OHT 20.

Strategic marketing

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OHT 20.2

Interaction between marketing and corporate strategy

Figure 20.1
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OHT 20.3

Corporate versus marketing strategy Corporate strategy: Marketing strategy:

Allocation of resources within an organisation to achieve the business direction and scope specified within corporate objectives.
Helps to control and co-ordinate the different areas of the organisation.
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Defines target markets, direction and requirements in order to create a defensible position compatible with the overall corporate strategy.

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OHT 20.4

Marketing plans and programmes Marketing plan: Turning strategies into implementable actions. A detailed written statement specifying target markets, marketing programmes, responsibilities, time scales and resources to be used within the defined budgets. Actions, often tactical, using marketing mix variables to gain advantage within target market.

Marketing programmes:

Means of implementing the marketing strategy.

Normally detailed in the marketing plan.
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OHT 20.5

Influences on marketing strategy

Figure 20.2
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OHT 20.6

Strategic marketing analysis models

All of these models view products as:

Manageable individual entities on an operational basis. A product portfolio (set of products each of which make a unique contribution to the corporate picture) on a strategic basis.

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OHT 20.7

Analysis models

Boston Box. GE matrix.

Shells directional policy matrix.

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OHT 20.8

The Boston Box

Figure 20.3
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OHT 20.9

Boston Box Dog - holds a weak market share in a low growth market. Question mark - high market growth with low share. Star - a market leader in a growth market.

Cash cow - as market growth starts to trail off, stars can become cash cows.
War horses - market leaders, whose cash generating position under threat due to negative market growth. Dodos - low share of a declining market means that sales are dwindling away.
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OHT 20.10

GE matrix

Figure 20.4
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OHT 20.11

Shells directional policy matrix

Figure 20.5
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OHT 20.12

Analytical models - the advantages

Useful planning tools.

Forces managers to think more strategically. Useful diagnostic tools giving overview of current position. Can stimulate debate on possible consequences of actions.

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OHT 20.13

Analytical models - the constraints

Do not give solutions. Simplistic use of variables.

Fail to consider synergies between businesses.

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OHT 20.14

Types of growth

Market penetration.
Market development. Product development.

Diversification - concentric, conglomerate.

Integration - backward, forward, horizontal. No growth - harvesting, entrenchment, withdrawal.

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OHT 20.15

Competitor analysis

A systematic attempt to identify and understand key elements of a competitors strategy in terms of objectives, strategies, resource allocation and implementation through the marketing mix.

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OHT 20.16

Porters Five Forces Model

1. Bargaining power of suppliers. 2. Bargaining power of customers.

3. Threat of new entrants.

4. Threat of substitute products or services. 5. Rivalry among current competitors.

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OHT 20.17

Strategic groupings

Figure 20.8
Source: Adapted from Wilson et al. (1992). Brassington and Pettitt: Principles of Marketing, 3rd Edition Pearson Education Limited 2003

OHT 20.18

Examining competitive strengths and weaknesses

Provides a valuable insight into their strategic thinking and actions.

Requires use of various information sources.

Consider in terms of critical success factors.

Rate competitors according to their strong and vulnerable points.

Information can be used to plan and launch attack.

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OHT 20.19

Useful information about competitors

Table 20.2
Source: Wilson et al. (1992).

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OHT 20.20

Generic strategies

Figure 20.9
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OHT 20.21

Choice of generic strategy

Fit between the demands of the strategy and the organisations capabilities and resources.

The main competitors abilities on similar criteria.

The key criteria for success in the market and their match with the organisations capabilities.

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OHT 20.22

Competitive positions and strategy

Figure 20.10
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OHT 20.23

Attacking and defending

Aggressive strategies - frontal, flank, encirclement, bypass, and guerrilla attacks.

Defence strategies - fixed position, mobile, flanking, contraction, counter offensive.

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OHT 20.24

Attack strategies

Figure 20.11
Source: Kotler and Singh (1981). Reproduced with permission of Thomson Media, Eleven Penn Plaza, New York, NY 10001 Brassington and Pettitt: Principles of Marketing, 3rd Edition Pearson Education Limited 2003

OHT 20.25

Defence strategies

Figure 20.12
Source: Kotler and Singh (1981). Reproduced with permission of Thomson Media Eleven Penn Plaza, New York, NY 10001. Brassington and Pettitt: Principles of Marketing, 3rd Edition Pearson Education Limited 2003

OHT 20.26

Co-operative and independent strategies

Many situations can also be characterised by peaceful coexistence and co-operative alliances between competitors.

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