Mark 3000 1st Edition Lecture 18 Outline of Last Lecture I Framework for Social Media II Mobile Marketing III Social Media Strategy IV Individual Branding Outline of Current Lecture I Marketing Strategy II Steps of the Marketing Plan Current Lecture Marketing Strategy Identifies the firm s target market marketing mix and method of obtaining a sustainable competitive advantage Sustainable competitive advantage something the firm can persistently do better than its competitors o Acts like a wall that the firm has built around its position in a market o 4 Strategies that focus on aspects of the marketing mix Customer Excellence Focus on retaining loyal customers and excellent customer service Using loyalty programs and CRM Operational Excellence Achieved through efficient operations and excellent supply chain and human resource management Ex Netflix had an efficient distribution center Product Excellence having products with high perceived value and effective branding and positioning is key IBM Google McDonalds are leaders in their fields because they have strong brands and a clear position in marketplace Locational Excellence having a good physical location and internet presence Ex Starbucks located conveniently These 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 o Does not include price or promotion because they are easily duplicable by competitors Developed through marketing planning Marketing plan Written document composed of an analysis of current marketing situation opportunities and threats for firm marketing objectives and strategy specified 3 Major phases Planning phase Includes steps 1 and 2 Implementation phase Includes steps 3 and 4 Control Phase managers evaluate performance of the strategy and take necessary corrective actions Step 5 1 Business mission Objectives a Applicable for the entire corporation or organization b Answer the questions i What do we stand for ii What business are we in iii What do we want to be in the future iv What do we need to accomplish our objectives c Must stay with the core competency i Should not succumb to marketing myopia thinking in terms of goods and services rather than benefits sought 2 Situational Analysis SWOT Assess firm s internal environment with regard to strengths and weaknesses and external environment in terms of its opportunities and threats a Determine a firm s strengths weaknesses opportunities and threats 3 Identify Opportunities STP Process of segmentation targeting and positioning that firms use to identify and evaluate opportunities for increasing sales and profits a Segmentation i Market segment group of consumers who respond similarity to firm s marketing efforts ii Market segment process of dividing market into groups of consumers with different needs wants or characteristics who therefore appreciate products or services geared especially for them b Targeting process of evaluating attractiveness of various segments and then deciding which to pursue as a market c Positioning process of defining marketing mix variables so that target customers have a clear distinctive desirable understanding of what the product does or represents in comparison with other products i Ex Hertz positions itself as a quality car rental company that is the first choice for each of its segments 4 Implement the marketing mix and allocate resources a Product Value creation Firms must attempt to develop products and services that customers perceive as valuable enough to buy b Price Value capture Firms must charge a price that customers perceive as giving them good value for the product they receive c Promotion Value Communication d Use Portfolio analysis to classify current business units and products i Helps determine how to allocate resources ii Boston Consulting Group Matrix BCG 1 Stars have high market share and growth rate Invest money and grow a Will eventually become cash cows 2 Question mark have low market share but high growth rate a Can either become stars or become dogs 3 Cash Cow Have high market share and low growth rate maintain and milk a Have excessive resources that can be spun off to those products that need it 4 Dog Have low market share and low growth rate Drop or consolidate e The portfolio analysis indicates whether growth or consolidation is appropriate for Specific Business Units SBU Division of firm itself that can be managed and operated independently from other divisions f Growth Strategies i Market penetration Used for current markets with current products ii Product Development Used for current markets with new products iii Market Development used for new markets with current products iv Diversification used for new markets with new products 1 Related current target market and or marketing mix shares something in common with new opportunity 2 Unrelated opposite of related g Consolidation strategies i Harvesting Cut back on resources devoted to product market ii Divestment eliminate entire product line or division iii Pruning eliminate specific product variety 1 Ex McDonalds getting rid of different types of quarter pounders iv Retrenchment cut back geographically h Portfolio analysis will lead to specific marketing objectives i What is planned for a specific product line over the next 1 2 years ii Should include target market and specific growth consolidation strategy iii Must be consistent with portfolio analysis i Set a target market that is consistent with marketing objectives 5 Use the marketing metrics to make decisions a Metrics measuring system that quantifies a trend dynamic or characteristic b Not a sequential step but part of steps 3 and 4