• MARKETING MIX:In order to achieve your marketing objectives you need to have a strategy that

includes different elements - the various parts of the marketing mix. Calling it a mix reminds you to
try and get the balance right between the different elements. It is easy to assume that one part of the
mix is wrong, when in fact it is another. For example, if take-up of a newly-priced service is poor, it
could be that the answer is to change the service, or to deliver it in a way that is more convenient to
the user, or to improve the quality of the promotion (rather than to cut the price). McCarthy
identified the four P's of the marketing mix: Product Defining the characteristics of your product or
service to meet the customers' needs. Price: Deciding on a pricing strategy. Even if you decide not to
charge for a service, it is useful to realise that this is still a pricing strategy. Identifying the total cost
to the user (which is likely to be higher than the charge you make) is a part of the price
element.Promotion This includes advertising, personal selling (eg attending exhibitions), sales
promotions (eg special offers), and atmospherics (creating the right impression through the working
environment). Public Relations is included within Promotion by many marketing people (though PR
people tend to see it as a separate discipline). Place or distribution. Looking at location (eg of a
library) and where a service is delivered (eg are search results delivered to the user's desktop, office,
pigeonhole - or do they have to collect them). There are two ways to impress bluffers.
You can extend the number of P's - the two which are usually seen as useful additions for services
(including information services) are:People Good information services are not likely to be delivered
by people who are unskilled or demotivated; Process The way in which the user gets hold of the
service (eg the way in which a document or a search can be ordered). The second way to show your
marketing knowledge is to dismiss the P's as being as old fashioned as the 1980s For example, there
are the C's developed by Robert Lauterborn (1) and put forward by Philip Kotler:

• Place becomes Convenience

• Price becomes Cost to the user
• Promotion becomes Communication
• Product becomes Customer needs and wants

MARKETING STRATEGY: Marketing strategy is a process that can allow an organization to

concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable
competitive advantage. Marketing strategies serve as the fundamental underpinning of marketing plans
designed to fill market needs and reach marketing objectives.[2] Plans and objectives are generally tested for
measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan
detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing
plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed
of change in the environment increases.[3] Marketing strategies are dynamic and interactive. They are
partially planned and partially unplanned. See strategy dynamics.

Marketing strategy involves careful scanning of the internal and external environments which are
summarized in a SWOT analysis.[4] Internal environmental factors include the marketing mix, plus
performance analysis and strategic constraints.[5] External environmental factors include customer analysis,
competitor analysis, target market analysis, as well as evaluation of any elements of the technological,
economic, cultural or political/legal environment likely to impact success.[3][6] A key component of
marketing strategy is often to keep marketing in line with a company's overarching mission statement.[7]

Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business
alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and
detail implementation.[3] A final step in developing a marketing strategy is to create a plan to monitor
progress and a set of contingencies if problems arise in the implementation of the plan.

Marketing strategies may differ depending on the unique situation of the individual business. However there
are a number of ways of categorizing some generic strategies. A brief description of the most common
categorizing schemes is presented below:
 • Strategies based on market dominance - In this scheme, firms are classified based on their market
share or dominance of an industry. Typically there are four types of market dominance strategies:
o Leader
o Challenger
o Follower
o Nicher
• Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength.
Strategic scope refers to the market penetration while strategic strength refers to the firm’s
sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two
alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each
with a dimension of Focus-broad or narrow.
o Product differentiation (broad)
o Cost leadership (broad)
o Market segmentation (narrow)
• Innovation strategies - This deals with the firm's rate of the new product development and business
model innovation. It asks whether the company is on the cutting edge of technology and business
innovation. There are three types:
o Pioneers
o Close followers
o Late followers
• Growth strategies - In this scheme we ask the question, “How should the firm grow?”. There are a
number of different ways of answering that question, but the most common gives four answers:
o Horizontal integration
o Vertical integration
o Diversification
o Intensification

A more detailed scheme uses the categories[8]:

• Prospector
• Analyzer
• Defender
• Reactor
• Marketing warfare strategies - This scheme draws parallels between marketing strategies and
military strategies

Swot analysis: SWOT analysis is a tool for auditing an organization and its environment. It is the first stage
of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses,
opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are
external factors
:

Example SWOT Analysis

A start-up small consultancy business might draw up the following SWOT Analysis:

Strengths:
• We are able to respond very quickly as we have no red tape, and no need for higher management
approval.
• We are able to give really good customer care, as the current small amount of work means we
have plenty of time to devote to customers.
• Our lead consultant has strong reputation in the market.
• We can change direction quickly if we find that our marketing is not working.
• We have low overheads, so we can offer good value to customers.
Weaknesses:
• Our company has little market presence or reputation.
• We have a small staff, with a shallow skills base in many areas.
• We are vulnerable to vital staff being sick, and leaving.
• Our cash flow will be unreliable in the early stages.
Opportunities:
• Our business sector is expanding, with many future opportunities for success.
• Local government wants to encourage local businesses.
• Our competitors may be slow to adopt new technologies.

Threats:
• Developments in technology may change this market beyond our ability to adapt.
• A small change in the focus of a large competitor might wipe out any market position we achieve.

As a result of their SWOT Analysis, the consultancy may decide to specialize in rapid response, good value
services to local businesses and local government.

Marketing would be in selected local publications to get the greatest possible market presence for a set
advertising budget, and the consultancy should keep up-to-date with changes in technology where possible.
PORTERS 5 FORCES: There is continuing interest in the study of the forces that impact on an organisation, particularly
those that can be harnessed to provide competitive advantage. The ideas and models which emerged during the period from

1979 to the mid-1980s (Porter, 1998) were based on the idea that competitive advantage came from the ability to earn a return

on investment that was better than the average for the industry sector (Thurlby, 1998).

As Porter's 5 Forces analysis deals with factors outside an industry that influence the nature of competition within it, the forces

inside the industry (microenvironment) that influence the way in which firms compete, and so the industry’s likely profitability is

conducted in Porter’s five forces model. A business has to understand the dynamics of its industries and markets in order to

compete effectively in the marketplace. Porter (1980a) defined the forces which drive competition, contending that the

competitive environment is created by the interaction of five different forces acting on a business. In addition to rivalry among

existing firms and the threat of new entrants into the market, there are also the forces of supplier power, the power of the buyers,

and the threat of substitute products or services. Porter suggested that the intensity of competition is determined by the relative

strengths of these forces.

Main Aspects of Porter’s Five Forces Analysis

The original competitive forces model, as proposed by Porter, identified five forces which would impact on an organization’s

behaviour in a competitive market. These include the following:

• The rivalry between existing sellers in the market.

• The power exerted by the customers in the market.

• The impact of the suppliers on the sellers.

• The potential threat of new sellers entering the market.

• The threat of substitute products becoming available in the market.

Understanding the nature of each of these forces gives organizations the necessary insights to enable them to formulate the

appropriate strategies to be successful in their market (Thurlby, 1998).

Force 1: The Degree of Rivalry

The intensity of rivalry, which is the most obvious of the five forces in an industry, helps determine the extent to which the value

created by an industry will be dissipated through head-to-head competition. The most valuable contribution of Porter's “five

forces” framework in this issue may be its suggestion that rivalry, while important, is only one of several forces that determine

industry attractiveness.

• This force is located at the centre of the diagram;

• Is most likely to be high in those industries where there is a threat of substitute products; and existing power of

suppliers and buyers in the market.

Force 2: The Threat of Entry

Both potential and existing competitors influence average industry profitability. The threat of new entrants is usually based on the

market entry barriers. They can take diverse forms and are used to prevent an influx of firms into an industry whenever profits,

adjusted for the cost of capital, rise above zero. In contrast, entry barriers exist whenever it is difficult or not economically feasible
for an outsider to replicate the incumbents’ position (Porter, 1980b; Sanderson, 1998) The most common forms of entry barriers,

except intrinsic physical or legal obstacles, are as follows:

• Economies of scale: for example, benefits associated with bulk purchasing;

• Cost of entry: for example, investment into technology;

• Distribution channels: for example, ease of access for competitors;

• Cost advantages not related to the size of the company: for example, contacts and expertise;

• Government legislations: for example, introduction of new laws might weaken company’s competitive position;

• Differentiation: for example, a certain brand that cannot be copied (The Champagne)

Force 3: The Threat of Substitutes

The threat that substitute products pose to an industry's profitability depends on the relative price-to-performance ratios of the

different types of products or services to which customers can turn to satisfy the same basic need. The threat of substitution is

also affected by switching costs – that is, the costs in areas such as retraining, retooling and redesigning that are incurred when a

customer switches to a different type of product or service. It also involves:

• Product-for-product substitution (email for mail, fax); is based on the substitution of need;

• Generic substitution (Video suppliers compete with travel companies);

• Substitution that relates to something that people can do without (cigarettes, alcohol).

Force 4: Buyer Power

Buyer power is one of the two horizontal forces that influence the appropriation of the value created by an industry (refer to the

diagram). The most important determinants of buyer power are the size and the concentration of customers. Other factors are the

extent to which the buyers are informed and the concentration or differentiation of the competitors. Kippenberger (1998) states

that it is often useful to distinguish potential buyer power from the buyer's willingness or incentive to use that power, willingness

that derives mainly from the “risk of failure” associated with a product's use.

• This force is relatively high where there a few, large players in the market, as it is the case with retailers an grocery

stores;

• Present where there is a large number of undifferentiated, small suppliers, such as small farming businesses supplying

large grocery companies;

• Low cost of switching between suppliers, such as from one fleet supplier of trucks to another.

Force 5: Supplier Power

Supplier power is a mirror image of the buyer power. As a result, the analysis of supplier power typically focuses first on the

relative size and concentration of suppliers relative to industry participants and second on the degree of differentiation in the

inputs supplied. The ability to charge customers different prices in line with differences in the value created for each of those

buyers usually indicates that the market is characterized by high supplier power and at the same time by low buyer power (Porter,

1998). Bargaining power of suppliers exists in the following situations:

• Where the switching costs are high (switching from one Internet provider to another);
• High power of brands (McDonalds, British Airways, Tesco);

• Possibility of forward integration of suppliers (Brewers buying bars);

• Fragmentation of customers (not in clusters) with a limited bargaining power (Gas/Petrol stations in remote places).

ANSOFF MATRIX: Introduction

The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy.

Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets
new or existing products in new or existing markets.

The output from the Ansoff product/market matrix is a series of suggested growth strategies that set the direction
for the business strategy. These are described below:

Market penetration

Market penetration is the name given to a growth strategy where the business focuses on selling existing products
into existing markets.

Market penetration seeks to achieve four main objectives:

• Maintain or increase the market share of current products – this can be achieved by a combination of competitive
pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling

• Secure dominance of growth markets

• Restructure a mature market by driving out competitors; this would require a much more aggressive promotional
campaign, supported by a pricing strategy designed to make the market unattractive for competitors

• Increase usage by existing customers – for example by introducing loyalty schemes

A market penetration marketing strategy is very much about “business as usual”. The business is focusing on
markets and products it knows well. It is likely to have good information on competitors and on customer needs. It
is unlikely, therefore, that this strategy will require much investment in new market research.

Market development
Market development is the name given to a growth strategy where the business seeks to sell its existing products
into new markets.

There are many possible ways of approaching this strategy, including:

• New geographical markets; for example exporting the product to a new country

• New product dimensions or packaging: for example

• New distribution channels

• Different pricing policies to attract different customers or create new market segments

Product development

Product development is the name given to a growth strategy where a business aims to introduce new products into
existing markets. This strategy may require the development of new competencies and requires the business to
develop modified products which can appeal to existing markets.

Diversification

Diversification is the name given to the growth strategy where a business markets new products in new markets.

This is an inherently more risk strategy because the business is moving into markets in which it has little or no
experience.

For a business to adopt a diversification strategy, therefore, it must have a clear idea about
what it expects to gain from the strategy and an honest assessment of the risks.

BOSTON CONSULTING GROUP MATRIX: The business portfolio is the collection of businesses and products that
make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the
most attractive opportunities.

The company must:

(1) Analyse its current business portfolio and decide which businesses should receive more or less investment, and

(2) Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time
deciding when products and businesses should no longer be retained.

Methods of Portfolio Planning

The two best-known portfolio planning methods are from the Boston Consulting Group (the subject of this revision
note) and by General Electric/Shell. In each method, the first step is to identify the various Strategic Business Units
("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and
that can be planned independently from the other businesses. An SBU can be a company division, a product line or
even individual brands - it all depends on how the company is organised.

The Boston Consulting Group Box ("BCG Box")

Using the BCG Box (an example is illustrated above) a company classifies all its SBU's according to two dimensions:

On the horizontal axis: relative market share - this serves as a measure of SBU strength in the market

On the vertical axis: market growth rate - this provides a measure of market attractiveness

By dividing the matrix into four areas, four types of SBU can be distinguished:

Stars - Stars are high growth businesses or products competing in markets where they are relatively strong
compared with the competition. Often they need heavy investment to sustain their growth. Eventually their growth
will slow and, assuming they maintain their relative market share, will become cash cows.

Cash Cows - Cash cows are low-growth businesses or products with a relatively high market share. These are
mature, successful businesses with relatively little need for investment. They need to be managed for continued
profit - so that they continue to generate the strong cash flows that the company needs for its Stars.

Question marks - Question marks are businesses or products with low market share but which operate in higher
growth markets. This suggests that they have potential, but may require substantial investment in order to grow
market share at the expense of more powerful competitors. Management have to think hard about "question marks"
- which ones should they invest in? Which ones should they allow to fail or shrink?

Dogs - Unsurprisingly, the term "dogs" refers to businesses or products that have low relative share in unattractive,
low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.

Using the BCG Box to determine strategy

Once a company has classified its SBU's, it must decide what to do with them. In the diagram above, the company
has one large cash cow (the size of the circle is proportional to the SBU's sales), a large dog and two, smaller stars
and question marks.

Conventional strategic thinking suggests there are four possible strategies for each SBU:

(1) Build Share: here the company can invest to increase market share (for example turning a "question mark" into
a star)

(2) Hold: here the company invests just enough to keep the SBU in its present position

(3) Harvest: here the company reduces the amount of investment in order to maximise the short-term cash flows
and profits from the SBU. This may have the effect of turning Stars into Cash Cows.

(4) Divest: the company can divest the SBU by phasing it out or selling it - in order to use the resources elsewhere
(e.g. investing in the more promising "question marks").
PEST ANALYSIS: PEST analysis is concerned with the environmental influences on a business.

The acronym stands for the Political, Economic, Social and Technological issues that could affect the strategic
development of a business.

Identifying PEST influences is a useful way of summarising the external environment in which a business operates.
However, it must be followed up by consideration of how a business should respond to these influences.

The table below lists some possible factors that could indicate important environmental influences for a business
under the PEST headings:

Political / Legal Economic Social Technological

- Environmental regulation
and protection
- Taxation (corporate;
consumer)
- International trade
regulation
- Consumer protection
- Employment law
- Government organisation /
attitude
- Competition regulation
- Economic growth - Income distribution - Government spending on
(overall; by industry (change in distribution of research
sector) disposable income;
- Monetary policy - Demographics (age - Government and industry
(interest rates) structure of the population; focus on technological effort
gender; family size and
composition; changing
nature of occupations)
- Government spending - Labour / social mobility - New discoveries and
(overall level; specific development
spending priorities)
- Policy towards - Lifestyle changes (e.g. - Speed of technology
unemployment Home working, single transfer
(minimum wage, households)
unemployment benefits,
grants)
- Taxation (impact on - Attitudes to work and - Rates of technological
consumer disposable leisure obsolescence
income, incentives to
invest in capital
equipment, corporation
tax rates)
- Exchange rates (effects - Education - Energy use and costs
on demand by overseas
customers; effect on
cost of imported
components)
- Inflation (effect on - Fashions and fads - Changes in material
costs and selling prices) sciences
- Stage of the business - Health & welfare - Impact of changes in
cycle (effect on short- Information technology
term business
performance)
- Economic "mood" - - Living conditions (housing, - Internet!
consumer confidence amenities, pollution)

MICRO-ENVIRONMENTAL FORCES: these are internal factors close to the company that have a direct impact on
the organisations strategy. These factors include:

Customers
Organisations survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to
do so will result in a failed business strategy.

Employees
Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of
an organisation. Training and development plays an essential role particular in service sector marketing in-order to
gain a competitive edge. This is clearly apparent in the airline industry.

Suppliers
Increase in raw material prices will have a knock on affect on the marketing mix strategy of an organisation. Prices
may be forced up as a result. Closer supplier relationships is one way of ensuring competitive and quality products for
an organisation.

Shareholders
As organisation require greater inward investment for growth they face increasing pressure to move from private
ownership to public. However this movement unleashes the forces of shareholder pressure on the strategy of
organisations. Satisfying shareholder needs may result in a change in tactics employed by an organisation. Many
internet companies who share prices rocketed in 1999 and early 2000 have seen the share price tumble as they face
pressures from shareholders to turn in a profit. In a market which has very quickly become overcrowded many havel
failed.

Media
Positive or adverse media attention on an organisations product or service can in some cases make or break an
organisation.. Consumer programmes with a wider and more direct audience can also have a very powerful and
positive impact, hforcing organisations to change their tactics.

Competitors
The name of the game in marketing is differentiation. What benefit can the organisation offer which is better then their
competitors. Can they sustain this differentiation over a period of time from their competitors?. Competitor anlaysis
and monitoring is crucial if an organisation is to maintain its position within the market.

Micro Environmental Factor/Stakeholder

Analysis