Marketing Strategy

Hierarchy of goals and objectives

Porters Economic Theory of Profits

Barriers to Entry

Competition

Substitutes

Customers

Suppliers

Marketing Strategy
Generic Marketing Strategies
Cost Leadership
Lower costs of production and distribution
Differentiation
Unique product or brand
Focus
Focus on customer needs in a few segments

Marketing Strategy
What business are you in?
Statement of marketing strategy
Mission statement

Indicates product, market scope

Shows growth factor

Shows differential advantage

Shows management orientation

Marketing Strategy
Product Mix Strategies
Market penetration versus market skimming

Premium
Goods

Penetration

Medium

OverPricing

Average
Quality

Bargain

Low

Hit and
Run

Shoddy
Goods

Cheap
Goods

High

Medium

High

Super
Bargain

Quality

Price

Low

Marketing Strategy
Product Market Growth Strategies

Old

Market Penetration Product Development

(increase usage)

(new uses)

Market Development

Diversification

(new users)

(new users, new uses)

Old

New

Markets

New

Products

Marketing Strategy
Boston Consulting Group Strategy:
Relative Market Share
Market Growth Rate
Problems with BCG Approach
Difficult to estimate relative market share in rapidly growing markets

Marketing Strategy
BCG Matrix:
22%

Market Growth
Rate

Stars

Some cash use

Future cash cow

High cash use

? Is to build or not

Cash Cows

Dogs

Generate cash for

?, Stars

Low or no cash use

When to divest

10%

0%
10x

1..5x
Relative Market Share

.1x

(log scale)

Marketing Strategy
Market Leader Strategies
Increase Size of Total Market
Product-Market Growth Strategies
Protect Market Share
Fortification
Assortment of brands, sizes
Innovation
Best defense is a good offense
Counteroffensive

Marketing Strategy
Market Leader Strategies (cont.)
Increase Market Share
BCG
Antitrust constraints

100%
Market Share

Marketing Effort ($)

Marketing Strategy
Market Challenger Strategies
Frontal Attack
Out-innovate leader
Tough to do, easier to defend
Flanking/Bypass Attack
Attack where leader is not looking
Find a new market segment
Price Discount Strategy
Buyers are sensitive to price
Works if leader does not cut price

Marketing Strategy
Market Challenger Strategies (cont.)
Cheaper Goods Strategy
Lower quality but much lower price
Vulnerable to still cheaper goods
Prestige Goods Strategy
Increase both quality and price

Marketing Strategy
Market Follower Strategies
Conscious Parallelism
Similar products, prices
Avoid unprofitable segments
Market Niche
Specialize in a very small group of customers
Concentrated segmentation strategy

Marketing Strategy
Encirclement

Flanking Defense

Preemptive
Defense

Attacker

Defender

Frontal

Contraction
Defense

(bigger)

(smaller)
Attack
Counteroffensive

Position
Defense

Guerilla Attack
Mobile Defense
Flank Attack

Bypass

eMarketing
Is eMarketing anything new?
or just an adaptation of existing strategy?
Addressability ability to identify customer prior to purchase
Marketers could always do this.
So why is web different? Is it more efficient?

only if you do not delete your cookies?

or they keep extensive files on you

eMarketing
Interactivity customers can express their needs and wants
directly to the firm
Marketers could always do this too. So what is new?
another efficiency argument?

Memory ability to access individual customer profiles

and purchase histories
This is probably valid. Information existed before but
was hard to access

eMarketing
Control customers ability to control flow and sequence of information
Pull versus push mediumweb versus television.
Who controls the flow?
Definitely an eMarketing characteristic, but a two-edged sword.
Why? Customers control the flow

Accessibility ability to obtain information..

Retrieving info from the Internet is like trying to drink from a
fire hose. You could always do this, web may be easier
for some users.

eMarketing
Digitilization can the product or benefits be represented digitally?
Does the media match the products attributes?
a problem for all media?

So, does eMarketing exist? Maybe, or maybe it is just

another information flow/distribution system to
use in designing a marketing strategy to meet
customer needs(and maximize profits).

Marketing Strategy
Bear Theory
Differential versus Absolute Advantage