LECTURE #10

TOPIC
Strategic Marketing
Planning
Marketing strategies
 Market dominance strategies

Types:
 Market Leader
 Market Challenger
 Market Follower
 Market Nicher
 Market Leader

 Market leader is dominant in its industry

 Has extensive distribution arrangements with
retailers
 Develops innovative new business models and
new products
 Has some market power in determining
either price or output
 Market Leader’s Options
Expand the total market by finding
 New users of the product
 New uses of the product
 More usage on each use occasion
 Protect your existing market share by:
 Developing new product ideas
 Improve customer service
 Improve distribution effectiveness
 Reduce costs
 Expand your market share:
 By targeting one or more competitor
 Without being noticed by government regulators
 Market Challenger

 A firm in a strong, but not dominant position

 Follows an aggressive strategy to gain market
share
 Typically targets the industry leader
 Can also target smaller, more vulnerable
competitors
 Market Challenger’s Options
 Price discounts or price cutting
 Line extensions
 Introduce new products
 Reduce product quality
 Increase product quality
 Improve service
 Change distribution
 Cost reductions
 Intensify promotional activity
 Market Follower

 A firm in a strong, but not dominant position

 Is content to stay at that position.
Market Follower’s Advantage
 Price discounts or price cutting
 No expensive R&D failures
 No risk of bad business model
 Best practices? are already established
 Able to capitalize on the promotional
activities of the market leader
 Minimal risk of competitive attacks
 Don’t waste money in a head-on battle with
the market leader
 Market Nicher

 Strategy concentrates on a select few target markets

 Focus of marketing efforts are on one or two
narrow market segments
 Tailors it’s marketing mix to few specialized
markets
 Profit margins are emphasized rather than revenue
or market share
 most suitable for relatively small firms
 Market Nicher’s Attributes

 They tend to be in high value added industries and

are able to obtain high margins.
 They tend to be highly focused on a specific market
segment.
 They tend to market high end products or services,
and are able to use a premium pricing strategy.
 They tend to keep their operating expenses down by
spending less on R&D, advertising, and personal
selling
 Cost Leadership Strategy

 Strategy emphasizes efficiency

 Produces high volumes of
standardized products
 Takes advantage of economies of
scale
 Uses experience curve effects
 Requires Continuous research for
cost reduction.
 Cost Leadership Strategy

Benefits:

 Process engineering skills

 Products designed for ease of manufacture
 Sustained access to inexpensive capital
 Close supervision of labor
 Tight cost control
 Incentives based on quantitative targets
 Differentiation Strategy

 Creates a product that is perceived as

unique
 Uniqueness provides superior value for
the customer
 Price elasticity of demand is reduced
 Generates more brand
 Can require a premium pricing
strategy.
 Differentiation Strategy

Requirements:

 Strong research and development skills

 Strong product engineering skills
 Strong creativity skills
 Good cooperation with distribution
channels
 Strong marketing skills
 Differentiation Strategy

Requirements:

 Incentives based largely on subjective

measures
 Be able to communicate the importance of
the differentiating product characteristics
 Stress continuous improvement and
innovation
 Attract highly skilled, creative people
Market Segmentation Strategy

 Concentrates on a select few target markets

 Gains a competitive advantage through
effectiveness rather than efficiency
 Tailors its marketing mix for specialized
markets
 Suitable for relatively small firms
 Much in common with guerrilla marketing
warfare strategies
Scenario Planning
A strategic planning method
that some organizations use
to make flexible long-term
plans
 Scenario Planning

 Combinations of fact and possible social

changes are called "scenarios."
 Includes plausible, but unexpectedly
important situations
 Identifies problems that exist in some small
form in the present day.
 Applied to a wider variety of problems
 Allows policy-makers to make and learn
from mistakes
 Scenario Planning Process

1. Decide on the key question to be answered

by the analysis
2. Set the time and scope of the analysis
3. Identify major stakeholder
4. Map basic trends and driving force
5. Find key uncertainties
6. Check for the possibility to group the
linked force
 Scenario Planning Process

7. Define the scenarios

8. Write out the scenarios
9. Assess the scenarios
10.Identify research needs
11.Develop quantitative methods
12.Converge towards decision scenarios