The Strategic Marketing Process

Four market-product strategies: Alternative ways to expand marketing opportunities, using Coca-Cola Company products as examples Market Penetration Selling more Coca-Cola to Americans Product Development Selling a new product like PowerAde to Americans Market Development Selling Coca-Cola to the Chinese for the first time Diversification Selling a new product like movies and home videos to Europeans

Present New Diversification Markets Market Penetration +: Know products & market segments well -: Growth limited to this segment Product Development +: Can gain marketing economies of scale -: Need new R&D and mfg., can cannibalize sales Market Development +: Can gain R&D and manufacturing economies -: Need new sales training and distribution Diversification +: Can mitigate swings in core business by products in new markets -: No economies of scale in R&D, mfg., or mktg

SWOT Internal Management Marketing Manufacturing Research & Dev SWOT Internal Management Marketing Manufacturing Research & Dev. Finance Product Mix Personnel External Economy Competition Consumer Trends Technology Industry/ Market Legal/Regulatory Channels S W O T

STRATEGIC PLANNING TOOLS (O’s &T’s) Opportunities: a) How Attractive? b) Do we have the right business strength? Threats: a) How serious? b) How probable?

SWOT ANATOMY Selected Factors A. Internal

SWOT ANATOMY Selected Factors B. External

Generic Marketing Strategies for Increasing a Firm’s Profits Present Markets, present products (market penetration) Increase Revenues Present markets, new products (product development) New markets, present products (market development) Goal Increase Profits New markets, new products (diversification) Decrease Expenses Scale or experience curve economies through larger unit volume Non-scale economies

Three Generic Growth Strategies I. Intensive MP MD PD II. Integrative Backward Forward Horizontal III. Diversification Concentric Conglomerate

GE MULTIFACTOR MATRIX Market Attractiveness Business Strength Market Size Growth Rate Profit Margins Number of Competitors and Their Strength Technological Conditions Seasonality and Cyclicality Business Strength Market Share Marketing Enterprise R&D Skills Manufacturing Efficiency Quality of Products New Product Planning Unit Costs

Profit Impact of Marketing Strategy (PIMS) DATA: 3,000+ SBUs from 450+ member business firms contributing 100+ data items – characteristics of market environment, competitor’s environment, strategies used by SBUs. Best Predictors of ROI and Cash Flow Market Share Industry Growth Rate PLC Position Ratio of Marketing Expenses to Sales