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Strategy

I. Strategy decisions-- longer term
involves long term planning.

II. Operational planning-- looking at
current decisions. marketing mix decisions
after start up of product.

III. Tactics-- actions that are short term
decisions that take advantage of situations.
May be one time action based on a unique
opportunity. Sometimes not consistent with
established strategies

IV. Because of rapidly changing
environments, strategy is much less
important. The rapid reaction to events is
either policy or tactics. Policy if the
decision on how to react was formulated
before the change. A tactic if the change
was made after the policy was established.
I.
COMPETITIVE
ADVANTAGE
MSDP:
monopoly position

AMarketing Advantage
–
–
–

BCost Advantage
–

1. Develop products or services that out perform
competitors
2. Develop strong brand names and corporate image
3. Provide superior service
1. Economies of scale reduce the per-unit cost
CMarket Niche
–
1. A company is able to gain both marketing and cost
advantage
II. IDENTIFYING A
COMPETITIVE ADVANTAGE
Window of Competitive Opportunity
Strength of
Competition
Strong
Weak
High
Market
Attractiveness
Low
High
Low
Strength of Firm
Porter’s Five-Forces Model
New Entrants
Suppliers
Industry Competitors
Substitutes
*Intensity of Rivalry
*Threat of New Entrants
*Bargaining Power of Buyers
*Bargaining Power of Suppliers
*Threat of Substitutes
Buyers
BCG Portfolio Matrix
Marketing Strategies :

Low price

Specific segment

Type of distribution

Cost advantage

Don't compete on price

Highest service
Almost all of the great strategies of the the last 50
years have been marketing strategies except
Microsoft.
1. Wal-Mart
2. P&G
3. IBM
4. Coke
5. Toyota
6. Gillette
7. Intel
SWOT Analysis
Strategic Planning Process
Strategic Planning at BYU
Tactics:

Major managerial/consulting motivational
book gives book to participants of motivational
seminars. Obtains the books by buying them at
a retail store rather than obtaining them at a
lower price from the publisher. The retail sales
keep the book ranked higher on the best seller
lists. This gives the book publicity and which
tends to sell more books and produce more
consulting opportunities.
Tactics: (con’t)

Brinkmanship. Act in a irrational manner when
dealing with competitors to create uncertainty
in their minds. Excellent lawyer yells and
screams during pretrial procedures which
disarms opposing lawyers. Get the CEO's of
the major tobacco companies to testify that in
their opinion tobacco consumption is not
harmful to the users health.
Tactics: (con’t)

Charging a price for a new product that is so
low that competitors can not make the product
for the same price that you are selling at. Thus,
no one ever competes with you.
Tactics: (con’t)

Informal collusion with competitors
– Geographic split of markets
Divide markets by industry
– High prices [no price competition] when cost of
market entry prevents new company entry.
– Delay introduction of new products
Retailer who buys large volume of popular toy [doll]
for delivery before Thanksgiving day. Runs weekend
after Thanksgiving sale at near cost for weekend only.
Uses proceeds to finance Christmas inventory.
–

Tactics: (con’t)

Pepsi discovers in blind taste test that Pepsi is
preferred to coke my a large majority of tasters.
Runs campaign of taste challenges.

.
Tactics: (con’t)

Jazz basketball organization sponsors youth basketball
teams called Junior Jazz. Get local companies to serve
as sponsors. The Junior Jazz seasons are run by city
recreation operations. The Junior Jazz player gets a Tshirt and a bad seat at a jazz game. The price of the Tshirt and the cost of the ticket are paid by the local
sponsoring companies. The Jazz organization builds
loyalty and interest in the team at no cost and sells
lousy seats that are not usually sold. This creates many
artificial ticket sold out situations which allows for
increased demand for tickets. This allows the Jazz
organization to increase ticket prices.
Tactics: (con’t)

Sale supplies give away the product Gillette (photowars)

Make hole in tooth paste tube large.
Increase amount used each brushing.

Microsoft selling suites. WordPerfect can’t
match.

Pepsi abandoning all consumers over 15
and focus on the "Pepsi generation".
Tactics: (con’t)

{Wandermaker} [Philadelphia retailer]
trying to get Thanksgiving to occur a week
earlier.

Burger King's New French Fry flop.
Market Analysis