Marketing Strategy: Introduction

What is strategy? How does marketing contribute? - The marketing concept - Market orientation

Marketing Strategy: Introduction

What is strategy?
A fundamental pattern of present and planned objectives, resource deployments, and interactions of an organization with markets, competitors, and other environmental factors

the search for a favourable competitive position (Porter, 85)

Marketing Strategy: Introduction

Corporate strategy
-organizations scope and resource deployment

Business-level strategy
-competitive strategy of a business unit in its industry

Marketing strategy
-targeting, segmenting and positioning for a product. Figuring out the marketing mix

Marketing Strategy: Introduction

What is the marketing concept?
determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. (Kotler et al, 96)

Marketing Strategy: Introduction

What do marketers mean when they say their firms are market oriented?

Marketing Strategy: Introduction

What are advantages and disadvantages of market orientation?

Why do some firms lack orientation towards the market ?

Marketing Strategy: Introduction

Market oriented in not marketing oriented
- information on all important buying influences permeates every corporate function -Strategic/tactical decisions are made interfunctionally and inter-divisionally -divisions and functions make well-coordinated decisions and execute them with commitment

Marketing Strategy: Introduction

Which should come first the customer need or the product idea?

- Marketing myopia

Discussion questions
Q.1 : In defining their strategies, should companies pursue broadly or narrowly defined missions?

Q. 2: What are the advantages of each approach?

Characteristics of Effective Corporate Mission Statements

Broad
Functional Based on customer needs
Transportation business

Specific
Long-distance transportation for largevolume producers of lowvalue, low-density products

Railroad business Long-haul, coal carrying Physical railroad Based on existing products or technology

Ansoff Strategies

Current Markets

Current Products Market penetration strategy Market development strategy

New Products Product development strategy Diversification strategy

New Markets

The BCG Growth Share Matrix

High

Stars 5 4

Question marks 2 3 7 Dogs 12 13

0.1

Market growth rate 10% (in constant dollars)

6 Cash cows

11 10

9
Low 10

1 Relative market share

Source: Adapted from Barry Hedley, Strategy and the Business Portfolio, Long Range Planning 10 (February 1977).

Cash Flows Across Businesses in the BCG Portfolio Model

Growth rate (cash use) High

Stars
Cash Flows

Question marks

Low

Cash cows

Dogs

High

Relative market share

Low

Desired direction of business development

The GE Nine-Cell Matrix

Industry attractiveness High Medium Low High Medium Low

Businesss competitive position

1
2

2
3

3
3

1 Invest/grow 2 Selective investment/ maintain position 3 Harvest/divest