OHT 20.1 © Pearson Education Limited 2003 Brassington and Pettitt: Principles of Marketing, 3rd Edition Strategic marketing

OHT 20.1

© Pearson Education Limited 2003Brassington and Pettitt: Principles of Marketing, 3rd Edition

Strategic marketing

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Interaction between marketingand corporate strategy

Figure 20.1

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Corporate versus marketing strategy

Corporate strategy:

• Allocation of resources within an organisation to achieve the business direction and scope specified within corporate objectives.

• Helps to control and co-ordinate the different areas of the organisation.

Marketing strategy:

• Defines target markets, direction and requirements in order to create a defensible position compatible with the overall corporate strategy.

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Marketing plans and programmes

Marketing plan:

• Turning strategies into implementable actions.

• A detailed written statement specifying target markets, marketing programmes, responsibilities, time scales and resources to be used within the defined budgets.

Marketing programmes:

• Actions, often tactical, using marketing mix variables to gain advantage within target market.

• Means of implementing the marketing strategy.

• Normally detailed in the marketing plan.

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Influences on marketing strategy

Figure 20.2

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Strategic marketing analysis models

All of these models view products as:

• Manageable individual entities on an operational basis.

• A product portfolio (set of products each of which make a unique contribution to the corporate picture) on a strategic basis.

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Analysis models

• Boston Box.

• GE matrix.

• Shell’s directional policy matrix.

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The Boston Box

Figure 20.3

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Boston Box

• Dog - holds a weak market share in a low growth market.

• Question mark - high market growth with low share.

• Star - a market leader in a growth market.

• Cash cow - as market growth starts to trail off, stars can become cash cows.

• War horses - market leaders, whose cash generating position under threat due to negative market growth.

• Dodos - low share of a declining market means that sales are dwindling away.

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GE matrix

Figure 20.4

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Shell’s directional policy matrix

Figure 20.5

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Analytical models - the advantages

• Useful planning tools.

• Forces managers to think more strategically.

• Useful diagnostic tools giving overview of current position.

• Can stimulate debate on possible consequences of actions.

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Analytical models - the constraints

• Do not give solutions.

• Simplistic use of variables.

• Fail to consider synergies between businesses.

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Types of growth

• Market penetration.

• Market development.

• Product development.

• Diversification - concentric, conglomerate.

• Integration - backward, forward, horizontal.

• No growth - harvesting, entrenchment, withdrawal.

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Competitor analysis

A systematic attempt to identify and understand key elements of a competitor’s strategy in terms of objectives, strategies, resource allocation and implementation through the marketing mix.

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Porter’s Five Forces Model

1. Bargaining power of suppliers.

2. Bargaining power of customers.

3. Threat of new entrants.

4. Threat of substitute products or services.

5. Rivalry among current competitors.

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Strategic groupings

Figure 20.8Source: Adapted from Wilson et al. (1992).

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Examining competitive strengths and weaknesses

• Provides a valuable insight into their strategic thinking and actions.

• Requires use of various information sources.

• Consider in terms of critical success factors.

• Rate competitors according to their strong and vulnerable points.

• Information can be used to plan and launch attack.

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Useful information about competitors

Table 20.2Source: Wilson et al. (1992).

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Generic strategies

Figure 20.9

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Choice of generic strategy

• Fit between the demands of the strategy and the organisation’s capabilities and resources.

• The main competitor’s abilities on similar criteria.

• The key criteria for success in the market and their match with the organisation’s capabilities.

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Competitive positions and strategy

Figure 20.10

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Attacking and defending

• Aggressive strategies - frontal, flank, encirclement, bypass, and guerrilla attacks.

• Defence strategies - fixed position, mobile, flanking, contraction, counter offensive.

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Attack strategies

Figure 20.11Source: Kotler and Singh (1981). Reproduced with permission of Thomson Media, Eleven Penn Plaza, New York, NY 10001

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Defence strategies

Figure 20.12Source: Kotler and Singh (1981). Reproduced with permission of Thomson Media Eleven Penn Plaza, New York, NY 10001.

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Co-operative and independent strategies

Many situations can also be characterised by peaceful coexistence and co-operative alliances between competitors.

Documents

OHT 20.1 © Pearson Education Limited 2003 Brassington and Pettitt: Principles of Marketing, 3rd Edition Strategic marketing