1. Part 1 STRATEGIC MARKETING AND ITS ENVIRONMENT

2. 1: Customer-Driven Strategic Marketing
2: Planning, Implementing, and Evaluating Marketing Strategies
3:The Marketing Environment, Social Responsibility, and Ethics

3. Chapter 2 Planning, Implementing, and Evaluating Marketing Strategies
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258

4. Marketing Applications

5. Figure 2.4 - The Four-Cell SWOT Matrix
2-5

6. 1. You probably are quite familiar with Apple and its highly popular products. You may even own an iPad, iPhone, or iPod. Create a SWOT analysis for Apple.
Students should address the internal strengths and weaknesses and the external opportunities and threats that Apple faces currently. The annual reports and the financial statements of the firm, in the form of ratios can help students find out a lot about the liquidity, financial leverage, and profitability of the firm which will help them carry out a good SWOT analysis.

7. 1. (cont.)
Some of the top opportunities for Apple are:
Technological innovation
Globalization
Increased use of PCs, phones, and laptops
Increased use of the internet
Innovation
Some of the threats that Apple faces are:
Recession
Credit crisis
Cheaper competitor products
Product poaching and substitution

8. 5. Marketing units may be organized according to functions, products, regions, or types of customers. Describe how you would organize the marketing units for the following:
a. A toothpaste with whitener, a toothpaste with sensitivity protection, a toothpaste with cinnamon flavor
b. A national line offering all types of winter and summer sports clothing for men and women: regions or functions
c. A life insurance company that provides life, health, and disability insurance

9. Answers
a. A toothpaste with whitener, a toothpaste with sensitivity protection, a toothpaste with cinnamon flavor
Ans: Types of customers
b. A national line offering all types of winter and summer sports clothing for men and women: regions or functions
Ans: Regions or functions
c. A life insurance company that provides life, health, and disability insurance
 Ans: Products, types of customers, or regions

10. Internet Exercise APPLE
One of Apple’s strengths is its ______ , which is considered to be very well organized and informative. See why by accessing
website

11. 1. Based on the information provided on the website, describe Apple’s SBUs. Does Apple have SBUs that are divisions, product lines, or some other profit-center structure within the parent company?
Apple is known for its well-designed products. It treats every product line as its own business unit.
For example, Apple’s iPhone, iPad, and iTunes are all examples of Apple’s SBUs.

12. 2. Based on your existing knowledge of Apple as an innovative leader in the consumer electronics industry, describe the company’s primary competitive advantage (i.e., what makes Apple strategically unique?). How does Apple’s website support this competitive advantage?
Apple’s main competitive advantage is its product __________ and ___________ . (hint: Porter’s generic strategy)
It provides its customers with advanced product designs, and its offerings draw its customers to an entire range of consumer electronics that integrate into one single platform. Apart from this an effective supply chain management system and an innovative internal organizational structure are the factors that lead to its competitive advantage.
innovation
differentiation

13. 3. Assess the quality and effectiveness of Apple’s website
3. Assess the quality and effectiveness of Apple’s website. Specifically, perform a preliminary SWOT analysis comparing Apple’s website with other high-quality websites you have visited.
Students should asses all aspects of the website, including ease of use, content, interactivity, and how different products are connected to each other via the site.
When comparing the Apple site to other websites, remind students that they can think outside the box and expand their search to successful websites like Amazon.com.

14. PORTER’S FIVE COMPETITIVE FORCES MODEL
Threats
NEW MARKET ENTRANTS
SUBSTITUTE PRODUCTS & SERVICES
THE FIRM
INDUSTRY COMPETITORS
Cost-effectiveness
Market access
Differentiation of product or service
According to Porter, there are five competitive forces in any industry, and the attractiveness of the industry depends on the strength of each force (Porter, 1985). Under the perspective of market structure, Porter’s competitive forces model (Porter, 1985; Applegate et al., 1999) has been broadly adopted as the underpinning for investigating the effect of information technology on the relationships between suppliers, customers, and other potential threats.
Contemporary strategic planning frameworks
-- 1) too narrow and pessimistic
-- 2) they are based on projections of market share and market growth
COMPETITIVE FORCES that SHAPE strategy
-- depends on the type of the industry
The ability to manage complexity and responsiveness has become a powerful source of competitive advantage.
Internal Forces: 1.customer focus, 2.communication, 3.core competencies, 4.complexity, 5.Quality
Due to characteristics of the instability of the markets in e-Commerce, Downes and Mui (1998) show that there are three forces that must be added to Porter’s five forces model: globalization, digitalization, and deregulation.
digitalization – the improvement and cost reductions in digital technology have had significant impact in business for many years now. The Internet has simply accelerated much of what was already happening and spread it into other industries across the world (esp. the information-based industries).
Deregulation and liberalization – it opened up new opportunities for many firms, and recent years have seen an increase in the number of related diversifications. (e.g., UK companies in the energy sector have branched out into related markets such as other forms of energy or telecommunications, making use of their physical distribution networks).
Globalization – an international level of many industries and liberalization of many markets (e.g., Eastern Europe) have opened up new foreign markets for Western firms while bringing Western firms into competition with multinationals based in other countries.,
Such international competition is likely to accelerate following political moves, such as the signing of the General Agreement on Trade and Tariffs by the leading industrial nations which promise to reduce barriers to international trade. Concept of “localization” where organizations must be a part of the local environmental setting. That is to think global and act according to local customs to survive and thrive in local conditions.
SUPPLIERS
CUSTOMERS
Bargaining power N
Dr. Chen, The Trends of the Information Systems Technology
TM -14

15. Generic Strategies Framework
Michael Porter describes how businesses can build a sustainable competitive advantage
“fundamental basis of above-average performance in the long run is sustainable competitive advantage.”
He identified three primary strategies for achieving competitive advantage:
______ leadership - lowest-cost producer
_____________ - product/service is with unique feature
_______ - limited scope; occupy narrow market niche where the products/services can stand out by virtue of their cost leadership or differentiation.
Cost
Differentiation
Focus

16. Competitive Advantage Focus
Figure 1.2: Porter’s Generic Strategy Framework –
3 Strategies for achieving Competitive Advantage
Competitive Advantage
Uniqueness
Perceived by
Customer
Lower Cost
Position
Industrywide (Broad Target)
Overall Cost Leadership
Differentiation
Competitive Scope
Three generic strategies
Cost leadership
differentiation (internal differentiation [e.g., stock option, bonus, salary increase] is good for building performance culture within the organization) From PRODUCT differentiation to SERVICE differentiation (BLUE OCEAN)
Focus (focused strategy is to develop a new market niches for specialized products/services where a target area better than its competitors) means an appropriate position/market
a. cost or
b. differentiation
PRODUCT differentiation  SERVICE differentiation  INNOVATION (BLUE OCEAN STRATEGY)
Core concept of this strategy are two basic principles:
1. Competitive advantage is believed to be the GOAL of any strategy
2. It is to be believed that a firm must define the TYPE of CA it seeks to attain and the scope within which it will be attained.
From “all things to all people” (a below-average performance) to a focus on core competencies.
Particular Segment only (Narrow Target)
Focus
Competitive Mechanism N
Dr. Chen, The Trends of the Information Systems Technology
TM -16

17. Business Strategies and its Competitive Advantage Innovation Alliance
Uniqueness
Perceived by
Customer
Lower Cost
Position
Industrywide (Broad Target)
Cost Leadership
Differentiation
Alliance
Innovation
Growth
Competitive Scope
Particular Segment only (Narrow Target)
Three generic strategies
Cost leadership
differentiation (internal differentiation [e.g., stock option, bonus, salary increase] is good for building performance culture within the organization) From PRODUCT differentiation to SERVICE differentiation (BLUE OCEAN)
Focus (focused strategy is to develop a new market niches for specialized products/services where a target area better than its competitors) means an appropriate position/market
a. cost or
b. differentiation
PRODUCT differentiation  SERVICE differentiation  INNOVATION (BLUE OCEAN STRATEGY)
Core concept of this strategy are two basic principles:
1. Competitive advantage is believed to be the GOAL of any strategy
2. It is to be believed that a firm must define the TYPE of CA it seeks to attain and the scope within which it will be attained.
From “all things to all people” (a below-average performance) to a focus on core competencies.
Cost Focus
Differentiation Focus
Knowledge-based economy
Industrial economy
Competitive Mechanism N
Dr. Chen, The Trends of the Information Systems Technology
TM -17

18. Video Case 2.1 (p.51)
HOW White Rock ADDS MARKETING SPARKLE

19. VIDEO CASE 2: HOW White Rock ADDS MARKETING SPARKLE Summary
This case describes the marketing strategies that White Rock used to revitalize its brand and grow in a highly competitive beverage industry. Although White Rock sparkling water was once popular, by the end of the 20th century, the company’s growth had stagnated. To bring its brand back from the brink, White Rock changed several elements of its marketing mix.
The company’s branding focuses on its rich history as well as the nutritional benefits of its products. White Rock introduced new packaging by changing its containers and is diversifying its product mix by acquiring other brands with high growth potential. The company also uses a hybrid distribution system and quality customer service to differentiate its brands from competitors. With this new marketing mix, White Rock plans to expand its market and increase sales.

20. 1. How would you describe White Rock’s strengths, weaknesses, opportunities, and threats?
Students may want to answer this question in a SWOT matrix (see Figure 2.4). Some answers may include:
Strengths—strong brand history, customer loyalty, products target health-food consumers, quality customer service, hybrid distribution system
Weaknesses—stagnant growth for White Rock brand, consumers are less familiar with the brands compared to competitors’ brands
Opportunities—health-food consumption is increasing, consumers want all-natural and organic products, consumers want alternatives to soft drinks
Threats—competitors have more capital, at their disposal, to compete; consumer demand for sparkling water is low, other environmental forces

21. 2. What do you think White Rock should do to gain competitive advantage?
Students may suggest that White Rock should expand its target market to include groups outside of the niche health food industry, embark on new marketing initiatives to make the White Rock brand more well-known, or form partnerships with restaurants or cafes to sell the product at their locations and promote its premium quality.

22. 3. What elements of the marketing mix could White Rock change to improve its marketing strategy?
Technically, White Rock could change all elements of the marketing mix. Some are harder to change than others, however.
The hardest to change would be __________ methods, as they involve transportation and location considerations.
_______ would be the easiest to change. Increasing the price for its products could promote its “premium brand” image, while lowering the price could attract more customers.
distribution
Pricing

23. 3. (cont.)
Increasing __________ would be the best way to spread awareness of the White Rock product, through advertising, by forming partnerships, or by engaging in greater customer relationship marketing.
White Rock could also change its _______ , either by adapting its current products, adopting different types of product packaging, or acquiring new brands. Changing any of these elements will likely affect the marketing strategy significantly.
promotion
products