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 Marketing Strategy Next time MARKETING STRATEGY CASE For Barco Projection, please prepare, by team, the case discussion for class on 2/12. The deadline for receipt of the PowerPoint presentation is noon 2/12. Market Segmentation Please read chapter 6