Marketing Strategy PDF

# **MARKETING STRATEGY** ## **FEEDBACK AND CONTROL** - All companies need to track results and monitor new developments in the environment. - The environment will change. When it does, the company will need to review its strategies or objectives. - Peter Drucker pointed out that it is more importa...

# **MARKETING STRATEGY** ## **FEEDBACK AND CONTROL** - All companies need to track results and monitor new developments in the environment. - The environment will change. When it does, the company will need to review its strategies or objectives. - Peter Drucker pointed out that it is more important to do the right thing (being effective) than to do things right (being efficient). Excellent companies excel at both. ## **IMPLEMENTATION** - Even a clear strategy and well-thought-out supporting program may not be enough. The firm may fail at implementation. - Employees in a company share a common way of behaving and thinking. They must understand and believe in the company's strategy. - The company must communicate its strategy to its employees and make them understand their part in carrying it out. To implement a strategy, the firm must have the required resources, including employees with the necessary skills to carry out that strategy. ## **MARKETING PLANNING** - A detailed marketing plan is needed for each business, product, or brand. The plan begins with an executive summary, which quickly overviews major assessments, goals, and recommendations. The main section of the plan presents a detailed SWOT analysis of the current marketing situation as well as potential threats and opportunities. The plan next states major objectives for the brand and outlines the specifics of a marketing strategy for achieving them. - A marketing strategy consists of specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels. - It outlines how the company intends to create value for target customers in order to capture value in return. - In this section, the planner explains how each strategy responds to the threats, opportunities, and critical issues spelled out earlier in the plan. ## **QUESTIONS TO ASK YOURSELF WHEN CREATING A MARKETING PLAN** - What's your business's current situation? - How much will it cost? - How will you execute your marketing plan? - Who is your target market? - What are your goals? - What marketing tactics will you use? ## **STRATEGIC THINKING** - Goals indicate what a business unit wants to achieve; strategy answers how to get there. Every business must tailor a strategy for achieving its goals. - Michael Porter has condensed three generic types that provide a good starting point for strategic thinking: - **Overall cost leadership:** Here, the business works hard to achieve the lowest costs. The problem with this strategy is that other firms usually emerge with still lower costs. The real key is for the firm to achieve the lowest costs among those competitors adopting a similar differentiation or focus strategy. - **Differentiation:** Here, the business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market. The relative importance of customer benefits shifts as demographic and psychographic characteristics of market populations change. - **Focus:** Here, the business focuses on one or more narrow market segments rather than going after a large market. ## **GOAL FORMULATION** - Very few businesses pursue only one objective. Most business units pursue a mix of objectives, including profitability, sales growth, market share improvement, and cost containment. - The business unit sets these objectives and manages by objectives. The business unit should strive to arrange its objectives from most to least important. - Where possible, objectives should be stated quantitatively. The objective "increase the return on investment" is not as satisfactory as "increase ROI [return on investment] to 15 percent" or even better, "increase ROI to 15 percent within two years." - Objectives support measurable goals. A business should set realistic goals. The levels should arise from an analysis of the business unit's opportunities and strengths, not from wishful thinking. **NOTE:** AFTER THE BUSINESS UNIT HAS DEFINED ITS MISSION AND CONDUCTED A SWOT ANALYSIS, IT CAN PROCEED TO DEVELOP SPECIFIC OBJECTIVES AND GOALS. ## **THREATS** - **Threat** is a challenge posed by unfavorable trends or developments that would lead, in the absence of defensive marketing action, to sales or profit deterioration. - **Threats should be classified** according to their seriousness and probability of occurrence. - After assembling a picture of major threats and opportunities, the following four outcomes are possible: - **An ideal business** is high in major opportunities and low in major threats. - **A speculative business** is high in both major opportunities and threats. - **A major business** is low in major opportunities and threats. - **A troubled business** is low in opportunities and high in threats. ## **EXTERNAL ENVIRONMENTAL ANALYSIS (OPPORTUNITY AND THREAT ANALYSIS)** - a business unit has to monitor key macroenvironmental forces (demographic-economic, technological, political-legal, and social-cultural) and significant microenvironmental forces (customers, competitors, distribution channels, and supplies) that will affect its ability to earn profits in the marketplace. - The business unit should set up a marketing intelligence system to track trends and important developments. For each trend or development, management needs to identify the implied opportunities and threats. ## **OPPORTUNITIES** - A major purpose of environmental scanning is to discern new opportunities. - We define a marketing opportunity as follows: an area of need that a company can perform profitably. ## **INTERNAL ENVIRONMENTAL ANALYSIS (STRENGTHS AND WEAKNESSES ANALYSIS)** - Management or an outside consultant reviews the business's marketing, financial, manufacturing, and organizational competencies. - Note: In examining its pattern of strengths and weaknesses, clearly the business does not have to correct all its weaknesses or gloat about all its strengths. - The big question is whether the business should limit itself to those opportunities for which it now possesses the required strengths or should consider better opportunities. ## **MANAGING THE MARKETING EFFORT** - Every company must manage some basic processes, such as new product development, raw materials to finished products, sales leads to orders, customer orders to cash payments, and so on. - Each process creates value and each process requires interdepartmental teamwork. ## **SWOT ANALYSIS** - **Strengths** include internal capabilities, resources, and positive situational factors that may help the company serve its customers and achieve its objectives. - **Weaknesses** include internal limitations and negative situational factors that may interfere with the company's performance. - **Opportunities** are favorable factors or trends in the external environment that the company may be able to exploit to its advantage. - **Threats** are unfavorable external factors or trends that may present challenges to performance. - **The company should** analyze its markets and marketing environment to find attractive opportunities and identify environmental threats. - **It should analyze** company strengths and weaknesses as well as current and possible marketing actions to determine which opportunities it can best pursue. - **The goal is** to match the company's strengths to attractive opportunities in the environment while eliminating or overcoming the weaknesses and minimizing the threats.