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MARKETING STRATEGY

Created by. Jude. Asongwe. MARKETING STRATEGY. Learning objectives: By the end of this lesson, students should be able to understand the following key issues: What is strategy and what is marketing strategy Why is strategy important The various different marketing strategies

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MARKETING STRATEGY

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  1. Created by Jude Asongwe MARKETING STRATEGY Learning objectives: By the end of this lesson, students should be able to understand the following key issues: • What is strategy and what is marketing strategy • Why is strategy important • The various different marketing strategies • Strategy and planning • Strategic management framework.

  2. Created by Jude Asongwe MARKETING STRATEGY • A marketing strategy serves as the foundation of a marketing plan. A marketing plan contains a list of specific actions required to successfully implement a specific marketing strategy • Without a sound marketing strategy, a marketing plan has no foundation • Marketing strategies serve as the fundamental underpinning of marketing plans designed to reach marketing objectives. It is important that these objectives have measurable results. • A good marketing strategy should integrate an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole. The objective of a marketing strategy is to provide a foundation from which a tactical plan is developed. This allows the organization to carry out its mission effectively and efficiently • Marketing strategies are partially derived from broader corporate strategies, corporate missions, and corporate goals. They should flow from the firm's mission statement. They are also influenced by a range of micro environmental factors. • Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics.

  3. Created by Jude Asongwe BUSINESS AND MARKETING STRATEGIES BUSINESS STRATEGY Ansoff Matrix Porters generic strategy

  4. Created by Jude Asongwe MARKETING STRATEGIES PORTERS GENERIC STRATEGY MODEL Differentiation Stuck with no clear strategy Cost leadership Focus

  5. Created by Jude Asongwe STRATEGIES Existing New ANSOFF MATRIX Existing New

  6. Created by Jude Asongwe MARKETING Strategies Segment 1 MARKETING MIX Segment 2 Concentrated strategy/marketing Segment 3 Segment 1 MARKETING MIX 1 Segment 2 MARKETING MIX 2 Segment 3 MARKETING MIX 3 Differentiated strategy/marketing Whole market MARKETING MIX Undifferentiated strategy/marketing

  7. Created by Jude Asongwe CORPORATE STRATEGIES ATTACH STRATEGIES • Direct challenge – differential advantage • Direct attack – distinctive competence • Direct attack – market share • Flank attack • Encirclement • Bypass • Guerrilla

  8. Created by Jude Asongwe DEFENCE STRATEGIES MARKETING STRATEGY • Position defence • Pre-emptive defence • Counter-offensive • Mobile defence • Flanking defence • Contraction defence • By-pass

  9. Created by Jude Asongwe COMPONENTS OF A MARKETING PLAN • EXECUTIVE SUMMARY • BUSINESS MISSION • MARKTING AUDITING • SWOT ANALYSIS • MARKETING OBJECTIVES • BUSINESS OBJECTIVES • MARKETING STRATEGIES • BUSINESS STRATEGIES • MARKETING MIX • IMPLEMENTATION • EXPECTED RESULT • MONITORING • CONTROLLING

  10. Created by Jude Asongwe STRATEGY AND PLANNING • Corporate or visionary planning that provides a mission and structure for evaluating and allocating resources to business • Business planning which involves long-range planning for positioning the company and its products to best serve its target markets • Functional planningincluding marketing planning which is generally annual planning involving specific goals and plans over one year.

  11. Created by Jude Asongwe CORPORATE STRATEGY Strategies are formulated as a response to the various factors in the company’s environment- and these may come from both external and internal sources: • External • Internal

  12. Created by Jude Asongwe Organizational Stance and Positioning • Leaders • Followers • Nichers

  13. Created by Jude Asongwe Marketing fundamentals - UNIT 2:MARKETING PLANNING AND BUDGETINGTHE BUSINESS MISSIONLearning Objectives • What is a Mission Statement. • What are the components of a mission statement. • What is the importance of a mission statemement. • What are the characteristics of a Mission Statement • Examples of Mission Statements: M&S, Asda, Tesco, Sainsbury, BT & Npower.

  14. Created by Jude Asongwe Marketing fundamentals - UNIT 2:MARKETING PLANNING AND BUDGETINGThe Marketing AuditLearning Objective • What is the marketing audit • What are its components • What is the importance of the marketing audit.

  15. Created by Jude Asongwe Marketing fundamentals - UNIT 2:MARKETING PLANNING AND BUDGETINGTHE SWOT ANALYSISLearning Objectives • What is the SWOT Analysis • What is the importance of carrying out a SWOT Analysis.

  16. Created by Jude Asongwe Marketing fundamentalsMarketing planning and budgeting.

  17. Created by Jude Asongwe PRODUCT PORTFOLIO PLANNING AND ANALYSIS Business Portfolio: The collection of businesses and products that make up the company. Portfolio analysis: A tool by which management identifies and evaluates the various businesses that make up the company Strategic business unit (SBU): A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. A SBU can be a company division, a product line within a division, or sometimes a single product or brand.

  18. Created by Jude Asongwe PORTFOLIO ANALYSIS High 20 BOSTON CONSULTING GROUP MATRIX Framework of the BCG Matrix 10 Market growth 0.1x Low 0 10x 1x Market share

  19. Created by Jude Asongwe PORTFOLIO ANALYSIS High –growth High market share (High-share businesses) Products often require heavy investment to finance their rapid growth Stars Cash cows Low-growth High-share businesses or products Established and successful units that generate cash that the company uses to pay its bills and support other business units that need investment Question marks Low-share business units in high-growth markets Dogs

  20. Created by Jude Asongwe BCG MATRIX : BCG CLASSIFICATION OF PRODUCTS High 20 Question marks Stars 10 Market growth Cash cows Low 0 1x 0.1x 10x Market share

  21. Created by Jude Asongwe BCG MATRIX- CASH POSITION FOR PRODUCTS

  22. Created by Jude Asongwe PORTFOLIO STRATEGIES Build Hold Harvest Divest

  23. Created by Jude Asongwe PRODUCT PORTFOLIO PLANNING AND ANALYSIS Business Portfolio: The collection of businesses and products that make up the company. Portfolio analysis: A tool by which management identifies and evaluates the various businesses that make up the company Strategic business unit (SBU): A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. A SBU can be a company division, a product line within a division, or sometimes a single product or brand.

  24. Created by Jude Asongwe PORTFOLIO ANALYSIS High 20 BOSTON CONSULTING GROUP MATRIX Framework of the BCG Matrix 10 Market growth 0.1x Low 0 10x 1x Market share

  25. Created by Jude Asongwe PORTFOLIO ANALYSIS High –growth High market share (High-share businesses) Products often require heavy investment to finance their rapid growth Stars Cash cows Low-growth High-share businesses or products Established and successful units that generate cash that the company uses to pay its bills and support other business units that need investment Question marks Low-share business units in high-growth markets Dogs

  26. Created by Jude Asongwe BCG MATRIX : BCG CLASSIFICATION OF PRODUCTS High 20 Question marks Stars 10 Market growth Cash cows Low 0 1x 0.1x 10x Market share

  27. Created by Jude Asongwe PORTFOLIO STRATEGIES Build Hold Harvest Divest

  28. Created by Jude Asongwe GENERAL ELECTRIC MATRIX

  29. Created by Jude Asongwe THE GENERAL ELECTRIC MATRIX BY MCKINSEY • The GE matrix / McKinsey matrix is a model to perform a business portfolio analysis on the Strategic Business Units of a corporation. • A business portfolio is the collection of Strategic Business Units that make up a corporation. The optimal business portfolio is one that fits perfectly to the company's strengths and helps to exploit the most attractive industries or markets. • A Strategic Business Unit (SBU) can either be an entire mid-size company or a division of a large corporation, that formulates its own business level strategy and has separate objectives from the parent company.

  30. Created by Jude Asongwe PRODUCT PORTFOLIO PLANNING AND ANALYSIS Business Portfolio: The collection of businesses and products that make up the company. Portfolio analysis: A tool by which management identifies and evaluates the various businesses that make up the company Strategic business unit (SBU): A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. A SBU can be a company division, a product line within a division, or sometimes a single product or brand.

  31. Created by Jude Asongwe PORTFOLIO ANALYSIS High 20 BOSTON CONSULTING GROUP MATRIX Framework of the BCG Matrix 10 Market growth 0.1x Low 0 10x 1x Market share

  32. Created by Jude Asongwe GENERAL ELECTRIC MATRIX

  33. Created by Jude Asongwe THE GENERAL ELECTRIC MATRIX BY MCKINSEY • The GE matrix / McKinsey matrix is a model to perform a business portfolio analysis on the Strategic Business Units of a corporation. • A business portfolio is the collection of Strategic Business Units that make up a corporation. The optimal business portfolio is one that fits perfectly to the company's strengths and helps to exploit the most attractive industries or markets. • A Strategic Business Unit (SBU) can either be an entire mid-size company or a division of a large corporation, that formulates its own business level strategy and has separate objectives from the parent company.

  34. Created by Jude Asongwe PRODUCT PORTFOLIO PLANNING AND ANALYSIS Business Portfolio: The collection of businesses and products that make up the company. Portfolio analysis: A tool by which management identifies and evaluates the various businesses that make up the company Strategic business unit (SBU): A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. A SBU can be a company division, a product line within a division, or sometimes a single product or brand.

  35. Created by Jude Asongwe PORTFOLIO ANALYSIS High 20 BOSTON CONSULTING GROUP MATRIX Framework of the BCG Matrix 10 Market growth 0.1x Low 0 10x 1x Market share

  36. Created by Jude Asongwe PORTFOLIO ANALYSIS High –growth High market share (High-share businesses) Products often require heavy investment to finance their rapid growth Stars Cash cows Low-growth High-share businesses or products Established and successful units that generate cash that the company uses to pay its bills and support other business units that need investment Question marks Low-share business units in high-growth markets Dogs

  37. Created by Jude Asongwe BCG MATRIX : BCG CLASSIFICATION OF PRODUCTS High 20 Question marks Stars 10 Market growth Cash cows Low 0 1x 0.1x 10x Market share

  38. Created by Jude Asongwe THE GENERAL ELECTRIC MATRIX BY MCKINSEY • The GE matrix / McKinsey matrix is a model to perform a business portfolio analysis on the Strategic Business Units of a corporation. • A business portfolio is the collection of Strategic Business Units that make up a corporation. The optimal business portfolio is one that fits perfectly to the company's strengths and helps to exploit the most attractive industries or markets. • A Strategic Business Unit (SBU) can either be an entire mid-size company or a division of a large corporation, that formulates its own business level strategy and has separate objectives from the parent company.

  39. Created by Jude Asongwe THE GENERAL ELECTRIC MATRIX BY MCKINSEY • The aim of a portfolio analysis is to: • 1) Analyze its current business portfolio and decide which SBU's should receive more or less investment, and2) Develop growth strategies for adding new products and businesses to the portfolio • 3) Decide which businesses or products should no longer be retained.The BCG Matrix (Boston Consulting Group Matrix) is the best-known portfolio planning framework. The GE / McKinsey Matrix is a later and more advanced form of the BCG Matrix.

  40. Created by Jude Asongwe THE GENERAL ELECTRIC MATRIX BY MCKINSEY Typical (external) factors that affect Market Attractiveness:- Market size- Market growth rate- Market profitability - Pricing trends - Competitive intensity / rivalry - Overall risk of returns in the industry- Entry barriers - Opportunity to differentiate products and services- Demand variability- Segmentation - Distribution structure- Technology development  Typical (internal) factors that affect Competitive Strength of a Strategic Business Unit:- Strength of assets and competencies- Relative brand strength (marketing)- Market share- Market share growth- Customer loyalty- Relative cost position (cost structure compared with competitors)- Relative profit margins (compared to competitors)- Distribution strength and production capacity- Record of technological or other innovation- Quality- Access to financial and other investment resources- Management strength 

  41. Created by Jude Asongwe THE GENERAL ELECTRIC MATRIX BY MCKINSEY • The aim of a portfolio analysis is to: • 1) Analyze its current business portfolio and decide which SBU's should receive more or less investment, and2) Develop growth strategies for adding new products and businesses to the portfolio • 3) Decide which businesses or products should no longer be retained.The BCG Matrix (Boston Consulting Group Matrix) is the best-known portfolio planning framework. The GE / McKinsey Matrix is a later and more advanced form of the BCG Matrix.

  42. Created by Jude Asongwe THE GENERAL ELECTRIC MATRIX BY MCKINSEY Typical (external) factors that affect Market Attractiveness:- Market size- Market growth rate- Market profitability - Pricing trends - Competitive intensity / rivalry - Overall risk of returns in the industry- Entry barriers - Opportunity to differentiate products and services- Demand variability- Segmentation - Distribution structure- Technology development  Typical (internal) factors that affect Competitive Strength of a Strategic Business Unit:- Strength of assets and competencies- Relative brand strength (marketing)- Market share- Market share growth- Customer loyalty- Relative cost position (cost structure compared with competitors)- Relative profit margins (compared to competitors)- Distribution strength and production capacity- Record of technological or other innovation- Quality- Access to financial and other investment resources- Management strength 

  43. Created by Jude Asongwe • A six-step approach to implementation of portfolio analysis (using the GE / McKinsey Matrix) could look like this: 1. Specify drivers of each dimension. The corporation must carefully determine those factors that are important to its overall strategy2. Weight drivers. The corporation must assign relative importance weights to the drivers 3. Score SBU's each driver4. Multiply weights times scores for each SBU5. View resulting graph and interpret it 6. Perform a review/sensitivity analysis using adjusted other weights (there may be no consensus) and scores.

  44. Created by Jude Asongwe • Some important limitations of the GE matrix / McKinsey Matrix are: • - Valuation of the realization of the various factors • - Aggregation of the indicators is difficult • - Core competencies are not represented • - Interactions between Strategic Business Units are not considered

  45. Created by Jude Asongwe CHANGES IN PRODUCT/STRATEGIC BUSINESS POSITION

  46. Created by Jude Asongwe CONCLUSION

  47. Created by Jude Asongwe GENERAL ELECTRIC BUSINESS SCREEN (GE)

  48. Created by Jude Asongwe

  49. Created by Jude Asongwe Key terms and definitions

  50. Created by Jude Asongwe Questions for revision

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