UNITV.

Marketing Strategy

Strategy vs. Tactics

Strategy: a marketing plan for a period longer than a year (i.e., long-run). Must be consistent, measurable, acceptable, and realistic Stratagus (Greek word) = the art of general (or the art of thinking in general terms) Tactics: marketing plan for a period of a year or less

Focus is on the 4Ps within a given budget and timeframe

Test: What are the seven major steps of a marketing plan Details: for your team projects

Strategic plan handout:

Generic Strategies by Michael Porter

Selecting Strategies: Managerial Techniques

Corporate performance objectives (Profits, Sales) Portfolio analysis (complex analysis of corporate units) BCG Matrix GE Matrix Ansoff Matrix SWOT Analysis PLC (Product Life Cycle) Gap Analysis (comparing goals vs. actual results) 80/20 rule: focus on 20% of products / customers that provide about 80% of sales volume and profits

Portfolio Analysis

SBU: Strategic Business Unit, any part of the company that can be managed separately SBUs are often called divisions or departments In Marketing a product, product line, or a brand may be an SBU Portfolio Management: management of SBUs according to organizational objectives and the SBUs contribution to the companys performance Ex: investing in selected SBUs vs. eliminating SBUs

BCG: Boston Consulting Group BCGs Growth-Share Matrix

High Market Growth Rate
QUESTION MARKS: STARS: Earnings are low & Earnings are high, unstable, but growing stable, and growing. Strategy: Invest or Strategy: ? extend product lines

Low Market Growth Rate

DOGS: Earnings are low & unstable.

Strategy: Divest?

CASH COWS: Earnings are high & stable Strategy: Milk = harvest revenues

Dimensions

Low relative market share

High relative market share

BCG Matrix

Star: Sony Playstation 2 (trendy products) Cash Cow: Ivory soap for Procter & Gamble (old, stable brands) ???: MP3 players (relatively new products) Dogs: Playboy the magazine (lossmakers to keep or )

The G.E. Matrix: Indexes of SBU Performance

Market share Customer knowledge Customer satisfaction Cost efficiency Product quality Financial strength

Market size Market growth Comp. pressure Price level Regulation High

Index of Business Strength

Strong Green Green Yellow? Average Green Yellow? Red

Weak
Yellow? Red Red

Market Medium Attractiveness Low Index

GE Matrix

Green SBU go ahead and invest in the long-run Yellow SBU be cautious, SBU maintenance Red SBU stop, drive SBU out of market

Ansoff-Matrix or Product-Market Expansion Grid

Dimensions Existing Products New Products

Existing Markets

1.1.

Do nothing 2. Withdraw 3. Consolidate 4. Penetrate

Product Development (risky + expensive)

New Markets

Market Development (when product is very competitive)

Diversification (assuming new activities)

Ansoff-Matrix
Improving the performance of existing businesses Do Nothing if the environment is static (short-run only) Withdraw when there is an irreversible decline in demand or opportunity costs of staying in a market are too high Consolidation means concentration of resources and focusing on existing competitive advantages Penetration means gaining market share

SWOT Analysis
SWOT is a universal analytical tool developed by the military: Matching corporate skills and resources with forecasted market opportunities 1. Strengths: Internal Positives (available skills & competencies) 2. Weaknesses: Internal Negatives (poor use or lack of skills) 3. Opportunities: External Positives (evaluating areas where advantages may be gained, ex: add a new product, target new segments) 4. Threats: External Negatives (evaluating forces that may prevent the company from accomplishing its objectives, ex: competition, regulation, customer preferences)