1. The Strategic Marketing Process

2. 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

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

4. SWOT Internal Management Marketing Manufacturing Research & Dev. Finance Product Mix Personnel External Economy Competition Consumer Trends Technology Industry/ Market Legal/Regulatory Channels SW OT

5. 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?

6. SWOT ANATOMY Selected Factors A. Internal

7. SWOT ANATOMY Selected Factors B. External

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

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

10. GE MULTIFACTOR MATRIX Market Attractiveness 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

11. 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

12. 1. Market Penetration How? >Greater Usage >Competitor’s Competition >Noncustomers Tactics? >Lower Prices >Expanded Distribution >Greater Promotion When Effective? >Growth Market 2. Market Development How? > New Locations >New Channels >New Customers International Markets >Exporting >Licensing >Joint Ventures >Direct Investment >Strategic Alliance

13. 3. Product Development How? >Product Innovation (Augmentation) >Product Line Extension Success Factors >Sufficient Market Size >Firm’s Resources >Cannabalism >Competitive Response >Significant Point Of Difference 4. Diversification Risky!!! Failures: > Anheuser-Busch >Eagle Snacks >Rohr and Grumman >Coca Cola >IBM >Holiday Inn