Marketing Strategy

• Introduction
• Three C’s
– Company
Professor Carl Mela – Consumer
Marketing 360 – Competition
• Four P’s
Marketing Management
• Summary
Fuqua School of Business

Marketing Strategy–
Medicines
• Done Well
– Analyses, Segmentation
• Consider Also
– Overview of issues
– Intuition regarding why analyses are necessary
– Intuition regarding results of analyses
– Overview
– See my cover memo for details on what the
best cases did

Marketing Strategy–
Agenda

• Strategic Planning
– BCG Matrix
– GE Matrix
– SWOT
• Marketing Planning

Marketing Strategy–
Marketing Strategy

• “More than half the polled

executives at 250 corporations
ranked Marketing as the most
important element of strategy”
– (Yankelovitch, Skelly & White Survey 1995)

Marketing Strategy–
 Strategic Planning and
Marketing Planning
Strategic Planning
* Situation Assessment
* Organizational Mission
* Org. Objectives
* Org. Strategies
Portfolio Analysis
Marketing Planning
* Marketing Objectives
* Marketing Strategies
Target Market
Marketing Mix
* Marketing Plans
Implementation
Control
Marketing Strategy–
 Corporate Strategic
Planning

Define Identify Strategic Analyze, Evaluate Identify New

Corporate Business Units Current Business Business Arenas
Mission (SBU’s) Portfolio to Enter

Marketing Strategy–
1. Define Corporate Mission
• What is our business?

• Who is the customer?

• What is the value to the customer?

• What will our business be?

• What should our business be?

-Peter Drucker
Marketing Strategy–
2. Identify SBUs

• Single business standing alone

from rest of company

• Having own competitors to equal

or surpass

• Has own manager who is

responsible for strategic planning
and profit

Marketing Strategy–
3. Evaluate the
Current Business
Portfolio

• The Boston Consulting Group

(BCG) Matrix

• The General Electric (GE)

Approach

Marketing Strategy–
 Portfolio Analysis:
The BCG Matrix

Invest
??? Based on the
principle of
STAR PROBLEM
High balancing cash
>10% CHILD
Reinvest flows
Cash Required

ow
Growth &

No
Fl
sh Invest
Ca

Low
<10% Divest

Cash Flow
CASH COW DOG

10 1 0
Relative Market Share wrt Biggest Competitor
Marketing Strategy–1
Portfolio Analysis:
The BCG Matrix

Marketing Strategy–1
Portfolio Analysis:
The BCG Matrix

Marketing Strategy–1
BCG Rise and Fall
• Rise
– Balanced cash flows and focused executive
attention on high growth areas
– Helped management make difficult decisions
– Only two dimension to strategy -- simple
• Fall
– Cash flow became less of an issue with more
efficient capital markets and lower interest rates
– Only two dimensions to strategy -- limiting
– Multiple companies could not jointly pursue a
strategy to be #1, but they tried…with disastrous
consequences

Marketing Strategy–1
The General Electric Model
5
MARKET ATTRACTIVENESS

High

3.33
Medium

1.67
Low

0
5 Strong 3.33 Medium 1.67 Weak 0

BUSINESS STRENGTH

Marketing Strategy–1
Evaluating Market
Attractiveness and
Business Strength
Rating
Weight (1 – 5) Value
Sales Volume in Market 0.4 3 1.2
Market Market Growth Rate 0.2 5 1.0
Attractiveness Competitive Intensity 0.4 4 1.6

3.8
Rating
Weight (1 – 5) Value
Market Share 0.2 5 1.0
Business Brand Reputation 0.3 5 1.5
Strength Distribution Coverage 0.1 4 0.4
Unit Costs 0.4 3 1.2

4.1

Marketing Strategy–1
Management Strategies
5
MARKET ATTRACTIVENESS

Protect Invest Build

High Position to Build Selectively
3.33
Selectivity/ Limited
Medium

Build
Manage for Expansion
Selectively
Earnings or Harvest
1.67

Protect and Manage for

Low

Divest
Refocus Earnings
0
5 Strong 3.33 Medium 1.67 Weak 0

BUSINESS STRENGTH

Marketing Strategy–1
Problems with Portfolio
Models

• Subjective inputs can lead to self-

confirming strategies
• Assumes SBU is independent
– Synergies not considered

Marketing Strategy–1
 SWOT: Strengths and
Weaknesses
PERFORMANCE IMPORTANCE
Strength Neutral Weak High Med Low
Marketing
1. Reputation ______ ______ ______ _____ _____ _____
2. Awareness ______ ______ ______ _____ _____ _____
3. Market Share ______ ______ ______ _____ _____ _____
4. Distribution Coverage ______ ______ ______ _____ _____ _____
Finance
1. Capital Cost/Availability ______ ______ ______ _____ _____ _____
2. Cash Flow ______ ______ ______ _____ _____ _____
Operations
1. Capacity ______ ______ ______ _____ _____ _____
2. Technical Skills ______ ______ ______ _____ _____ _____
Organization
1. Employee Morale ______ ______ ______ _____ _____ _____
2. Responsiveness ______ ______ ______ _____ _____ _____

Marketing Strategy–1
SWOT: Opportunities and
Threats
Success Probability Probability of Occurrence
High Low High Low
Attractiveness

Seriousness
High 1 2 High 1 2

Low Low
3 4 3 4

Opportunities - e.g., Technology Threats - e.g., competitor

1. ___________________ 1. ___________________
2. ___________________ 2. ___________________
3. ___________________ 3. ___________________
4. ___________________ 4. ___________________
Marketing Strategy–1
 The Marketing Plan
- Integrating the 3 C’s and the 4 P’s -
Current Background data on sales, costs,
marketing profits, market, competitors,
situation (3 C’s) distribution, and environment.

Opportunity and Identifies the main

issue analysis (3 opportunities/threats,
C’s) strengths/weaknesses.

Objectives Defines plan’s financial and marketing

goals in terms of sales volume, market
share, and profit.
Marketing
strategy Presents the broad marketing approach
(4 P’s) that will be used to achieve the plan’s
objectives.
Action programs
(4 P’s) Presents the special marketing
programs
Adapted From: Philip Kotler, Marketing Management, pg. 89. designed to achieve the
Project profit- business objectives. Marketing Strategy–2
The Marketing Plan

Marketing Strategy–2
Agenda: Key Take Aways

• Strategic Planning
– BCG Matrix
– GE Matrix
– SWOT Analysis
• Marketing Planning

Marketing Strategy–2