The Oxford Textbook of Marketing

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The Oxford Textbook of Marketing

• Part 4 Formulating and Implementing Marketing
  Strategy

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The five loyalty profiles
The committed
Active loyalist
Habitual buyer
Constrained switcher
Promiscuous switcher
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The financial objective of business and strategic
marketing

• The source of financial success
• Strategic marketing competitive and corporate
  strategy
• The nature of competitive strategy
• Offerings and markets the two central elements

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What competes for customer choices?

• Offerings, not companies
• Identifying the single offering the single
  competitive position
• Outputs compete, not inputs
• Differentiation and price as the dimensions of
  competitive positioning
• Differentiation is more fundamental than price

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The fundamental business objective and source
Success in financial markets
Success in commercial markets
Source Mathur and Kenyon (1998)
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Four main competitive strategies
High
Product-buy
System-buy
Differentiation
Merchandise
Service-buy
Commodity-buy
Low
High
Low
Differentiation
Support
Source Mathur and Kenyon (1998)
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Where does competition take place? The anatomy of
markets

• The definition of a market
• Models of a market public and private
• The clumps and the galaxy
• Industries and markets
• The value of industry and industry analysis
• Dynamic positioning markets can be destabilized
  and reshaped

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Strategic marketing decisions competitive
strategy

• Competitive strategy the financial criteria for
  selection
• The scissors what makes an offering profitable
• Blade 1 attractive market position
• Blade 2winning resources
• Which blade comes first?

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The STP stages of market segmentation

• SEGMENTATION
• Choose variables for segmenting market
• Build a profile of segments
• Validate emerging segments
• TARGETING
• Decide on targeting strategy
• Identify which and how many segments should be
  targeted

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The STP stages of market segmentation

• POSITIONING
• Understand consumer perceptions
• Position products in the mind of the consumer
• Design appropriate marketing mix to communicate
  positioning

Source Dibb et al (1997205)
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Segmentation variables

• Consumers
• Demographic
• Geographic
• Geodemographic
• Socio-economic
• Personality and lifestyle

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Segmentation variables

• Behavioural
• Purchase behaviour
• Purchase and usage occasion
• Benefit
• User status and consumption behaviour
• Product attitudes

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Segmentation variables for business markets

• Business demographics
• Operating variables
• Purchasing approach
• Situational factors
• Personal characteristics

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Strategies for targeting

• Undifferentiated strategy
• targeting of an entire market with a single
  marketing mix
• Concentrated strategy
• marketing effort is directed towards a single
  segment
• Differentiated (multi-segment) strategy
• marketing effort is directed at two or more
  segments, developing a separate marketing mix for
  each

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Impediments to inter-organizational co-operation

• Territory problems
• Interpretation barriers
• Communication barriers
• Conflicting performance measures
• How can these barriers be overcome?

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Manufacturing strategy as a response to marketing
strategy
Marketing strategy
Manufacturing strategy
cost competitiveness
reduction in unit costs
reduction in manufacturing lead times
product differentiation
flexibility of batch size or product specification
focus
vertical linkage
improved quality
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Disparity of costs between two similar customers
Customer A
Customer B
Costs
Costs
100
60
Sales representatives
80
Delivery
50
1,300
1,000
Profit
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Investment in AMT makes new marketing strategies
possible
Marketing Strategy
AMTs capabilities
Potential Strategies
reduction in unit costs
cost competitiveness
cost competitiveness
reduction in manufacturing lead times
product differentiation
product differentiation
flexibility of batch size
flexibility of product spec.
focus
focus
improved quality
vertical linkage
vertical linkage
distributed info.
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Andrewss model of the strategy formulation
process
Environmental analysis
Management values
Identify current objectives, strategy, and
policies
Major strategic opportunities and threats
Revised objectives, strategy, and policies
Identify strategic alternatives
Strategic decision- making
Resource analysis
Social responsibilities
Source Andrews (1965)
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External analysis
Customer analysis - Customer segments -
Customer motivations - Unmet needs
Market Analysis - Size and growth - Market
dynamics - Distribution channels
Competitor Analysis - Strengths weaknesses
- Strategies - Performance
Industry Structure - Cost structure -
Profitability - Intensity of competition
Environmental Analysis - Technological -
Governmental - Cultural - Demographic
Source Asker (199541-126)
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Sources of competitive advantage and superior
performance
Performance outcomes
Positions of advantage
DISTINCTIVE CAPABILITIES - Based on superiority
in process management x integration of
knowledge x diffusion of learning
Capabilities of the business
Core competencies of the corporation
Business assets
- Scale, scope, and efficiency - Financial
condition - Brand equity - Location
- Skills and accumulated knowledge - Enable
the activities in a business process to be
carried out
- Span and support multiple lines of
business
Source Day (199440)
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The content of marketing strategy

• Porters model
• Cost leadership
• Differentiation strategy
• Focus strategy
• Three generic strategies?
• Alternative sources of competitive advantage

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The content of marketing strategy

• Other strategic challenges
• Timing issues
• Globalization
• Strategic alliance
• Turnaround situations
• Market level strategies

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The strategy-tactics matrix
Strategy
Ineffective
Effective
Die (quickly) 3
Thrive 1
Efficient
Tactics
Survive 2
Die (slowly) 4
Inefficient
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Relative costs and differentiation
Relative costs
High
Low
High
Outstanding success
Niche
Differentiation
Lowest cost
Disaster
Low
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The gap analysis
Objective
Sales
New strategies
Diversification
New markets
Gap
New products
Market penetration
Productivity
Trend/forecast
Time
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The contents of a strategic marketing plan

• Mission statement
• financial summary
• market overview
• market structures
• market trends
• key market segments
• gap analysis

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The contents of a strategic marketing plan

• strengths weaknesses, opportunities, threats and
  issues to be addressed
• by product
• by segment
• overall business groups
• portfolio summary
• assumptions

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The contents of a strategic marketing plan

• Marketing objectives
• strategic focus
• target customers groups
• market extension/penetration
• product development/deletion/mix
• Marketing strategies (4 x Ps)
• product/price/promotion/place
• Resource requirements
• budget