© 2012 Pearson Education, Inc. publishing Prentice Hall. Chapter 2 Situation Assessment: The External Environment

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Situation Assessment 2

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Concentric Markets 3

© 2012 Pearson Education, Inc. publishing Prentice Hall. Table Questions in Competitive Assessment 4

© 2012 Pearson Education, Inc. publishing Prentice Hall. Table Elements of the Context: PEST 5

© 2012 Pearson Education, Inc. publishing Prentice Hall. Table Organizing Customer-Focused Research 6

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Customer Knowledge throughout Strategic Marketing Management 7

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Five Forces Industry Analysis 8

© 2012 Pearson Education, Inc. publishing Prentice Hall. Laws of Strategic Marketing  The laws of marketing strategy describe essential regularities in the way things work and the way things relate  The generalizations include:  The product lifecycle (product-market evolution)  Scale effects (cost leverage)  Market share effects (share leverage) 9

© 2012 Pearson Education, Inc. publishing Prentice Hall. Laws of Strategic Marketing  Managers may choose a strategy:  That builds directly on one of the generalizations  That is less directly tied to a given generalization, but they can’t change the reality 10

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure The Product Lifecycle 11

© 2012 Pearson Education, Inc. publishing Prentice Hall. Figure Experience Curve 12

© 2012 Pearson Education, Inc. publishing Prentice Hall. Table Sources of Scale Effects 13

© 2012 Pearson Education, Inc. publishing Prentice Hall. Market Share Effects/Share Leverage  Firms with higher market share tend to be more profitable  The share-profitability association is logical; market share will correlate with advantages of scale  Scale leads to lower unit costs, and lower unit costs should lead to higher profits  Shaping strategy around market share ignores the ambiguity in the share ROI findings 14

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