Porter's Strategy Standpoint

Standpoint for Strategic Thinking

• Michael Porter's standpoint for strategic thinking involves three main strategies:
• Cost Leadership: operating at the lowest production and distribution cost to price lower than competitors and gain market share
• Differentiation: achieving superior performance in a vital customer benefit area, such as service, quality, style, or technology
• Focus: focusing on one or more narrow market segments and practicing either cost leadership or differentiation within the target segment

Program Formulation

• Once a business unit has developed its principal strategies, it must work out detailed supporting programs
• Marketing programs must be tentatively formulated, and their costs estimated using Activity-Based Cost (ABC) accounting
• Programs must be justified based on their potential results

Implementation

• The implementation stage involves putting marketing strategies and plans into action
• Assignments are given to individuals and groups, addressing the who, where, when, and how of reaching goals and objectives

Feedback and Control

• The firm must track results and monitor new developments in the internal and external environment
• A company's strategic fit with the environment will inevitably erode due to environmental changes
• Peter Drucker emphasized the importance of "doing the right thing" (effectiveness) over "doing things right" (efficiency)

Marketing Planning

• Planning involves forecasting future events and identifying strategies to achieve organizational objectives
• Marketing planning entails crafting activities connected to marketing objectives and the changing marketing environment
• A marketing plan sets out how to put marketing strategy into practice, with the customer as the starting point

The Marketing Plan Process

• Defining the Business Mission: setting the limitations for all succeeding decisions, objectives, and strategies
• Situation Analysis: examining the Strengths, Weaknesses, Opportunities, and Threats within the market and internal environment
• Benefits to Company and Consumers: using marketing research to increase sales and profit, fight competition, boost goodwill, and reduce marketing risk

Marketing Research

• Similar to Military Intelligence: gathering commercial intelligence through systematic study and analysis
• Applied Research: using marketing research to solve marketing problems and provide practical value
• Connected with MIS: using marketing research as a component of Marketing Information System (MIS) to solve marketing problems and make marketing decisions

Importance of Marketing Research

• Provides Valuable Data: providing data to decision-makers to make informed decisions
• Studies Consumer Behavior: providing data on demographics, customer opinions, and other consumer behavior
• Selects Promotional Techniques: helping companies select suitable sales promotion techniques
• Supplies Marketing Information: providing data on market situation, competition, and opportunities
• Evaluates Marketing Performance: helping companies evaluate their marketing performance and improve it

Steps in Marketing Research

• Stage 1: Formulating the Marketing Research Problem
• Stage 2: Statement of Research Objectives
• Stage 3: Research Design

Business Buying Process

• Proposal Solicitation: inviting qualified suppliers to propose
• Supplier Selection: reviewing proposals and selecting the best supplier
• Order-Routine Specification: preparing an order-routine specification with the chosen supplier
• Performance Review: reviewing supplier performance and deciding whether to continue, modify, or end the arrangement