STRATEGY Ch 2 Steps in the Strategy Process o Mission Statement what it is characteristics of good mission statements Mission statement is a statement of the organization s purpose and what it wants to accomplish in the larger environment It asks what IS our business Who is the customer What do these customers value What should our business be Mission statements should be market oriented and defined in terms of satisfying basic customer needs o Company Objectives Goals Use the mission statement to create detailed supporting objectives for each level of management A Broad mission becomes a hierarchy of objectives marketing strategies and programs are then developed to support these objectives To increase its market share a company can broaden its product lines increase product availability and expand into new markets o Business Portfolio BCG Matrix Stars Cash Cows Question Marks Dogs The Product Market Expansion Grid what it is characteristics of each quadrant of the grid market penetration market development product development diversification Portfolio planning tool for identifying company growth opportunities through 4 means Market Penetration company growth by increasing sales of current products to current market segments without changing the product Market Development growth by identifying and developing new market segments for current company products Product Development growth by offering modified or new products to current market segments Diversification growth through starting up or acquiring businesses outside the company s current products and markets o Strategy Formulation Marketing Management o Analysis Planning Marketing Plan Table 2 2 recognize the sections of a marketing plan and know generally what each section is no need for details Major functional dept work together to accomplish strategic objectives Marketing concept suggests the company should resolve around building profitable relationships with important consumers Marketing provides inputs to strategic planners by identifying attractive opportunities and assessing their potential to take advantage of these SWOT Analysis Fig 2 7 Strengths internal capabilities resources and positive situational factors that may help the company serve its customers Weaknesses internal limitations and negative situational factors that may interfere with company performance Opportunities favorable factors or trends in the external environment that the company may be able to exploit to its advantage Page 1 of 6 Threats unfavorable external factors or trends that may present challenges to the company s performance 4 P s price place promotion product 4 C s customer solution customer cost convenience communication o Implementation Control Implementation carrying out the plans Control measure results and evaluate compare actual results to potential take corrective action if necessary STP Ch 6 Steps in STP Segmentation o Definition involves dividing a market into smaller segments of buyers with distinct needs characteristics or behaviors that might require separate marketing strategies mixes o Variables Geographic Demographic Psychographic Behavioral Intermarket Table 6 1 is useful to understand be able to identify examples e g Which type of segmentation within each variable but don t memorize the table Geographic calls for dividing the market into different geographical units many companies are localizing their products advertising promotions and sales efforts to fit the needs of their individual regions Demographic divides the market into segments based on variables such as age life cycle stage gender income occupation education religion ethnicity and generation Most popular base for segmenting because consumer needs often reflect their demographics and these variables are easier to measure than most others Psychographic divides buyers into different segments based on social class lifestyle or personality characteristics People in the same demographic group can have very different psychographic characteristics People buy products that reflect their lifestyles Marketers also use personality variables to segment markets Behavioral divides buyers into segments based on their knowledge attitudes uses or responses to a product o Requirements for Effective Segmentation Measureable size purchasing power and profiles of the segments can be measured Accessible market segments can be effectively reached and served Substantial segments are large or profitable enough to serve A segment with the largest possible homogeneous group worth pursuing with a tailored marketing program Differentiable segments are conceptually distinguishable and respond differently to different marketing mix elements and programs Actionable effective programs can be designed for attracting and Targeting serving the segments o Definition consists of evaluating each market segment s attractiveness and selecting one or more market segments to enter o Evaluating Market Segments Look at 3 factors segment size and growth segment structural attractiveness and company objectives and resources Page 2 of 6 o Target Marketing Strategies Undifferentiated Differentiated Niche Local Individual Undifferentiated a firm decides to ignore market segment differences and go after the whole market with one offer difficulties arise in developing a product that will satisfy everyone Differentiated a firm decides to target several market segments and designs separate offers for each Creates more total sales than undifferentiated marketing across all segments but also increases the costs of doing business Concentrated Niche firm goes after a large share of one or a few segments niches Firm achieves a strong market position because of its greater knowledge of consumer needs in the niches it serves It can thus market more effectively by fine tuning products prices and programs to the defined segments It allows smaller companies to focus their limited resources on serving the niches that may be overlooked by the larger competitors Micromarketing tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments Local tailors brands and promotions to the needs and wants of local customer segments Individual tailors products and marketing programs to the needs and preferences of individual customers Makes relationships with customers even more important o Definition the way a product is defined by customers on important attributes the place the