3–1 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Part 1: Marketing strategy and management Chapter 3: Identifying marketing opportunities Step 1: Analyse the current market environment

3–2 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy When we finish this lecture you should Understand the sorts of company objectives that are useful for a company’s marketing strategy Recognise that a company’s resources affect its search for opportunities Know the effect of competitive pressures on strategy planning Understand why a competitive advantage is key to capitalising on marketing opportunities Understand how the economic, technological, social and cultural, and political and legal environments influence strategy planning Know about the different types of international and domestic marketing opportunities to pursue Understand how to screen and evaluate marketing strategy opportunities Know the logic behind planning grids or matrices

3–3 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Forces that shape the marketing Environment Direct marketing environment – Customers – The company – Competitors External market environment – Economic – Technological – Political and legal – Cultural and social

3–4 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Company objectives Mission statement – Sets out the organisation’s basic purpose for being Three generic objectives – Engage in activities that perform a socially and economically useful function – Develop an organisation to carry out the functions of the business and implement its strategies – Earn sufficient profit to survive

3–5 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.1 A hierarchy of objectives

3–6 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Examples of company resources Financial strength (BHP Billiton) Production capability and flexibility (Fisher and Paykel) Marketing strengths – Patents (Sarich) – Channel relationships (Nestle, Westpac) – Distribution dominance (Coca-Cola) – Skilled sales force; low-cost Internet Web site – Technical capability (Du Pont) – Loyal customer base (Kraft)

3–7 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy The competitive environment Pure competition Oligopoly Monopoly Monopolistic competition

3–8 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Threats of new entrants Figure 3.2 The five competitive forces

3–9 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Competitive advantage The company has a marketing mix that the target market sees as better than a competitor's mix The company is required to – understand current competitors' offerings – anticipate competitors' likely plans – monitor effects of changes in competition

3–10 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.3 A framework for competitor analysis— disposable nappies in Japan

3–11 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Economic environment Affects the way in which companies (or the whole economy) use resources Affected by the interaction of the macroeconomic system Changes rapidly Marketing strategy may fail if a country suffers a rapid or extended business decline Changes in economy are often accompanied by changes in interest rates Economies of the world are interconnected

3–12 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Technological environment Technology—the application of science to convert economic resources to output Robotics (better quality control, lower production costs) Computer scanners at retail check-out counters Automated inventory control Worldwide satellite communications of data Personal computers Fax machines for communication for communication Internet and the World Wide Web

3–13 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Examples of changes in the political and legal environments Ban on liquor or cigarette sponsorship Control of advertising by the Trade Practices Commission (Australia) or Commerce Commission (NZ) Unsafe or defective goods are the liability of the manufacturer Deregulation of the broadcasting industry Deregulation of the airline industry Deregulation of government services to allow competition Native title and land claims legislation

3–14 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.4 Main features of the Trade Practices Act (Australia) and the Commerce Act and Fair Trading Act (New Zealand)

3–15 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Cultural and social environments Affect how people live and why they behave as they do Affect buying behaviour Variables – Languages people speak – Types of education – Religious beliefs – Types of food – Styles of clothing – Housing they choose – View of marriage and family

3–16 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Social and cultural trends Increasing multiculturalism Changing role of women – More women in the workforce (66 %) – Women delaying marriage and having fewer children ‘Ageing’ of the population More single-person households More convenience-oriented More health consciousness – Food products with reduced fats and added fibre More concern about the environment

3–17 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Attractive opportunities Marketing strategy planning—finding attractive opportunities and developing profitable marketing strategies Breakthrough opportunities—enable innovators to develop marketing strategies that are difficult to imitate and are more likely to be profitable for a long period of time Competitive advantage—exists when the marketing mix of a company is perceived by the target market as superior to that of the company’s competitors

3–18 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.5 Four basic types of opportunities New Present

3–19 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Types of opportunities Marketing penetration—Visa sponsored the Sydney 2000 Olympic Games and re-focused its advertising on encouraging current customers to use their card more often, to increase their chance of winning tickets to the Games Market development—McDonald’s reached new customers by opening outlets in airports, office buildings and zoos

3–20 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Types of opportunities (continued) Product development—Microsoft boosted sales by introducing new versions of programs and also new products Diversification—Sony expanded into the production of recorded music and motion pictures; Sony announced expansion into corporate Internet

3–21 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Evaluating opportunities Growth strategies are necessary but they can carry different risks – Diversification is most risky – Market penetration is the most usual strategy – Market development and international growth are profitable ways of taking advantage of current strengths – Trends in environment may make an opportunity more, or less, attractive

3–22 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Evaluating opportunities (continued) SWOT is a useful aid for identifying and listing a company’s strengths, weaknesses, opportunities and threats International trade is increasing; a low-cost foreign producer may enter the home market

3–23 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.6 An example of product-market screening criteria for a small retail and wholesale distributor ($5 million annual sales)

3–24 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.7 Expected sales and cost curves of two strategies over five-year planning periods

3–25 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.8 Continuum of environmental sensitivity

3–26 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.9 General Electric’s strategic planning grid

3–27 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy Figure 3.10 The Boston Consulting Group (BCG) matrix

3–28 ﴀ Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy What we will be doing in the next chapter In Chapter 4 we will discuss how information can be obtained to facilitate the planning and implementation of successful marketing strategies