week 8 lecture 7 student slides strategic marketing .ppt

Strategy Formulation,Market,Industry and Competitor analysis,Customer segments and behavioural analyses,Company position analysisand S.W.O.T,Product range and performance analysis,PEST,Strategic Analysis,Generic Strategy(Porter),Growth Strategy(Ansoff),Strategic options,Objectives,Objective 1,Objective 2,Objective 3,Product Range and Performance Analysis,E.g.:Positioning MapsProduct Life-Cycles(PLC)Diffusion of InnovationBoston Consulting Group Matrix(BCG),Mens Clothing Retailer Positioning,Price+,Age+,2.Product Life-Cycle(PLC),Products deemed to go through a life-cycle:introduction,growth,maturity,decline,Stark,J.(2011)Product Lifecycle Management,London,Springer-Verlag.,Not always according to standard model(does it account for market share?)Impacts on how to use marketing mix tools:e.g.advertise for awareness;e.g.sales promotion to induce purchase;e.g.PR to build opinionCan vary for each product e.g.fad,fashion,extended life-cycle,Product Life-Cycle,Levitt,T.(1965)“Exploit the Product Life Cycle”,Harvard Business Review,Vol.43(November),pp.81-94.Day,G.(1981)“The product lifecycle:analysis and applications issues”,Journal of Marketing,Vol.45,pp.60-67.,A Fad/Fashion?,Maturity,An Extended Life-Cycle,Maturity,An Extended Life-Cycle,Maturity,An Extended Life-Cycle,3.Diffusion of Innovation,Based on how an innovation or new product/service diffuses through a marketSimilar to PLC model(customers not products)Not everyone is equally interested in new thingsYou may aim to target your new product at the innovators and not the laggards,Mahajan,V.and Muller,E.(1979)“Innovation diffusion and new product growth models in marketing”,Journal of Marketing,Vol.43 No.4,pp.55-68.Evans,M.(1989)“Consumer behaviour towards fashion”,European Journal of Marketing,Vol.23 No.7,pp.7-16.,“Trickle-Down”,McCracken,G.(1985)The trickle-down theory rehabilitated:The psychology of fashion,Lexington,MA.,“Trickle-Up”,Trickle-Sideways,See:Canniford,R.(2011)“How to manage consumer tribes”,Journal of Strategic Marketing,19(7),pp.591-606.,Trickle Down,IntroductionGrowthMaturityInnovatorsEarly AdoptersEarly Majority Late Majority,Cost Focus?,Segments?,Parallel Diffusion,Midgley and Wills(1979)“Fashion Marketing”,Lateral Marketing Thoughts,MCB Publications,Bradford,p.131.,Innovators/IntroductionEarly Adopters/GrowthEarly Majority/MaturityLate Majority/Maturity,Time,4.Boston Consulting Group Matrix(BCG),The growth/share matrixDeveloped in the 1970sResource allocationTo position SBUs/Product PortfolioAssist decision-makingAllocate organisational resources,Boston Consulting Group Matrix(BCG),Y-axis,X-axis,PLC(growth but not share)to BCG,Y-axis,X-axis,Introduction,Decline,Maturity,Growth,Boston Consulting Group Matrix(BCG),Y-axis,X-axis,Apple iPod,Apple iPhone 6,Apple iWatch,Hypothetical new product launch,Relative share ratio,Apple Headspace,Generally require investment to become stars and keep up with the growing market.The name question mark indicates the decision managers need to make in order to develop the product/SBU into a star or withdraw it from the market.,Apple iWatch,These need high investment in order to maintain market position/growth by keeping competitors at bay.Stars are likely to generate cash but they require a lot of investment to maintain their position.,Apple iPhone 6,Products which generate considerable amounts of cash as they are in a position with high market share in a market which sees little growth.Furthermore,little cash is invested in these products as there are limits to the expansion of the market.Consequently cash is generated which can be used to fund the development of questions marks.,Apple iPod,Typically generate little profit or a loss due to a low market share in a market which sees little growth.,?,Strategy Prescription,Build or Harvest:Cease or minimise investment,maybe raise price,Harvest or Divest:Cease production or sell off to withdraw resources,Build:Invest heavily to increase volume or share,Hold:Invest just enough to keep current share and/or profits,Product Portfolio:A Basis for Product Marketing Strategy?,Analysis of:Positioning;P.L.C;Diffusion of an Innovation;Market Share and Market Growth.,BCG:Limitations,Focuses on market share and market growth rates only Other factors such as profitability are sometimes more important.Many low growth markets are still attractive(niche markets for example)There are many successful low market share firms(i.e.niche strategy),BCG:Limitations,How is the market(for share assessment)defined?Too inward facing,ignores some external factors such as competitors activity.Focused on cash flow,neglects profitability,ROI.,Market Definition,Market Definition,Hence Further Analysis of Company Position,Directional Policy Matrix(Shell/DPM),orG.E/McKinsey Matrix(last week),On Balance.,Supporters claim:DPM is more complete than B.C.G.Matrix(factors other than just growth and share)More prescriptive in terms of strategy developmentCritics argue:It is more cumbersomeScope for political bias Subjectivity in scoring,1b.Market,Industry and Competitor analysis,2.Customer segments and behavioural analyses,4.Company position analysisand S.W.O.T,3.Product range and performance analysis,1a.PEST,Strategic Analysis,Generic Strategy(Porter),Growth Strategy(Ansoff),Strategic options,Objectives,Objective 1,Objective 2,Objective 3,Ansoffs Matrix(1957,in Harvard Business Review),Ansoffs Matrix(1957,in HBR),Market penetration:Aim is to increase sales of existing products in current markets.An aggressive marketing drive via competitive pricing,sales promotion or advertising can expand the share of an existing market.Low risk as dealing with familiar customer and products and a good starting point to the planned growth,Ansoffs Matrix(1957,in HBR),Market development:Aims to find new markets for existing products.Could involve new geographic markets,adding distribution channels or finding new market segments.E.g.sports clothing as fashion items targeted at new set of retailers,Ansoffs Matrix(1957,in HBR),Product development:Firms must update their product portfolio to remain competitive.Ideally a balanced portfolio should exist with established products generating funds for product development,Ansoffs Matrix(1957,in HBR),Diversification:Involves moving beyond existing areas of operation and activity,seeking involvement in unfamiliar activities.It can be related or unrelated.,Now C21st More Sophisticated than Ansoffs 1950s,Marketing strategies are now more complex than Ansoffs four potential decision variablesE.g.:Product Extension,1950s,1990s,Today,Now C21st More Sophisticated than Ansoffs 1950s,Marketing strategies are now more complex than Ansoffs four potential decision variablesE.g.:Brand Extension,Now C21st More Sophisticated than Ansoffs 1950s,Marketing strategies are now more complex than Ansoffs four potential decision variablesE.g.:Product Innovation,In a Retail Context.,Customer Markets,Cf.Kristensen,L.(1983)“Strategic Planning in Retail”,European Journal of Marketing,17(2),pp.43-59.,“Strategic planning is an effort to organise this variety,not an answer to solving it”(Kristensen,1983,p.43).,Verdict on Portfolio Models,Possible Benefits:Aid strategic analysis Assist resource allocationPinpoint priority Product MarketsPrescribe strategiesForce the facing-up to marginal Product Markets,I Would Encourage You to Read:,Patterson,A.,Quinn,L.and Baron,S.(2012)“The Power of Intuitive Thinking:A Devalued Heuristic of Strategic Marketing”,Journal of Strategic Marketing,Vol.20 No.7,pp.35-44.,Ardley,B and Quinn,L.(2014)“Practitioner Accounts and Knowledge Production:An Analysis of Three Marketing Discourses”,Marketing Theory,Vol.14,No.1,pp.97-118.,Verdict on Portfolio Models,Possible Benefits:Aids strategic analysisAssists resource allocationPinpoints priority Product MarketsPrescribes strategiesForces facing-up to marginal Product MarketsOverall,they enrich management decision-making.And the formulation of your strategic objectives!,1b.Market,Industry and Competitor analysis,2.Customer segments and behavioural analyses,4.Company position analysisand S.W.O.T,3.Product range and performance analysis,1a.PEST,Strategic Analysis,Generic Strategy(Porter),Growth Strategy(Ansoff),Strategic options,Objectives,Objective 1,Objective 2,Objective 3,Common Mistakes when Formulating Strategy,Ignorance about markets,based on the false assumption that the information is not availableCompeting on price rather than developing a unique selling proposition(USP)Pitching prices too low,leaving inadequate margins for the cost of advertising or sales promotionExpanding sales of the least profitable product or servicesLaunching new products or services with inadequate prior research of the market,Further Reading:Dibb,S.and Simkin,L.(2012)“Leadership teams rediscover market analysis in seeking competitive advantage and growth during economic uncertainty”,Journal of Strategic Marketing,Vol.20 No.1,pp.45-54.,Distinguishing between Strategic and Tactical Decisions,Steiner,G.and Miner,J.(1977)Management Policy and Strategy:Text Readings and Cases,Collier Macmillan,New York.,Further References,Barney,J.(1991)“Firm resources and sustained competitive advantage”,Journal of Management,Vol.17 No.1,pp.99-120.Gummesson,E.(2001)“Are current research approaches in marketing leading us astray?!,Marketing Theory,Vol.1 No.1,pp.27-48.Morrison,A.and Wensley,R.(1991),“Boxing up or boxed in?A short history of the Boston Consulting Group share/growth matrix,”Journal of Marketing Management,Vol.7,pp.105-129.Wensley,R.(1981),“Strategic marketing:Betas,boxes,or basics?”Journal of Marketing,Vol.45,pp.173-181.,Assignment 1 Feedback,