marketing week 5 6

Marketing Strategy

Jon Kittojkitto@theibam.co.uk

Key Elements of Mission Statements

Not just the mission as a "wish".Purpose and values of the organization Which business the organization wants to be in (products or services, market) or who are the organizations primary "clients" (stakeholders) Which are the responsibilities of the organization towards these "clients" What are the main objectives which support the company in accomplishing its mission

Mission vs. Vision

A Mission statement: tells you what the company is now. It concentrates on the present; it defines the customer(s), critical processes and it informs you about the desired level of performance. A Vision statement: outlines what a company wants to be. It concentrates on the future; it is a source of inspiration; it provides clear decision-making criteria.

BusinessObjectives

Marketing Objectives

Product Price Place PromotionObjectives Objectives Objectives Objectives

Objectives

The strategic planning gap

10

20

30

40

50

60

70

New strategies gap

Operations gap

(£60M) Corporate objective

(£45M) Revised forecast

(£30M) Initial forecast

The plannin

g gap

Time (years)

Sale

s(£

m)

Objectives should be ...

... Hierarchical ... Quantitative ... Realistic ... Consistent

... SMART Specific Measurable Achievable Results-oriented Time-bounded

Ansoff’s Growth Matrix

Markets

Products

Existing

Existing

New

New

MarketPenetration

MarketDevelopment

ProductDevelopment

Diversification

Product market strategy

Marketpenetration

1

Marketextension

2

Product development

3

Diversification4

ProductCurrent New

Current

New

Market

ProductNewExisting

1 4

162

Existing

NewMarket

Souce

: A

nso

ff

RISK

Porter’s generic strategies

STRATEGIC ADVANTAGE

STR

ATEG

IC T

AR

GET

Uniqueness perceived

by customer

Low costposition

Industry-wide

Segmentonly

FOCUS

DIFFERENTIATIONOVERALL

COSTLEADERSHIP

Source: Porter

Strategic choice

DEVELOPMENT

STRATEGIES

GENERIC STRATEGIES

• Cost leadership• Differentiation• Focus

ALTERNATIVEDIRECTIONS

• Do nothing• Withdrawal• Consolidation• Market penetration• Product development• Market development• Diversification

ALTERNATIVE METHODS

• Internal development• Acquisition• Joint development

Sourc

e:

Johnso

n &

Sch

ole

s

Approaches to developing sustainable competitive advantage

Superior product benefitPerceived advantageLow-cost operationsLegal advantageSuperior contactsSuperior knowledgeScale advantagesOffensive advantages

Source: Davidson, 1977

Barriers to implementation

CulturePower and politicsAnalysis, not actionResource issuesSkills

Product Development & Management

Jon Kittojkitto@theibam.co.uk

Anatomy of a Product

Core

Tangible

Augmented

Potential

The product life-cycle

Introduction Growth Maturity Decline

Profit

Sales

Sale

s an

d p

rofits

(£

)

(a) Growth-slump-maturity pattern

Sale

s volu

me

Time

(b) Cycle-recycle pattern

Sale

s volu

me

Sale

s volu

me

(c) Scalloped pattern

Time

Time

Initial cycle Recycle

The Product Life-cycle

I G M D

Sale

s an

d p

rofits

(£

)

Time

A

B

Sales

Profits

Diffusion of Innovation

Actors & Agents (Victoria University)

Everett Rogers

BCG’s Growth Share Matrix

Low

2

4

6

8

10

12

14

16

1820

High

10x 1x 0.1x

High LowRelative market share

STARS QUESTION MARKS (problem children)

CASH COWS DOGS

Modest+ or -cash flow

Largenegativecashflow

Largepositivecashflow

Modest+ or -cash flow

Optimum

cash

flow

SO

UR

CE:

Adapte

d f

rom

Hed

l ey (

1977

) , p

. 1

2

Mark

et

gro

wth

GE multifactor matrixBusiness strengths

Ind

ustr

y a

ttra

cti

ven

ess

Low

Hig

hM

ediu

m

Strong Medium Weak

Invest

for g

rowth

Harvest

/with

draw

Manage sele

ctively fo

r earn

ings

Shell directional policy matrix

Prospects for sector profitability

Bu

sin

ess’

com

peti

tive c

ap

ab

ilit

ies

Str

ong

Weak

Avera

ge

Unattractive Average Attractive

Disinvest

Phasedwithdrawal

Phasedwithdrawal

Custodialgrowth

Cashgeneration

Doubleor quit

Tryharder

LeaderGrowthleader

The Booz Allen Hamilton Classification of New Products

New to the world New sector development Additions to existing lines Improvements and revisions to existing lines Repositioning Cost reduction through product modification

The Role of NPD Avoid product obsolescence Ensure match with environmental conditions Enable the organisation to compete in new and

developing sectors Reduce dependence on vulnerable product sectors Match the competition Fill excess capacity Achieve greater long term growth and profit

The NPD process

Idea generation

Initial screening

Concept development

Business evaluation

Product development

Product launch

Why Brand?

For differentiation & recognitionTo add value to a naked commodityEasier to promoteHelps market segmentationCan help boost share priceEasier to integrate - sales promotion, personal selling & packagingCan help corporate image

Brand Strategies

Manufacturers Brand Cadbury’s, Ford, Coca-cola

Multi - Branding (Individual Brand Name) Proctor & Gamble

Tide, Daz, Dreft, Ariel

Price Brand Tesco ‘Value’

Private/own Label Boots, Sainsbury’s

Generic ‘No Frills’ Products

BRAND DEVELOPMENTINCREASED SALESCOST EFFICIENCIESVOLUME BUILDING

BRAND SALES GROWRETAILER CONCENTRATIONVOLUME BUILDINGIMPROVED PRODUCTS

WIDER DISTRIBUTIONNETWORK BUILT UP

INVEST IN NEW BRAND

BUILD AWARENESSOF ATTRIBUTES

SALES INCENTIVEPROGRAMME, TRADEPROMOTION, P.O.S

BRAND RECOGNITIONAND CUSTOMERDEMAND FOR BRAND

RETAILERSLIST

BRAND

Packaging

ContainProtectInformDifferentiateEnvironmental considerations‘Silent salesperson’