Marketing Strategy: Introduction What is strategy? How does marketing contribute? - The marketing concept - Market orientation

Marketing Strategy: Introduction What is strategy? A fundamental pattern of present and planned objectives, resource deployments, and interactions of an organization with markets, competitors, and other environmental factors “…the search for a favourable competitive position…” (Porter, ‘85)

Marketing Strategy: Introduction Corporate strategy -organizations scope and resource deployment Business-level strategy -competitive strategy of a business unit in its industry Marketing strategy -targeting, segmenting and positioning for a product. Figuring out the marketing mix

Marketing Strategy: Introduction What is the marketing concept? “…determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitor’s do.” (Kotler et al, ‘96)

Marketing Strategy: Introduction What do marketers mean when they say their firms are market oriented?

Marketing Strategy: Introduction What are advantages and disadvantages of market orientation? Why do some firms lack orientation towards the market ?

Marketing Strategy: Introduction Market oriented in not marketing oriented - information on all important buying influences permeates every corporate function -Strategic/tactical decisions are made inter- functionally and inter-divisionally -divisions and functions make well-coordinated decisions and execute them with commitment

Marketing Strategy: Introduction Which should come first – the customer need or the product idea? - Marketing myopia

Discussion questions Q.1 : In defining their strategies, should companies pursue broadly or narrowly defined missions? Q. 2: What are the advantages of each approach?

Characteristics of Effective Corporate Mission Statements BroadSpecific Functional Based on customer needs Transportation business Long-distance transportation for large- volume producers of low- value, low-density products Physical Based on existing products or technology Railroad businessLong-haul, coal carrying railroad

Ansoff Strategies

The BCG Growth Share Matrix High Low Stars Dogs Question marks Relative market share Market growth rate (in constant dollars) 10% 1 Source: Adapted from Barry Hedley, “Strategy and the Business Portfolio,” Long Range Planning 10 (February 1977) Cash cows

Cash Flows Across Businesses in the BCG Portfolio Model Growth rate (cash use) High Low Stars Cash cows Dogs Question marks HighLow Relative market share Desired direction of business development Cash Flows

The GE Nine-Cell Matrix Business’s competitive position High Low Medium Industry attractiveness HighMediumLow Invest/grow 2 Selective investment/ maintain position 3 Harvest/divest