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Strategy in Marketing

Strategy in Marketing

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Strategy in Marketing

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  1. Strategy in Marketing Professor Lawrence Feick University of Pittsburgh

  2. Outline • What is marketing strategy? • Framework for marketing strategy • External analysis: environmental scanning • Internal analysis: core skills of the firm • SWOT: matching the external and internal • Portfolio models

  3. Marketing strategy • Answers basic questions: • to whom will we sell? • what will we sell, how will we sell it? • Focus on: • target market selection • marketing mix design

  4. Marketing strategy formulation • External analysis (looking outside the firm) • environmental scanning • environmental management • identifying opportunities and threats • Internal analysis (looking inside the firm) • mission and objectives • key skills, resources of the firm • identifying strengths and weaknesses

  5. External analysis:The key environments • Socio-cultural environment • Economic environment • Technological environment • Political-legal environment • Competitive environment

  6. External analysis:The socio-cultural environment • Demographics • age, education, marital status, race, etc. • Culture • US culture, subcultures, foreign cultures • pop culture, style, fashion, conventional wisdom • ideas, movements, causes • How is this environment changing?

  7. Life expectancy at birth by sex, US by year

  8. Racial (ethnic) characteristics of the US, percentages by year

  9. Percent distribution of origin of US naturalized citizens by year Source: US INS

  10. External analysis:The economic environment • GDP and business cycles • Personal income • Inflation • Unemployment

  11. External analysis:The technological environment • Creation of substitutes for the product category (e.g., marketing myopia examples) • Changes in the product or product usage • Changes in the production, service, or support process • Changes in distribution channels • Changes in promotion, media

  12. External analysis:The political-legal environment • Government laws and regulations • Maintaining a competitive market • Protecting consumers • Industry self-regulation • Litigation

  13. External analysis:The competitive environment • Who is our competitor? • brand-level competition • product category-level competition • want-level competition • Open markets and increased competition • global connections • emphasis on exports • virtual marketing

  14. External analysis: recap Economic Environment Socio-cultural Environment Technological Environment Firms, Consumers, Competitors, and Products Political-legal Environment Competitive Environment

  15. External analysis: recap • Five external environments change continually • Changes create opportunities and challenges in new and existing markets • Marketers’ key jobs: • environmental scanning, forecasting, adaptation • environmental management (if possible)

  16. Internal analysis • Motivation: how does the firm choose from among all of the opportunities in the environment? • Examples • Microsoft • Federal Express

  17. Internal analysis:Mission • The self-defined description of the business the firm is in; why the firm exists • Usually includes mention of • customer groups served • customer needs met • technology employed • Constrains marketing strategy choices

  18. Mission statement example • Intel: Do a great job for our customers, employees, and stockholders by being the preeminent building block supplier to the computing industry.

  19. Internal analysis:Organizational objectives • Define sought after benchmarks • Usually specific about time and quantity • Often involve sales, profits, numbers of customers, customer satisfaction, etc. or hoped for changes in these • Constrains marketing strategy choices

  20. Internal analysis:Strengths and weaknesses • Assessment of skills, resources, competencies of the firm • What do we do exceptionally well, what not so well? • What assets (e.g., patents, image, brands, people) do we have that give us an advantage? • How do we compare to competition on these?

  21. SWOT • Combining the results of internal analysis (SW) with external (OT) • Build on strengths to take advantage of environmental changes • Manage weakness that are made greater by environmental changes

  22. Recap: marketing strategy • Outcome of SWOT analysis: • a focus on who: which target markets? • a focus on how: what marketing mix will move them? • Key to success: consistency • with the target market and mix • among elements of the mix

  23. Aside: Portfolio models • Purpose: assess each of the firms businesses using internal and external criteria • Two examples: • Boston Consulting Group Growth/Share Matrix • GE Business Screen

  24. BCG Growth/Share Matrix Fast Growth 10% Slow Growth High Relative Share 1.0 Low Relative Share

  25. BCG Growth/Share Matrix Fast Growth C 10% Slow Growth A B High Relative Share 1.0 Low Relative Share

  26. GE Business Screen High Industry Attractiveness Green Yellow Medium Red Low Strong Average Weak Business Strength

  27. Portfolio models: Summary • Assumptions • Uses • Limitations