3 understanding successn3
TRANSCRIPT
Keys to Growth
• Understand why you have been successful
• Build on strengths and core competencies and shore up weaknesses
• Build a marketing strategy for each product that reflects the appropriate generic strategy, plus
– the stage the it is at in its life cycle and
– all in the context of its place in the portfolio of products
Generic Marketing Strategies
COMMODITY SUPPLIER
OUTSTANDING SUCCESS
MARKET TRADER
NICHE PLAYER
Broad market
Focused market
Low price
Low differentiation High differentiation
High price
Strategy Imperatives which one?
Selling on low price
Maintaining cost leadership
Continually driving down costs
Generic Marketing Strategies
COMMODITY SUPPLIER
OUTSTANDING SUCCESS
MARKET TRADER
NICHE PLAYER
Broad market
Focused market
Low price
Low differentiation High differentiation
High price
When you’ve got single digit market share – and you’re competing with the big boys –
you either differentiate or die
Niche Player• Selling a differentiated product/service to a
well-targeted, narrow market segment
• Emphasising non-price elements of the marketing mix
• Focusing on customers or products rather than methods of production
• Stressing the inherent advantages of the product/service over its competitors
Selling on high differentiation
Understanding basis of differential advantage
Reinforcing & building differential advantage
Building the brand
Often involves continual innovation
Strategy Imperatives
The Pricing Range
Pricing Range
Variable cost per
unit
‘Too-low’ price
Average cost per
unit
Value to the customer
‘Going-rate’ price
‘Too-high’ price
Going rate pricing - matching prices in market place
Skimming - charging higher price because people will buy anyway
Penetration - charging lower than going-rate to gain market share quickly because people will try product or switch
Pricing options at launchPricing options at launch
Customer Loyalty LadderCustomer Loyalty Ladder
Prospect
Customer
Regular Customer
Supporter
Advocate
Increasing Loyalty
Where are your customers on this ladder?
Dimensions of Differentiation
Emotions
Aesthetics
Functional Core
Where are your products/service placed?
Successful Strategy
• Strategy should emphasise something that makes your firm as unique as possible and delivers as much value as possible to the customer
• The best chance of doing this comes from differentiation with the aim of dominating your market and to do this effectively and quickly
• Then to continue to innovate based upon your differential advantage
Sustaining Competitive Advantage
• Reputation – often encapsulated in the brand, but communicated through relationships
• The way the organisation innovates – again and again
• The organisation’s strategic assets – particularly the ones that can’t be copied or competitors do not have access to
AND……...
• Strategy should be clear and focused
• Supported by- a culture that aims high- a structure that is flexible & responsive
• A good strategy is important but effective strategy execution is vital (and often ignored)