Marketing Strategy
Hierarchy of goals and objectives
Porters Economic Theory of Profits
Barriers to Entry
Competition
Substitutes
Customers
Suppliers
Marketing Strategy
Generic Marketing Strategies
Cost Leadership
Lower costs of production and distribution
Differentiation
Unique product or brand
Focus
Focus on customer needs in a few segments
Marketing Strategy
What business are you in?
Statement of marketing strategy
Mission statement
Indicates product, market scope
Shows growth factor
Shows differential advantage
Shows management orientation
Marketing Strategy
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 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
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 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
Marketing Strategy
Market Leader Strategies (cont.)
Increase Market Share
BCG
Antitrust constraints
100%
Market Share
Marketing Effort ($)
Marketing Strategy
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
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
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
Encirclement
Flanking Defense
Preemptive
Defense
Attacker
Defender
Frontal
Contraction
Defense
(bigger)
(smaller)
Attack
Counteroffensive
Position
Defense
Guerilla Attack
Mobile Defense
Flank Attack
Bypass
eMarketing
Is eMarketing anything new?
or just an adaptation of existing strategy?
Addressability ability to identify customer prior to purchase
Marketers could always do this.
So why is web different? Is it more efficient?
only if you do not delete your cookies?
or they keep extensive files on you
eMarketing
Interactivity customers can express their needs and wants
directly to the firm
Marketers could always do this too. So what is new?
another efficiency argument?
Memory ability to access individual customer profiles
and purchase histories
This is probably valid. Information existed before but
was hard to access
eMarketing
Control customers ability to control flow and sequence of information
Pull versus push mediumweb versus television.
Who controls the flow?
Definitely an eMarketing characteristic, but a two-edged sword.
Why? Customers control the flow
Accessibility ability to obtain information..
Retrieving info from the Internet is like trying to drink from a
fire hose. You could always do this, web may be easier
for some users.
eMarketing
Digitilization can the product or benefits be represented digitally?
Does the media match the products attributes?
a problem for all media?
So, does eMarketing exist? Maybe, or maybe it is just
another information flow/distribution system to
use in designing a marketing strategy to meet
customer needs(and maximize profits).
Marketing Strategy
Bear Theory
Differential versus Absolute Advantage
