WK 2 MKG Strategy Process (Resource)_2009

8/8/2019 WK 2 MKG Strategy Process (Resource)_2009

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Discussion

Applying strategic marketing thinking: What is marketingstrategy?

How does it fit with overall firm strategy?

Developing a coherent and successful marketing strategy

Implications for implementation of chosen marketingstrategies

Why firms fail when it comes to marketing strategyimplementation?


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Microsoft and its Business Ecosystem (Source: Company data)

DOMAIN Number of firms

Systems integrators 7,752

Development services companies 5,747

Campus resellers 4,743

Independent software vendors 3,817

Trainers 2,717

Breadth value-resellers 2,580

Small specialty firms 2,252

Top value-added resellers 2,156

Hosting service providers 1,379

Internet service providers 1,253

Business consultants 938

Software support companies 675

Outbound hardware firms 653

Consumer electronics companies 467

Unsegmented resellers 290

Media stores 238

Mass merchants 220

Outbound software firms 160

Computer superstores 51

Application service provider aggregators 50

E-tailers 46

Office superstores 13

General aggregators(7); Warehouse club stores (7); Niche specialty stores (6); Sub-distributors (6) 26

Applications integrators (5); Microsoft direct resellers (2); Microsoft direct outlets (1); Network equipment providers (1); Network service providers (1)

10


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Marketing strategy process

Strategic marketing Product marketing Operation

Corporate

objectives

Marketing

audit

SWOT

analysis

SWOT

balance

Product-market

objectives

Strategic

focus

Core

strategy

Marketing

mix

Estimate

results

Organise

Implement

Track


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Strategic Marketing Triangle

Market

Environment

Strategy Organisation

'Fit' 'F

it'

'Fit'


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Strategic Marketing Planning:

The Basic Questionss WHERE are we now?

s HOW did we get here?

s WHERE do we want to go?

s WHERE might we go?

s WHERE must we go?

s HOW do we get there?


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The marketing auditKnow:s In business

Your company

Your competition The market The business and

economic environment

s In battle Your forces

Your opposition The battle ground The climate


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The Marketing Environment

Micro environmental forces

Macro environmental forces

PublicsCompetitors

Suppliers

Intermediaries

Customers

Company

Political

Socio-demographic

Legal

EconomicTechnological

Natural


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Environment AnalysisMacro: Changes taking place in the broader environment?

Micro: Trends

EgCustomers Current? Future?

What do they want & need?

Competitors Who/what do/will we compete with?

Key Success

Factors What it takes to win in this business?Opportunities What might we do?

Threats What must we do?


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What makes aWhat makes a

resourceresource

valuable?valuable?


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Contribute to ProvidingContribute to Providing

Value for CustomersValue for Customers

Unique toUnique to

the Firmthe Firm

Hard forHard for

Competitors toCompetitors to

Acquire or ImitateAcquire or Imitate

Resource Advantage

SCASCA


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Wal-Mart: Ecosystem Edge

More than half of Wal-Marts cost advantage derived from how the company manages its ecosystem of

business partners..by sharing information, Wal-Mart is better able to match supply and demand across

the entire ecosystem, raising productivity and responsiveness for itself and for its partners.

Source: M. Iansiti, HBR, March 2004.

Global procurement 0.5% BenefitsCentralized buying 2% attributed

Optimized product mix 2% to

Distribution efficiencies 2% ecosystem

Other operating efficiencies 2% management

Information sharing 6%

Lower shrinkage rates 0.5%

Preferred real estate rental rates 2%

Lower labour costs 5%

Wal-Marts total margin advantage in retail groceries 22%


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s Draws from the audit

s It concentrated on a few key

issues

s Strengths and weakness are key

factors for success (KFS) in the

industry.

s Opportunities and threats

external to the company. Based on

the planning assumptions.

S.W.O.T. analysis

Strength Weakness

Opportunity Threats

Good indicators Danger signals


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Balancing the SWOTS &W O & T Action

strong opportunity ?

strong threat ?

weakness opportunity ?

weakness threat ?

S W

O T


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Managing the assumptions

Certainty Importance Action

high high ?

low high ?

high low ?

low low ?


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Strategic Objectives

What are our goals?What are our goals?

How can they be quantified in terms of:How can they be quantified in terms of:

Profitability & Financial Returns?Profitability & Financial Returns?

Sales and Market Share?Sales and Market Share?

Customer Satisfaction & Retention?Customer Satisfaction & Retention?

Employee Satisfaction?Employee Satisfaction?

Resource Utilisation?Resource Utilisation?


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Strategic Focus

How we will achieve our objectives?

What are the main components of our strategy?


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IMPROVE

PERFORMANC

E

EXPAND

VOLUME

IMPROVE

PROFITABILITY

Identify main elements of the business strategy

Strategic Focus


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Strategic FocusReduce capital cost

Reduce fixed cost

Reduce variable cost

Reduce costs

Change product mix

Increase price

Add value

Increase margins

Improve Profitability

Win competitors cust.

Acquisition/Alliances

Increase usage rate

Increase market share

New segments

New markets

Innovation

Expand market

Increase Volume

Improve Performance


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Product-Market ExpansionExisting products New products

New

Existin

g

mark

e

ts

mar ke

ts

ProductDevelopment

Diversification

MarketPenetration

Market

Development


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In a downturn.Critical prioritiesCommunicate key objectivesForce hard ChoicesAccelerate necessary Changes

Seize window of opportunity Value Creation > Cost of resourcesHarness Creativity

Major change efforts are difficult in the best of times, and many executivesworry that a downturn will halt future progress, or reverse any gains madeto date. Indeed, ..managers too often scurry from fighting one fire to the

next and thereby lose sight of the longer transformation effort.Downturns provide an ideal opportunity to renew a sense of urgency,justify unpopular decisi9ons and overcome complacency or resistance tochange.

[D Sull, FT, 23/01/09)


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Core Marketing Strategy

sCustomer targets who to serve? what to offer?

sCompetitor targets who we compete with?

sPositioning reason for customer to prefer doing

business with us?


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Creating and Keeping Customers

sOffer customer value

sCreate and sustain a differential advantage

s

Market targeting


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Competitor Targeting: Marketing Strategies

for Competitive Advantages Market leader

s

Market challenger

s Market follower

s Market nicher

Competitive advantage depends on

industry position.


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Routes to Competitive Advantage

Differentiation

Cost Focus

Stuck in

the middle


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Reckitt Bensicker has shrugged off the economic malaise that isstarting to worry consumer goods rivals by promising to EXPAND SALES

at twice the rate of the market this year and increase net income

by 8-10 per cent.

Bart Becht CEO of R-B said that Reckitt would increase sales by 4 per cent

in 2009 and was winning market share in spite of shoppers ditching branded lines in favour of cheaper supermarket goods.

One analyst highlights 3 reasons for R-Bs success:

Focus (household products, healthcare)

Innovation and Marketing Cost cutting Culture of entrepreneurship and accountability

[E Rigby & M Urry, FT 12/02/09]


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Marketing Mix

OfferingOffering What bundle of product and services?What bundle of product and services?

PricePrice How will we cost our offerings?How will we cost our offerings?

What (and how) will we charge for it?What (and how) will we charge for it?

PromotionsPromotions How will we communicate ourHow will we communicate our

offeringsofferings to the target customers?to the target customers?

DistributionDistribution How will we physically get ourHow will we physically get ourofferingsofferings toto where consumerswhere consumers

want to purchasewant to purchase or useor use

them?them?


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StaffStaff What combination of people/skills?What combination of people/skills?

SystemsSystems What systems (e.g knowledge, IT) needed toWhat systems (e.g knowledge, IT) needed to

deliver the offerings to ourdeliver the offerings to our

customers?customers?

ProcessesProcesses What processes required to ensure delivery?What processes required to ensure delivery?

StyleStyle What culture to support our marketingWhat culture to support our marketing

goals and activities?goals and activities?

StructureStructure Whats the most appropriate organisationalWhats the most appropriate organisational

structure for implementing thestructure for implementing the

marketing activities?marketing activities?

Organisation


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Feedback & Control

EvaluationEvaluation How successful are we vsHow successful are we vs

plan? Others?plan? Others? What metrics will we use?What metrics will we use?


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Business Orientation and Success Rate (1992)

Aggressive PushersSales Orientation

Quality Marketeers

Balanced Orientation

Mature Marketeers

Marketing Orientation

Innovators

Product Orientation

Product MakersProduction Orientation

Price Promoters

Financial Orientation

Success Rate (%)

25

100

50

75

(Saunders and Wong, 1993)

J 46%

A 36%B 18%

J 15%

A 54%

B 31%

J 59%

A 18%

B 23%

J 18%

A 53%

B 29%

J 22%

A 14%

B 64%

J 31%

A 31%

B 38%


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Business Orientation & Survival Rate

SUCCESS FAILURES

SURVIVORS Balanced orientation (91%)

Marketing orientation (92%)

Innovation-led

(91%)

Financial orientation (86%)

FAILURES Production orientation

(62%)Sales orientation (65%)

1992

2002

(Saunders and Wong, 2003)


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What Type of Company will

survive in TodaysEnvironment?


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Summary

Marketing Stratgey Process Marketing Audit

Resource Advantage Strategic Focus the key elements ofbusiness strategy

Product-Market Led Expansion

Routes to Competitive Advantage

WK 2 MKG Strategy Process (Resource)_2009

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