
25
PORTFOLIO ANALYSIS

• Stars
• Cash cows
• Low-growth
• High-share businesses or products
• Established and successful units that generate
  cash that the company uses
• to pay its bills and support other business units
  that need investment
• Question marks
• Low-share business units in high-growth markets
• Dogs

High growth High market share (High-share
businesses) Products often require heavy
investment to finance their rapid growth
26
BCG MATRIX BCG CLASSIFICATION OF PRODUCTS
High
20

Dogs
Question marks
Stars
10
Market growth
Cash cows
Low
0
1x
0.1x
10x
Market share
27
PORTFOLIO STRATEGIES

• Build
• Hold
• Harvest
• Divest

28
GENERAL ELECTRIC MATRIX
29
THE GENERAL ELECTRIC MATRIX BY MCKINSEY

• The GE matrix / McKinsey matrix is a model to
  perform a business portfolio analysis on the
  Strategic Business Units of a corporation.
• A business portfolio is the collection of
  Strategic Business Units that make up a
  corporation. The optimal business portfolio is
  one that fits perfectly to the company's
  strengths and helps to exploit the most
  attractive industries or markets.
• A Strategic Business Unit (SBU) can either be an
  entire mid-size company or a division of a large
  corporation, that formulates its own business
  level strategy and has separate objectives from
  the parent company.

30
PRODUCT PORTFOLIO PLANNING AND ANALYSIS

• Business Portfolio The collection of businesses
  and products that make up the company.
• Portfolio analysis A tool by which management
• identifies and evaluates the various businesses
  that
• make up the company
• Strategic business unit (SBU) A unit of the
  company that has
• a separate mission and objectives and that can be
  planned
• independently from other company businesses. A
  SBU can be
• a company division, a product line within a
  division, or
• sometimes a single product or brand.

31
PORTFOLIO ANALYSIS

• BOSTON CONSULTING GROUP MATRIX
• Framework of the BCG Matrix

High
20


10
Market growth
0.1x
Low
1x
10x
0
Market share
32
GENERAL ELECTRIC MATRIX
33
THE GENERAL ELECTRIC MATRIX BY MCKINSEY

• The GE matrix / McKinsey matrix is a model to
  perform a business portfolio analysis on the
  Strategic Business Units of a corporation.
• A business portfolio is the collection of
  Strategic Business Units that make up a
  corporation. The optimal business portfolio is
  one that fits perfectly to the company's
  strengths and helps to exploit the most
  attractive industries or markets.
• A Strategic Business Unit (SBU) can either be an
  entire mid-size company or a division of a large
  corporation, that formulates its own business
  level strategy and has separate objectives from
  the parent company.

34
PRODUCT PORTFOLIO PLANNING AND ANALYSIS

• Business Portfolio The collection of businesses
  and products that make up the company.
• Portfolio analysis A tool by which management
• identifies and evaluates the various businesses
  that
• make up the company
• Strategic business unit (SBU) A unit of the
  company that has
• a separate mission and objectives and that can be
  planned
• independently from other company businesses. A
  SBU can be
• a company division, a product line within a
  division, or
• sometimes a single product or brand.

35
PORTFOLIO ANALYSIS

• BOSTON CONSULTING GROUP MATRIX
• Framework of the BCG Matrix

High
20


10
Market growth
0.1x
Low
1x
10x
0
Market share
36
PORTFOLIO ANALYSIS

• Stars
• Cash cows
• Low-growth
• High-share businesses or products
• Established and successful units that generate
  cash that the company uses
• to pay its bills and support other business units
  that need investment
• Question marks
• Low-share business units in high-growth markets
• Dogs

High growth High market share (High-share
businesses) Products often require heavy
investment to finance their rapid growth
37
BCG MATRIX BCG CLASSIFICATION OF PRODUCTS
High
20

Dogs
Question marks
Stars
10
Market growth
Cash cows
Low
0
1x
0.1x
10x
Market share
38
THE GENERAL ELECTRIC MATRIX BY MCKINSEY

• The GE matrix / McKinsey matrix is a model to
  perform a business portfolio analysis on the
  Strategic Business Units of a corporation.
• A business portfolio is the collection of
  Strategic Business Units that make up a
  corporation. The optimal business portfolio is
  one that fits perfectly to the company's
  strengths and helps to exploit the most
  attractive industries or markets.
• A Strategic Business Unit (SBU) can either be an
  entire mid-size company or a division of a large
  corporation, that formulates its own business
  level strategy and has separate objectives from
  the parent company.

39
THE GENERAL ELECTRIC MATRIX BY MCKINSEY

• The aim of a portfolio analysis is to
• 1) Analyze its current business portfolio and
  decide which SBU's should receive more or less
  investment, and2) Develop growth strategies for
  adding new products and businesses to the
  portfolio
• 3) Decide which businesses or products should no
  longer be retained.The BCG Matrix (Boston
  Consulting Group Matrix) is the best-known
  portfolio planning framework. The GE / McKinsey
  Matrix is a later and more advanced form of the
  BCG Matrix.

40
THE GENERAL ELECTRIC MATRIX BY MCKINSEY

• Typical (external) factors that affect Market
  Attractiveness- Market size- Market growth
  rate- Market profitability - Pricing trends -
  Competitive intensity / rivalry - Overall risk
  of returns in the industry- Entry barriers -
  Opportunity to differentiate products and
  services- Demand variability- Segmentation -
  Distribution structure- Technology development 
• Typical (internal) factors that affect
  Competitive Strength of a Strategic Business
  Unit- Strength of assets and competencies-
  Relative brand strength (marketing)- Market
  share- Market share growth- Customer loyalty-
  Relative cost position (cost structure compared
  with competitors)- Relative profit margins
  (compared to competitors)- Distribution strength
  and production capacity- Record of technological
  or other innovation- Quality- Access to
  financial and other investment resources-
  Management strength 

41
THE GENERAL ELECTRIC MATRIX BY MCKINSEY

• The aim of a portfolio analysis is to
• 1) Analyze its current business portfolio and
  decide which SBU's should receive more or less
  investment, and2) Develop growth strategies for
  adding new products and businesses to the
  portfolio
• 3) Decide which businesses or products should no
  longer be retained.The BCG Matrix (Boston
  Consulting Group Matrix) is the best-known
  portfolio planning framework. The GE / McKinsey
  Matrix is a later and more advanced form of the
  BCG Matrix.

42
THE GENERAL ELECTRIC MATRIX BY MCKINSEY

• Typical (external) factors that affect Market
  Attractiveness- Market size- Market growth
  rate- Market profitability - Pricing trends -
  Competitive intensity / rivalry - Overall risk
  of returns in the industry- Entry barriers -
  Opportunity to differentiate products and
  services- Demand variability- Segmentation -
  Distribution structure- Technology development 
• Typical (internal) factors that affect
  Competitive Strength of a Strategic Business
  Unit- Strength of assets and competencies-
  Relative brand strength (marketing)- Market
  share- Market share growth- Customer loyalty-
  Relative cost position (cost structure compared
  with competitors)- Relative profit margins
  (compared to competitors)- Distribution strength
  and production capacity- Record of technological
  or other innovation- Quality- Access to
  financial and other investment resources-
  Management strength 

43

• A six-step approach to implementation of
  portfolio analysis (using the GE / McKinsey
  Matrix) could look like this 1. Specify
  drivers of each dimension. The corporation must
  carefully determine those factors that are
  important to its overall strategy2. Weight
  drivers. The corporation must assign relative
  importance weights to the drivers 3. Score SBU's
  each driver4. Multiply weights times scores for
  each SBU5. View resulting graph and interpret it
  6. Perform a review/sensitivity analysis using
  adjusted other weights (there may be no
  consensus) and scores.

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• Some important limitations of the GE matrix /
  McKinsey Matrix are
• - Valuation of the realization of the various
  factors
• - Aggregation of the indicators is difficult
• - Core competencies are not represented
• - Interactions between Strategic Business Units
  are not considered

45
CHANGES IN PRODUCT/STRATEGIC BUSINESS POSITION
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CONCLUSION
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GENERAL ELECTRIC BUSINESS SCREEN (GE)
48
(No Transcript)
49
Key terms and definitions
50
Questions for revision