Marketing Management

Functional Strategies and Programs

-A company's value proposition, assets, and competencies require the support of functional activities to succeed. -Functional strategies or programs might include: Information Technology/Distribution/Global/Quality/Sourcing/Logistical/Manufacturing/Analytics/... Strategies or Programs - So usually what functional departments a company might have?

•The Customer Value Proposition

-The customer value proposition is a clear statement about what sources of distinctive value the business wants to offer the customer. -Choosing a value proposition - the company must decide how it will differentiate and position itself in the marketplace. -For example, Vine gives you "the best way to see and share life in motion" through "short, beautiful, looping videos in a simple and fun way for your friends and family to see" and Facebook helps you "connect and share with the people in your life."

The Product-Market Investment Strategy: Where to Compete

-The scope of a business is defined by the products it offers and chooses not to offer, by the markets it seeks to serve and not serve, by the competitors it chooses to compete with and to avoid, and by its level of vertical integration. -It is important to emphasize that knowing which product markets your company does NOT serve is equally as important as knowing which product markets your company does serve. Otherwise, your valuable resources may be used inefficiently.

Assets and Competencies

-The strategic assets and competencies that underlie the strategy are the critical resources that produce sustainable competitive advantage (SCA) for a firm. -A strategic asset is a resource that the firm owns or controls that can be leveraged in the design or implementation of a firm's strategy: financial/human/physical/legal/brand/... assets -Competencies leverage these assets to perform activities important to the firm's strategy. -Assets and competencies—the key to a long-term investment perspective (vs. a short-term fixation).

A strategic group is a set of firms that:

1. Over time pursues similar competitive strategies (e.g., 4P marketing mix) 2. Has similar characteristics (e.g., size, aggressiveness) 3. Has similar assets and competencies (e.g., brand associations, logistics capability, global

What is a strategy

A framework which guides those choices that determine the nature and direction of an organization

Identifying Competitors - Strategic Groups

Each strategic group has mobility barriers that inhibit or prevent businesses from moving from one strategic group to another .• The conceptualization of strategic groups can make the process of competitor analysis more manageable.

External Analysis

External Analysis can address the strategic questions related to existing business/new business/value proposition/assets and competencies/functional area strategies and programs...

Obtaining Information on Competitors

From A Competitor's website • From A Competitor's suppliers, customers, distributors, and so on • From security analysts and stockholders • From government legislators and regulators • From market research

The Planning Cycle

In particular, a strategy process should involve the following activities: •Start with the issues •Bring together the right people •Adapt planning cycles to the businesses •Implement a strategy performance system

Potential Competitors

Market expansion • Product expansion • Backward integration Forward integration • The purchase of assets or competencies

Identifying Competitors - Customer-Based Approaches

One approach to identifying competitor sets is to look at them from the perspective of customers - what choices are customers making? (For example, for virtual meeting apps, what are your alternative choices to Webex by Cisco?) • Another approach that provides insights is the association of brands with specific-use contexts or applications. (For example, think about CVS? If it is perceived as a convenience store chain, what are its competitors? If it is perceived as a pharmacy store chain, what are its competitors?)

Market Segmentation

Refers to the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments).

market segment

a group of consumers who respond in a similar way to a given set of marketing efforts.

what is a business

an organizational unit with a defined strategy and a manager with sales and profit responsibility

what is a business strategy

is defined by four dimensions—the product-market investment strategy, the customer value proposition, assets and competencies, and functional strategies and programs. The first specifies where to compete, and the remaining three indicate how to compete to win

Market

refers to the group of consumers or organizations that is interested in the product, has the resources to purchase the product, and is permitted by law and other regulations to acquire the product.

In terms of the three key players (competitors, customers, company) strategy is defined as

the way in which a corporation endeavors to differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer needs

Identifying Competitors - Indirect Competitors

• In most instances, primary competitors are quite visible and easily identified. Think about Coke's primary competitors? Or NBC's primary competitors? • In many markets, however, customer priorities are changing, and indirect competitors offering customers product alternatives are strategically relevant. Think about Coke's indirect competitors? How about NBC's?

Actual and Potential Market or Submarket Size

•A starting point for the analysis of a market or submarket is the total sales level •To assess total sales level, the useful sources include: -Published financial analyses of the relevant firms -Customers -Government data -Trade magazine and associations -The ultimate source is often a survey of product users in which the usage levels are projected to the population • Potential Size •Don't simply avoid the small markets - think about the first-mover advantages

Demographic Segmentation Variables

•Age •Gender •Family size •Family life cycle •Income •Race •Occupation •Education •Religion •Generation •Nationality

Market and Submarket Growth

•Identifying Driving Forces •Forecast Growth: such as demographic data, sales of related equipment •Submarket Growth •Detecting Maturity and Decline: -Price pressure caused by overcapacity and the lack of product differentiation -Buyer sophistication and knowledge -Substitute products or technologies -Saturation -No growth sources -Customer disinterest

Criteria to Select Business Strategies- Five General Questions

•Is the ROI attractive? •Is there a sustainable competitive advantage? •Will the strategy have success in the future? •Is the strategy feasible? •Does the strategy fit with the other strategies of the firm?

Behavioral Segmentation Variables

•Occasions •Benefits •User Status •User Rates •Loyalty Status •Readiness Stage •Attitude Toward the Product

Customer Analysis - Unmet Needs Identified by Marketing Research

•Primary Data vs Secondary Data •Quantitative Research vs Qualitative Research •Different Ways of Quantitative Research and Qualitative Research

Marketing's Role in Strategy

•Primary driver of the strategic analysis •Focus attention on customer insight and customer value •Drive growth strategy for the firm •Play a leading role in building, managing, and defending strong customer and brand assets - called customer and brand equity.

Seven ways submarkets emerge:

•Provide a lower price point •Serve nonusers •Serve niche markets •Provide systems solutions •Serve unmet needs •Respond to a customer trend •Leverage a new technology

External Analysis - The Additional Analysis Objectives

•Significant trends and future events (Think about the future consumer market trend in the post-Covid world) •Threats and opportunities (Think about the commonly used "SWOT analysis") •Strategic Uncertainties (Focus on specific unknown elements that will affect the outcome of strategic decisions)

Six Management Tasks in the Context of Dynamic Markets

•Strategy development needs to reflect the fact that markets are dynamic. In particular, you need to develop competencies around six management tasks: -Strategic analysis - Importance of information about consumers, competitors, market trends, etc. -Customer value - Need to resonate with target customer segment(s) and offer more benefits and/or lower costs than competitors -Innovation - Diffusion of Innovations (Rogers, 1962) -Managing multiple businesses - Business portfolio (Upsizing or Downsizing? Emerging New Markets or Submarkets?) -Creating SCAs (sustainable competitive advantages) -Developing growth platforms - How to stretch the organization in creative ways?

Market Trends

•Trends versus Fads •Three questions that can help detect a real trend: 1.What is driving it? 2.How accessible is it in the mainstream? 3.Is it broadly based?

Key Success Factors

•Two Types: Strategic Necessities vs Strategic Strengths

External Analysis - The Ways, Level, and Timing of Analysis

•Two important ways: Information-need areas; Scenario analysis •Level: broad scope vs narrow scope vs scope in between •Timing: Annual, Bi-annual, Quarterly, ...? - Does it relate to the analysis depth?

Geographic Segmentation Variables

•World Region or Country •U.S. Region •State •City •City or Metro Size •Neighborhood •Density •Climate