chapter one: marketing strategy - · pdf filegillette company very simple design for decades...
TRANSCRIPT
Production Orientation
• Until the early 1950’s
• Based on the belief that consumers will buy products that are inexpensive and readily available
• Mind set of the mass production, industrial age
• Simple: Make things and push them out into the market No market research or any
thought as to what the consumer actually wants
First Signs of the ‘Shift’
Alfred Sloan, CEO of General Motors in a 1933 letter to stockholders, called for:
• An ‘Operating philosophy’ that extends through all phases of the business
• Serve the customers how they want to be served!
Marketing Orientation
• A company must understand what the consumer wants, needs and values
• Company must then organize itself to produce and deliver the products and services that the customer’s truly value
Increased competition and market saturation change way of thinking.
Examples of Transitions
Gillette Company Very simple design for decades with little concern over what the consumer wanted.
Ford Motor Company Henry Ford said "They can have any color they want, as long as it's black."
What Chapter One Covers
• Basics of business strategy
• Aligning marketing strategy with business strategy
• How market strategy changes in the phases of the product or service life cycle
Business Strategy
Military-like: Strategy for controlling and utilizing resources
• Human • Physical • Financial capital
Strategy is a plan that aims to give an enterprise a competitive
advantage over rivals.
A satisfied customer is the best business strategy of all.
Synergy: Business and Marketing
• Competitive threats
• Profitable opportunities
• Areas of market growth, maturity, decline
• Latent and explicit customer needs
• Ideas for distribution and pricing
Most important question: “Why should customers buy our product or service and not those of the competitor?”
Marketing Strategy
• The target market
• How the product or service will be positioned to appeal to the market
• How the product will be branded
• The target market size
• The primary benefit as seen by the customers
• An estimate of sales, market share, and profits that the product could generate now and in the future
Product Life Cycles: Four Phases
1. Introduction Phase
2. Growth Phase
3. Maturity Phase
4. Decline Phase
What does the book mean when it says that the computer has
become a “commodity product?
Introduction Phase
• Pioneers try to draw attention to “The Next Big Thing”
• Revenues “eaten up” by development, manufacturing and marketing costs.
Growth Phase
• Net income shoots up, ending start-up losses
• Many immediately invest profits into more development. ‘Bottom line’ sees little change
Growth Phase: Key Goals
• Switch from creating product awareness to brand building
• This is because others are jumping on the bandwagon
• Therefore you need to differentiate yourself
• A good idea is to extend the product
!The marketing challenges in the
mature phase include:
• Protecting market share through intense promotion
• Reducing manufacturing cost to allay price pressure
• Eliminate weakness in the product
• Leverage success of current brands with brand extensions (features and innovations)
Maturity Phase
• Flattening of the market • Decreased profit margin • ‘Punching match’ between entrenched
competitors • Product changes become incremental,
not groundbreaking
Decline Phase
Technical obsolescence Changing buying behavior Poor marketing innovation
Solutions • Promote new uses for old
products • Find new markets • Back to the drawing board!