Download - Class 1 and 2 Slides
3/5/2014
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Marketing Strategy Marketing Strategy and Managementand Management
Asif ShahzadAsif ShahzadEmail: [email protected]
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Sessions Outline� Course Structure
� Processes in Strategic Marketing Management� Defining the Organization’s Business, Mission,
and Goals� Formulating Product-Market Strategies� Drafting a Marketing Plan� Marketing Ethics and Social Responsibility
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Teaching Philosophy
� The teaching philosophy is guided by the following quote from Benjamin Franklin;
� “Tell me and I forget. � Teach me and I remember.
�Involve me and I learn.”
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Course Focus
� Content:� Current research� Current examples� Recent cases
� Delivery:� Case analysis � Class discussion� Lectures
**Your Experiences**
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Class Preparation
� Readings� Chapters and handouts
� Case studies� Preparation questions
� Lecture notes� Slides on subject website
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Assessment� Class Prep & Participation (10%)
� Attendance� Presentation of reasoned arguments� Relevance of comments� Respect and acknowledgement of other students’
contributions� Individual Assignment (10%)
� Assignment on Analysis – 5%� Surprise Quiz – 5%
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Assessment
� Group Presentation & project (15%)� A proposal outlining a new business, brand,
product or service in Pakistan � Written report and presentation� Due in Second Last Week
� Exams (65%)� Mid term – 25% (In week 8 / 9)� Final term – 40%
Contact DetailEmail: [email protected]
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What is strategy?
• A definition of long term goals (Chandler 1962)
• A definition of competitive domain (Andrews et al 1965)
• A continuous and adaptive response to changing capabilities and environment (Mintzberg 1979)
• A search for competitive advantage (Porter 1985)
• A means of focusing the resources of the business (Andrews 1980)
• A motivating and directing force for stakeholders (Chaffee 1985)
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Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.
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Marketing Strategy Should
� Be part of the over all strategy
� Be based on the clear understanding of the market, and its analysis
� Be based on a firm's strengths
� Address a firm's weaknesses
� React to threats
� Be integrated and coherent
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Introduction to
Foundations of Marketing
Strategy and Management
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Contrasting OrientationsContrasting Orientations
Market Integratedmarketing
Profits throughcustomer
satisfactionCustomer
needs
(b) The marketing orientation
FactoryExistingproducts
Selling andpromotion
Profits throughsales volume
Startingpoint Focus Means Ends
(a) The selling orientation
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In this session, you will learn about…
1. Defining the Organization’s Business, Mission, and Goals
Business Definition
Business Mission
Business Goals
2. Identifying and Framing Organizational Growth Opportunities
Converting Environmental Opportunities into
Organizational Opportunities
SWOT Analysis
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In this session, you will learn about…
3. Formulating Product-Market Strategies
Market-Penetration Strategy
Market-Development Strategy
Product-Development Strategy
Diversification
Strategy Selection
The Marketing Mix
4. Budgeting Marketing, Financial, and Production Resources
5. Developing Reformulation and Recovery Strategies
6. Drafting a Marketing Plan
7. Marketing Ethics and Social Responsibility
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The Primary Purpose of
Marketing
To create long-term and mutually
beneficial exchange relationships between
an entity and the publics (individuals and
organizations) with which it interacts.
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Expanding Responsibilities of Marketing Managers
Expanded responsibilities include:
Charting the direction of the organization
Contributing to decisions that will create
and sustain a competitive advantage and
affect long-term organizational
performance
They no longer function solely to direct day-to-day operations. They must make strategic decisions as well.
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Evolution of the Marketing Manager
This has prompted the emergence of
marketing strategy and management marketing strategy and management
as a course of study and practice.
From being only an implementer….
to being a maker of organization
strategy.
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Processes in Strategic Marketing Management
1. Defining the organization’s business, mission, and goals
2. Identifying and framing organizational growth opportunities
3. Formulating product-market strategies
4. Budgeting marketing, financial, and production resources
5. Developing reformulation and recovery strategies
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Defining the
Organization’s Business,
Mission, and Goals
Process One
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Business Definition
By defining a business from a
customer or market perspective…
an organization is appropriately
viewed as:
a customer - satisfying endeavor
a product-producing or service delivery enterprise.
not
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An organization should define a
business by:
The type of customers it wishes to serve
The particular needs of those customer
groups it wishes to satisfy
The means or technology by which the
organization will satisfy the customer
needs
“What business are we in?”
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Most statements describe:
the organization’s purpose
customers, products/services,
markets, philosophy, and technology
Business Mission
Underscores the scope of an
organization’s operations apparent in
its business definition
Reflects management’s vision of
what the organization seeks to do
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Benefits of Mission Statements
1. Crystallizes management’s vision of the
organization’s long-term direction and
character
2. Provides guidance in identifying, pursuing,
and evaluating market and product
opportunities
3. Inspires and challenges employees to do
those things that are valued by the
organization and its customers
4. Provides direction for setting business goals
or objectives
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Business Goals
Goals or objectives convert the organization’s mission into tangible actions and results that are to be achieved, often within a specified time frame.
Three major categories of goals:
1. Production
2. Financial
3. Marketing
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Production Goals
Apply to the use of manufacturing and service capacity and to product and
service quality.
Financial Goals
Focus on return on investment, return on sales, profit, cash flow, and
shareholder wealth.
Marketing Goals
market share
marketing productivitysales volumeprofitcustomer satisfactioncustomer value creation
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Identifying and Framing
Organizational Growth
Opportunities
Process Two
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Sources of environmental opportunity:
Unmet or changing customer needs
Unsatisfied buyer groups
New means or technology for delivering
value to prospective buyers
What might we do?
Converting Environmental
Opportunities into
Organizational Opportunities
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What do we do best?
Distinctive Competency describes an
organization’s unique strengths or qualities
including:
Skills
Technologies
Resources
…that distinguish it from other organizations.
Converting Environmental
Opportunities into
Organizational Opportunities
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What must we do?
Success Requirements are basic tasks
that an organization must perform in a
market or industry to compete
successfully.
If what must be doneis inconsistent with what can be doneto capitalize on an environmental
opportunity, an organizational growth opportunity
will fail to materialize.
Converting Environmental
Opportunities into Organizational
Opportunities
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
internal
external
A formal framework for identifying and framing organizational growth opportunities
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SWOT Analysis
Framework for focusing attention on the fact that an
organizational growth opportunity results from…
a good fit between an organization’s
INTERNAL CAPABILITIES
(Strengths & Weaknesses)
and
its EXTERNAL ENVIRONMENT
(Opportunities & Threats)
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Pose dangers to the welfare of the organization
Threats
Developments or conditions in the environment that have favorable implications for the organization
Opportunities
What an organization lacks or does poorly relative to competitors
Weakness
What the organization is good at doing or a characteristic that gives it an important capability
Strength
SWOT Analysis
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Questions to be asked once
SWOT has been identified
1. Which internal strengths represent
distinctive competencies? Do these
strengths compare favorably with what are
believed to be market or industry success
requirements?
2. Which internal weaknesses disqualify the
organization from pursuing certain
opportunities?
3. Does a pattern emerge from the SWOT?
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Formulating
Product-Market Strategies
Process Three
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DiversificationMarket
Development
MarketPenetration
ProductDevelopment
Existingproducts
Newproducts
Existingmarkets
Newmarkets
Product-Market Strategies
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Seeking a larger market share in a market in
which organization already has an offering
This strategy involves:
Attempts to increase present buyer’s
usage or consumption rates of the
offering
Attracting buyers of competing offerings
Stimulating product trial among potential
consumers
Market Penetration Strategy
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Introducing its existing offerings to markets other than those that the organization is
currently serving.
Reaching new markets requires:
Carefully considering competitor strengths
and weaknesses and competitor retaliation
potential
Modification of the basic offering
Different distribution outlets
Change in sales effort and advertising
Market Development Strategy
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LicensingExporting
Joint Venture or Strategic Alliance
Direct Investment
Market Development in the International Arena
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Creating new offerings for existing markets.
This approach may be taken for:
Product Innovation – develop totally new
offerings
Product Augmentation – enhance the
value to customers of existing offerings
Product line extension – broaden the
existing line of offerings by adding different
sizes, forms, flavors, etc.
Product Development Strategy
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Development or acquisition of offerings new to the organization and introducing those offerings
to publics not previously served by the organization.
Growing trend in recent years
High-risk strategy because both the
offering and market served are new to
the organization
Diversification Strategy
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Market-penetrationstrategy
Market-developmentstrategy
Estimated profit of$1 million
Estimated profit of$4 million
Action Response Outcome
Aggressivecompetition
Passivecompetition
Aggressivecompetition
Passivecompetition
Strategy Selection – Sample Decision Tree
Estimated profit of$2 million
Estimated profit of$3 million
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The Marketing Mix
Customer
ChannelStrategy
ProductStrategy
PriceStrategy
Communications Strategy
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Budgeting Marketing,
Financial, and Production
Resources
Process Four
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A formal, quantitative expression of an organization’s planning and strategy
initiatives expressed in financial terms
A well-prepared budget meshes and
balances an organization’s
Financial,
Production, and
Marketing Resources
so that overall organizational goals or
objectives are attained.
The Budget
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1. Operating Budget
Also referred to as a pro forma
Income Statement
Focuses on an organization’s income
statement
2. Financial Budget
Focuses on the effect that the
operating budget and other initiatives
will have on the organization’s cash
position
Components of a Budget
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Developing Reformulation
and Recovery Strategies
Process Five
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Comprehensive, systematic, independent, and
periodic examination of a company’s marketing
environment, objectives, strategies, and activities to
recommend a plan of action to improve the
company’s marketing performance.
The Marketing Audit
Helps answer the questions:
Are we doing the right things?
Are we doing things right?
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Focus can be on a business, product, or brand
Time Dimension can be short-run (typically one
year) or long-run (multi-year)
A formal written document that describes the context and scope of an organization’s marketing effort to
achieve defined goals or objectives within a specified future time period.
The Marketing Plan
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Marketing Ethics and
Social Responsibility
Marketing decisions reflect an
organization’s orientation toward the
publics with which it interacts
The marketplace is populated by
individuals with diverse value systems
Their actions will be judged publicly
by others with different values
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Sessions Take Away
Marketing strategy and management is the cap-stone coursefor most marketing degrees. In this course we will furtherdevelop theory and concepts that have been covered inprevious marketing courses and apply them to a real lifebusiness situation. You will be introduced to the principlesof strategy and learn how to take advantage of marketopportunities to generate sustainable business growth.Additionally, you will be exposed to cutting-edgeknowledge that will allow you to understand how toformulate and assess strategies and business models withregards to relevant organizational contexts.
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Next Sessions…
Cases studies
Aldi in Australia
Additional readings
The seven questions of marketing strategy
Innovation from the inside out – BOP
The right game: Use game theory to shape
strategy