GLOBAL MARKETING Marketing Strategy

Benefits of Strategy Coordinates activities among functional areas of organization Defines resource allocation Leads to a superior market position

Components of Strategy Statement of objectives Selection of strategic alternative(s) Selection of customer targets Choice of competitor targets Statement of core strategy Description of supporting marketing mix Description of supporting functional programs Establish general direction of strategy Positioning Implement strategy

Marketing Goals Desired general accomplishments stated in vague terms. Indicate the direction the firm is attempting to move and the set of priorities it will use in evaluating alternatives and making decisions.

Should be attainable and realistic. Should be internally consistent. Should be comprehensive and help to clarify the roles of all parties in the organization. Should involve some degree of uncertainty.

Examples of Goals To have the largest, best-trained sales force in the industry. Having the best recognized and most effective advertising campaign in the industry.

Marketing Objectives Provide specific and quantitative benchmarks that can be used to gauge progress toward the achievement of the marketing goals for which they are developed. Should be attainable with a reasonable degree of effort.

Should specify the time frame for their completion. Usually related to sales revenues, market share, profitability, or cash flow

Examples of Objectives The marketing department will be responsible for having 40% of customers listing this financial institution as their primary financial institution within one year. The sales department will increase sales 18% during the next 2 years.

Strategic Alternatives: Growth Market development strategies –Attract non-users –Enter new markets

Attracting non-users Increase willingness to buy –Demonstrate benefits of product form –Develop new product forms with desired benefits Increasing ability to buy –Offer lower prices or credit –Provide greater availability

Enter new markets Broaden distribution –Move into new geographic markets –Add channels of distribution Product-line extension –Vertical product line extension –Horizontal product line extension Expansion through acquisition or diversification

Market penetration strategies –Increase purchase rate of existing customers –Attract competitors’ customers

Increasing purchase rate Broaden usage –Provide examples of additional uses of product Increase consumption levels –Lower prices, special-volume packaging –Improve buyers’ perceptions of product benefits Increase rate of replacement –Improve benefits, e.g., convenience, lower operating costs, that encourage early replacement

Attracting competitors’ customers Head-to-head competition –Superior marketing effort Quality, selection, availability, brand name recognition –Price-cost leadership Offer comparable quality at lower price

Differentiation –adding a set of meaningful and valued differences to distinguish the firm’s offering from competitors’ offerings –Criteria: important preemptive distinctive affordable superior profitable

Differentiation Variables ProductServicesPersonnelChannelImage FormOrdering easeCompetenceCoverageSymbols FeaturesDeliveryCourtesyExpertiseMedia PerformanceInstallationCredibilityPerformanceAtmosphere ConformanceCustomer trainingReliabilityEvents DurabilityCustomer consulting Responsiveness ReliabilityMaintenance & repair Communication RepairabilityMiscellaneous Style Design

Strategic Alternatives: Profitability Maintain satisfaction –Consistent, high quality –Effective customer complaint system Build strong customer relationships –Encourage repeat business through formal relationships –Target best customers Develop complementary products –Increase dependence on firm

Decrease costs/increase efficiencies Increase price Decrease product offerings/emphasize selling of most profitable products

Strategic Alternatives: Cash Flow Harvest market position –Systematically raise prices and reduce marketing expenses to capitalize on ST performance opportunities Divest market position –Sell firm –Close down operation and sell assets

Implications of Product Life Cycle on Marketing Strategy

Introduction Stage Objective: Create awareness and product trial Product—offer a basic product Price—charge cost-plus Distribution—selective Communications—target advertising to early adopters and dealers to increase awareness; heavy sales promotion to stimulate trial

Growth Stage Objective: Maximize market share Product—product extensions, warranties Price—decrease prices to penetrate Distribution—intensive Communications—target advertising to mass market to increase awareness; reduce sales promotions

Maturity Stage Objective: Maximize profit while defending market share Product—diversify products and brands Price—match or best competitors’ prices Distribution—more intensive Communications—use advertising to stress brand differences and benefits; increase sales promotions to encourage brand switching

Decline Stage Objective: Reduce expenditure and milk the brand Product—phase out weak models Price—cut price Distribution—selective; phase out unprofitable outlets Communications—reduce and target hard-core loyals; reduce sales promotions to minimal levels