1. STRATEGY GENERIC STRATEGIES FOUR P’S MAPS & MATRIXES
SWOT, OPPORTUNITY & THREAT, BOSTON GROWTH SHARE, PRODUCT LIFE CYCLE, COMPETITOR MAP, PERCEPTUAL MAP
TARGET MARKET & SEGMENTATION

2. Chapter 1
Market Driven Strategy (info on customers, competitors, market) and Deliver superior customer value
Distinctive Capabilities (competencies)
Provide Customer Value

3. Figure 1-7: Contrasts Between the Sales Concept and the Marketing Concept

4. Group Exercise
What do you think are product and market definitions for the following?
Missouri-Pacific Railroad?
Xerox?
Standard Oil?
Colombia Pictures?
Example: Carrier
Product: We make air conditioners and furnaces
Market: We provide climate control in the home

5. Table 4.1: Product-Oriented versus Market-Oriented Definitions of a Business
Company
Product Definition
Market Definition
Missouri-Pacific Railroad
We run a railroad
We are a people-and-goods mover
Xerox
We make copying equipment
We help improve office productivity
Standard Oil
We sell gasoline
We supply energy
Columbia Pictures
We make movies
We market entertainment
Encyclopaedia
We sell encyclopedias
We distribute Information
Carrier
We make air conditioners and furnaces
We provide climate control in the home

6. Chapter 2 STRATEGY FORMULATION Define Corporate mission Set Objectives
Determine Strategic Business Units
Establish strategic Guidelines

7. DESIRABLE CAPABILITIES
Superior to
the
Competition
Applicable to
Multiple
Competitive
Situations
Difficult to
Duplicate
Source: George S. Day, Journal of Marketing, October 1994, 49.
TM 1-6

8. Chapter 2 CORPORATE STRATEGY Management’s long term vision
Objective milestones toward vision
Assets, skills, capabilities
Business Composition
Structure, Systems & Processes

9. Chapter 2 MARKETING STRATEGY SEGMENTATION TARGET MARKETS
POSITIONING (4P’s)
IMPLEMENTATION & MANAGEMENT

10. Company Orientations Toward the Marketplace
Target Market
Customer Needs
Stated needs
Real needs
Unstated needs
Delight needs
Secret needs

11. Chapter 3 Market Opportunity Analysis
1) Define Product Markets
2) Analyze End Users
3) Industry & Value Chain Analysis
4) Evaluate Key Competitors
5) Estimate Market Size & Growth
Competitor Map pg. 97
Perceptual Map pg. 103

12. Defining and Analyzing Markets #3
Define Product-Market Boundaries and Structures
Describe and Analyze End-User
Analyze Industry & Value Added System
Evaluate Key Competitors
Forecast Market Size & Growth Trends
McGraw-Hill/Irwin
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.
TM 3-6

13. Generic Competition Strategies
Overall Cost Leadership
Need high market share, efficient facilities, cost reduction, tight overhead, no marginal customer accounts, raw materials access, re-investments
Differentiation
Unique: design, technology, features, service...
Focus
Specific buyer group, segment of a product line, geographic market...

14. Overall Cost Leadership
Sustained capital investments
Process engineering skills
Products designed for ease in manufacture
Low cost distribution system
Tight cost control
Frequent, detailed reports
Incentives based on quantitative targets

15. Differentiation Strong marketing abilities
Product engineering & creative flair
Strong research & function coordination
Reputation for quality or leadership
Subjective incentives & measurements
Amenities to attract high-caliber people
FOCUS: Above, directed at specific target

16. Competitive Strategy-Broad formula: How to compete, set goals, policies to achieve goals
COMPET. FORCES
Entry
Threat of substitution
Buyer bargaining power
Supplier bargaining power
Current competitor rivalry
ENTRY BARRIERS
Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution
Cost disadvantages
Government

17. Figure 1-5: The Four P Components of the Marketing Mix

18. Figure 9-3: Competitor Map – Eastman Kodak

20. BOSTON
Growth
Share
Matrix

21. Figure 4-5: Three Intensive Growth Strategies: Ansoff’s Product-Market Expansion Grid

22. Figure 4-7: Opportunity and Threat Matrices

23. DESCRIBING AND ANALYZING END-USERS
Identifying and
Describing Buyers #3
Building
Customer
Profiles
DESCRIBING
AND
ANALYZING
END-USERS
How
Buyers
Make
Choices
Environmental
Influences
McGraw-Hill/Irwin
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.
TM 3-7

24. Illustrative Example: Gasoline Buyers #4
Road
Warriors
Higher-income, middle-aged
men, drive miles a year
… buy premium with a credit card
… purchase sandwiches and drinks
from the convenience store
… will sometimes use carwash
16% of
buyers
True
Blues
Men and women with moderate to
high incomes, loyal to a brand and
sometimes a particular station …
frequently buy premium, pay in cash
16% of
buyers
Generation
F3 (Fuel,
Food & Fast)
Upwardly mobile men and women -
half under 25 years of age -
constantly on the go … drive a lot
snack heavily from the convenience
store
27% of
buyers
Homebodies
Usually housewives who shuttle
children around during the day and
use whatever gas station is based on
town or on route of travel
21% of
buyers
Price
Shoppers
Not loyal to brand or station and
rarely buy premium … frequently on
tight budgets.
20% of
buyers
TM 4-10
McGraw-Hill/Irwin
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

25. Illustrative Consumer Perception Map #4
Expensive
GROUP II
Brand A
Brand E
Brand B
GROUP V
Low
Quality
High
Quality
GROUP I
GROUP
III
Brand C
Brand D
GROUP IV
TM 4-11
McGraw-Hill/Irwin
Inexpensive
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

26. A Framework for Market Sensing #5
Probability of the Event Occurring
High
Medium
Low 7
Field of
Utopia 6
Dreams 5
Effect of the
Event on the
Things to
Company* 4
Watch 3
Future 2
Danger
Risks 1 *
1=Disaster, 2=Very bad, 3=Bad, 4=Neutral, 5=Good, 6=Very good, 7=Ideal
TM 5-4
McGraw-Hill/Irwin
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

27. Figure 11.3: Sales and Profit Life Cycles

28. Product Life-Cycle Marketing Strategies

29. Issues in Collecting and Using Information #6
Invasion of customer privacy
e.g., use of medical databases to sell healthcare products
Information and ethics
e.g., guidelines for sharing of confidential information
TM 5-13
McGraw-Hill/Irwin
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

30. Bargaining Power of Buyers
Concentrated or large volume sales
Purchased products are a significant fraction of buyer’s costs
Products are standard or undifferentiated
There are few switching costs
Low profits - pressure on suppliers
Buyers pose threat of backward integration
Buyer has full information

31. Bargaining Power of Suppliers
Concentrated suppliers, fragmented buyers
Little substitution threat
Customer is not an important buyer
Supplier’s product is important input
High buyer switching costs
Suppliers pose threat of forward integration
Government - defense, timber, regulation

32. Rivalry: Price competition, advertising, product introductions, customer service..
Numerous Competitors: More mavericks
Slow Industry Growth
High Fixed or Storage Costs (Excess capacity often leads to price wars)
Lack of Differentiation = commodity
Foreign Competitors
High Strategic Stakes
High Exit Costs

33. Likelihood of retaliation to entry
History of retaliation
Established firms with substantial resources such as cash, borrowing capacity, excess productive capacity, distribution leverage
Established firms with illiquid industry assets
Slow industry growth - can’t absorb new competition.

34. Figure 9-2: Barriers and Profitability