BUAD 307—MARKETING FUNDAMENTALS MARKETING STRATEGY

Learning Objectives Identify The scope of strategic decisions Tradeoffs that firms must make in their decisions Cumulative and “spill-over” effects of strategic decisions and the need for consistency The need for industry balance and firm unit cash flow balance

Strategy Plan To achieve desired objectives (e.g., profit, market share) Based on available resources (e.g., financial, patents, trademarks, people, brand name/image , distribution channels) Subject to choices made (e.g., willingness to take risk, short run vs. long run goals)

MARKETING STRATEGY STRATEGY RESOURCES ENVIRONMENT PRIORITIES/ OPPORTUNITY COSTS EXPERIMENTATION/ EXPRIENCE

Market Balance A WELL BALANCED GADGET INDUSTRY Different firms should attempt to offer different forms of value, appealing to different customer segments—otherwise, competition is likely to degenerate into price competition EASYTECH, LTD. EASE OF USE TROJAN CREATIONS, INC. PERFORMANCE BRUIN PRIDE, INC. LOW PRICE MICROGEEKS, LTD. SMALL SIZE PATIENCE-IS-STUPID, INC. SPEED

Core Competencies Broad, fundamental capabilities—not readily imitated by competitors— in which an organization excels Deployable across a variety of products and situations E.g., stylish design of electronics (Apple) E.g., economies of scale and broad assortment of online merchandise (Amazon)

Examples of Objectives Profit level Profit growth Total unit sales Growth in unit sales Growth in dollar sales Total dollar sales Brand perception by customers Value Quality Innovativeness Reliability Brand name recognition Brand name recognition by product category Product availability Availability across retailers and other distributors Store placement Percentage of products sold at full price Percentage of revenue from new products Affordability of product Elimination of unsafe product ingredients Certain objectives must be accomplished (e.g., brand awareness, distribution coverage) before others can be effectively attempted (e.g., sales volumes).

Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis INTERNAL TO FIRM EXTERNAL STRATEGY WEAKNESSES OPPORTUNITIES Note that merely listing each factor has limited use. We need to analyze: How to take advantage of strengths and opportunities How to address weaknesses and threats How to use strengths and opportunities to counter weaknesses and threats THREATS

Compensating for Weaknesses and Threats STRENGTHS OPPORTUNITIES PERFORMANCE STRENGTHS OPPORTUNITIES THREATS

SWOT Deciding where to concentrate resources Taking advantage of strengths and opportunities Addressing weaknesses and threats Using strengths and opportunities to compensate for weaknesses and threats

SWOT—Apple Strengths Weaknesses Opportunities Threats Market leading/dominating position Strong brand name Financial strength Strong R&D Strong demand for iPhone Weaknesses Legal problems (loss of several patent lawsuits) Product recalls Dependence on the legacy of Steve Jobs for brand image No major recent new product types Opportunities ApplePay New product introductions Increasing global demand for smart phones Threats Android devices (free operating system) Counterfeiting and industrial espionage Competition—both on low cost and on innovative features Declining desktop and laptop markets in developed countries Unstable world economy Increased import tariffs Foreign trade barriers placed in retaliation for possible U.S. barriers Source: “Apple,” Global Markets Direct SWOT Reports (from Business Essentials), June 1, 2016