BUAD 307—MARKETING FUNDAMENTALS MARKETING STRATEGY

Perner 2 BUAD 307 OVERVIEW AND STRATEGY Relationship Marketing Selling (selling existing products with whatever methods are necessary) vs. marketing orientation (serving customer needs whether in current or new forms) Maintaining a relationship with the customer over time rather than just focusing on immediate sales –Anticipating customer needs –Providing solutions –Investing in products and services optimized for the customer

Perner 3 BUAD 307 OVERVIEW AND STRATEGY STRATEGY Strategy Target markets Related marketing mix: Product, distribution, promotion, and price Counterintuitive realities Marketing, strategy, and the organization Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis

Perner 4 BUAD 307 OVERVIEW AND STRATEGY Learning Objectives Appreciate –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

Perner 5 BUAD 307 OVERVIEW AND STRATEGY 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)

Perner 6 BUAD 307 OVERVIEW AND STRATEGY MARKETING STRATEGY EXPERIMENTATION/ EXPRIENCE RESOURCESENVIRONMENT PRIORITIES/ OPPORTUNITY COSTS STRATEGY

Perner 7 BUAD 307 OVERVIEW AND STRATEGY Marketing Strategy: Sequence BUSINESS MISSION STATEMENT OBJECTIVES MARKETING STRATEGY SITUATION/ SWOT ANALYSIS IMPLEMENTATION EVALUATION CONTROL PRODUCT PRICE DISTRIBUTION PROMOTION Adapted from text, p. 16.

Perner 8 BUAD 307 OVERVIEW AND STRATEGY Market Balance 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 BRUIN PRIDE, INC. LOW PRICE TROJAN CREATIONS, INC. PERFORMANCE PATIENCE-IS-STUPID, INC. SPEED MICROGEEKS, LTD. SMALL SIZE A WELL BALANCED GADGET INDUSTRY

Perner 9 BUAD 307 OVERVIEW AND STRATEGY 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)

Perner 10 BUAD 307 OVERVIEW AND STRATEGY 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

Perner 11 BUAD 307 OVERVIEW AND STRATEGY Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis STRATEGY STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

Perner 12 BUAD 307 OVERVIEW AND STRATEGY SWOT—Apple Strengths –Strong brand name –Highly regarded products –Wide mix of products (computers, cell phones, tablets, entertainment devices) Weaknesses –Dependence on cell phone service providers –Limited cell phone variations –Dependence on the legacy of Steve Jobs for brand image Opportunities –Growth in tablet market –Growing demand in emerging markets –New products Threats –Amazon Fire phone –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 Source: “Apple,” Global Markets Direct SWOT Reports (from Business Essentials), August