Marketing Strategies and Definitions

Strategy Strategy is an organization’s long-term course of action designed to deliver a unique customer experience while achieving its goals. 2-3

Marketing Strategy Marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it. 2-4

Strategic Marketing Process The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets. 2-6

Goals or Objectives Goals or objectives are the statements of an accomplishment of a task to be achieved, often by a specific time. 2-8

Business A business is the clear, broad, underlying industry or market sector of an organization’s offering. 2-9

Organization of a typical manufacturing firm, showing a breakdown of the marketing department 2-10

The board of directors oversees the three levels of strategy in organizations: corporate, business unit, and functional 2-11

The organization of a business unit in a typical consumer packaged goods firm shows two product or brand groups 2-12

Profit Profit is the money left after a business firm’s total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings. 2-13

Profits are not evil! No company or person can stay in business if they do not make a profit. But we have mixed feeling about this!

Suppose a John Deere worker makes $80,000 a year.

He starts his own business. How much would he have to make just to break even? It would be close to $100,000

That is how much he would have to make after paying for all his own supplies salaries insurance non-personal taxes of all kinds etc… etc..

If McDonald’s doubled its minimum wage what would be the cost of a BigMac?

Santa Claus does not appear by magic and give gifts made by someone else (not like you) from somewhere (not here) to deserving people (like you).

Market Share Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself. 2-20

Core Values Core values are the fundamental, passionate, and enduring principles of an organization that guide its conduct over time. 2-22

Organizational Culture An organizational culture consists of the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization. 2-23

Mission A mission is a statement of the organization’s function in society that often identifies its customers, markets, products, and technologies. The term is often used interchangeably with vision. 2-24

Star Trek Enterprise Why is a mission statement important? 2-25

Mission Statement: What business are we in? What makes you different from all others?

Mission Statement: It should serve as an “invisible hand” that guides people in the organization.

Mission Statement: It must be believable It must be something employees can buy into

2-29 Mission Statement

Marketing Dashboard A marketing dashboard is the visual computer display of the essential information related to achieving a marketing objective. 2-30

An effective marketing dashboard like Sonatica’s helps managers assess a business situation at a glance 2-31

Marketing Metric A marketing metric is a measure of the quantitative value or trend of a marketing activity or result. 2-32

Business Portfolio Analysis Business portfolio analysis is a technique that managers use to quantify performance measures and growth targets to analyze its clients’ strategic business units (SBUs) as though they were a collection of separate investments. 2-33

SETTING STRATEGIC DIRECTIONS WHERE DO WE WANT TO GO?  Business Portfolio Analysis ( BCG Matrix ) Business Portfolio Analysis ( BCG Matrix ) Market Growth Rate Stars Cash Cows Dogs Question Marks Relative Market Share High Low 2-34

Kodak Consumer-Related Products What SBU type in the BCG growth-share matrix? Kodak Picture kioskKodak film Kodak digital photo printerKodak digital camera 2-35

BCG business portfolio analysis for Kodak’s consumer SBUs for 2003 (red circle) and 2012 (red arrow) Kodak digital photo printer Kodak Picture kiosk ④ ③ Kodak digital camera Kodak film ① ② 2-36

Market Segmentation Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. 2-37

Limited Resources to Market Offerings  Can’t Be “All Things to All People” 2-38

Marketing Plan A marketing plan is a road map for the marketing activities of an organization for a specified future time period, such as one year or five years. 2-40

Visionary organizations: (1) establish a foundation, (2) set a direction, and (3) create strategies to successfully develop and market their offerings 2-41

Elements in typical marketing and business plans targeted at different audiences 2-42

 Have Complete and Feasible Plans  Set Measurable, Achievable Goals  Use a Base of Facts and Assumptions  Use Simple, But Clear and Specific Plans  Make Plans Controllable and Flexible  Find the Right Person to Implement  Work Toward Consensus-Building 2-43 Marketing Plan Rules

Competitive Advantage 1.Who is a competitor? Levels Same producttouchplay machines Same product classslot machines Others that supply the same servicecasinos Compete for the same dollarsentertainment Compete with resourcesrent, etc.

 Competitors 2-45

Competitive Advantage 1.Who is a competitor? Point-of-view Industry viewWhat industry are you in? Coca Cola Pepsi Customer viewCoca Cola thirst lifestyle etc.

Competitive Advantage 1.Who is a competitor? Competitor myopia: short-sighted Kodaksold film Britannicasold hard copy encyclopedia

Competitive Advantage 2. What can competitors do? a. What are your competitors’ objectives? market share cash flow leadership profitability stock viability

Competitive Advantage 2. What can competitors do? b. What are the competitors’ strategies? c. What are competitors strengths and weakness? SWOT analysis Information sources? d. What will competitors do?

Competitive Advantage 3. Selecting the competitors to compete with. a. Strong and weak competitors weak: easier but less gain strong: hard by greater gain customer value analysis what actions create customer value? how do customers rate value?

Competitive Advantage 3. Selecting the competitors to compete with. b. Close or distant competitors close: they are like you distant: they are unlike you Why not just destroy close competitors? 1. They can increase total demand. 2. They can share cost and R&D 3. They can serve unattractive segments 4. They can lower threat from government 5. They can improve bargaining power with publics (governments, unions, special interest groups, etc.

Competitive Advantage 3. Selecting the competitors to compete with. c. Good and bad competitors good: play be the rules bad: do not play fair

Competitive Advantage 4. Building a system to gather information Proctor and Gamble example.

Competitive Advantage 5. Developing competitive strategies. a. Cost leadership b. Differentiation c. Focus What do they emphasize 1. Operational excellenceWal-Mart 2. Customer intimacyEmirates 3. Product leadershipApple

Competitive Advantage 5. Developing competitive strategies. d. Market leadership Niching a. Low volume, high margins b. Specialization customer size service geography end users (beds in NY)\ etc….

 Diversification Analysis Diversification Analysis Market Penetration Market Development Product Development Diversification 2-56

 Defining Precise Tasks, Responsibilities, and Deadlines Program Schedules Gantt Chart Action Item List 2-58

Tasks and time needed to complete a term project 2-59

Gantt chart for scheduling a term project that distinguishes sequential and concurrent tasks 2-60

 Improving Implementation of Marketing Programs Reward Successful Program Implementation Communicate Goals and The Means of Achieving Them Have a Responsible Program Champion Willing to Act 2-61

The evaluation phase of the strategic marketing process ties results and actions to goals, often using marketing metrics and dashboards 2-62

The evaluation phase requires that Kodak compare actual results with goals to identify and act on deviations to fill in the “planning gap” by