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7/29/2019 Strat Mktg Basic Slides Fall 2012-1
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Shift from Consumer Behaviorto Strategic Marketing
Level of analysis?
Consumer behavior: micro level
Strategic marketing: macro level
Focus?
Consumer behavior: customer Strategic marketing: competitor
Duration?
Consumer behavior: short-term
Strategic marketing: long-term
Organizational level
Consumer behavior: front-line marketers
Strategic marketing: top-level marketers
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STRATEGIC MARKETING
Basic Goal of StrategicMarketing
Environmental Analysis (SWOT)
Generic Competitive Strategies Portfolio Analysis Product/Market Expansion Grid
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BASIC GOALS OF STRATEGICMARKETING
Identifying a core competency
Developing a sustainable competitive
advantage
Focusing on a long-term strategy
Being proactive rather than reactive
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CEOs top priorities
Of these following 10 issues, which should be the toppriority for a CEO?
Talent acquisition
Innovation
Corporate brand and reputation
Sustainability
Investor relations
Business growth
Cost optimization
Government regulation Customer relationships
International expansion
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Marketers must analyze
strengths and weaknesses for
their company and their key
competitors.
Goal is to identify distinctivecompetencies that can be used
for competitive advantage.
ENVIRONMENTAL ANALYSIS(SWOT)
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Fortunes methodology
Survey of executives
Evaluate companies in their industry,but not their own company
Fortune focuses on 8 key attributes
Fortunes Annual List of Most AdmiredCompanies
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Innovation
Financial soundness
Use of corporate assets
Long-term investment
People management
Quality of management
Social responsibility
Quality of products/services
Fortunes 8 attributes
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Marketers must also analyzeenvironmental opportunities andthreats that could impact
company Political/Legal/Regulatory
Economic
Technological
Societal
Competitive
ENVIRONMENTAL ANALYSIS(SWOT)
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GENERIC COMPETITIVESTRATEGIES: Prof. Porter
Cost Leadership: lowestprice in a broad market
Differentiation: superiorfeatures in a broad market
Niche or Focus: superiorcustomer satisfaction in anarrow market
9
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Which strategy will work?
Each of these 3 genericcompetitive strategies can beeffective.
In most industries you will find all3 strategies represented byvarious competitors.
If you dont, this might signal amarket entry opportunity.
Beware! Getting caught in themiddle can be a recipe for
failure.
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THE NEED TO DIFFERENTIATE BRANDEDPRODUCTS FROM PRIVATE-LABELS OR
GENERICS
Companies that pursue adifferentiation strategy oftenhave to explain to consumers
why their products are betterthan lower priced or genericcompetitors.
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Linking Promotional Strategyand Competitive Strategy
Companies that follow adifferentiation strategy usually investheavily in promotional efforts (often
advertising) to drive home theirsuperior features and benefits.
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THE LINK BETWEEN BRANDEQUITY AND DIFFERENTIATION
MOST COMPANIES THAT PURSUEA DIFFERENTIATION STRATEGYARE ALSO ATTEMPTING TO BUILDBRAND EQUITY.
BRAND EQUITY REPRESENTS THEINTRINSIC VALUE OF A BRAND.
BRANDS WITH A HIGH DEGREE OF
BRAND EQUITY USUALLY AREWIDELY RECOGNIZED AND HAVEHIGHLY LOYAL CUSTOMERS.
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PORTFOLIO ANALYSIS
Most corporations have multipleproduct lines and strategicbusiness units (SBUs).
Challenge: How can youeffectively manage these variousunits?
Answer: You must manage these
diverse units as a portfolio. Portfolio theory was first
developed in finance.
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15
e os on onsu nge os on onsu ngGroups Growth-ShareGroups Growth-Share
MatrixMatrix
3
?
10x 4x 2x 1.5x 1x10x 4x 2x 1.5x 1x
20%-20%-
18%-18%-
16%-16%-
14%-14%-12%-12%-
10%-10%-
8%-8%-
6%-6%-4%-4%-
2%-2%-
00Marketgrowt
hrate
Relative market share
Stars
Cash cow
Question marks
Dogs? ??5
4
2
1
68
7.5x .4x .3x .2x .1x.5x .4x .3x .2x .1x
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MARKET SHARE RELATED TORETURN ON INVESTMENT
16
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FunctionFunctionof Accumulatedof Accumulated
ProductionProduction
$10
$8
$6
$4
$2
-
-
-
-
-Costperu
nit
Costperunit
- - - -100,000100,000 800,000800,000400,000400,000200,000200,000
Accumulated productionAccumulated production
T1Experience
curve
Current price
B
A
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Product /Market Expansion GridProduct /Market Expansion Grid
1. MarketPenetration
2. MarketDevelopment
3. ProductDevelopment
4. Diversification
Existing
Markets
NewMarkets
ExistingProducts
NewProducts
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STRATEGIC MARKETING
Basic Goal of StrategicMarketing
Environmental Analysis(SWOT)
Generic CompetitiveStrategies
Portfolio Analysis Product/Market Expansion
Grid