MARKETING STRATEGY

Session 1

Course coordinator:
Prof. Dr. Nathalie Demoulin

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 Who am I?

◆ Prof. Dr. Elke Cabooter (e.cabooter@ieseg.fr; Office B246)

◆ Professor at Marketing Department (Lille campus)

◆ Ph.D. in Belgium, Ghent University

◆ Consumer Behavior, Market Research, Pricing, Data

Analysis, Marketing strategy etc.
 Course objectives

• Differentiate the corporate strategy from the marketing

strategy
• Know and master marketing analysis tools
• Be able to segment a market
• Be able to position an offer
• Be able to design a marketing plan
• Build a sound marketing strategy
• Implementation of the marketing strategy
 The learning experience

• My slides on IESEG online (e.cabooter)

• Online sessions and PDF with comments on IESEG
online
• Business game: Markstrat
 Assessment

• Markstrat results : 40 %
• Final presentation: 40 %
• MCQ tests before the 1st, 2nd and 5th decisions:
20 % (DO NOT FORGET!!)
 Length Outside the
Sessions Topic covered Type of class MCQ tests
(minutes) class
1 110 Introduction to marketing strategy Interactive course
Online Session 1: SWOT and BCG matrix E-learning X
2 110 Exercise SWOT and BCG Matrix Interactive course
Online Session 2: Segmentation - targeting E-learning X
Read Markstrat Handbook p. 1-58 Reading X
MCQ: course slides,
Segmentation & targeting - Introduction online sessions 1 and
120 Interactive course
to Markstrat 1 2 & Markstrat
3 Handbook Part 1
120 Markstrat Decision 1 Coaching
Online Session 3 : Positioning E-learning X
Read Markstrat Hanbook p.58-end. Reading X
MCQ online session 3
120 Positioning & Introduction to Markstrat 2 Interactive course & Markstrat
4 Handbook Part 2
Write
120 Markstrat Decision 2 Coaching progress
report
Online Session 4: Formulating Marketing
E-learning X
Strategies
Debriefing of the Progress report &
160 Coaching
5 Markstrat Decision 3
110 Strategy & Markstrat Decision 4 Coaching MCQ online session 4
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7 160 Markstrat Decisions 5, 6 Coaching Decision 7
8 160 Markstrat Decisions 8, 9 Coaching
9 160 Final presentations Presentation
 Main references
Alsem K.J. (2007), Strategic Marketing : an applied perspective,
McGrawll-Hill International editions.
Hooley G., Saunder, J. Piercy (2017), Marketing strategy and
competitive positioning, Prentice Hall, Fifth Edition.
Kerin R.A., Peterson R.A. (2004), Strategic Marketing Problems, 10th
edition, International Edition.
Lambin J-J, (2007), Market-Driven Management : Strategic &
operational marketing, McMilliam Press Ltd.
Walker O., Mullins J., Boyd H., Larréché J-C (2013), Marketing
Strategy, MCGraw Hill International Edition, Eighth Edition.

If you want to know more

about marketing strategy….
THE MARKSTRAT CHALLENGE -
INTRODUCTION I
B2C – DURABLE GOODS

Powered by

NATHALIE DEMOULIN - MARKETING STRATEGY - IESEG - SCHOOL OF

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CONGRATULATIONS ON YOUR NEW POSITION
You have been recruited to manage the marketing
department of the Electronics division of a large
corporation:

• You will compete with several other firms to market two

types of durable goods to consumers

• You will be responsible for formulating and implementing

the long-term marketing strategy of your division

Your performance will be assessed each year on:

• Your business results – sales, market share gain and

improved profit – are combined in a Share Price Index
(SPI)
Introduction to the Markstrat Challenge - Part I

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YOUR ROLE FOR THE NEXT 9 YEARS

Work in a highly competitive market

Target consumer segments and position your products

Launch new products and improve existing ones

Manage your brand portfolio

Production planning

Make marketing mix decisions for each product: pricing,

advertising, distribution, product characteristics etc.

Order market research studies to get market insights!

Introduction to the Markstrat Challenge - Part I 10

NATHALIE DEMOULIN - MARKETING STRATEGY - IESEG - SCHOOL OF

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 YOUR OBJECTIVE
Maximize your Share Price Index (SPI)
All teams start at 1000…

You will have to optimize:

◦ Market share
◦ Revenues
◦ Net contribution
◦ Cumulative net contribution
◦ Sales growth
◦ R & D investments

WINNER = highest SPI …

… but the main objective is to LEARN!!!

NATHALIE DEMOULIN - MARKETING STRATEGY - IESEG - SCHOOL OF

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 THE MARKSTRAT WORLD
80 MILLION INHABITANTS: MARKET CONDITIONS:
• Large territory with a highly developed economy

• Inflation and GNP growth fairly stable and no

40% URBAN 25% major political, social or economic events are
35%
(top 5 cities) SMALLER anticipated.
RURAL
URBAN
• Currency: Markstrat Dollar ($)

4 COMPETING FIRMS EACH MANAGED BY A ANNUAL BUDGET FUNCTION OF RESULTS:

TEAM:
• All firms start in a different situation:
Product specification, target consumers, All competitors operate under similar budget
brand awareness levels, market share, constraints, with annual budget granted as a
distribution coverage, profitability, R&D percentage of past period profits (EBT).
expertise, ...

• The marketing strategy of your firm should

be adapted to its particular situation;

NATHALIE DEMOULIN - MARKETING STRATEGY -

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 TWO PRODUCT CATEGORIES

You can market up to 5 brands in each category at a given time

INDEPENDENT
NOT SUBSTITUTES
NOT COMPLEMENTARY

SONITES VODITES

Nathalie Demoulin - Marketing strategy - IESEG -

School of Management

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 SONITE CONSUMERS
EXPLORERS (Ex) PROFESSIONALS (Pr) SHOPPERS (Sh)

Highly interested in Sonite Personal and professional Good product knowledge

product usage through extensive product
Demand high performance Look for high quality, high- comparison.
products performance and easy-to-use Demand high quality–price
Quite price sensitive products ratio
Can afford expensive products Quite price-sensitive.
SAVERS (Sa) HIGH EARNERS (Hi)

Cautious in the way they spend

High income level
their money
Demand cheap, low-performance, Demand performance and
average convenience products convenience
Future growth rate could exceed Purchase expensive products
forecasts.

Introduction to the Markstrat Challenge - Part I

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I. INTRODUCTION TO
MARKETING STRATEGY
 The definition of strategic marketing

A systematic and continuous analysis of the

needs and requirements of key customer
groups and the design and production of an
offer that will enable the company to serve
selected segments more effectively than
competitors.
Adapted from Lambin (2000)
 From corporate strategy to marketing
strategy
What is the corporate strategy?

What is the marketing strategy?

What are the links between corporate and marketing strategy?

 From corporate strategy to
marketing strategy

Corporate strategy
•Specifying organisation’s mission
Guides
•Defining organisational objectives
Coordinates
•Portfolio of activities for the organisation
Controls
•Allocation of resources across the whole
organisation
Marketing strategy
•Defining and selecting markets
and segments
Informs •Market positioning
Achieves •Developing a sustainable
competitive advantage
 Aggregation levels in a company

Corporate Strategy
Marketing strategies
Example of SBU’s in L’Oréal
(based on markets)
Example of SBU’s in Unilever
(based on product categories)
II. THE STRATEGIC MARKETING
PROCESS

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 Processes in strategic marketing
1. Define the organization’s business,
This session

mission, and goals

2. Identify and frame organizational
growth opportunities

3. Portfolio analysis

4. Formulate product-market strategies

5. Segmentation, targeting and

positioning

6. Develop marketing plan

Processes in strategic marketing

1. Define the organization’s business,

mission, and goals
 1.a. Business definition
What business are we in?

Who is Parker Pens’ main competitor?

Same purpose
(writing), same
price/quality?

Different purpose, but

same purchase
occasion?
Same purpose
(writing) but
cheaper?
 1.a. Business definition

By defining a business from a customer or

market perspective…

an organization is appropriately viewed as:

a customer-satisfying endeavor

…and not
a product-producing or service delivery
enterprise.
L’Oréal’s business definition

For more than a century, L’Oréal has

devoted itself solely to one business:
beauty. It is a business rich in meaning,
as it enables all individuals to express
their personalities, gain self-confidence
and open up to others.

Source: http://www.loreal.com/group/who-we-are/our-mission.aspx

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 “What business are we in?”

An organization should define a business by:

• The type of customers it wishes to serve
(target segment)

• The particular needs of those customer groups

it wishes to satisfy

• The means or technology by which the organization

will satisfy the customer needs
 4 technologies for the same function :
Portable Music Players

Smartphone and MP3 Compact Disc Cassette

OGG Format
320 kbps

NATHALIE DEMOULIN - MARKETING STRATEGY - IESEG - SCHOOL OF MANAGEMENT 29

Different means of transport

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 Macro-segmentation:
defining the reference market
Solutions
What are the solutions sought (= needs)?

Groups of customers
Who are the buyers to satisfy?

Technologies
How are buyers’ needs satisfied?
 Macro-segmentation:
market boundaries definition
Need Need
Product-market or SBU Solution-market

Group Group
of customers of customers
Technology Technologies
Needs
Industry

Groups of customers
Technology
 Market boundaries definition =
macro-segmentation
Need Need
Streaming on smartphone Portable music players

Group Group
of customers of customers
Technology Technologies
Needs
Industry: all audio equipment using
streaming technology

Groups of customers
Technology
 1.b. Mission statement

Formulating the mission into a brief and concise statement.

Underscores the scope of an organization’s operations apparent in

its business definition.

Reflects management’s vision of what the organization seeks to

do.

Most statements describe:

the organization’s purpose

customers, products/services, markets, philosophy, and

technology
 L’Oréal’s Mission

L’Oréal has set itself the mission of offering all

women and men worldwide the best of cosmetics
innovation in terms of quality, efficacy and safety. It
pursues this goal by meeting the infinite diversity of
beauty needs and desires all over the world.

Source: http://www.loreal.com/group/who-we-are/our-mission.aspx

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 Benefits of a mission statement

1. Provides guidance in identifying, pursuing, and

evaluating market and product opportunities

2. Inspires and challenges employees to do those things

that are valued by the organization and its customers

3. Provides direction for setting business goals or

objectives
 1.c. Business goals

Goals or objectives convert the organization’s mission

into tangible actions and results that are to be
achieved, often within a specified time frame.

Production Goals
Marketing Goals
Apply to the use of manufacturing and ❑ Market share
service capacity and product and ❑ Sales volume
service quality. ❑ Profit
❑ Customer satisfaction
Financial Goals
❑ Customer loyalty
Focus on return on investment, return ❑ Number and content of
on sales, profit, cash flow, and complains
shareholder wealth.
 Marketing goals characteristics

Specific Timed

Measurable SMART Realistic

Ambitious
 Marketing goals characteristics:
Which objective is SMART?
A. In 2020, our objective is to be the leader.

B. Our objective is to reach a 25% market share.

C. In June 2020, we will reach a profit of 15 000 Markstrat Dollars for our
product SONO, with a market share of 35 %. There are three competitors.

D. End of 2020, our market share on the Sonite market will be 5%. There
are 4 competitors.
 Volkswagen Group – Goals
Our Strategy focuses on positioning the Volkswagen Group as a
global economic and environmental leader among automobile
manufacturers.
We have defined four goals that are intended to make Volkswagen
the best automaker in the world by 2025:
◦ Volkswagen intends to deploy intelligent innovations and technologies to
become a world leader in customer satisfaction and quality.
◦ The goal is to increase unit sales to more than 10 million vehicles a
year; in particular, Volkswagen intends to capture an above-average share
of growth in the major growth markets.
◦ Volkswagen’s aim is a sustainable return on sales before tax of at least
8% so as to ensure that the Group’s solid financial position and ability to
act are guaranteed even in difficult market periods.
◦ Volkswagen aims to become the top employer across all brands, in all
companies and regions; this is necessary in order to build a first-class
team

NATHALIE DEMOULIN - MARKETING STRATEGY - IESEG - SCHOOL OF MANAGEMENT 40

Processes in strategic marketing

1. Define the organization’s business,

mission, and goals
2. Identify and frame organizational
growth opportunities
2. Situation analysis and
identification of growth
opportunities
Online session 1

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 2.1. Identifying market opportunities

What might we do?

Sources of environmental/market opportunity:

Unmet or changing customer needs

Unsatisfied buyer groups

New means or technology for delivering value to

prospective buyers
Changing customers’ needs
Changing lifestyles and increasing concerns about the
effects of pollution, stress, UV damage, allergies and
ageing skin are influencing consumer behaviour

24% of the world's consumers perceive health as

an investment and 52% of these include skincare
as a health issue

Sensitive skin is a concern for 71% of women in

France and in Russia, 57% in Germany, 52% in the
USA, 47% in Brazil and 34% in China

NATHALIE DEMOULIN - MARKETING STRATEGY - IESEG - SCHOOL OF MANAGEMENT 44

 2.2. Evaluating market attractiveness

MarkStrat - Evaluation of opportunities according to market

attractiveness

1. Market size and market segments size on both

markets (Sonites and Vodites)
2. Market and market segment growth
3. Rivalry among competitors
 SWOT analysis
A formal framework for identifying and framing
organizational growth opportunities

Framework for focusing attention on the fact that an

organizational growth opportunity results from…

a good fit between an organization’s

INTERNAL CAPABILITIES
(Strengths & Weaknesses)
and
its EXTERNAL ENVIRONMENT
(Opportunities & Threats)
 SWOT analysis

Strengths What the organization is good

at doing or a characteristic that
gives it an important capability

Weaknesses What an organization lacks or

does poorly relative to
competitors

Opportunities Developments or conditions in

the environment that have
favorable implications for the
organization

Threats Pose dangers to the welfare of

the organization
2.3. Converting environmental opportunities
into organizational opportunities
What do we do best?

A distinctive competency describes an

organization’s unique strengths or qualities
including:
Skills
Technologies
Resources

…that distinguish it from other organizations.

Questions to be asked after SWOT analysis
1. Which internal strengths represent distinctive
competencies?

2. Do these strengths fit favorably with what are believed to be

market or industry success requirements?

3. Which internal weaknesses disqualify the organization

from pursuing certain opportunities?

4. Does a pattern/strategy emerge from the SWOT?

NATHALIE DEMOULIN - MARKETING STRATEGY - IESEG - SCHOOL OF MANAGEMENT 50
Company performance

SOFT has a low brand contribution

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Brand awareness and market share

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Market forecast

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Market forecast Vodites

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 SWOT – Common mistakes
Strengths Weaknesses
1. SOFT: low total brand contribution
1. High market share (2nd on each segment) 2. No products on the market that attract
explorers, professionals and high earners
2. Highest brand awareness for SOFT and
3. Low advertising budget for SOLO
SOLO 4. Small commercial team for SOFT
3. Offer two products for two very different 5. Inexperienced marketing team
and large market segments (shoppers and
savers)
4. High purchase intention
5. High brand contribution for SOLO
Opportunities Threats
1. Good position in the potential market 1. The segment of Explorer is decreasing
segment (shoppers and savers) 2. Quick evolution of the needs of many
2. Growing segments on the Sonites market: segments in terms of economy,
Shoppers, High Earners, professional and performance and convenience
Savers 3. Potential entry of other brands in
3. Low competition on the Shoppers attractive segments/markets
segment 4. Our company has a low SPI
4. Attractive Vodite market
5. New brand will be launched

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 SWOT – Common mistakes
Strengths Weaknesses
1. SOFT: low total brand contribution
1. High market share (2nd on each segment) 2. No products on the market that attract
explorers, professionals and high earners
2. High brand awareness for SOFT and SOLO
3. Low advertising budget for SOLO
3. Offer two products for two very different 4. Small commercial team for SOFT
and large market segments (shoppers and 5. Inexperienced marketing team
savers)
4. High purchase intention
5. High brand contribution for SOLO

Opportunities Threats
1. Good position in the potential market 1. The segment of Explorer is decreasing
segment (shoppers and savers) 2. Quick evolution of the needs of many
2. Growing segments on the Sonites market: segments in terms of economy,
Shoppers, High Earners, professional and performance and convenience
Savers 3. Potential entry of other brands in
3. Low competition on the Shoppers attractive segments/markets
segment 4. Our company has a low SPI
4. Attractive Vodite market
5. New brands will be launched

NATHALIE DEMOULIN - MARKETING STRATEGY - IESEG - SCHOOL OF MANAGEMENT 59

 !!! TO DO !!!
What? When? Where?
Follow online session 1: Before Session 2 IESEG online
SWOT & BCG Matrix
Read Handbook Markstrat Before Session 3 IESEG online
(58 pages)