Ch 2 Developing Marketing Strategies and a Marketing Plan 01 25 2016 What is a marketing strategy Marketing strategy a 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 It is key to long term financial success Four Strategies o Customer excellence retaining loyal customers and excellent customer service Retaining loyal customers customers are reluctant to patronize other firms Key to modern customer retention Must view customers with a lifetime value perspective rather than a transaction transaction basis Two Strategies Developing clear and precise positioning Creating emotional attachments through strategies loyalty programs Customer service o Operational excellence efficient operations excellent supply chain and human resource management Firms with strong relationships main gain exclusive rights to Sell merchandise in a particular region Obtain special terms of purchase that are not available to competitors Receive merchandise that maybe in short supply o Product excellence high perceived product value effective o Locational Excellence good physical location and internet branding and positioning presence Not easily duplicated The Marketing Plan a written document composed of an analysis of the current marketing situations opportunities and threats for the firm marketing objectives and strategy specified in terms of the four Ps action programs and projected or pro forma income and other financial statements Planning Phase o Step One Define the Business Mission Mission statement a broad description of a firms objectives and the scope of activities it plans to undertake attempts to answer three main questions What type of business are we What do we need to do in order to accomplish our goals and objectives how the firms is building a sustainable competitive advantage o Step Two Conduct a Situation Analysis SWOT asses both the internal external environments I Strength Weaknesses E Opportunities Threats CDSTEP opportunities and uncertainties due to Cultural Demographic Social Technological Economic and Political forces Implementation Phase o Step Three Identifying and Evaluating Opportunities Using STP Segmentation Targeting and Positioning Segmentation Market segment a group of consumer who respond similarly to a firms marketing efforts Marketing segmentation the process of dividing that market into groups of customers with different needs wants or characteristics who therefore may appreciate product or services geared especially towards them Targeting the process of evaluating the attractiveness of various segments and then deciding which to pursue as a market Positioning Market positioning the process of defining the marketing mix variables so that target customers have a clear distinctive desirable understanding of what the product does or represents in comparison with competing products o Step Four Implement Marketing Mix and Allocate Resources Marketers implement the actual marketing mix the 4P s for each product and service on the basis of what they believe their target market will value make important decisions about how they will allocate their resources to their various product and services Products Value Creation anything that is of value to a consumer and can be offered through a voluntary marketing exchange Price Value Capture Value based marketing requires firms to charge a price that customers perceieve as giving them a good value for the product they receive Place Value Delivery make the product readily accessible when and where the consumer wants it Promotion Value Communication communicate through a variety of different media Living social groupon new stores vs old Control Phase o Step Five Evaluating Performance Using Marketing Metrics Metrics a measuring system that quantifies a trend demand or characteristic Used to explain why things happen plan for the future and compare results Commonly used metrics to asses performance Absolute level of sales revenues sales profits Relative metric of sales profits increase or decrease over the prior year compare growth relative to other benchmark companies metrics should not be used independently metric used to evaluate a firm may vary due to the level of organization at which the decision is made the resources the manager controls Portfolio analysis management evaluates the firms various products and businesses its portfolio and allocates resources according to which products are expected to be the most profitable for the firm in the future Performed at o Strategic Business Unit a division of the firm itself that can be managed and operated somewhat independently from other divisions and have different missions or objectives ex Good year SBUS north America Europe middle east Africa etc o Product lines groups of associated items such as those that consumer use together of think of as part of a group of similar product Boston Consulting Group Matric most popular portfolio analysis method specific entity o Market share the percentage of a market accounted for by a Relative market share horizontal axis a measure of the products strengths in a particular market defined as the sales of the focal product by the sale achieved by the largest firm in the industry Market growth rate vertical axis annual rate of growth of the specific market in which the product competes How attractive a market is Quadrants Stars high growth rate high market share Cash Cows low growth markets high market shares Question marks high growth markets relatively low market shares Dogs low growth markets low market shares Strategic planning is not sequential Growth Strategies Marketing Penetration employs the existing marketing mix and focuses the firm s efforts on existing customers o Greater marketing efforts increased advertising Market development employs existing marketing offering to reach new market segments whether domestically or internationally Product development offers a product or service to a firms current o i e MTV developing a new show for people who like The Real target market World Diversification introduces a new product or service to a market segment that currently is not served o Related diversification The current target market marketing mix shares something in common with the new opportunity i e MTV producing shoes on positive social messages instead of wealth fame celebrities sex o