Marketing Strategy

Hierarchy of goals and objectives

Porter’s Economic Theory of Profits

Barriers to Entry

Competition

Substitutes

Customers

Suppliers
 Marketing Strategy

Generic Marketing Strategies

Cost Leadership
Lower costs of production and distribution

Differentiation
Unique product or brand

Focus
Focus on customer needs in a few segments
 Marketing Strategy

What business are you in?

Statement of marketing strategy

Mission statement

Indicates product, market scope

Shows growth factor

Shows differential advantage

Shows management orientation

 Marketing Strategy

Product Mix Strategies

Market penetration versus market skimming

Premium Penetra- Super

High Goods tion Bargain
Quality
Over- Average Bargain
Medium Pricing Quality

Low Hit and Shoddy Cheap

Run Goods Goods

High Medium Low

Price
 Marketing Strategy

Product Market Growth Strategies

Old Market Penetration Product Development

(increase usage) (new uses)

Markets

New Market Development Diversification

(new users) (new users, new uses)

Old New

Products
 Marketing Strategy

Boston Consulting Group Strategy:

Relative Market Share

Market Growth Rate

Problems with BCG Approach

Difficult to estimate relative market share in rapidly growing
markets
 Marketing Strategy

BCG Matrix:

22%

Stars ?
Some cash use High cash use
Future cash cow ? Is to build or not

Market Growth 10%

Rate

Cash Cows Dogs

Generate cash for Low or no cash use
?, Stars When to divest

0%
10x 1..5x .1x (log scale)
Relative Market Share
 Marketing Strategy

Market Leader Strategies

Increase Size of Total Market
Product-Market Growth Strategies

Protect Market Share

Fortification
Assortment of brands, sizes
Innovation
Best defense is a good offense
Counteroffensive
 Marketing Strategy

Market Leader Strategies (cont.)

Increase Market Share
BCG
Antitrust constraints

100%

Market Share

Marketing Effort ($)

 Marketing Strategy

Market Challenger Strategies

Frontal Attack
Out-innovate leader
Tough to do, easier to defend
Flanking/Bypass Attack
Attack where leader is not looking
Find a new market segment
Price Discount Strategy
Buyers are sensitive to price
Works if leader does not cut price
 Marketing Strategy

Market Challenger Strategies (cont.)

Cheaper Goods Strategy
Lower quality but much lower price
Vulnerable to still cheaper goods

Prestige Goods Strategy

Increase both quality and price
 Marketing Strategy

Market Follower Strategies

Conscious Parallelism
Similar products, prices
Avoid unprofitable segments

Market Niche
Specialize in a very small group of customers
Concentrated segmentation strategy……
 Marketing Strategy
Encirclement

Flanking Defense

Preemptive
Defense
Contraction
Frontal
Defender Defense
Attacker (bigger)
(smaller)
Attack
Position
Counteroffensive Defense
Guerilla Attack

Mobile Defense

Flank Attack

Bypass
 eMarketing

Is eMarketing anything new?

…or just an adaptation of existing strategy?

Addressability – ability to identify customer prior to purchase

Marketers could always do this.

So why is web different? Is it more efficient…?

…only if you do not delete your cookies…?

…or they keep extensive files on you…
 eMarketing

Interactivity – customers can express their needs and wants

directly to the firm

Marketers could always do this too. So what is new?

…another efficiency argument…?

Memory – ability to access individual customer profiles

and purchase histories

This is probably valid. Information existed before but

was hard to access
 eMarketing
Control – customer’s ability to control flow and sequence of information

Pull versus push medium…web versus television.

Who control’s the flow?

Definitely an eMarketing characteristic, but a two-edged sword.

Why? Customers control the flow……

Accessibility – ability to obtain information…..

“Retrieving info from the Internet is like trying to drink from a

fire hose.” You could always do this, web may be easier
for some users.
 eMarketing

Digitilization – can the product or benefits be represented digitally?

Does the media match the product’s attributes?

…a problem for all media…?

So, does eMarketing exist? Maybe, or maybe it is just

another information flow/distribution system to
use in designing a marketing strategy to meet
customer needs…(and maximize profits).
 Marketing Strategy

Bear Theory

Differential versus Absolute Advantage