As Unit 2

Topic 1

Market Objectives and Strategy

Marketing Strategy

• The broad approach the company intends to adopt in the longer term to achieve its objectives

• A medium to long term plan for achieving a firms marketing objectives

• The means or plan by which marketing objectives will be achieved

• Concerns markets, positioning, direction of development and competitive advantage

• A plan for future marketing activity

A marketing strategy should…

• Be part of an overall strategy• Be based on a clear understanding of the

market• Be based on analysis of the market• Be based on a firms strengths • Match opportunities to strengths • Address a companies weaknesses• React to threats• Be integrated and well thought out

Influences on strategy

• Business objectives

• The firms resources

• The firms strengths

• Market conditions

• Opportunities in the market

• Competition and market structure

MOST: components of a strategy

• Mission

• Objectives

• Strategy – overall plan

• Tactics – short term responses to threats

Stages in the development of a marketing strategy

• Clarify objectives• Carry out a marketing audit• Conduct a SWOT analysis• Define marketing objectives• Develop marketing strategies• Implement marketing plans• Review and evaluate outcomes• Prepare the next plan

Consistent cycles

The marketing audit

• A systematic analysis of business actives, operations and the external environment which may affect how the business markets its products.

• The audit is carried out to analyse the position of the business now and explain how it arrived at that position

• The purpose is to identify strategic issues in terms of SWOT

External variables

• Political

• Economic

• Social / cultural

• Technological

• Market Characteristics

• Industry structure

• Competition

We sometimes know this as PEST

Internal Variables

• The business itself• Its marketing mix• Marketing objectives• Products• Marketing department• Financial performance• Human resources• Research and development capabilities

Analytical tools

• Marketing audit• PEST• SWOT analysis• Product Life Cycle• Ansoff Growth Matrix• Boston Matrix• Market Mapping• Porter’s Generic Strategies

SWOT

Internal

External

Positive Negative

Marketing objectives

• What the marketing functions need to do to fulfil the corporate objectives

• They are derived from the firms corporate objectives

• Like any other objectives they should be SMART

• Example to raise market share to 10% in 2 years or to increase brand awareness by 5% in Sheffield by the end of the year

Components of a marketing strategy

• Target marketing • Positioning• Marketing Mix (Right product, right

promotion, the right price and the right place / distribution to satisfy customers)

• Competitive advantage – that which gives a firm an edge over its rivals (USP)

Three key decisions • Direction of growth – market penetration,

market development, product development or diversification (Ansoff)

• Choice of mass or niche marketing

• Choice of generic strategy – cost leadership, differentiation or focus (Porter)

Direction of growth

• Ansoff Matrix• Market development – develop new

markets• Market penetration – larger share of

the existing market• Product development – new product

development • Diversification – new products for new

markets

Ansoff Matrix

Mass vs niche• Mass

• Economies of scale• Less vunarable to

changes in demand by a small number of customers

• High volume of sales• Requires high level

of investment or capital

• Niche• Avoid clash with

large rivals• Requires less

resources• Targets limited

market• Will fit in with the

firms USP• Low volume of sales

Generic strategy

• Choice of generic strategy to achieve competitive advantage

• Cost leadership – lowest cost producer• Differentiation – different and better• Focused strategy – focusing on a niche

in the market– Cost focused– Differentiation focused

Porters Generic Strategies

Marketing tactics

• What needs to be done to ensure that the strategy is successful

• Measures used to implement strategy• Activities that deal with short term

opportunities or threats• Short term actions taken to achieve the

marketing strategy• Tactics are small scale, short term individual

ways in which objectives might be achieved

A successful marketing strategy….

• Is part of the overall business strategy• Matches the right products to the right

market• Builds on the firms strengths• Defends against weakness• Protects against threats• Achieves the marketing objectives