MRKTNG 3000 1st Edition Lecture 2 Outline of Last Lecture I. What is marketingII. Marketing’s first taskIII. Marketing’s second task IV. Product vs price vs promotion vs placementV. ExampleVI. BenefitsVII. CostsOutline of Current Lecture I. Analyzing the marketing environment a. Shoe industry exampleb. NFL example c. Chinese food industry example II. Three stages of strategic marketing plana. 1- Defining the mission and/or visioni. Porter’s Five Forces model ii. BCG portfolio model iii. Sustainable competitive advantage b. SWOT Analysis III. Hypothetical market structure and strategiesCurrent LectureAnalyzing the marketing environment:-$40 billion diet industry-Increased consumption of health and diet products-Businesses responding to the demand in a variety of waysHow do companies identify potential changes/trends that may affect them?-Market researchThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Marketing environment analysis framework:Consumers immediate environment (competition, corporate partners, company) Macro environment (demographics, social, technology, economic, political/legal, culture)Ex- What types of macro environmental factors have affected the athletic shoe industry in the past five years?-technological changes -child labor laws -Wearing athletic shoes for looksWhat might affect the NFL in the next five years? -Concussion sensitivity (NFL)-Other sports are on the rise-Rule changes making the game more exciting -Recovery from recession allowing more people to attend games-Technology making TV watching better, hurting attendance What about Chinese restaurants in the USA?-Increased competition makes Chinese food less special-MSG, concern over health -Healthy restaurants developing fusion products-Many restaurants are privately owned, and many owners are older can’t get up to speed on technologyThree stages of strategic marketing plan:1. Defining the mission and or visionTwo questions to answer:1. In which industries/businesses should we operate?2. What is our sustainable competitive advantage?1. Porter’s Five Forces Model:-Corporate Strategy-In which industries do we want to compete?-Industry Profitability dependent on…1. Industry competitiveness -Intensity of current competitors-Low intensity=higher profitability-Industry has lower intensity when there are fewer firms-Ex: Commercial aircraft (manufacturing airplanes, aka Boeing) 2. Availability of substitute products-Customers can choose different products as a substitute-Few or no substitutes= higher profitability-Examples of few/no substitutes: Gas, proprietary drugs-Examples of many substitutes: Fresh veggies, soft drinks, technological products3. Potential entrants (threat of new competition)-High barriers to entry= higher profitability -High barriers to entry exist when:-High capital requirements-Economies of scale are present-High product differentiation (ex- wristwatches)-Network externalities (Technological or learning curve)4/5. Supplier/buyer power-Lower bargaining power of suppliers/buyers=higher profitability-Lower bargaining power when:-High number-Low information-Lower supplier power example-Computer industry (hard disk drives)-Lowe buyer power example-Medical services (patients)Allocating resources using BCG portfolio model:2. Sustainable competitive advantage: An advantage versus competition that can be maintained consistently over time Ex- McDonald’s: operational excellence Macro strategies for developing customer value:-Product excellence, customer excellence, or operational excellence customer value Customer excellence:-Retaining loyalty with excellent customer service Operational excellence:-Efficient operations, excellent supply chain management Product excellence:-achieving effective branding and product positioning 2. SWOT Analysis -Used to evaluate strengths, weakness, opportunities, threats of a business or venture-Intensive growth strategies: product/market expansion gridHypothetical market structure and strategies:Market leader- 40%Wants to expand market, defend market share, expand market shareMarket challenger-30%Wants to attack leader or maintain their status quo Market follower-20%Wants to imitateMarket nicher-10%Wants to