MARKETING STRATEGY

Ilan Bijaoui
2007
ibii@netivision.net.il
 MISSION VERSUS VISION

• Mission: What business are we in?

• Vision: What do we want to become?
• Fedex Mission: higher financial returns by
providing high value added logistics,
transportation and related information services
• Fedex vision: Leading the way
• Lexmark vision: Customers for life
• Boeing: People working together, as a global
enterprise for aerospace leadership
ELEMENTS OF MISSION STATMENTS

• Who are we?

• Who are our customers?
• What is our operating philosophy?
• What are our core competencies?
• What are our concerns and interests?
 FIVE P’S FOR STRATEGY
Henry Mintzberg
Strategos: Art of the Army General

PLAN-PLOY PATTERN
Intended Course of Actions Consistency in Behavior
Purpose Realized
POSITION PERSPECTIVE
Match Organization & Way of Perceiving the World
Environment Mc Donald: quality,service,
Egg McMuffin P change cleanliness & value
Candle night dining P change
 STRATEGY FOR CHANGE
James Brian Quinn

A Strategy is a Pattern/Plan that Integrates an

Organization’s Major Goals, Policies and Actions Sequences
to a Cohesive whole
Goals (ROI)-Objectives (Sales) Policies
What & When Rules or Guidelines
Strategic Goals-Viability
Programmes Strategic Decisions
How, Sequences of Actions True Goals
Resources-Goals
 CRITERIA FOR EFFECTIVE
STRATEGY-Quinn
Clear Objectives Initiative Concentration
Understood, Attainable Maintained Decisive

Flexibility Coordination Committed

Leadership

Surprise Secure Resources Secure Operating

Speed, Secrecy Bases Points
Intelligence
THE CONCEPT OF CORPORATE STRATEGY
Kenneth R. Andrews

Formulation Implementation

Opportunity Structure/
& Risk Relationship
Corporate
Resources
Strategy Processes/
Behaviour
Values
Pattern
Top
Responsibility Leadership
 MARKETING DEFINITION
The American Marketing Association

The Process of Planning & Executing

The Conception, Pricing, Promotion &

Distribution of Ideas, Goods & Services

To Create Exchange,
that Satisfy Individuals & Organizational
Goals
Kotler: Marketing managers seek to influence the
level, the timing, and composition of demand to
meet the organization’s objectives
Peter Drucker: The aim of marketing is to know
and understand the customer so well that the
product fits him and sells
 VALUE BRIDGE

PRODUCT-PRICE

FIRM VALUE CUSTOMER

MARKETING VALUE

Psychological Bridge

Physical Bridge
 MARKET ORIENTED
DEFINITIONS
Product Oriented Market Oriented

Revlon Cosmetics Lifestyle,

Self-expression
Walt Disney Movies, Parks Fantasies
Entertainment
Xerox Office Machines Business more
Productive
Nike Sportive shoes Sportive Leisure
 D E V E L O P M E N T O F E C O N O M IC S T R A T E G Y

E N V IR O N M E N T A L C H O IC E O F D IS T IN C T IV E
C O N D IT IO N S -T R E N D S PRO DUCTS & M ARKETS COM PETENCE
G e o g ra p h y , D e m o g r a p h y , C u ltu r e , E c o n o m ic S tr a te g y F u n c tio n a l, F in a n c ia l,O r g a n iz a tio n a l
E c o n o m y , T e c h n o lo g y P o litic , L e g a l P r o d u c t/C u s to m e r /P r o m o tio n /P la c e /P r ic e R e p u ta tio n , H is to ry

O P P O R T U N IT IE S & R IS K S CORPORATE
Id e n tific a tio n RESOURCES
In q u iry S tr e n g th s & W e a k n e s s e s
A s s e s s m e n t o f R is k In c r e a s in g C a p a b ility
Distinctive Competence
 RESOURCES
Tangible Intangible
Financial resources Human resources; knowledge,
trust, managerial capabilities
Organizational resources : Innovation resources: ideas,
planning, reporting, scientific capabilities,
controlling, coordinating
Physical resources: firm’s Reputational resources: with
plant, equipment customers, brand name,
perception of products,
reputation with suppliers
Technological resources:
patents, trademark
Hall R.1992 The strategic analysis of intangible resources Strategic
Management Journal 13-136-139 Cambridge
THE CORE COMPETENCE OF THE
CORPORATIONCK Perahalad G/ Hamel

END PRODUCTS

BUSINESS UNITS

CORE PRODUCTS

COMPETENCIES
 NEC STRATEGY
Computing & Communication Convergence

END PRODUCTS

Alliances

Semiconductors

From Mechanical to
Digital From Mainframe to New Markets
Communication Processing Components
 SELECTED CORE COMPETENCIES/PRODUCTS
SONY 3M
• Miniaturization • Sticky Tape
CP: Elect. Components Magnetic tape, photographic
EP: Television film, coated abrasives

CANON HONDA
Comp.: Optics, Precision CP: Engines
Mech.fine Chemicals EP: Scooters, Cars
CP:Laser printer engine
EP: Laser Printer
 CORE COMPETENCY IDENTIFICATION
IDENTIFY STRATEGIC
• Access to wide variety of ARCHITECTURE
markets • How long could preserve
• Contribution to perceived technology
customer benefits • How central is the core
• Difficult to imitate competence for customers
• Outsourcing and Core • Future opportunities in
Competency (GE-GTE- other core competencies
Motorola TV Color)
 NATURAL ENVIRONMENT
Raw
materials Energy costs Pollution Geography

Regulatory

TECHNOLOGICAL ENVIRONMENT

R&D spending, Patent protection, New development, Internet, Telecom.

PM 4.4 Natural and technological environments

 DEMOGRAPHIC ENVIRONMENT

Age Family Population Education

ECONOMIC ENVIRONMENT
Economic Wages, Energy availability
GDP Interest Inflation , Unemployment

PM 4.3 Demographic and economic environments

 FAMILY LIFE-CYCLE STAGES

Young Middle-aged Older

LIFESTYLE DIMENSIONS

Activities Interests Opinions Demographics

PM 6.5 Family and lifestyle

 POLITICAL ENVIRONMENT

Antitrust, Environment, Tax, Incentives, Foreign trade, Stability

CULTURAL ENVIRONMENT

Career expectations, consumer activism, Lifestyle

PM 4.5 Political and cultural environments

 SOURCES OF INFORMATION

Secondary Data Primary Data

• Government • Direct Observation
• Periodicals • Focus Group
• Commercial • Survey
• Experiment
SWOT ANALYSIS
THE STRUCTURING OF ORGANIZATIONS
H. Mintzberg

Strategic Apex

Middle
Techno Support
Structure Line
Staff

Operating Core

Ideology
THE STRUCTURING OF ORGANIZATIONS
H. Mintzberg

Basic Parts

Operating Core Strategy Apex Middle line

Producing Manager Between Apex and
Operating

Techno structure Support staff Ideology

Analysts Internal services
 Coordinating Mechanisms

Mutual Adjustment Direct Supervision Standardization of

Coordination Work Process
between operator Programs Assembly
Instructions

Standardization of Standardization of Standardization of

Outputs Skills Norms
Body of knowledge Set of beliefs
 Configurations
Entrepreneurial Machine Professional
Direct supervision Highly specialized Standardization of
Apex + Operating Larger Middle Line skills Operating core
core Techno structure + Horizontal structure
Support Staff (hospitals universities)

Diversified Innovation Missionary

Standardization of Mutual Adjustment- S. of Norms
Outputs. Independent dominated by experts Ideology: sharing of
entities Middle Line Adhocracy values and beliefs
Balkanize Projects structure Mass of non
Fuse experts specialized members
 THE STRATEGIST H. Mintsberg
Frame of the Job

Perspectives Agenda Positions

Issues Scheduling
Values
Experience Knowledge
Competencies Model
Style

Within
Outside
Inside
Core in Context
 MANAGING LEVELS
Leading Doing Inside
Individual Action
Group Doing Outside
People
Unit
Linking Controlling
Gate Keeper Information
System,
Structure
Directive
Communicating

Conceiving
 MARKETING’S ROLES & GOALS

Roles Goals
Corporate Corporate strategy Market Share
Customer, Competitive
Perspective

Strategic Marketing Growth

Business Unit

Products/markets Marketing Management Profitability

 MARKETING STRATEGY –THREE C’s
Differentiate itself positively from its competitors, using its
relative corporate strengths to better satisfy customer’s needs
in a given environmental setting
Business Environment
Customers

How to Compete?
Where to Compete?

Competition Corporation
When to Compete?
 GILETTE’S MACH3 MARKET STRATEGY
• Where (Market): All USA
• How (Means): Premium Product 35% more
expensive than SensorExcel
• When (Timing): before Mr Zein (CEO) retires
• Competition: Atra, SensorExcel, Shick
• Customer: MUS$ 750 in research, 35 patents Global
product
• Philip Morris and Miller Beer (Corporate strength)
• TI and digital watches (Competition strength)
• Goodyear: focus on tire (strategic decision)
FUTURE OF STRATEGIC MARKETING
• Market Share
• Deregulation
• Acquisitions, mergers Columbia, Coca Cola
• Channel Structure
• Overseas companies
• Fragmentation of Markets: : cars – segments
• Early entrants
• Customer’s requests: Quality and Price not enough
• Demographic Shifts
 STRATEGIC MARKET PLAN-
MARKETING PLAN
A Strategic Market Plan is a plan of all
aspects of an organization’s strategy in the
market place

A Marketing Plan deals with the delineation

of target segments and the four P’s

Source: Abell D F Hammond J. Strategic Market Planning Englewood Cliffs NJ Prentice Hall
1979. p9
 STRATEGIC MARKETING -MARKETING
MANAGEMENT
Strategic Marketing Marketing Management
The business to be in Stresses running a business

Time Long Range Current

Orientation Inductive-Intuitive Deductive analytical
Decision process Bottom up Top down
Nature of job Creativity Experience maturity
Leadership Proactive Reactive
Orientation Opportunistic Deterministic
Throw constraints Optimize within constraints
Source: Subhash C. Jain Marketing Planning & Strategy South Western College
Publishing 2000
 DEFINITION OF COMPETITION

• Natural Competition: Evolution by Adaptation

• Strategic Competition: Understand competitive

interaction, predict consequences, available
resources, predict risk and return, make the
commitment
 SOURCES OF COMPETITION

• Customer Need
• Existing Industry
• New Industry
• Product line
• Type of the Firm
 COMPETITIVE INTELLIGENCE

• Defensive Intelligence: protect business

• Passive Intelligence: Ad hoc information for a
specific purpose
• Offensive Intelligence: identify new opportunities
• Sources: Public (advertising, publications,
speeches)Trade Professionals(Customers, Patents),
Government, Investors
 FORCES DRIVING INDUSTRY COMPETITION

Potential Threats
Entrants

Bargaining Power Bargaining Power

Suppliers Industry Buyers

Competitors

Substitutes
Threats
 Encirclement

Flanking Bypass

Frontal Guerrilla

ATTACK STRATEGIES

PM 12.6 Market challenger strategies

 ?HOW TO DEFINE A MARKET

• Product characteristics
• Needs characteristics (Use)
• Private/Owner brand
• Regional sales
• Boundaries: technology (material, energy);
customer function, customer group (category)
 DEFINING MARKET BOUNDARIES
Personal Financial Transactions

Customer Groups:
Airports, Stores
Gas stations, saving
associations, banks

Customer Functions:
Technologies: cash, deposit,bill,
ATM, System, check, transactions
Teller

Source: Abell D F Hammond J. Strategic Market Planning Englewood Cliffs NJ Prentice Hall
1979. p9
 SEGMENTATION

Category Impact Factors:

• Private • Geography
• Professional/Industry • Demography, Cycle
• Public • Culture, Life style
• Economy
Behavior:
• Benefit
• User
• Usage
• Brand loyalty
 Product
attributes

Product class Benefits

Not competition Usage

Against Users
competition POSITIONING STRATEGIES
Brands Activities

Origin Personalities

PM 10.4 Positioning strategies

 Disaster

Success
 BCG STRATEGY IMPLICATIONS

Investment Earning Cash Flow Strategy

Stars Capacity Low to Negative Increase

expansion High CF Mkt Share
Cash Cows Capacity High Positive Maintain
maintenance CF share
Question High R&D Negative Negative Share or
Marks to low CF withdraw
Dogs Deplete High to Positive Withdraw
capacity low CF
 MARKET COVERAGE
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 X X X X X

P2 X
P3 X

P1 X X X X X X
P2 X X X
P3 X X X X
 GENERAL ELECTRIC GRID
Industry
Attractiveness Strong Average Weak

Question
High Winners marks

Medium

Profit
Low Losers
Producers

Business Strength
 Restaurant Specialized machinery

Market
share
Steel
Industry

Porter’s generic strategies approach:

Overall cost leadership, differentiation, focus