Strategy in Marketing

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Strategy in Marketing

• Professor Lawrence Feick
• University of Pittsburgh

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Outline

• What is marketing strategy?
• Framework for marketing strategy
• External analysis environmental scanning
• Internal analysis core skills of the firm
• SWOT matching the external and internal
• Portfolio models

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Marketing strategy

• Answers basic questions
• to whom will we sell?
• what will we sell, how will we sell it?
• Focus on
• target market selection
• marketing mix design

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Marketing strategy formulation

• External analysis (looking outside the firm)
• environmental scanning
• environmental management
• identifying opportunities and threats
• Internal analysis (looking inside the firm)
• mission and objectives
• key skills, resources of the firm
• identifying strengths and weaknesses

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External analysisThe key environments

• Socio-cultural environment
• Economic environment
• Technological environment
• Political-legal environment
• Competitive environment

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External analysisThe socio-cultural environment

• Demographics
• age, education, marital status, race, etc.
• Culture
• US culture, subcultures, foreign cultures
• pop culture, style, fashion, conventional wisdom
• ideas, movements, causes
• How is this environment changing?

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Life expectancy at birth by sex, US by year
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Racial (ethnic) characteristics of the US,
percentages by year
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Percent distribution of origin of US naturalized
citizens by year
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External analysisThe economic environment

• GDP and business cycles
• Personal income
• Inflation
• Unemployment

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External analysisThe technological environment

• Creation of substitutes for the product category
  (e.g., marketing myopia examples)
• Changes in the product or product usage
• Changes in the production, service, or support
  process
• Changes in distribution channels
• Changes in promotion, media

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External analysisThe political-legal environment

• Government laws and regulations
• Maintaining a competitive market
• Protecting consumers
• Industry self-regulation
• Litigation

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External analysisThe competitive environment

• Who is our competitor?
• brand-level competition
• product category-level competition
• want-level competition
• Open markets and increased competition
• global connections
• emphasis on exports
• virtual marketing

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External analysis recap
Economic Environment
Socio-cultural Environment
Technological Environment
Firms, Consumers, Competitors, and Products
Competitive Environment
Political-legal Environment
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External analysis recap

• Five external environments change continually
• Changes create opportunities and challenges in
  new and existing markets
• Marketers key jobs
• environmental scanning, forecasting, adaptation
• environmental management (if possible)

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Internal analysis

• Motivation how does the firm choose from among
  all of the opportunities in the environment?
• Examples
• Microsoft
• Federal Express

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Internal analysisMission

• The self-defined description of the business the
  firm is in why the firm exists
• Usually includes mention of
• customer groups served
• customer needs met
• technology employed
• Constrains marketing strategy choices

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Mission statement example

• Intel Do a great job for our customers,
  employees, and stockholders by being the
  preeminent building block supplier to the
  computing industry.

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Internal analysisOrganizational objectives

• Define sought after benchmarks
• Usually specific about time and quantity
• Often involve sales, profits, numbers of
  customers, customer satisfaction, etc. or hoped
  for changes in these
• Constrains marketing strategy choices

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Internal analysisStrengths and weaknesses

• Assessment of skills, resources, competencies of
  the firm
• What do we do exceptionally well, what not so
  well?
• What assets (e.g., patents, image, brands,
  people) do we have that give us an advantage?
• How do we compare to competition on these?

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SWOT

• Combining the results of internal analysis (SW)
  with external (OT)
• Build on strengths to take advantage of
  environmental changes
• Manage weakness that are made greater by
  environmental changes

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Recap marketing strategy

• Outcome of SWOT analysis
• a focus on who which target markets?
• a focus on how what marketing mix will move
  them?
• Key to success consistency
• with the target market and mix
• among elements of the mix

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Aside Portfolio models

• Purpose assess each of the firms businesses
  using internal and external criteria
• Two examples
• Boston Consulting Group Growth/Share Matrix
• GE Business Screen

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BCG Growth/Share Matrix
Fast Growth
10
Slow Growth
High Relative Share
1.0
Low Relative Share
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BCG Growth/Share Matrix
Fast Growth
C
10
Slow Growth
A
B
High Relative Share
1.0
Low Relative Share
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GE Business Screen
High
Industry Attractiveness
Green
Yellow
Medium
Red
Low
Strong
Average
Weak
Business Strength
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Portfolio models Summary

• Assumptions
• Uses
• Limitations