From structure to chaos?

Understanding marketing strategy

Reference: Marketing strategies A contemporary approach by Ashok Ranchood, and
Strategic Marketing by David W crevenc

Prepared By:
Sakera Begum
Lecturer, School of Business
University of Creative Technology, Chittagong (UCTC)
The marketing concept
 The main premise of the concept is linking production and
consumption. The marketing concept relies on the creation of value
for the consumers.

 Marketing is an organizational function and a set of processes for

creating, communicating and delivering value to customers and
for managing customer relationships in ways that benefit the
organization and its stakeholders.
Marketing as a business process
 Value-defining processes: Processes that enable an organization to
understand the environment in which it operates better, understand its own
resources and capabilities more clearly, determine its own position in the
overall value chain and assess the value it creates by analyzing its target
customers.
 Value-developing processes: Processes that create value throughout
the value chain, such as the procurement strategy, new product and service
development, design of distribution channels, strategic partnership with
service providers and, ultimately, the development of the value proposition
for customers.
 Value-delivering processes: Processes that enable the delivering of
value to customers, including service delivery, customer relationship
management, distribution and logistical management, marketing
communications management (such as advertising and sales promotion),
product and service enhancement and customer support services.
 The role of market
orientation
Information generation This is the generation of
customer-, market- and competitor- related
information as a result of a company’s intelligence-
gathering activities. The information is either from
internal or external sources. The role of
Information dissemination Having obtained the market
necessary information, a company needs to orientation
disseminate this information effectively to all the • Information
individuals operating within its confines. If gathering
information dissemination is poor, it can be difficult • Information
dissemination
for a company to develop the correct strategy for a
• Implementatio
given market or set of customers. n and response
Implementation and response to the
information received A company needs to act on
the information received in a clear and precise manner.
Therefore, the type of information gathered and the
speed with which it is disseminated within a company
play an important role in the development and
implementation of marketing strategies.
Components of market
orientation

Customer orientation
information generation
pertaining to customers

Competitor orientation:
when a business is
competitively oriented, it
constantly reassesses its
strengths and weaknesses
relative to its competitors.

Inter-functional
coordination dissemination
of information obtained
pertaining to customers across
the functional departments.
Strategic Planning To Deliver
The Marketing Concept

Strategic marketing planning

involves careful analysis of an
organization's environment, its
competitors and its internal
strengths in order to develop a
sustainable plan of action that will
develop the organization's
competitive advantage and
maximize is performance within
given availability of resources.
 Environmental Factors:
Studies into market orientation
often utilize an environmental
turbulence scale to understand
its effect on the level of market
orientation practiced by
organizations. However, this
environmental turbulence only
measures the impact of
technology and competitors
within a given market. For a
greater understanding,
companies need to analyze the
role played by the general
environment, including global
climate and political issues, as
shown in Figure.
 Components of corporate strategy:

Corporate  Corporate vision: Vision is an almost “impossible dream”

that provides a direction for the company.
Strategy
 Objectives: Objectives need to be set so that the performance
of the enterprise can be gauged. Corporate objectives may be
established in the following areas: marketing, innovation,
resources, productivity, social responsibility, & finance.

 Business composition: Defining the composition of business

A corporate strategy entails a provides direction for both corporate & marketing strategy
clearly defined, long-term design. A business segment, group, or division is often too large
vision that organizations set, in terms of product & market composition to use in strategic
seeking to create corporate analysis & planning, so it is divided into more specific strategic
value and motivate the units.
workforce to implement the
proper actions to achieve  Resources: It is important to place a company’s strategic focus
customer satisfaction. on its resources- assets, skills, & capabilities. These resources
may offer the organization the potential to compete in different
markets, provide significant value to end-user customers, &
create barriers to competitor duplication.

 Structure, Systems, & processes: Structure determines the

composition of the corporation. Systems are the formal policies
& procedures that enable the organization to operate. Processes
consider the informal aspects of the organization’s activities.
 Corporate Planning Activities
1.Defining the corporate mission: Mission is a statement of the
organization’s purposes what it wants to accomplish in the larger
environment. To define the mission, the company should address the following
questions:

What is our business?

Who is the customer?
What is of value to the customer?
What will our business be?
What should our business be?

Good mission statement has three characteristics:

First, they focus on a limited number of goals.
Second, mission statements stress the major policies & values the company
wants to honor.
Third, they define the major competitive scopes within which the company
will operate. For example, industry scope, products & application scope,
competence scope, market segment scope, Vertical scope, geographical scope.
 Corporate Planning Activities
2. Establishing Strategic Business Units: Strategic Business Unit is a
unit of the company that has a separate mission & objectives & that can
be planned independently from other company businesses. It can be a company
division, a product line within the division, or sometimes a single product or
brand.

An SBU has three characteristics:

1. It is a single business or collection of related businesses that can be planned
separately from the rest of the
company
2. It has its own set of competitors
3. It has a manager who is responsible for strategic planning & profit
performance & who controls most of
the factors affecting profit.
Corporate Planning Activities

3. Assigning resources to each SBU:

4. Planning new business,
Downsizing or terminating older
 The purpose of identifying the business:
company’s strategic business units is
to develop separate strategies & assign
appropriate funding. Two of the best-  The company plans for its existing
known business portfolio evaluation businesses allow it to project total
models are: sales & profits. If there is a gap
 Boston Consulting Group (BCG) between future desired sales and
Approach projected sales corporate management
will have to develop or acquire new
 General Electric (GE) Approach
business to fill it.
Boston Consulting Group
(BCG) Approach:

Boston Consulting Group

analysis is a chart that had
been created by Bruce
Henderson for the Boston
Consulting Group in 1968 to
help corporations with
analyzing their business units
or product lines. This helps
the company allocate resources
and is used as an analytical
tool in brand marketing,
product management,
strategic management, and
portfolio analysis.
 Boston Consulting Group (BCG)
Approach:
The growth-share matrix has two controlling aspect namely relative market share and market
growth rate. It is divided into four cells, each indicating different types of business.

Question Marks: These are products with a low share of a high growth market. They
consume resources and generate little in return. They absorb most money as the company
attempt to increase market share.

Stars: These are products that are in high growth markets with a relatively high share of that
market. Stars tend to generate high amounts of income. The company must spend substantial
funds to keep up with the high market growth, & to fight off competitors attack.

Cash Cows: These are products with a high share of a low growth market. Cash Cows
generate more than is invested in them. So the company should keep them in its portfolio of
products for the time being.

Dogs: These are products with a low share of a low growth market. These are the canine
version of 'real turkeys!’ They do not generate cash for the company, they tend to absorb it. The
company should get rid of these products.
General Electric (GE) Approach:

 The General Electric Business Screen was

originally developed to help marketing
managers overcome the problems that
are commonly associated with the Boston
Matrix (BCG)
 The GE approach introduces a three by
three matrix, which now includes a
medium category. It utilizes industry
attractiveness as a more inclusive
measure than BCG's market growth and
substitute’s competitive position for the
original's market share.
General Electric (GE) Approach:
Market attractiveness depends on:

 Size of market. The GE matrix is divided into nine cells, which in

 Market rate of growth
turn fall into three zones.
 The nature of competition and its diversity.
 Profit margin.  The three cells in the upper left corner indicate strong
 Impact of technology, the law, and energy
efficiency. SBUs in which the company should invest or grow.
 Environmental impact.
 The diagonal cells stretching from the lower left to
Competitive position depends on: upper right indicate SBUs that are medium in overall

 Market share. attractiveness. The company should pursue selectivity

 Management profile.
& manage for earnings in these SBUs.
 R & D.
 Quality of products and services.  The three cells in the lower right corner indicate SBUs
 Branding and promotions success.
 Place (or distribution). that are low in overall attractiveness. The company
 Efficiency.
should give serious thought to harvesting or divesting
 Cost reduction.
these SBUs.
Strategic Planning Gap:
 Strategic Planning Gap:

 Three options are available to fill up the strategic planning gap:

I. The first is to identify opportunities to achieve further growth

within current businesses (Intensive growth opportunities)

II. The second is to identify opportunities to build or acquire

businesses that are related to current businesses (Integrative
growth opportunities)

III. The third is to identify opportunities to add attractive businesses

tat are unrelated to current businesses (Diversification growth
opportunities)
Intensive Growth Strategy
 Integrative Growth
Strategies:

Integrative Growth strategies: There are

four types of integrative growth strategies:

1. Backward integration (integration

with the suppliers)
2. Forward integration (integration
with the distributors)
3. Horizontal integration (integration
with one or more of the competitors)
4. Vertical integration ( integration
with another member of supply chain
Downsizing Or Terminating
Older Business:
Companies must not only develop new
businesses, but must also carefully prune,
harvest, or divest tired old businesses in order
to release
needed resources & reduce costs.