2009 2-1
BUS360
MARKETINGMETHODS
Chapter2
DevelopingMarketing
Strategies
Regular
Instructor
EdWeems
McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-2
The Strategic Marketing Planning
Process
Steps in developing the strategic marketing plan
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-3
Three Phases of a Strategic Plan
Planning
Implementing
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Controlling
2-4
The Planning Phase
Step 1: Define the Mission and/or Vision
1) A broad description of the firms objectives
and the scope of activities it plans to undertake.
Answers two primary questions
What type of business are we?
What do we need to do to accomplish our
goals and objectives
2) Addresses an objective to establish and
maintain a sustainable competitive advantage.
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-5
The Planning Phase
Sample mission statement
MADD
The mission of MADD is to stop drunk driving,
support the victims of this violent crime and prevent
underage drinking.
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-6
The Planning Phase
Establishing & Maintaining a Competitive Advantage
Think about it:
What are the keys to McDonalds achieving
sustainable competitive advantage?
2-7
The Planning Phase
Step 2:Conduct Situation Analysis
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-8
The Planning Phase
2. Situation Analysis
1) Assess the business internal and
external environment to determine the:
Strengths
Weaknesses
Opportunities
Threats
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-9
The Planning Phase
2. Situation Analysis Examples
Internal/External Examples
Strengths Diverse businesses, well known
brand
Weaknesses Over-reliance on relationships,
seasonal fluctuations, Risky foreign operations
Opportunities Building current brand in new
areas
Threats Increasing competitive pressures
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-10
Step Three: Identifying and Evaluating
Opportunities Using STP
Step 3: Identify & Evaluate Opportunities - STP
Segmentation
Targeting
Positioning
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-11
Step Three: Identifying and Evaluating
Opportunities Using STP
Step 3: Identify & Evaluate Opportunities - STP
1) Segmentation The process of dividing the market
into groups of customers with different needs, wants
or characteristics.
2) Targeting After evaluating a segments
attractiveness deciding which to pursue
3) Positioning Defining the market mix variables so
that target customers have a clear, distinctive,
desirable understanding of what the product does or
represents in comparison to competing products
2-12
Disney:
Segmentation, Targeting, Positioning
STP Targeting. Positioning Examples
Magic Kingdom
Families w/younger kids
Pleasure Island
Singles and Couples
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Epcot
Adults, families w/older kids
2-13
Step Four: Implement Marketing
Mix and Allocate Resources
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-14
Product and Service Strategy
Customer perception of value
Creating products
and services that
customers perceive to
be valuable enough to
buy
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-15
Price Strategy
Cost-Based
Pricing Determine the cost to
produce and provide the product and add a
fixed amount.
Competitor-Based Pricing When you set the
price below, at or above the prices of
competitors
Value-Based Pricing When you determine
the perceived value of the product from the
customers point of view and set the price
based on that
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-16
Promotion Strategy
Promoting the
product
through the
various media
Television
Radio
Magazines
Sales force
New Media
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-17
Place Strategy
Making the product or service readily
accessible when and where the
customer wants it
Direct
and immediate delivery to the
customer such as Papa Johns pizza for
consumers
and
NAPA auto parts for auto garages
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-18
Allocating Resources
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-19
Allocating Resources
Base allocation on which products are
expected to be the most profitable for the future
Consider:
Relative market share
Market growth rate.
Which are:
Stars
Cash Cows
Question Marks
Dogs
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-20
Step Evaluate Five: Performance
and Make Adjustments
5.EvaluatePerformance
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-21
Steps to Evaluating Performance
Involves evaluating the strategy and processes
implemented and making adjustments as
X
X
required
Determine why the company did or did not
achieve its performance goals
X
Determine the awareness of the brand and its
impact on performance
Determine the degree to which competition is
having an impact on sales
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-22
Growth Strategies
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-23
Market Penetration Strategy
Involves using the
existing market mix and
focusing on existing
customers. You attract
new consumers in the
current market or
encourage customers to
buy more often or in
greater quantity.
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-24
Market Development Strategy
What can a company
do to continue to
grow in a difficult
retail environment?
With this strategy
you use the existing
market offering to
reach new markets
both domestic and
international
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-25
Case in Point: Dunkin Donuts
Challenge
Answer
Results
To continue to grow in a
difficult retail environment.
Continue an aggressive global
expansion strategy combined
with an expanding multichannel strategy.
4,400 US outlets, 1,700 non US
in 29 countries including:
Philippines, Indonesia, South
Korea, and Thailand as well as
in the EU. Revenue worldwide
of $3.6 Billion
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-26
Product Development Strategy
New product or
service
Current target
market
Offer a new product or service to the
current target market of the company
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-27
Diversification Strategy
Introducing a new product or service to the
current market that is not currently served by the
company
Related
Existing vendors
Same distribution system
Same management information system
Same advertising venue
Unrelated
no common elements with the present business
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-28
Entrepreneurial Marketing
FedEX Kinkos
New
service/new market
Current
service/current
market
New service/current
market
Current service/new
market
2-29
Topic Three: Macro Strategies for
Developing Customer Value
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-30
Customer Excellence
Focuses on
retaining loyal
customers with
excellent customer
service
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-31
Operational Excellence
Focuses on:
Efficient operations
And
Excellent supply
chain management
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-32
Product Excellence
Focuses on
positioning the
product or service
using clear,
distinctive brand
image and
constantly
reinforcing that
image.
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-33
Chapter 2 Glossary
Competitor-based pricing: When a firm prices below, at,
or above its competitors offerings.
Cost-based pricing: When a firm determines the costs of
producing or providing its product and then adds a fixed
amount above that total to arrive at the selling price.
Market penetration strategy: Employs the existing
marketing mix and focuses the firms efforts on existing
customers.
Market segmentation: The process of dividing the market
into groups of customers with different needs, wants, or
characteristicswho therefore might appreciate products
or services geared especially for them.
Mission statement: a broad description of a firms
objectives and the scope of activities it plans to undertake.
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
2-34
Chapter 2 Glossary (Contd.)
Positioning: When the firm decides which segments to
pursue, it must determine how it wants to be positioned
within those segments so that target customers have a
clear, distinctive, desirable understanding of the product in
comparison with competing products.
Sustainable competitive advantage: Something the firm
can persistently do better than its competitors.
Targeting: After a firm has identified the various market
segments it might pursue, it evaluates each segments
attractiveness and decides which to pursue.
Value-based pricing: When the firm first determines the
perceived value of the product from the customers point of
view and then prices accordingly.
2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin