STRATEGY Ch 2 Steps in the Strategy Process A Defining the company position B Setting company objectives goals C Designing the business portfolio D Planning marketing and other functional strategies A Mission Statement a statement of the organization s purpose o Characteristics Market oriented Realistic Specific Motivating Illustrative of distinctive competencies o Example of a good mission statement To bring Inspiration and innovation to every athlete in the world If you have a body you are an athlete Nike Make all athletes better through passion design and relentless pursuit of innovation Under Armour B Company Objectives Goals Mission statement leads to o Detailed supporting objectives for each level of management o Must be measurable C Business Portfolio o A combination of businesses that has the potential of reaching objectives o Businesses may be called Strategic Business Units divisions markets product lines o BCG Matrix Which businesses enter Which exit Who much to invest Star high market growth rate and high relative market share o Ex Disney toys Question Mark high market growth rate and low relative market share o Ex Disney smaller theme parks and cruise Cash Cow low market growth rate and high relative market share o Ex Disney World Dog Low market growth rate and low relative market share usually they exit o Ex Disney movies o Criticisms of BCG Matrix Limited number of variables used Ignores interrelationships between businesses e g Disney movies are considered dogs The placement of a business in the matrix is highly dependent on the definition of a market o The Product Market Expansion Grid Used to identify growth opportunities Page 1 of 9 Market Penetration o Strategy to increase sales to current customers without changing the product being sold o Can be achieved by price place and promotion o Ex free wifi loyalty cards open for longer hours Market Development o Strategy identify and develop new markets demographic growth or geographic growth for current products o Ex moving over sees or into new parts of town where your product is not already o Strategy offering new modified or new products to current markets o New line of products you usually sell hot drinks so you begin to sell cold canned sold Product Development beverages Diversification o Start up or buy businesses outside or current products and markets o Ex Vera Wang Mattresses Marlboro Clothing Mercedes Benz Bike a its as D Strategy Formulation What do we know What do we want to accomplish How will we do it Marketing Plan Executive Summary Current Marketing System SWOT Analysis Strengths company reach its objectives Internal capabilities that may help You have good service and committed workers Weaknesses internal limitations that may interfere with a company s ability to achieve objectives Your advertising and selection is not good as it could be Opportunities External factors that the company may be able to exploit to its advantage Threats Objectives Marketing Plan Action Programs Budgets Controls Marketing Implementation Implementation Control Segmentation Targeting and Positioning STP The 4 Ps of the Marketing Mix Your opened a new line in your store that you can advertise to public current and emerging factors that may challenge the companies performance New competitor is moving down the block and they have bigger and better advertising The execution of a plan is usually the hardest part Implementation often ends up being more about personal relationships and or luck than plans took into account Successful implementation depends on Company culture Employee s shared beliefs and values Page 2 of 9 Organizational structure Reward System took into account Marketing Controls Implementation often ends up being more about personal relationships and or luck than plans o Evaluate the results of marketing strategies and plans Set new marketing goals Measure actual vs expected performance on goals Take corrective action to close goals between goals and performance STP Ch 6 Steps in Segmentation Targeting Positioning 1 Market Segmentation Identify vases for segmenting the market and develop segment profiles o Dividing a market into smaller groups that 1 Have distinct needs characteristics or behaviors 2 Respond differently to marketing efforts and therefore 3 Might require their own products and marketing 4 Ps o Variables Geographic Dividing a market into different geographical units Country country region city size Demographic Dividing a market based on demographic variables Age gender family size family life cycle race generation Easier to measure than most other types of variables Psychographic Dividing market based on Social Class Personality Lifestyle Behavioral Based on behaviors such as Benefits sought Usage occasion User status Usage rate Intermarket Loyalty status o Requirements for Effective Segmentation they are located in different countries Measurable Accessible Substantial Differentiable Actionable Can be identified and measured Can be reached and served Large and profitable enough Separate from other segments Can be marketing to by our company Segments of consumers who have similar needs and buying behavior even though 2 Target Marketing Develop measure of segmentation attractiveness and select target segments o Targeting choosing the segment that is more attractive to your organization Page 3 of 9 Targeting broadly Targeting narrowly o Evaluating Market Segments Internal External Does the segment fit with our objectives and resources How big is the segment What is its growth potential What is the competitive climate like Are there a lot of substitute products How much power do suppliers and customers hold o Target Marketing Strategies Undifferentiated mass Marketing Differentiated segmented Marketing Targets several market segments and designs separate offers for each Ex Umbrella Brand for Old Navy Athleta Piperlime Banana Republic Concentrated Niche Marketing Gap Targets a large share of one or a few small segments or niches Micromarketing local or individual Marketing Tailoring products and markets to suit the tastes of specific locales and or individuals Local Marketing Ex Lion Tutors Family Clothesline Individual Marketing Mass customization 3 Market Positioning develop positioning for target segments and develop a marketing mix for each individual segment o The key concept to be communicated to the target consumer o The place the product occupies the consumer s mind relative to competing