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STMKT Class.1
STMKT Class.1
STMKT Class.1
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An Overview of Strategic Marketing
Dr.Amira El-Deeb
Defining Marketing
Marketing
The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment
The purchasers of organizations products; the focal point of all marketing activities
Customers
What is Marketing?
Marketing as a culture characterized by a set of values and beliefs that highlights the importance of the customers interests Marketing as a strategy concerned with the choice of products, markets and competitive attitude Marketing as the set of tactics (essentially the seven Ps of the expanded marketing mix) that provides the basis for the implementation of the business and competitive strategy.
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Figure 1.2
Information Acquisition
Obtaining information about, customers, competitors, markets Viewing the information from a total business perspective Deciding how to deliver superior customer value
Taking actions to provide value to customers
2.
3.
Marketing Strategy
Targeting strategies Positioning strategies Developing ,implementing and managing the marketing program positioning strategies designed to meet the needs of customers.
Its a market-driven process of strategy development, taking into account a constantly changing business environment and the need to achieve high levels of customer satisfaction.
concerned with the direction and scope of the long-term activities performed by the organization to obtain a competitive advantage to satisfy needs or solving problems
Its both a philosophy and a set of techniques which address everything about the product
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Profit
Optimization
Cost
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Planning, Implementing, and Controlling Marketing Strategies
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Wrong group targeted Weak positioning strategy Marketing environment assessed inadequately Misperception about product or service attributes and benefits
Wrong pricing strategy Insufficient level of new product/new service awareness from advertising Over-optimism about marketing plan
Strategic Planning
The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan
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Defining the purpose and mission of the Company. Designing the business portfolio. Planning for new business, downsizing older business
Business unit mission SWOT analysis Goal formulation Designing strategies Developing detailed marketing plans
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Core Competencies
Things a firm does extremely well (strengths), which sometimes give it an advantage over its competition
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Market Opportunity
A combination of circumstances and timing that permits an organization to reach a target market
Strategic window
optimal fit between market opportunities (the key requirements of a market) and core competencies
Mission/Strategy/Tactics
Mission
Goals
Strategy
Tactics
Strategy
Mission
The
Mission
Statement
the question What business are we in?
Answers
Goals
Provide
Strategies
Plans
Tactics
The
Strategy Example
Example 1
Rita is a high school student. She would like to have a career in business, have a good job, and earn enough income to live comfortably
Developing Vision & Mission Participation by as many managers as possible is important in developing the mission because through involvement people become committed to an organization
WHAT TO DO?
HOW TO DO?
Business vision
Desired future state; the aspiration of the Organization
Tyson Foods vision is to be the worlds first choice for protein solutions while maximizing shareholder value.
General Motors vision is to be the world leader in transportation products and related services.
Dells vision is to create a company culture where environmental excellence is second nature.
Vision
Mission Statement
Markets
Employees
Mission Components
Technology
MARRIOTTS Mission Statement: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value
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LOreal, we believe that lasting business success is built upon ethical standards which guide growth and on a genuine sense of responsibility to our employees, our consumers, our environment and to the communities in which we operate.
Nokia
Vision :
Our vision is a world where everyone can be connected
Mission :
Nokia helps people to fulfill this need and we help people feel close to what matters to them. We focus on providing consumers with very recent technology that is a joy to use, and beautiful.
Principles of Marketing A.U.C - Amira EL-Deeb 47
Vision
The creation of products to serve the better health of people around the world.
Clinical studies are carried in research centers in the USA ,Germany, UK and Japan aiming for products of universal value. With a collaboration among marketing, research sectors so that customers' real needs may be feedback for further product development.
Mission
Principles of Marketing
Could be good example since it express the core values of the organization. Also conveys unique qualities about the organization.
Too vague and unclear. Need more descriptive information about what makes the organization special.
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Better financial results agreement on purpose Resource allocation Establishment of culture Focal point for individuals Establishment of work structure Basis of assessment and control Resolution of different views
Market-Oriented Mission
A mission statement should be:
An invisible hand to guide & control everything in the organization. Not too narrow nor too broad Fitting of market environment Based on distinctive competencies Motivating
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Do not offer me things. offer me solutions Do not offer me clothes. Offer me attractive looks. Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking. Do not offer me a house. Offer me security, comfort, and a place that is clean and happy. Do not offer me books. Offer me hours of pleasure and the benefit of knowledge.
(Product oriented )
( Market Oriented )
Principles of Marketing
Business Goals
Goals convert the organizations mission into tangible actions and results that are to be achieved, often within a specified time frame.
Three major categories of goals:
1. 2. 3. Production Financial Marketing
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Production Goals Apply to the use of manufacturing and service capacity and to product and service quality.
Marketing Goals market share sales volume profit customer satisfaction customer value creation
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Marketing objectives
e.g.
To increase sales of product globally by 30% within 5yrs.
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GOAL
OBJECTIVE
STRATEGY
i) ii) iii) iv) v) Increase product promotion Design product pricing Penetration New market development Quality improvement
By classifying Strategic Business unit ( SBU )into one of four categories using the:
Market growth rate SBUs relative market share within the market. Boston Consulting Group matrix
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Source: The BCG Portfolio Matrix from the Product Portfolio Matrix, 1970, The Boston Consulting Group. Reproduced by permission.
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BCG MATRIX
1. Question mark: (high growth market but with low market share),
question mark units or products require lots of money 2. Stars a market leader unit (or product) in a high growth market, the company must spend money to keep up with the high market growth. 3. Cash cow a product still has the largest relative market share although the market annual growth rate is less than 10 %. Although a cash cow business produces a lot of cash for the company, it doesnt have to finance expansion because the market growth rate has slowed down. 4. Dogs are products that have weak market share in a low growth markets.
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After the analysis, the company determines which strategy and budget are to assign to each SBU, and a one of four strategies can be applied:
Case: SMART
Your company smart is working in the manufacturing and marketing of entertainment products producing four products: DVD, Notebook, videos, and radios,
as a marketing manager you should determine what objective and which strategy and budget is to assign to each product, Before deciding on a strategy, you should explain the reason for adopting such strategy to such product
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2007
Total DVD market Product A Sales SMART DVD 10.000.000 700.000 0 11.800.000 800.000 200.000
2008
18.000.000
1.800.000
20.700.000
2.200.000
Product B sales
1.000.000
1.200.000
7.000.000
500.000 250.000
7.500.000
600.000 300.000
5.590.000 800.000
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300.000
The GE Matrix
Weak Medium
Strong
Strong
Medium
Weak
Business Strength
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GE Matrix
The size of each represents the size of each market. Within each circle is a clearly defined segment which represents the businesss market share within that market. The larger the circle, the larger the market, and the larger the segment, the larger the market share.
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Market attractiveness:
Size of market. Market rate of growth. The nature of competition and its diversity. Profit margin. Impact of technology, the law, and energy efficiency. Environmental impact.
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Competitive position:
Market share. Management profile. R & D. Quality of products and services. Branding and promotions success. Place (or distribution). Efficiency. Cost reduction.
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New Product
Product Development
Market Development
Diversification
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Market penetration
where a company would attempt to make more sales to current customers without changing its products.
Market development
a situation where a company would identify and develop new markets for its current products.
acquiring supplier
Forward integration:
acquiring distributor
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We redefine the mission of our business but for each SBU Analyze the environment around us, externally & internally
B. SWOT analysis
C. Setting the goals & objectives D. Developing Marketing strategy & plan E. Implementation & Feedback
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SWOT Analysis
limitations on competitive capability favorable conditions in the environment conditions or barriers to reaching objectives
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Opportunities
Threats
Source: Reproduced from Nigel F. Piercy, Market-Led Strategic Change. Copyright 1992, p. 371, with permission from Elsevier Science.
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