Summary O&E Part 1 Vincent Cieraad 6370012

Strategy and Marketing

Strategy – The coordinated means by which an organization
pursues its goals and objectives
Business strategy – Strategy for competing against rivals within a
particular industry or industry segment
Corporate strategy – Strategy for guiding a firm’s entry and exit
from different businesses, for determining how a parents company
adds value to and manages its portfolio of business, and for creating
value through diversification
1. In what business will we compete
2. How can we, as a corporate parents, add value to our various
lines of business?
3. How will diversification or our entry into a new industry help
us to compete in our other industries?
Strategy formulation – Process of developing a strategy
Strategy implementation – Process of executing a strategy
Strategy Diamond: Page 15
1. Arenas – Where will we be active?
2. Vehicles – How do we get there? Joint ventures etc.
3. Differentiators – How will we win in the marketplace?
4. Staging and pacing – What will be our speed and sequence of
moves?
5. Economic Logic – How will we obtain returns?
Competitive advantage – A firm’s ability to create value in a way
that its rivals cannot –Three perspectives on competitive advantage
1. Internal – Analyze firm resources
2. External – Analyze the industry
3. Dynamic – Look for opportunities to shape high velocity and
interconnected markets
Taking these three things in consideration a company creates a
strategy -> Competitive advantage -> Firm’s Performance

Marketing
Marketing – Not only selling products, but satisfying customer
needs
Understand the marketplace and customers needs and wants ->
Design a customer-drive marketing strategy ->
Construct a marketing programme that delivers superior value ->
Build profitable relationships and create customer delight ->->->
Capture value from customers to create profits and customer
quality

Understanding:
Needs, want and demands. Need food, wants a big mac.
Marketing offerings – Physical products AND services.
(Marketing myopia – A company focuses only on existing products
and doesn’t look forward to new products or customer needs)
Customer value and satisfaction – Make sure expectations don’t
become to high and will disappoint customers
Markets – The set of actual and potential buyers of a product.
(Marketing systems: Every link in the chain needs to add value to
satisfy customers. For example BMW can’t sell high quality cars
without good and high quality dealers).
Marketing management – Targeting the right markets and
customers and building profitable relationships with them.

Marketing management orientations – Page 40

Five marketing strategies: Production, Product, Selling, Marketing
and Societal Marketing Concepts.
The production concept – Customers will favour products that are
available and highly affordable
The product concept – Customers will favour products that offer
the most in quality, performance and innovative features. Focusing
on making continuous product improvements
The selling concept – Customers will not buy enough of the firm’s
products unless it undertakes a large-scale selling and promotion
effort. For example products that people normally wouldn’t think of
buying
The marketing concept – Better understand the customers and
therefore better produce to their needs.
The societal marketing concept – questions whether the pure
marketing concept overlooks possible conflicts between consumer
short-term wants and consumer long-term welfare. Is satisfying the
present customers needs the best for customers on the long run?
For example Fast Food.

Customer relationship management – Building blocks

Customer value – Customer perceived value – The customers
evaluation of the difference between all the benefits and price
differences of competitive offers
Customer satisfaction – The products quality in contrast with the
buyers expectation. Is it better of worse then the customer was
hoping for?
More carefully selected customers – Choosing your customers
more careful
Long term relating – Attract new customers and make sure they
stick around for a longer period of time
Direct relating – For example online-stores, you can find
everything by the click of a button

Partner relationship
Partner relationship management – Managing the relationships
with partners being involved in the value chain
Partners inside the company – Marketing is not only left for the
marketing department, but is for the whole firm.
Partners outside the firm – For example the supply chain
management, strategic alliances with other firms.

Page 52
Capturing value from customers by keeping them satisfied for
longer periods of time.
Customer equity – is the combined discounted customer lifetime
values of all the company’s current and potential customers. More
loyal customers, higher equity.
Butterflies: High prof, short-term
True Friends: High prof, high term
Strangers: Low prof, short-term
Barnacles: low prof, long-term

What is marketing all together page 57 – 60

Strategic planning – The process of developing and maintaining a

strategic fit between the organisation’s goals and capabilities and
its chaging marketing opportunities.
Mission statement – A statement of the organisation’s purpose –
what it wants to accomplish in the larger environment.

Portfolio
Business portfolio – The collection of businesses and products
that make up the company.
Analysing the current business portfolio – Evaluation the
products and business that make up the company.
Boston Consulting Group (BCG) model – page 74
Star, Question Mark, Cash Cow, Dog, continues circle
Developing strategies for growth and downsizing – Look at possible
new products and business for the firm’s future.
Product-market expansion grid model – page 76
Comparing new products/existing products towards existing
markets/new markets
Market penetration Exis prod, exis mark
Product development New prod, Exis Mark
Market development Exis prod, new mark
Diversifcation New prod, New mark

Value chain – working together with other companies involved in

the production process.
Value-delivery network – Macdonalds with it’s own transportation
service, Toyota keeps close bands with their dealers.

Marketing strategy: - The marketing logic by which the company

hopes to achieve these profitable relationships
Customer-centred marketing strategy – A company cannot
satisfy everyones needs, therefore the need to select a market;
market segmentation, target marketing and market positiong.
Market segmentation – dividing a market into different
segments/groups. Male/female, young/old, rich/poor. A market
segment consists of consumers who respond in a similar way to a
give set of marketing efforts.
Target marketing- After defining the segments they can evaluate
each market segment’s attractiveness and selecting one or more
segments to enter.
Market positioning – arranging for a product to occupy a clear,
distrinctive and desirable place relative to competing products in
the minds of target customers. How is our different product from
others and how can we make them pay a little bit more for “The
same” product.
After deciding the marketing strategy, it’s time for the marketing
mix.
Consists of the 4 P’s: Page 84
Product, Price, Place, Promotion.
And 4 C’s:
Customer solution, Customer Cost, Convenience, Communication
SWOT Analyses: Strength, Weaknesses, Opportunities,
Threats. Page 85

Marketing implementation – is the process that turns marketing

plans into marketing actions. Planners address what and why,
implementation addresses the who, where, when and how.
Marketing control – involves evaluation the results of marketing
strategies and plans and taking corrective action to ensure that
objectives are attained.
Each company should periodacly see if their marketing strategy is
not outdated:
Marketing audit – Examination of the present company’s
marketing strategy to find out of it’s still up to date

Measuring and managing return on marketing – The profits

generated by investments in marketing activities. Page 93