Download Marketing Strategy

Formulating Strategic
Marketing Programs
What are the Benefits of Strategy?
Components of Strategy
Statement of goals & objectives
Selection of strategic alternative(s)
Establish general
direction of strategy
Selection of customer targets
Choice of competitor targets
Positioning
Statement of core strategy
Description of supporting marketing mix
Description of supporting functional programs
Implement
strategy
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
Growth Strategies

Market development strategies


Attract non-users
Enter new markets
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



Product-line extension



Move into new geographic markets
Add channels of distribution
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


Increase consumption levels



Provide examples of additional uses of product
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
distinctive
superior
□ preemptive
□ affordable
□ 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
Durability
Customer
consulting
Responsiveness
Reliability
Maintenance &
repair
Communication
Repairability
Miscellaneous
Style
Design
Package
Events
Profitability Strategies

Maintain satisfaction



Build strong customer relationships



Consistent, high quality
Effective customer complaint system
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
Implications of Product Life Cycle on
Marketing Strategy
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 share
Product—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
Decline Stage

Objective: Reduce expenditure and milk the
brand; focus on cash flow
Product—phase out weak models
Price—cut price
Distribution—selective; phase out unprofitable outlets
Communications—reduce and target hard-core loyals; reduce
sales promotions to minimal levels