Marketing Strategy: Key Concepts 2
Section 1, 2
Strategic Planning Process
Higher levels (corporate) govern lower level planning processes.
Strategic planning requires:
- Corporate Level
- Business Level
- Product Level
Corporate Strategic Planning
Mission Statement: Purpose; Business; Values
Reason to be? Invisible hand etc.
- Identify the company's Mission
- Identify SBUs (customer focused)
- Allocate Resources across SBUs (BCG Model; GE Model; Product
Life Cycle; systems)
- Growth Strategies for SBUs (intensive; integrative; diversification)
Market Terms...keep in touch with consumer's needs
From five years ago, and still relevant:
- AT&T is in the communications business not the
- Visa...allows customers to exchange values...not credit cards
- 3M solves problems by putting innovation to work.
Example Mission Statements:
Discussion Topic: Find your company's mission statement.
How well is this statement understood among employees and
customers? Evaluate the missions statements above with respect
to purpose, business and values.
Indentify the limiting factors with the BCG and GE models.
Discussion Topic: Cite examples of strategic alliances.
Identify alliances your company participates and why.
SBU Strategic Planning
Provides the context for the preparation of the marketing plans for the
units products and services.
If goal is to grow a business by 15%, what other data are relevant to
judge the merits of the goal?
- Defining Business Mission
- Analyzing External Environment (OT) (economic, demographic,
technology, political, legal, socio and cultural, markets, competitors,
- Analyzing Internal Environment (SW) (competitive advantages,
- Choosing Objectives and Goals (specific, measurable,
achievable and consistent)
- Developing Business Strategies (cost leadership; differentiation;
- Preparing Programs
- Implementing Programs (McKinsey 7-S Framework)
- Gathering Feedback and Exercising Control
Discussion Topic: Create a SWOT analysis of your own
business (business unit).
Focus on product and market, focus on detailed marketing strategies for
achieving the product's objectives in a target market.
Consider the difference between strategic marketing and tactical
Marketing Planning Process includes:
Put another way:
- Analyzing marketing opportunities
- Researching and selecting target markets
- Designing marketing strategies
- planning marketing programs (marketing mix)
- implementation and control
- Situation Analysis
- Corporate Capabilities and Culture
- Customer Analysis
- Competitive Analysis
- Macro Issues
- SWOT Analysis
- Alternative Strategies
- Action Plans
- Evaluation and Recommendations
- Marketing Mix Elements (Product,
- Implementation and Evaluation
Priceline Remain Profitable wrt strategic planning issues.
- Forecasting and Budgeting
- Measures of Effectiveness
Identify the four Cs: Customer, collaborator, competition and company
Consider past and future growth strategies
Consider the four Ps: Price, Product, Promotion and Place.
More sales by value in B2B than B2C.
- MRO (Maintenance, Repair and Operations) 80% business purchases versus
In order to:
- Increase Sales
- Cut Costs
- Meet Social and Legal Requirements
- Businesses for Profit
Characteristics of Business Customers:
- Risk Averse
- Fewer and Larger
- Nature of Demand (Derived, Inelastic, Fluctuating)
- Purchase versus Lease
Buying Process consists of:
Modified depending on whether: Straight rebuy, Modified rebuy or New
- Problem Recognition
- General Need Description
- Product Specification
- Supplier Search
- Proposal Solicitation
- Supplier Selection
- Order Routine Specification
- Performance Review
Contrast this with the Consumer buying
Who makes the purchasing decision?
What are the contextual elements that impact the decision?
What is included in purchase: re: customer service levels etc.
Evolution of Business Buying
Evolution of B2B: Lessons From the Auto Industry
GE Global eXchange Services
Dell Medium and Large
Business Home Page
Dealing with Competition
Porter's five basic forces of competition:
- Threat of new entrants
- Rivalry among existing competitors
- Bargaining power of suppliers
- Bargaining power of buyer
- Threat of substitutes
Whenever you make choices with respect to your customers (business or
final consumers) you need to be aware how your competition changes as a
function of your decisions. Understanding the prisoners dilemma
model is useful. Clearly your relation compared to other competitors
is important (market leader versus follower for instance) and the nature
of the marketplace (monopoly, oligopoly and monopolistic competition).
Consequences of zero percent financing for autos?
Need to consider competitors AND customers for decisions.
Importance of competitive intelligence.
Classification of competitors (brand, industry, form, generic)
Industry Concept of Competition:
- Impacts of Barriers
to Entry and Exit
- Number of sellers and degree of competition (monopoly, oligopoly,
monopolistic competition, pure competition)
- Cost Structure
- Degree of Vertical Integration
- Degree of Globalization
Priceline, Expedia and American Airlines versus Travel Agent market
Discussion Topic: Identify and discuss other industries
prone to disruptive technologies.
The Marketing Plan
Audit Comes of Age
to Write a Mission Statement
Link to discussion
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