wk 2 mkg strategy process (resource)_2009
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Discussion
Applying strategic marketing thinking: What is marketingstrategy?
How does it fit with overall firm strategy?
Developing a coherent and successful marketing strategy
Implications for implementation of chosen marketingstrategies
Why firms fail when it comes to marketing strategyimplementation?
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Microsoft and its Business Ecosystem (Source: Company data)
DOMAIN Number of firms
Systems integrators 7,752
Development services companies 5,747
Campus resellers 4,743
Independent software vendors 3,817
Trainers 2,717
Breadth value-resellers 2,580
Small specialty firms 2,252
Top value-added resellers 2,156
Hosting service providers 1,379
Internet service providers 1,253
Business consultants 938
Software support companies 675
Outbound hardware firms 653
Consumer electronics companies 467
Unsegmented resellers 290
Media stores 238
Mass merchants 220
Outbound software firms 160
Computer superstores 51
Application service provider aggregators 50
E-tailers 46
Office superstores 13
General aggregators(7); Warehouse club stores (7); Niche specialty stores (6); Sub-distributors (6) 26
Applications integrators (5); Microsoft direct resellers (2); Microsoft direct outlets (1); Network equipment providers (1); Network service providers (1)
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Marketing strategy process
Strategic marketing Product marketing Operation
Corporate
objectives
Marketing
audit
SWOT
analysis
SWOT
balance
Product-market
objectives
Strategic
focus
Core
strategy
Marketing
mix
Estimate
results
Organise
Implement
Track
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Strategic Marketing Triangle
Market
Environment
Strategy Organisation
'Fit' 'F
it'
'Fit'
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Strategic Marketing Planning:
The Basic Questionss WHERE are we now?
s HOW did we get here?
s WHERE do we want to go?
s WHERE might we go?
s WHERE must we go?
s HOW do we get there?
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The marketing auditKnow:s In business
Your company
Your competition The market The business and
economic environment
s In battle Your forces
Your opposition The battle ground The climate
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The Marketing Environment
Micro environmental forces
Macro environmental forces
PublicsCompetitors
Suppliers
Intermediaries
Customers
Company
Political
Socio-demographic
Legal
EconomicTechnological
Natural
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Environment AnalysisMacro: Changes taking place in the broader environment?
Micro: Trends
EgCustomers Current? Future?
What do they want & need?
Competitors Who/what do/will we compete with?
Key Success
Factors What it takes to win in this business?Opportunities What might we do?
Threats What must we do?
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What makes aWhat makes a
resourceresource
valuable?valuable?
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Contribute to ProvidingContribute to Providing
Value for CustomersValue for Customers
Unique toUnique to
the Firmthe Firm
Hard forHard for
Competitors toCompetitors to
Acquire or ImitateAcquire or Imitate
Resource Advantage
SCASCA
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Wal-Mart: Ecosystem Edge
More than half of Wal-Marts cost advantage derived from how the company manages its ecosystem of
business partners..by sharing information, Wal-Mart is better able to match supply and demand across
the entire ecosystem, raising productivity and responsiveness for itself and for its partners.
Source: M. Iansiti, HBR, March 2004.
Global procurement 0.5% BenefitsCentralized buying 2% attributed
Optimized product mix 2% to
Distribution efficiencies 2% ecosystem
Other operating efficiencies 2% management
Information sharing 6%
Lower shrinkage rates 0.5%
Preferred real estate rental rates 2%
Lower labour costs 5%
Wal-Marts total margin advantage in retail groceries 22%
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s Draws from the audit
s It concentrated on a few key
issues
s Strengths and weakness are key
factors for success (KFS) in the
industry.
s Opportunities and threats
external to the company. Based on
the planning assumptions.
S.W.O.T. analysis
Strength Weakness
Opportunity Threats
Good indicators Danger signals
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Balancing the SWOTS &W O & T Action
strong opportunity ?
strong threat ?
weakness opportunity ?
weakness threat ?
S W
O T
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Managing the assumptions
Certainty Importance Action
high high ?
low high ?
high low ?
low low ?
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Strategic Objectives
What are our goals?What are our goals?
How can they be quantified in terms of:How can they be quantified in terms of:
Profitability & Financial Returns?Profitability & Financial Returns?
Sales and Market Share?Sales and Market Share?
Customer Satisfaction & Retention?Customer Satisfaction & Retention?
Employee Satisfaction?Employee Satisfaction?
Resource Utilisation?Resource Utilisation?
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Strategic Focus
How we will achieve our objectives?
What are the main components of our strategy?
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IMPROVE
PERFORMANC
E
EXPAND
VOLUME
IMPROVE
PROFITABILITY
Identify main elements of the business strategy
Strategic Focus
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Strategic FocusReduce capital cost
Reduce fixed cost
Reduce variable cost
Reduce costs
Change product mix
Increase price
Add value
Increase margins
Improve Profitability
Win competitors cust.
Acquisition/Alliances
Increase usage rate
Increase market share
New segments
New markets
Innovation
Expand market
Increase Volume
Improve Performance
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Product-Market ExpansionExisting products New products
New
Existin
g
mark
e
ts
mar ke
ts
ProductDevelopment
Diversification
MarketPenetration
Market
Development
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In a downturn.Critical prioritiesCommunicate key objectivesForce hard ChoicesAccelerate necessary Changes
Seize window of opportunity Value Creation > Cost of resourcesHarness Creativity
Major change efforts are difficult in the best of times, and many executivesworry that a downturn will halt future progress, or reverse any gains madeto date. Indeed, ..managers too often scurry from fighting one fire to the
next and thereby lose sight of the longer transformation effort.Downturns provide an ideal opportunity to renew a sense of urgency,justify unpopular decisi9ons and overcome complacency or resistance tochange.
[D Sull, FT, 23/01/09)
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Core Marketing Strategy
sCustomer targets who to serve? what to offer?
sCompetitor targets who we compete with?
sPositioning reason for customer to prefer doing
business with us?
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Creating and Keeping Customers
sOffer customer value
sCreate and sustain a differential advantage
s
Market targeting
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Competitor Targeting: Marketing Strategies
for Competitive Advantages Market leader
s
Market challenger
s Market follower
s Market nicher
Competitive advantage depends on
industry position.
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Routes to Competitive Advantage
Differentiation
Cost Focus
Stuck in
the middle
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Reckitt Bensicker has shrugged off the economic malaise that isstarting to worry consumer goods rivals by promising to EXPAND SALES
at twice the rate of the market this year and increase net income
by 8-10 per cent.
Bart Becht CEO of R-B said that Reckitt would increase sales by 4 per cent
in 2009 and was winning market share in spite of shoppers ditching branded lines in favour of cheaper supermarket goods.
One analyst highlights 3 reasons for R-Bs success:
Focus (household products, healthcare)
Innovation and Marketing Cost cutting Culture of entrepreneurship and accountability
[E Rigby & M Urry, FT 12/02/09]
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Marketing Mix
OfferingOffering What bundle of product and services?What bundle of product and services?
PricePrice How will we cost our offerings?How will we cost our offerings?
What (and how) will we charge for it?What (and how) will we charge for it?
PromotionsPromotions How will we communicate ourHow will we communicate our
offeringsofferings to the target customers?to the target customers?
DistributionDistribution How will we physically get ourHow will we physically get ourofferingsofferings toto where consumerswhere consumers
want to purchasewant to purchase or useor use
them?them?
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StaffStaff What combination of people/skills?What combination of people/skills?
SystemsSystems What systems (e.g knowledge, IT) needed toWhat systems (e.g knowledge, IT) needed to
deliver the offerings to ourdeliver the offerings to our
customers?customers?
ProcessesProcesses What processes required to ensure delivery?What processes required to ensure delivery?
StyleStyle What culture to support our marketingWhat culture to support our marketing
goals and activities?goals and activities?
StructureStructure Whats the most appropriate organisationalWhats the most appropriate organisational
structure for implementing thestructure for implementing the
marketing activities?marketing activities?
Organisation
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Feedback & Control
EvaluationEvaluation How successful are we vsHow successful are we vs
plan? Others?plan? Others? What metrics will we use?What metrics will we use?
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Business Orientation and Success Rate (1992)
Aggressive PushersSales Orientation
Quality Marketeers
Balanced Orientation
Mature Marketeers
Marketing Orientation
Innovators
Product Orientation
Product MakersProduction Orientation
Price Promoters
Financial Orientation
Success Rate (%)
25
100
50
75
(Saunders and Wong, 1993)
J 46%
A 36%B 18%
J 15%
A 54%
B 31%
J 59%
A 18%
B 23%
J 18%
A 53%
B 29%
J 22%
A 14%
B 64%
J 31%
A 31%
B 38%
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Business Orientation & Survival Rate
SUCCESS FAILURES
SURVIVORS Balanced orientation (91%)
Marketing orientation (92%)
Innovation-led
(91%)
Financial orientation (86%)
FAILURES Production orientation
(62%)Sales orientation (65%)
1992
2002
(Saunders and Wong, 2003)
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What Type of Company will
survive in TodaysEnvironment?
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Summary
Marketing Stratgey Process Marketing Audit
Resource Advantage Strategic Focus the key elements ofbusiness strategy
Product-Market Led Expansion
Routes to Competitive Advantage