MKT Generic Model 2010A.doc

STRATEGY & IMPLEMENTATION

Components of Strategy

ScopeGoals and objectivesResource deploymentsId of sustainable competitive advantageSynergy

Types of corporate strategy

Market oriented (mktng concept)Product/production orientedSales oriented

What – Where – How?

Strategic FitComp. & Mark. Strat fit customer needs Business structure fit StrategyOrganizational FitOrg structure designed to support strategy

Corporate Business-Level Functional (product/market) 2+18

TARGET SEGMENTS

3 step process: Market segmentation  Target marketing  Product positioning

Market segmentation process:

Identify homogeneous group, different needs and behavior to others Specify criteria to define segment

Determine size and potential

Targeting strategies

Mass-market strategyNiche-market strategyGrowth-market strategy

Req.s for effective segmentation

Adequate sizeDifferent response from othersAccessibilityMeasurability

Descriptors

DemographicGeographicBehav iouralPhysical

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MARKET

Market attractiveness/business position matrix

Selecting market attractiveness and business strength factorsWeighting each attractiveness and business strength factorRating each segment as to its market attractiveness and company strengthsProjecting the future position of the marketChoosing target markets and allocating resources

BCG market growth/relative share matrix

Market attractiveness/ Competitive position matrix

Factors

Market AttractivenessCustomer needs & behaviour Market/segment size & growth rate

Macro trends favourable?Competitive PositionOpportunity for competitive advantage Firm & competitor capabilities & resources

Attractiveness of industry

5-ing

_Competitive

position

Market

attractiveness

Invest/grow (desirable potential target) Build selectively/ protect & refocus

Manage for earnings Harvest/divest

weak medium strong H

M L Targeting 2+

ANALYSIS

Major components of the macro-environment:

1. Political/legal 2. Economical 3. Sociocultural 4. Technological 5. Environment 6. Demographic

Research process

1. Identify Problem & research Objectives 2. Determining Data sources and types 3. Research design

4. Collect data 5. Analyse Data 6. Report Results PODRCAR

6 major methods

Statistical (quantitative) Observation

Surveys Analogy Judgement Market tests

SOSAJuMa

Opportunity/threat matrix

Probability of occurrence

High Low

Level of impact on company

(profit and/or market share) HighLow

SWOT

INDUSTRY ANALYSIS

Industry competition – 5 interactive forces

Industry competition – Porter’s 5 Forces

5

Errors

Market opportunity analysis 4 C’s:

 Company  Context  Customers  Copetitors/ comp sit

High involvement Low involvement Extended decision making Complex decision making Limited decision making (variety) Habit/routine decision making

Brand loyalty Inertia

Decision-making process

1. Problem identification 2. Info search

3. Evaluation of alternatives 4. Purchase

5. Post-purchase evaluations

GROWTH POSSIBILITIES

AnsoffProductsCurrentNewMarketsCurrent

Market penetrationProduct development

New

Market developmentDiversification

Growth possibilities

ExpansionIncreasing penetration of current product marketsDeveloping new products for current customersSelling existing products to new segments or countriesDiversificationIntegrationRelated (concentric)

diversificationUnrelated (conglomerate)Relationships/networks 2

BUSINESS STRATEGIES

Miles & Snow business strategies

ProspectorDefender – Diff/ Low CostAnalyzer – Diff/ Low CostReactor

Goals & objectives

Porter

CostDifferentiationFocus

- Effectiveness, relative to comp (growth) - Efficiency, relative to resource use (ROI) - Adaptability (new product success)

One way comparison

POSITIONING (Market)

The positioning process

1. Identify a relevant set of competitive products (substitutes) 2. Identify determinant attributes

3. Customers perceptions – collect data & determine 4. Analyse current positions in the competitive set

 two determinant attributes, map all products on these (2x2) 5. Determine customer’s most preferred combination of attributes 6. Define market positioning and market segmentation

7. Write position statement & value proposition:

Target market + benefits offered + price range

Levers

Simple physical attributes Complex physical attributes Essentially abstract attributes

Physical vs. perceptual

5+10

DEVELOPMENT

Stage – Gate – Systems (prod development process)

Stage Successing Gate

Quality dimensions

- Goods

PerformanceFeaturesReliabilityConformanceDurabilityServiceabilit yAesteticsPerceived quality

- Service

TangiblesReliabilitiesRespo nsivenessAssuranceEmpathy 1 1

CBP

ORGANISATIONAL BUYER (B2B

)

Characteristics

Relatively inelastic More erratic Cyclical/fluctuating Fewer Larger Geographically concentrated Indirect demand

Buying Centre

Deciders Influencers Buyers Users Gatekeepers

Buying situations

Straight rebuy Modified rebuy New-task buying

Types

Resellers Goods producers Services producers Governments

Product Categories

Raw materials

Component parts & materials Installations Accessory equipment Operating supplies Services

CUSTOMER (B2C)

Psychological influences

PerceptionMemoryAttitudesNeeds

Social influences

CultureSocial classReference groupFamily

PRICE

Pricing objectives

Penetration pricing (max sales growth)Maintain position (quality or service)Skimming – maximize current profitHarvesting – maximize current profitSurvivalSocial objectives

Price-setting decision process

Set strategic pricing objective Estimate demand and price elasticity Determine costs and relationship to volume Examine competitor’s prices and costs Select method for calculating price Set price level

Adapt price structure

Price calculations

Cost-oriented Competition-oriented Customer-oriented

4+12

3 C’s

MATURE/DECLINING MARKETS

Shakeout



Maturity



Decline

(must discover slowing growth!)

Shakeout strategies

Maintain & protect market share

Differentiate (product quality or service quality) Low cost position maintenance

Maturity Strategies

Maintain & protect market share Stimulate additional volume growth

Maintain loyalty of existing customers (lifetime value) Repeat purchase – reduce switching

Decline Strategies

Prepare for it (efficiency)

Exit barriers & relative attractiveness Rivalry determinants

Marketing strategies for remaining competitors

Harvesting/ Divesting / Liquidation Maintenance

Profitable survivor - Niche

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NEW MARKET ENTRIES

Strategic marketing programs for

pioneers

Mass-market penetrationNiche penetrationSkimming and early withdrawal

Pioneers vs. Followers

1st _{choice: segment & position Take advantage of:Define the “rules of}

the game”- P’s position mistakesDistribution advantage- P’s product mistakesEconomy of scale and experience- P’s marketing

mistakesHigh switching costs for early adaptersUse latest technologyPre-emption of scarce resourcesUse P’s limited resources

Successful pioneers tend to:

Large entry scaleBroad product lineHigh product qualityHeavy promotional expenditures

1

5

GROWTH MARKETS

Objectives (in principle two groups):

Share leaderChallengerShare maintance: - retain repeat/replacement purchs

- large share of new customersBuild share (growth > market): - Steal repeat/replacement purchse

- larger share of new customers

Share leaders

: marketing actions and strategies

Fortress/position-defence strategyFlanker strategyConfrontation strategyMarket expansionContraction or strategic withdrawal

Challengers

: marketing actions and strategies

Frontal attackLeapfrogFlank attackEncirclementGuerilla attack

Challengers must decide

who

to attack:

Share leaderAnother challenger/ FollowerSmaller companiesNo front (hit ’em where they ain’t)

1 6

PLACE

Channel-design decisions

Specifying channel objectives

Develop channel structure (needs of marketmarketing strategy) Number of middlemen levels & types of institutions



Channel management (policies & procedures)

to gain/maintain cooperation of all institutions within the channel(s)

Channel objectives

Availability (ACM/position)Meeting customer service reqPromotional effortMarket informationCost effectivenessFlexibility

Efficiency

TransactionalFunctionalScale

Integrated distribution

Corporate VMSContractual VMSAdministered VMSRelational VMS

Institutions

Merchant wholesalersAgent middlemenRetailersFacilitatin g agencies

Going global

ExportContractual entry modes - licencing - franchising - contractual manufactureDirect

Channel control:

pull vs push

1+2+1 3

PROMOTION

(Integrated Marketing Communication – IMC)

Developing IMC-plan

1. Define Target audience2. Set Promotional objectives3. Promotional budget4. Design promotion mix

- components

- choose activities within each component

- choose vehicle within each activity5. Evaluate the results

Adoption stages

AwarenessInterestEvaluationTrialAdoption

Promotion mix components

AdvertisingPersonal sellingSales promotionPublic relation

PERSONAL SELLING

- role expectations (sales persons understanding of job)

Sales program

1. Sales force organizing2. Account Mgmt policies3. Deployment/ territory design4. Quotas

Program implementation

Aptitude * skill * motivation = successSales cycleEvaluating Sales force:

-Sales analysis -Cost analysis -Behavioral analysis

3+5+14

PRODUCT

Augmented Product Concept

Managing product lines

Line filling Line stretching Line extensions Brand extensions Dropping products Product systems

Product life cycle 1. Introduction 2. Growth 3. Shake-out 4. Maturity 5. Decline

Tangible vs. intangible

Branding

Individual Family Co-brand Globalization Store Brands Multiple

Consumer

goods

Convenience Shopping Specialty Unsought

CONTROL PROCESS

Setting standards of performance Specifying the necessary feedback data Obtaining the needed control data Evaluating feedback data Taking corrective action

Audit

1 9

MARKETING PLAN