MARKETING STRATEGY Ilan Bijaoui 2006 ibii netivision net il

MARKETING STRATEGY Ilan Bijaoui 2006 ibii@netivision. net. il

FIVE P’S FOR STRATEGY Henry Mintzberg Strategos: Art of the Army General PLAN-PLOY Intended Course of Actions Purpose POSITION Match Organization & Environment Egg Mc. Muffin P change PATTERN Consistency in Behavior Realized PERSPECTIVE Way of Perceiving the World Mc Donald: quality, service, cleanliness & value Candle night dining P change

STRATEGY FOR CHANGE James Brian Quinn A Strategy is a Pattern/Plan that Integrates an Organization’s Major Goals, Policies and Actions Sequences to a Cohesive whole Goals-Objectives What & When Strategic Goals-Viability Programmes How, Sequences of Actions Resources-Goals Policies Rules or Guidelines Strategic Decisions True Goals

CRITERIA FOR EFFECTIVE STRATEGY-Quinn Clear Objectives Understood, Attainable Flexibility Surprise Speed, Secrecy Intelligence Initiative Maintained Concentration Decisive Coordination Committed Leadership Secure Resources Bases Secure Operating Points

THE CONCEPT OF CORPORATE STRATEGY Kenneth R. Andrews Formulation Implementation Opportunity & Risk Structure/ Relationship Resources Corporate Strategy Values Pattern Responsibility Processes/ Behaviour Top Leadership

THE CORE COMPETENCE OF THE CORPORATION CK Perahalad G/ Hamel END PRODUCTS BUSINESS UNITS CORE PRODUCTS COMPETENCIES

NEC STRATEGY Computing & Communication Convergence END PRODUCTS Alliances Semiconductors From Mechanical to Digital Communication From Mainframe to Processing Components New Markets

SELECTED CORE COMPETENCIES/PRODUCTS SONY • Miniaturization CP: Elect. Components EP: Television 3 M • Sticky Tape Magnetic tape, photographic film, coated abrasives CANON HONDA Comp. : Optics, Precision CP: Engines Mech. fine Chemicals EP: Scooters, Cars CP: Laser printer engine EP: Laser Printer

CORE COMPETENCY IDENTIFICATION • • IDENTIFY Access to wide variety of markets Contribution to perceived customer benefits Difficult to imitate Outsourcing and Core Competency (GE-GTEMotorola TV Color) STRATEGIC ARCHITECTURE • How long could preserve technology • How central is the core competence for customers • Future opportunities in other core competencies

NATURAL ENVIRONMENT Raw materials Energy costs Pollution Geography Regulatory TECHNOLOGICAL ENVIRONMENT R&D spending, Patent protection, New development, Internet, Telecom. PM 4. 4 Natural and technological environments

DEMOGRAPHIC ENVIRONMENT Age Family Population Education ECONOMIC ENVIRONMENT Economic GDP Interest Inflation , Unemployment Wages, Energy availability PM 4. 3 Demographic and economic environments

FAMILY LIFE-CYCLE STAGES Young Middle-aged Older LIFESTYLE DIMENSIONS Activities Interests PM 6. 5 Family and lifestyle Opinions Demographics

POLITICAL ENVIRONMENT Antitrust, Environment, Tax, Incentives, Foreign trade, Stability CULTURAL ENVIRONMENT Career expectations, consumer activism, Lifestyle PM 4. 5 Political and cultural environments

THE STRUCTURING OF ORGANIZATIONS H. Mintzberg Strategic Apex Techno Structure Middle Line Operating Core Ideology Support Staff

THE STRUCTURING OF ORGANIZATIONS H. Mintzberg Basic Parts Operating Core Producing Strategy Apex Manager Middle line Between Apex and Operating Techno structure Analysts Support staff Internal services Ideology

Coordinating Mechanisms Mutual Adjustment Direct Supervision Standardization of Work Process Coordination between operator Programs Assembly Instructions Standardization of Outputs Standardization of Skills Norms Body of knowledge Set of beliefs

Configurations Entrepreneurial Direct supervision Apex + Operating core Machine Highly specialized Larger Middle Line Techno structure + Support Staff Professional Standardization of skills Operating core Horizontal structure (hospitals universities) Diversified Standardization of Outputs. Independent entities Middle Line Balkanize Innovation Mutual Adjustmentdominated by experts Adhocracy Projects structure Fuse experts Missionary S. of Norms Ideology: sharing of values and beliefs Mass of non specialized members

THE STRATEGIST H. Mintsberg Frame of the Job Perspectives Agenda Positions Issues Scheduling Values Experience Knowledge Competencies Model Style Within Core in Context Outside Inside

MANAGING LEVELS Leading Individual Group Unit Linking Gate Keeper Action Doing Inside Doing Outside People Information Conceiving Controlling System, Structure Directive Communicating

MARKETING DEFINITION The American Marketing Association The Process of Planning & Executing The Conception, Pricing, Promotion & Distribution of Ideas, Goods & Services To Create Exchange, that Satisfy Individuals & Organizational Goals

Kotler: Marketing managers seek to influence the level, the timing, and composition of demand to meet the organization’s objectives Peter Drucker: The aim of marketing is to know and understand the customer so well that the product fits him and sells

VALUE BRIDGE PRODUCT-PRICE FIRM VALUE MARKETING Psychological Bridge Physical Bridge CUSTOMER VALUE

MARKETING’S ROLES & GOALS Roles Corporate strategy Goals Market Share Customer, Competitive Perspective Business Unit Products/markets Strategic Marketing Growth Marketing Management Profitability

MARKETING STRATEGY –THREE C’s Differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer’s needs in a given environmental setting Business Environment Customers Where to Compete? How to Compete? Corporation Competition When to Compete?

GILETTE’S MACH 3 MARKET STRATEGY • Where (Market): All USA • How (Means): Premium Product 35% more expensive than Sensor. Excel • When (Timing): before Mr Zein (CEO) retires • Competition: Atra, Sensor. Excel, Shick • Customer: MUS$ 750 in research, 35 patents Global product • Philip Morris and Miller Beer (Corporate strength) • TI and digital watches (Competition strength) • Goodyear: focus on tire (strategic decision)

FUTURE OF STRATEGIC MARKETING • • • Market Share Deregulation Acquisitions, mergers Columbia, Coca Cola Channel Structure Overseas companies Fragmentation of Markets: : cars – segments Early entrants Customer’s requests: Quality and Price not enough Demographic Shifts

STRATEGIC MARKET PLANMARKETING PLAN A Strategic Market Plan is a plan of all aspects of an organization’s strategy in the market place A Marketing Plan deals with the delineation of target segments and the four P’s Source: Abell D F Hammond J. Strategic Market Planning Englewood Cliffs NJ Prentice Hall 1979. p 9

STRATEGIC MARKETING -MARKETING MANAGEMENT Strategic Marketing The business to be in Time Orientation Decision process Nature of job Leadership Orientation Marketing Management Stresses running a business Long Range Inductive-Intuitive Bottom up Creativity Proactive Opportunistic Throw constraints Current Deductive analytical Top down Experience maturity Reactive Deterministic Optimize within constraints Source: Subhash C. Jain Marketing Planning & Strategy South Western College Publishing 2000

DEFINITION OF COMPETITION • Natural Competition: Evolution by Adaptation • Strategic Competition: Understand competitive interaction, predict consequences, available resources, predict risk and return, make the commitment

SOURCES OF COMPETITION • • • Customer Need Existing Industry New Industry Product line Type of the Firm

COMPETITIVE INTELLIGENCE • Defensive Intelligence: protect business • Passive Intelligence: Ad hoc information for a specific purpose • Offensive Intelligence: identify new opportunities • Sources: Public (advertising, publications, speeches)Trade Professionals(Customers, Patents), Government, Investors

FORCES DRIVING INDUSTRY COMPETITION Potential Threats Entrants Bargaining Power Suppliers Industry Competitors Substitutes Threats Buyers

Encirclement Flanking Bypass Frontal Guerrilla ATTACK STRATEGIES PM 12. 6 Market challenger strategies

HOW TO DEFINE A MARKET? • • • Product characteristics Needs characteristics (Use) Private/Owner brand Regional sales Boundaries: technology (material, energy); customer function, customer group (category)

DEFINING MARKET BOUNDARIES Personal Financial Transactions Customer Groups: Airports, Stores Gas stations, saving associations, banks Technologies: ATM, System, Teller Customer Functions: cash, deposit, bill, check, transactions Source: Abell D F Hammond J. Strategic Market Planning Englewood Cliffs NJ Prentice Hall 1979. p 9

MARKET ORIENTED DEFINITIONS Product Oriented Revlon Cosmetics Walt Disney Movies, Parks Xerox Office Machines Nike Sportive shoes Market Oriented Lifestyle, Self-expression Fantasies Entertainment Business more Productive Sportive Leisure

SEGMENTATION Category • Private • Professional/Industry • Public Behavior: • Benefit • User • Usage • Brand loyalty Impact Factors: • Geography • Demography, Cycle • Culture, Life style • Economy

MARKET COVERAGE M 1 M 2 P 1 M 3 M 1 M 2 P 2 M 3 X X X P 3 M 1 X X X M 3 X P 1 X X X P 3 X X P 2 X X X

Product attributes Product class Not competition Against competition Benefits Usage POSITIONING STRATEGIES Brands Activities Origin PM 10. 4 Positioning strategies Personalities Users

Disaster Success

BCG STRATEGY IMPLICATIONS Investment Earning Cash Flow Strategy Capacity expansion Low to High Negative CF Increase Mkt Share Cash Cows Capacity High maintenance Positive CF Maintain share Question Marks High R&D Negative to low Negative CF Share or withdraw Dogs Deplete capacity High to low Positive CF Withdraw Stars

GENERAL ELECTRIC GRID Industry Attractiveness Strong High Average Weak Question marks Winners Medium Low Profit Producers Losers Business Strength

Restaurant Specialized machinery Market share Steel Industry Porter’s generic strategies approach: Overall cost leadership, differentiation, focus