Components of StrategyStatement of goals & objectives
Selection of strategic alternative(s)Selection of customer targets
Choice of competitor targets
Statement of core strategyDescription of supporting marketing mix
Description of supporting functional programs
Establish generaldirection of strategy
Positioning
Implementstrategy
Marketing goals & objectives are tied to: Organizational mission
What is the organization’s reason for being?
What does the firm stand for?
What is the basic operating philosophy?
Marketing Goals Desired general accomplishments stated in vague
terms.
Indicate the direction the firm is attempting to move and the set of priorities it will use in evaluating alternatives and making decisions.
Should be attainable and realistic.
Should be internally consistent.
Should be comprehensive and help to clarify the roles of all parties in the organization.
Should involve some degree of uncertainty.
Goals vs. Tactics
To have the largest, best-trained sales force in the industry. Hiring 100 new salespeople.
Having the best recognized company in the industry. Doubling the advertising budget.
Marketing Objectives Provide specific and quantitative benchmarks that
can be used to gauge progress toward the achievement of the marketing goals for which they are developed.
Should be attainable with a reasonable degree of effort.
Should specify the time frame for their completion.
Usually related to sales revenues, market share, profitability, or cash flow
Examples of Objectives The marketing department will be responsible for
having 40% of customers listing this financial institution as their primary financial institution within one year.
The sales department will increase sales 18% during the next 2 years.
Strategic Alternatives Three basic strategic directions:
Growth (sales or market share) Profitability Cash flow
Attracting non-users Increase willingness to buy
Demonstrate benefits of product form Develop new product forms with desired benefits
Increasing ability to buy Offer lower prices or credit Provide greater availability
Enter new markets Broaden distribution
Move into new geographic markets Add channels of distribution
Product-line extension Vertical product line extension Horizontal product line extension
Expansion through acquisition or diversification
Market penetration strategies Increase purchase rate of existing customers Attract competitors’ customers
Increasing purchase rate Broaden usage
Provide examples of additional uses of product
Increase consumption levels Lower prices, special-volume packaging Improve buyers’ perceptions of product benefits
Increase rate of replacement Improve benefits, e.g., convenience, lower operating
costs, that encourage early replacement
Attracting competitors’ customers Head-to-head competition
Superior marketing effort Quality, selection, availability, brand name
recognition
Price-cost leadership Offer comparable quality at lower price
Differentiation adding a set of meaningful and valued differences
to distinguish the firm’s offering from competitors’ offerings
Criteria: important □ preemptive distinctive □ affordable superior □ profitable
Differentiation Variables
Product Services Personnel Channel Image
Form Ordering ease Competence Coverage Symbols
Features Delivery Courtesy Expertise Media
Performance Installation Credibility Performance Atmosphere
Conformance Customer training Reliability Events
Durability Customer consulting Responsiveness
Reliability Maintenance & repair
Communication
Repairability Miscellaneous
Style
Design
Package
Profitability Strategies Maintain satisfaction
Consistent, high quality Effective customer complaint system
Build strong customer relationships Encourage repeat business through formal relationships Target best customers
Develop complementary products Increase dependence on firm
Decrease costs/increase efficiencies
Increase price
Decrease product offerings/emphasize selling of most profitable products
Cash Flow Strategies Harvest market position
Systematically increase profit margin by reducing marketing expenses to capitalize on ST performance opportunities; may sometimes be able to increase price, also
Divest market position Sell firm Close down operation and sell assets
Introduction Stage Objective: Create awareness and product trial
Market development
Product—offer a basic product
Price—charge cost-plus
Distribution—selective
Communications—target advertising to early adopters and dealers to increase awareness; heavy sales promotion to stimulate trial
Growth Stage Objective: Maximize market share
Market penetration
Product—product extensions, warranties
Price—decrease prices to penetrate
Distribution—intensive
Communications—target advertising to mass market to increase awareness; reduce sales promotions
Maturity Stage Objective: Maximize profit while defending
market shareProduct—diversify products and brands
Price—match or best competitors’ prices
Distribution—more intensive
Communications—use advertising to stress brand differences and benefits; increase
sales promotions to encourage brand switching