Download Marketing Strategies Selecting Marketing Strategies

MARKETING STRATEGIES
BUSS3.9 Selecting Marketing Strategies
SELECTING MARKETING
STRATEGIES
SELECTING MARKETING STRATEGIES
IN THIS TOPIC YOU WILL LEARN ABOUT:
Low cost versus differentiation

Market penetration

Product development and market development
strategies

Diversification

Assessing effectiveness of marketing strategies
BUSS3.9 Selecting Marketing Strategies

MARKETING STRATEGY
Corporate objectives
Market analysis
Marketing strategy
How the business will go about achieving its
marketing objectives
BUSS3.9 Selecting Marketing Strategies
Marketing objectives
USING A MATRIX TO ANALYSE MARKETING
STRATEGY

Strategies



BUSS3.9 Selecting Marketing Strategies

Low cost v. Differentiation
Market penetration
Product development and market development strategies
Diversification
MICHAEL PORTER’S STRATEGIC MATRIX
Analyses low cost v. differentiation
 Porter’s basic premise is to be one thing or the
other and not stuck in the middle.
 Marketing messages must be clear and non
contradictory


Tesco “ Good food that costs less”
M&S “ Its not just food its M&S food”
PRIMARK
BUSS3.9 Selecting Marketing Strategies

PORTER’S GENERIC STRATEGY
Lowest
Cost
Highest
Differentiation
Cost
Leadership
Differentiation
Niche
Market
Focused Cost
Leadership
Focused
Differentiation
BUSS3.9 Selecting Marketing Strategies
Mass
Market
JJB – WHY DID IT FAIL?
BUSS3.9 Selecting Marketing Strategies
• Most obvious problems included expanding too
fast, overtrading and excessive gearing.
• However JJB’s CEO described them as being
‘stuck in the middle’ – Lack of Retail Focus
• Never found a proper point of difference
• Sports Direct focused on value for money.
• JD sports is at the fashion end of the sportswear
market.
• Therefore no reason for consumers to go there.
ACTIVITY – PORTER
Select an industry in which there are several
competitors e.g. Clothing, supermarkets, cars
 List all the firms that compete in this industry
and try to place them in Porter’s matrix

Mass
Niche
Differentiated
BUSS3.9 Selecting Marketing Strategies
Low cost
IGOR ANSOFF’S MATRIX
Ansoff looked at the degree of risk and potential
for reward from different strategic options
 However trying to just sell more of an existing
product in an existing market is unlikely to bring
about substantial growth opportunities

BUSS3.9 Selecting Marketing Strategies
IGOR ANSOFF’S MATRIX
Existing
PRODUCTS
New
Existing
Market
Penetration
Product
Development
Market
Development
Diversification
MARKETS
New
ANSOFF’S MATRIX – MARKET PENETRATION
Trying to sell more of an existing product to the
existing market
 Low risk strategy but limited potential reward

Innocent
McDonalds
BUSS3.9 Selecting Marketing Strategies
Volvic
ANSOFF’S MATRIX – MARKET DEVELOPMENT
Attracting new customers to buy existing
products
 Risk associated with lack of knowledge of
customers (may be new customer type or new
location).

Wii
BUSS3.9 Selecting Marketing Strategies
Tescos
ANSOFF’S MATRIX – PRODUCT DEVELOPMENT
Selling new and better products to existing
customers
 Risk comes from not knowing the products, high
R&D costs and competitors’ reactions

BUSS3.9 Selecting Marketing Strategies
IHG
ANSOFF’S MATRIX - DIVERSIFICATION
Selling new products to new markets
 High risk strategy as 2 elements are unknown the market and the product
 High risk but also greatest potential for reward

BUSS3.9 Selecting Marketing Strategies
NATIONAL & INTERNATIONAL CONTEXTS

Market Penetration

Product Development
May tap into expertise for R&D
 Identify country leading in product development


Market Development
Identify rising star countries
 Easier if new areas have similar expectations and
cultures
Fresh ‘n’


Diversification

Easy
Continues to be highest risk strategy especially in an
international context
BUSS3.9 Selecting Marketing Strategies

A business already operating internationally has wider
potential
ENTERING INTERNATIONAL MARKETS

Methods
Export products to already established distribution
outlets
 Set up an overseas operation
 Export from UK base (easier with internet sales)

Risks
Cultural differences
 Greater use of intermediaries
 Language barriers


Benefits
Wider target market
 Expertise from around the world
 Global branding

BUSS3.9 Selecting Marketing Strategies

ASSESSING THE EFFECTIVENESS
OF
MARKETING STRATEGIES
Did it help achieve marketing objectives?

Has it contributed towards corporate objectives?


What has impact been on other functional
objectives?
How has decision impacted upon stakeholders?
BUSS3.9 Selecting Marketing Strategies
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ACTIVITY
1.
2.
Draw a blank Ansoff’s matrix on A4 paper
Place each of the following strategic decisions in
the correct quadrant
2.
3.
4.
5.
6.
7.
3.
4.
Coca Cola launch bottled milkshake
Tesco open stores in Saudi Arabia
Sainsbury take over Costcutter convenience stores
British Gas launch Goldfish credit card
Mercedes introduce the A class small car
Apple introduces the iPad mini 2
M and S introduce the ‘2 Dine for £10’ this weekend
Research the history of the “Easy” brand and
track this using Ansoff’s matrix.
Using both Porter and Ansoff assess the
effectiveness of marketing strategies adopted by
the Easy group of brands.
BUSS3.9 Selecting Marketing Strategies
1.