marketing strategy2 notes

8/2/2019 Marketing Strategy2 Notes

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Marketing

Strategy

andPlanning

All Chapters

All

ChaptersHello everyone. In this guide, I included all the chapters that are

required in only 15 pages! It includes very important topics that are

discussed both in lecture and revision. I came to the doctors office

yesterday, I asked him if the contents in revision lecture were

enough, he said and I quote YEA YEA THATS EVERYTHING and hetold me that whats more important is to apply the marketing

concepts (i.e give tons of examples). And the ability to relate

chapters with each other. The exam will be 3 questions, choose only

2. And one of the 3 questions is subdivided into 2 questions. So this

means that its possible for the exam to come from topics other

than discussed in revision, because he gave you the option to

choose questions. Thats why I believe that 2 of questions are from

the revision lecture, and the third is from outside revision lecture.

Dont forget to give examples and relate to other chapters!

Good luck

Prepared by

Feras


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Ch.1

What are different definitions for marketing?According to Felton According to Kotler According to Ferrel

A corporate state of mind

that exists on the

integration and co-

ordination of all the

marketing functions which,

in turn, are melded with all

other corporate functions,

for

the basic objective of

producing long-range

profits.

The marketing concept holds

that achieving organizational

goals depends on

determining

the needs and wants of

target markets and

delivering the desired

satisfactions more

Effectively and efficiently

than competitors do.

Marketing is the

process of planning

and executing the

conception, pricing,

planning and

distribution of ideas,

goods and services to

create exchanges that

satisfy individual and

organizational

objectives

What is the new marketing concept?1 Create customer focus throughout the business.

2 Listen to the customer.

3 Define and nurture the organizations distinct competencies.

4 Define marketing as market intelligence.

5 Target customers precisely.

6 Manage for profitability, not sales volume.

7 Make customer value the guiding star.

8 Let the customer define loyalty.

9 Measure and manage customer expectations.

10 Build customer relationships and loyalty.

11 Define the business as a service business.

12 Commit to continuous improvement and innovation.


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13 Manage culture along with strategy and structure.

14 Grow with partners and alliances.

15 Destroy marketing bureaucracy.

What is resource based marketing?An approach, where firms instead of only mainly focusing on the

market needs or mainly focusing on the capability of the organization. Instead

it focuses on both equally. Resource based marketing seeks a long term fit

between the requirements of the market and the abilities of the organization.The resource profile of the company must be continually developed to enable

it to compete and take advantage of opportunities. Where resources could be

having enough money, enough man power, skilled employees and so on

What is Corporate Strategy and marketing Strategy?A corporate strategy is the overall direction of a corporation and the ways in

which various business operations work together to achieve a certain goal. whereas

marketing strategy is an operational strategy which is related to product

identification,advertising,selling etc. corporate strategy set up the objectives

for the organization within the consideration of every single department not

only marketing section such as accounting, and Finance. Conventionally

corporate strategy is supposed to be determined before marketing strategy.

The marketing strategy should not oppose the corporate strategy.


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CH.2

Marketing Strategy ProcessThere are 3 levels for developing marketing strategy; the establishment of a

core strategy, the creation of

The companys competitive positioning, and the implementation of the

strategy.The establishment of an effective marketing strategy starts with a

detailed, and Creative, assessment both of the companys capabilities its

strengths and weak-nesses relative to the competition and the opportunities

and threats posed by the

Environment. On the basis of this analysis the core strategy of the company

will be selected, identifying marketing objectives and the broad focus for

achieving them. At the next level, market targets (both customers and

competitors) are selected and/or identified. At the same time the companys

differential advantage, or com-petitive edge, in serving the customer targets

better than the competition is defined. Taken together the identification of

targets and the definition of differential advantage constitute the creation of

the competitive positioning of the organization and its offerings. At the

implementation level a marketing organization capable of putting the strategy

into practice must be created

Establishing Core StrategyTo establish the core strategy requires a detailed analysis of both the

resources available and the market in which the organization will operate, both

within the context of achieving the overall business purpose or mission.


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For analysis of markets served, it helps focus on opportunities and threats for a

company that come from both the customers and competitors (ch.4, ch.5),

market segmentation helps provide insights into customer requirements. In

computers, for example, there are several ways in which the total market couldbe segmented. A simple, product-based segmentation is between mainframe,

mini-computers and PCs. IBM has long dominated the mainframe market.

Recognizing the difficulties in tackling such a giant head-on, competitors

sensibly focused their efforts on the minicomputer market.

Competitive PositioningPositioning has come to mean the process by which marketers try to

create an image or identity in the minds of their target market for its product,

brand, or organization. Positioning is done to achieve objectives of core

strategy.

How to achieve competitive positioning?First is choosing target market. An attractive market would be a large market,

growing, its contribution margins are high. Competitive rivalry is low, there is

high entry and low exist barriers, and the market is not vulnerable to

uncontrollable events.

Second is by differential advantage, which can be created with companys

strength or distinctive competencies differential advantage could be through

cost leadership or differentiation (Ch,11 Generic Routes).

CH.3
http://en.wikipedia.org/wiki/Product_%28business%29http://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Product_%28business%29


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External AnalysisPEST analysis is a management tool used for external environment analysis. By

analyzing Political, Economic, Social, Technological factors that might affect a

company. In order to react correctly to the changes that occurs.

Political Economic Social Technological

Involves the

actions of the

government in

economy. Such as

tax policy, labor

law. Some laws

may prevent

production of

certain goods.

Includes changes

interest and

exchange rate,

inflation. Where

interest rate

affects the cost

of capital of a

company. And

exchange rates

affect the cost of

exporting and

price of

importing goods.

Includes the

changes

population

growth rate, age

distribution,

population health

or education, as

well as trends in

social factor

affect the

demand for a

product, same

way for changes

in fashion.

The rate of

technological

changes

determines the

barriers of entry,

for example its so

difficult to start a

company like

Vodafone, mobile

and etisalat.

Impact of

reduction in

communication

costs, for example

people use skype

to call people

internationally

rather than use

traditional and

expensive call

through a phone.


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Five Forces of competitionPorters five forces of competition is a strategic tool used to analyze the

attractiveness of an industry structure.Entry of

Competitors

Threat of

substitutes

Bargaining

power of

buyer

Bargaining

power of

supplier

Rivalry among

existing

players

How difficult

it is for new

entrants to

compete,

what barriersexist in the

industry? For

example

barriers for

entry of

making a

restaurant is

low. Patentsand branding

fall into this

category

The chance

that a

product can

be

substituted,especially

when

substitute is

cheaper. For

example

email had an

impact an

postal service,

Buyers are

people who

create

demand in an

industry. Howstrong is the

position of

buyers? The

bargaining

power is

higher when

there are

standardizedproducts and

many sellers.

Buyers can

work together

to order large

Suppliers

supply raw

materials for

the industry.

If there arefew suppliers

then their

bargaining

power is

high.

Sometimes

conflicts

occurbetween

suppliers and

a company,

thats why for

example KFC

Is there

strong

competition

among

existingplayers, is

there a

certain player

who is

dominant? Or

all players are

equal in size

and strength?If cost of exist

is high , this

would result

more rivalry


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volumes to

squeeze a

companys

profit margin

has its own

farms. To

avoid issues

for supplying.

Space Matrix (Strategic Position and action evaluation matrix)A management tool that focuses of strategy formulation especially as

related to competitive advantage. The outcome of this matrix is 1 out of 4

quadrants, each suggests a different strategy.

1- Aggressive(if space matrix for a company advices it should followaggressive tactics, this means that company has a strong competitive

position in market, and it should develop market penetration,

product development, acquisitions, and so on.)

2- Conservative( are Companies in mature market, they should seek todefend their existing product to ensure a continued ash flow and in

the mean time they should seek new market opportunities)

3- Defensive(are vulnerable companies, they need to foster resourcesby operating efficiently and be prepared to retreat from competitive

markets)

4- Competitive(are companies in an attractive industry but they needmore financial resources to maintain their competitive position)

To determine the outcome shown in space matrix for a firm, an analysis is done for 2

external (environmental stability, industry strength) and 2 internal (financial strength,

competitive advantage) strategic dimensions

1- Financial strength analysis includes the return on investment,liquidity of a company, cash flow, working capital


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2- Competitive advantage includes the speed of innovation, productquality, and customer loyalty.

3- Environmental Stability involves inflation rate, Technologicaladvancements, demand and elasticity, Taxation condition (VerySimilar to PEST)

4- Industry analysis involves barriers to entry, growth potential ofindustry.

Advantage MatrixIs a strategy model created by a famous consulting firm known as BCG. Thismodel looks at 2 factors, the number of different approaches to competitive

advantage available, and the potential size of competitive advantage. This

model gives a good feeling about best strategy and the likely profits, but it

doesnt show any feel for the cash flow.

The results of this model are one of four categories:

1- Stalemate(few advantages available, and they are small) (example : textilebusiness, shipbuilding)(strategies involved is reducing factor costs, bymoving to areas/countries where costs are low)

2- Volume(few advantages but they are large) (there are high economies ofscale, which allows organizations to become the volume and cost

leader.)(Examples: Volume cars, software, electronics)

3- Fragmented(many advantages but are small)(organizations gain benefitfrom differentiation)(example: restaurants)(therefore innovation strategies

work well in this category)4- Specialized(many advantages that can be large)(business gain benefits

from economies of scale and differentiation, its main strategies are focus,

and segment leadership.(examples: branded food)


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Ch.4

The more information a company has about customers, the better they canserve them, there are key questions for understanding customers; what are

their choice criteria? Why do they buy a certain product? Where do they buy

it? And son on

Marketing researchCommercial research organizations will conduct studies for clients that cost at

least 2000 sterling pounds, depending on the research,

o The starting point for gathering marketing data is through the effectiveuse ofcompanys records. The data obtained can be used for

marketing decisions. The value of data relies on how well it was

collected in the first place; therefore its best to collect data on a routine

and detailed basis .company records includes sales records and

accounts records. Where sales records could be used to determine or

identify the product life cycle. Sales records should be kept by customer

customer type, product, product line, sales territory, detailed time of

purchase. Therefore aqueduct sales records should reveal frequencies of

purchase. TESO, a British super market (something like awlad ragab, but

100x better XD) uses its loyalty card (club card) in order to build profile

of its customers, and know how they think.

o Second step is to design a tailor made research, which could bequantitative research or qualitative research.

1- Qualitative is researchbased on opinion and judgment, such asunstructured, semi structured in depth interviewing , group

discussions among 7-9 respondents along with a group leader to

ensure that discussion does not deviate from its purpose.

Qualitative research helps provide insights to the problem,

generate more ideas, hear customer description of things, getting

reactions to new ideas.


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2- Quantitative researchincludes surveys, observation, andExperiments. Surveys could be 3 types: personal interview (face to

face), Telephone Interview, and postal surveys by sending self-

completion questionnaire to respondents. (we took it indissertation , so relate to it). Survey helps determine customer

behavior, determine requirements and expectations, determine

customers opinions, provide data for segmentation of markets.

Observation would be useful when respondents seem unwilling to

give answers (observation example: observing shopper behavior

in malls). Experimentation can be carried on field on in labs. for

example test market(field) for a new product in a limitedgeographic area and test their reactions before officially

launching it.for example Cadbury flake made a marketing test,

results were good at first until suddenly sales dropped because

customers found that the product is too messy. Overall

experimentation helps estimating market potential, establish

causation, test elements of strategy, test customer reactions to

alternative strategies.

o Off the Peg:research involves tapping into existing researchservices, and using existing data. There are 3 types of off peg

research according to crouch, first is research of very large body of

already published data (aka desk/secondary research), second is

research using available data from regular market surveys from

syndicated research, third is use of research instruments such asomnibus surveys.

CH 5


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Competitor analysis is an assessment of the strength and weakness of currentand potential competitors. It provides offensive and defensive strategic

context. (Ch.11). basically companies should know what customers want or

care about or whats important to them, such as price, quality, and safety. Andbased on these information we compare against competitors who best deliver

these criteria.

Competitive benchmarkingis a process of measuring your companysstrategies and operations against best in class companies both inside and

outside your own industry in order to identify the best practices that can be

adopted to improve the performance. There are 4 steps for benchmarking

1-Identify who to benchmark against(industry leaders are obvious firms tocompare with) (Xenon wanted to improve its order processing so it

benchmarked against LL beans)

2- Identify aspects of business to bench mark(all aspects of business acrossthe complete value chain are candidates, the initial focus would be on the

processes that account for cost, customer satisfaction)

3- Collect data relevant to enable processes(from public sources likecompany reports. And data sharing which takes place in conferences. anddata interview from customers, industry experts)

4- Comparison with own process(final stage, where a comparison is madebetween a firms own process against the identified best in class to identify

the actions needed to take place)

Components of Competitor analysis


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1- Asses competitors current & future objectives(understanding what thecompetitor is setting out to achieve, can give a clue on the direction to be

taken and aggressiveness with which it will pursue that direction)

a-

What are they trying to achieve?b- Why are they trying to achieve it?c- Are they satisfied with their achievements?

2- Asses competitors current strategy(this can identify opportunities andthreats rising from competitors)

a- What target market are they pursuing?b- What is their strategic focus? (their competitive advantage) (Ch.2)c-

What marketing mix do they use? (4Ps)

d- How do they organize their marketing?3- Asses competitors resource profile(the assets and capabilities of

competitors , gives us an idea of what they are currently able to do)

a- How is their financial resource?b- How is their production and operation capability?c- How is their marketing assets? (Ch.6)

4-Predict competitors future strategy(by combining the above analysis, wecould predict the firms actions in the future)

a- How will competitors react to our actions?b- What underutilized resources do they have?

CH 6

Companys resources and capabilities must change regularly to fit with marketneeds.

Companys should create value to customers by either having a productleadership, developing customer intimacy, or having operational excellence

(trying to be better in what they do)


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Resources could be tangible such as: money, vehicles, shops, equipment They could be intangible like: brand, skills, experience. Companies must make use the best of their resources to create a competitive

advantage, RBV (Resource Based View) is a management tool used to determine the

strategic resources available to the company. It explains its ability to deliver

competitive advantage; basically it is a reality check is it possible to create

things with current resources?

Dynamic Capabilities: the capacity for an organization to create, extend ormodify its resource base. This view recognizes that as markets change, and

become more globally integrated, more forms of competition emerge, newtechnologies are employed, and thus firms cannot rest on their existing

capabilities alone. Some researchers suggested that dynamic capabilities are

idiosyncratic and highly dependable on the specific firm market context.

Creating Marketing assets: are resources, normally intangible, that can beused to take advantage. A variety of company properties can be converted

into marketing assets.

1-Customer based assets:are assets valued by current or potentialcustomers, such as the reputation of the company, like SONY, they have

high reputation for quality. Another thing is country of origin like the

Coffee where Colombia is the best country that has premium coffee

beans.

2- Supply Chain Assets. Involves the manner in which a product/service isconveyed to the customer. It includes distribution network for example

Vodafone where you can pay bills for several places in Cairo. Thedelivery leads time such as McDonalds as they claim to have fastest

delivery in Egypt.

3- Internal marketingsupport assets, such as cost advantages where usingup to date technology and achieving better capacity utilization can be


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translated into lower prices for products. Information system is another

asset that keep the company informed about its customers and

competitors

4-Alliance based marketing assets: where assets could be held by a firmor through an alliance or partnership. Such as exclusivity where

partnerships create monopolistic conditions just like the relationship

between McDonalds and coca cola as it denies access to outlets for

other cola producers.

Developing marketing capabilities are the processes that deploy marketingassets. They are the ability to implement marketing mix activities such as

promotions, price deals. One of main operational marketing capabilities are:1- Product and service managements: marshaling all resources to deliver

customer value. For example Mercedes cars are positioned as luxury

vehicle.

2- Advertising and promotion:it includes sponsorship, the same waylarge companies sponsor football team. Managing communication

process and campaigns are important marketing capabilities.

3-Distribution:the ability to employ existing channels or develop newmethods. The logistics can be critical issue. For example amazon has

the ability to accurately and consistently deliver goods bought online

to customers though agents like FedEx

4- Pricing:it is a difficult decision, because if prices are high the salescan be low and firm may not be able to survive. (Ch.12 Price

Consideration)

Dynamic Marketing Capabilities the ability to create new resources inchanging markets, to respond to change. there are 3 types:


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1- Absorptive capabilities:are processes that enable firms to recognize thevalue of new information from the market. The capacity for understanding

whats happening in external environment with respect to demand,

customers, and competitors are essential to design a strategy in changingmarket. In addition to that, learning process enable firms to have long

term competitive advantage and essential for surviving in dynamic

environment.

2- Adaptive Capabilities:centre on the firms ability to identify and capitalizeon emergence marketing opportunities. Alternative opportunities could be

identified could be done if company has market target and market

positioning capabilities,3- Innovative marketing capabilities:the ability to innovate and develop the

next generation of goods. It requires a good R&D department.

CH 8

Market Segmentation: how marketers divide the market into groups of similarcustomers, where there are important differences between those groups.

Segmentation is important because the resources rely on it, if a company

does not have enough resources (money, capital), the it should not serve a

large segment.

After segmentation comes choice of target markets (evaluating theattractiveness of different market segments, parts of segments, and choosing

which should be targets for our marketing.

After Choice of Target Market Comes Positioning the essential principle ofcompetitive positioning is that it is concerned with how customers in different


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parts of the market perceive the competing companies (in UK the major

grocery retailing include Tesco, and Asda. Positioning is based on those

identities) or products/services (positioning applies to the level of product) or

brands (positioning is most frequently discussed in terms of brand identitiessuch as coca cola vs. Pepsi)

Segmenting in consumer markets vs. Segmenting in Business marketsSegmenting in consumer market Segmenting in business market

Three variables are used in segmenting:

1- Customer backgroundwhichincludes the Gender (m/f), Age,

geographic location (some

companies want to market only

locally), subculture (based on racial,

ethnic religious similarity), the

income levels of people, peoples

occupations (manager? Skilled

worker? Unemployed?), their social

class(upper, middle lower class),

lifestyle of people (involves 3

elements, 1- activity like sports,

hobbies, 2- interaction with other

like self-perception, 3- opinions

about political, technological,

environmental issues. ), family life

cycle (single? Couple with no

children? Old married couple? )

2- Customer attitudeby studyingperception and preferences

(focusing on identifying segments of

respondents who view products in a

similar way) and examining the

benefits sought by customers (it

could be applied in banking, where

Three variables are used in

segmenting:

1- Company Backgroundincludes industry type,

company size (small

companies have different

needs than larger ones,

size has a significant

impact (thats what she said: D sorry I

had to say it xD), on issues like

average order size.),

customer location (has

an impact on sales,

distribution costs. Product

preferences may differ by

location internationally).

2- Attitudesegmentingbusiness on the basis of

benefits being sought by

the purchasers, for

example the urgency for

of a customers need to

keep a plant in operation

may change both

purchase process and

criteria used.


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people seek higher interest rates).

The drawbacks of this technique it

that it requires costly primary

research and complicated data

analysis techniques.

3- Customer Behavior by studyingpurchase behavior (Volkswagen

used loyalty to segment customers

into: first time buyers and

replacement buyers), study the use

of elasticity (of response change in

marketing mix variables is a basis for

segmentations however there could

be methodological problems when

identifying responsiveness to

change) , Communication Behavior

(markets could be segments based

on information seeking behavior,

where information seekers is an

attractive segment for companies

who base their strategies on

promotional material with heavy

information content)

3- Behavioral businessgoods market can be

segmented by buyer-

seller similarity

(comparability in

technology and size are

good ways to distinguish

between customers),

buyer risk perception

(the personal style of the

individual, self-confidence

may provide leverage),

the product volume

(identifying the major

purchasers for products

through volume

purchased can be useful,

in paint market for

example the ultimate

product use dictates the

type of paint and its

properties and is a basic

method for segmentation)

Benefits of Segmenting market1- A useful approach for smaller companies. It allows target market to be

matched with competencies (ch.6 RBV)

2- Identifies gaps in the market (unserved segments) which can serve astarget for new product development

3- In declining market, it is possible to identify certain segments that aregrowing


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4- Allows marketer to match product/service closer to needs of targetmarket, thus improving the competitive position.

CH 10

Factors to determine market segment attractiveness1- Market Factors :includes the size of the segment (high volume markets

offer greater potential for sales expansion), Segment growth rate (cola

market has declined in some western areas, so its less attractive),

predictability( the more predictable the market, the less prone it is to

turbulence) , bargaining power of supplier (when buyers have the higher

power, the segment is less attractive)

2- Economic and Technical Factors:includes barriers to entry(markets thathave substantial barriers to entry like technology and high switching costs

is attractive for incumbents, & unattractive for aspirants),barriers to exist

(if it is high, it will be less attractive because companies can be locked into

uneconomic positions) bargaining power of supplier (if there is

monopoly in supply, market is less attractive)

3- Competitive factors: includes competitive intensity (is market dominatedby one monopoly? or few oligopoly like mobinil, Vodafone or

none?aka perfect competition, which requires many small players, with

standardized products) , threat of substitution (the increasing rate of

technology will make it more probable that the products will be become

substituted)

4- General Business Environmentincludes exposure to economicfluctuations (some markets are more vulnerable than other, in new

Zealand, the wool export industry was badly affected in 1990s), exposure

to political and legal factors ( the more prone to political, legal factors,

the less attractive, unless those factors affect companies positively),


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Degree of regulation (less regulated market, results more freedom in its

actions, however the more regulation can be beneficial for some , for

example, the protection of European car manufactures from Japanese car

imports by quota)

Determining Current and Potential Strength now we reached to a point wherewe want to know how can the resources, capabilities, competencies can be

deployed in a certain market/segment. We should divide the this evaluation

into 3 issues

1- Current Market Positionincludes the relative market share (higher share= better performance in serving customer needs, the market share alsocan confer an advantage in further penetrating the marking such as high

share brands), Exploitable marketing resources (in target markets,

where marketing assets have potential for further exploitation, the

company has potential strength from which to build), Unique

products/services ( superior products has a potential for stronger

competitive position)

2-Economic and Technological Positionincludes relative cost decision(low relative production costs, trough technological leadership, gives the

financial edge to a company in a certain market), Technological

position(matching technology to customers requirements is important)

3- Capacity profileincludes management strength (the more skilled theworking staff are, the more opportunities can be exploited, the skills of

managers is important for service organizations like consultancy

companies), Forward and backwards integration (the level of control ofsupply of raw materials backward integration and the level of control

in distribution channels forward can affect the strength of a company

in serving a target)


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Ch. 11

Using organizational resources to create a sustainable competitive advantagethe characteristics of resources should be

1- Contribution to creating customer value (value creation maybe directthrough better service, brand reputation, and could be done indirectly like

effective cost controlling systems.)The value of resource in creating

customer value should be assessed relative to the resources of

competitors, for example a strong brand name like Nike may convey more

value to customers than a less known sporting brand.2- Uniqueness (for an advantage to be sustainable, the rarity of resources

used must be sustained over time)

3- Inimitability (even if resource are unique, there is chance that they can beimitated or substituted) there are some resources that cant be imitated

like unique location , some resources are hard to imitate like customer

loyalty , other resources are easy to imitate like unskilled workforce,

machinery)

Generic Routes to competitive advantage Porter has identified 2 main routesin creating a competitive advantage

Cost leadership Differentiation

There are several factors that affect

organizational costs, the factors are

known as costs drivers

1- Economies of Scale (singlemost effective cost driver, it

refers to the cost advantages

that an enterprise obtains due

Several factors affect differentiation

are known as uniqueness drivers,

they are:

1- Product Differentiation productscan be seen at 4 levels; 1- core

offer (the differentiation here

can be by developing new ways


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to expansion. It makes the

average cost per unit decrease

as output increase. It affects

the manufacturing sector more

than the service sector.

Sources f it can be from bulk

buying of materials through

long term contract or

spreading the cost of

advertising over greater range

of output in media markets)

2- Experience further costreductions could be done by

hiring experienced staff and be

enhanced with training.

3- Location (geographic locationsto take advantage of lower

distribution, assembly, raw

materials cost

4- Policy Choices Decisionsregarding product or product

line affect the cost. However

the general rule is to reduce

cost but not to significantly

affect valued uniqueness and

invest in technology to achieve

low cost process automation

of delivering the basic benefits)

2- the expected offer (

differentiation here can be done

by improvements in features like

warranties, packaging) 3-

augmented offer (differentiation

here could be new benefits not

normally offered like credit

facilities) 4- potential offer (

anything else used to

differentiate from competitors)

2- Distribution (by having differentnetworks or coverage of a

market , like shopping by phone

through TV based catalogues)

3- Price differentiation (lower pricesis a differentiation that is

appropriate for companies who

have cost advantage)

4- Promotional (using differentmessage with normal media

advertising. For example most

beer ads are promoted by

showing a group of people

having fun. However Heineken

ads added humor to the ads

and a caption in its ad.

Sustaining a Competitive Advantage The most important way in creatingdefensible positions are:


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1- Unique and valued Products (which stems from employing superiortechnology, utilizing superior raw materials . however unique products

do not stay forever, therefore companies should innovate continually)

2-

Clear definition of target markets to keep the products valued,monitoring of customers, understanding who they are, and how to

access them are required.

3- Enhanced customer Linkages (by creating closer bonds with customersthrough enhanced service , creating switching costs makes it less likely

to shop around for other sources of supply)

4- Established Brand Credibility (Brand reputation are among the mostdefensible assets a company assets, thats why customers all over theworld prefer Nike, Mercedes, SONY, Rolex. As they want to buy the

maker not the product.

Offensive and Defensive strategiesOffensive Defensive

Includes but not limited to:

1- Frontal Attacka direct attack,meeting competitors with the

same product line, price,

promotion. It focuses on

attacking the competitors

strength, therefore this is very

risky.

2- Flanking Attackattacking theweak points in the

competitors defense. It is

achieved by attacking

geographic areas where the

competitor is under

Includes but not limited to:

1- Position Defensestatic defenseof current position, retaining

current product markets by

increasing barriers to copy and

entry. This can be achieved

using differentiation.

2- MobileDefence it is achievedby continually updating

companys offering to the

market place, same way Persil

in UK was successful by

constant attempts to keep the

product line with changing


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presented. customer requirements

CH 12

Product choice Criteria to understand why people choose certain productsover other, 2 main sets should be distinguished the rational & overt and

Emotional & Covert

o Emotional reasonscould be purchasing goods based on thereassurance that a well-known brand can bring. Or choosing a

product because it fits the life style of a customer, or it expresses

his/her identity, that why some people spend thousands of dollars

on a Rolex. Some people only fly by planes even if the trip is very

short because they feel that its not in their nature to travel by car

like normal people. More in depth quantitiave and projective

research is used to uncover the emotional & covert motivations

o Rationalis when customers makes comparison of perceivedbenefits, for example people might consider traveling by car rather

than a plane, due to comparison of costs involved). Quantitate

market research is used to uncover the rational decisions.

o However most purchases are combination of rational andemotional , the balance between the 2 will vary among brands,


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thats why marketers need to understand that balance for their

market,

Diffusion of Innovation the rate of diffusion in any innovation depend on anumber of factors:

1- Relative advantage of innovation over previous solutions2- The comparability of innovation with existing values3- A lack of complexity in innovation4- Divisibility to facilitate trial5-

The communicability of advantages of innovation.

According to roger there are 5 adopter groups:

1- Innovatorsthe first to adopt a new technology or product, theyare technology enthusiasts, they wish to be up to date, however

some innovations fail because they are technology driven and not

meeting the real needs of a customer. (relate to CH 1 marketing

Concepts)

2- Early Adoptersare similar to innovators, but often demonstrate amore visionary reason for adopting new technology. For example

Jeff Bezos at Amazon.com saw the use of internet as a new way

for retailing books and other products.

3- Early Majorityare more pragmatic than early adopters, they aremore likely to see the incremental possibilities for improvement.

They are efficiency driven for example, using internet technology

to improve an aspect of supply chain efficiency.


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4- Late majorityare conservatives who often adopt technology,because others in market have done so, and fear being left

behind.

5-Laggardsare scepticswho dont really see the potential for newtechnology, and will attempt to resist adoption.

Pricing Consideration: the factors that need to be taken into account forsetting price levels are:

1- Production costs(simplest pricing method used, the less theproduction costs, the less the prices, thus sufficient quantities are sold,

and a given level of profitability is ensured.)

2- Competitor price level(if 2 product having similar characteristics, thechoice determinant for customers would be price, thus firms may

either set price higher than competitor (signal for superior quality) or

setting price the same as competitor or lower to attract customers)

3- Price Elasticitywhich is the responsiveness in demand when priceschange. It is calculated by the percentage of change in demand

divided by percentage of change in price. If demand is elastic (percent

change in demand is higher than percent change in price) and the

company increases the price, the quantity will fall significantly thus the

total revenue would fall even though the price was higher. Inelastic

demand means that the percentage of change In price is lower, thus if

companies increase the price, the quantity of purchased products will

decrease a little but overall the revenue will go higher.


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4- Corporate objectives(does the company want to harvest? Or maximizeprofit? Which would indicate marginal cost pricing. Relate this to CH.1

in corporate strategy.

The Use of extended marketing Mix (additional 3ps)People Processes Physical Evidence

Refer to the employees of

a company. There are

certain strategies in for

staffing.

1- Job design anddescription:by

having a clear idea

of job role and

tasks needed to be

done

2- Selection:selectingthe best candidate

for a job. In

nightclubs, if a

bouncer needed to

be hired then the

job description will

be the ability to

defend himself and

others and keep

trouble outside the

night club

3- Training:even ifemployee is very

skilled, additional

training is

Refers to the systems

involved in delivering the

product/service

CRM (customer

relationship management)

cover all methods used by

companies to manage

their relationships with

customers. An effective

CRM system should help

organizations to acquire

customers, build closer

relationships with them,

provide better customer

service

Refers to elements within

store.

For example when you go

to Pull and Bear, the

Clothing store that has a

branch in City Stars. Unlike

traditional clothing stores,

Pull and Bear deliberately

plays music inside the

store that is of interest for

customers of their target

segment, also the effect of

lighting on the mood.


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important as well

to ensure skills are

maintained and

enhanced.

4- Appraisal:monitoring and

giving feedback to

staff on their

performance. In

order to avoid

certain mistakes.

CH 13

What are the Pressures and Spurs (Stimuli) for Innovation Basically what arethe reasons to innovate?

o They include the Internal Pressures to exploit existing and newtechnologies, with the desire to use organizational resources, assets and

capabilities as effectively as possible.

o External Pressures include the push from intense competition,increasingly demanding customers, and the technological drive of

shortening product life Cycle

The new product development process1- Idea Generation(finding novel ideas that come out of inspiration . a

company may facilitate the generation of new ideas by creating an

environment that will induce and facilitate creativity)

2- Screening(selecting the best idea) screening could be based on initialscreen where new idea may hit a legal, technical, marketing barrier.

Another way of screening is formalized screening, where new ideas are


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evaluated logically and within a systematic structure, and it is less

impressionistic than initial screening.

3- Business analysis(considers the attractiveness of the market for theproposed idea)(evaluating if sales, cost, and profit projections satisfy thecompanys objectives)

4- Product development(at this stage R&D convert the idea into a physicalproduct)(developing a product prototype is in this stage)

5- Market testingTechniques used are simulated sale using carefully selectedcustomers and a full test market in one or more regions of a country. It is

useful for forecasting new product sales, and tests effectiveness of

marketing plan6- Commercialization(most new products fail because marketing launch

strategy was poorly executed)

Want more things to study? You are too smart? Dont think the content is not

enough?

Difference between radical, rational, robust strategies Components of market orientation Strategic fit Strategic focus Industry evolution Environmental turbulence Choosing good competitors Resource portfolio Alternative marketing strategy Product life cycle and how to integrate the 4ps in it Causes of new product failure

marketing strategy2 notes

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