BUAD 307—MARKETING FUNDAMENTALS MARKETING STRATEGY

Perner 2 BUAD 307 OVERVIEW AND STRATEGY Learning Objectives Identify –The scope of strategic decisions –Tradeoffs that firms must make in their decisions –Cumulative and “spill- over” effects of strategic decisions and the need for consistency –The need for industry balance and firm unit cash flow balance

Perner 3 BUAD 307 OVERVIEW AND STRATEGY Strategy Plan –To achieve desired objectives (e.g., profit, market share) –Based on available resources (e.g., financial, patents, trademarks, people, brand name/image, distribution channels) –Subject to choices made (e.g., willingness to take risk, short run vs. long run goals)

Perner 4 BUAD 307 OVERVIEW AND STRATEGY MARKETING STRATEGY EXPERIMENTATION/ EXPRIENCE RESOURCESENVIRONMENT PRIORITIES/ OPPORTUNITY COSTS STRATEGY

Perner 5 BUAD 307 OVERVIEW AND STRATEGY Market Balance Different firms should attempt to offer different forms of value, appealing to different customer segments— otherwise, competition is likely to degenerate into price competition EASYTECH, LTD. EASE OF USE BRUIN PRIDE, INC. LOW PRICE TROJAN CREATIONS, INC. PERFORMANCE PATIENCE-IS-STUPID, INC. SPEED MICROGEEKS, LTD. SMALL SIZE A WELL BALANCED GADGET INDUSTRY

Perner 6 BUAD 307 OVERVIEW AND STRATEGY Core Competencies Broad, fundamental capabilities—not readily imitated by competitors— in which an organization excels Deployable across a variety of products and situations –E.g., stylish design of electronics (Apple) –E.g., economies of scale and broad assortment of online merchandise (Amazon)

Perner 7 BUAD 307 OVERVIEW AND STRATEGY Examples of Objectives Profit level Profit growth Total unit sales Growth in unit sales Growth in dollar sales Total dollar sales Brand perception by customers –Value –Quality –Innovativeness –Reliability Brand name recognition Brand name recognition by product category Product availability –Availability across retailers and other distributors –Store placement Percentage of products sold at full price Percentage of revenue from new products Affordability of product Elimination of unsafe product ingredients

Perner 8 BUAD 307 OVERVIEW AND STRATEGY Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis STRATEGY STRENGTHS WEAKNESSES OPPORTUNITIES THREATS INTERNAL TO FIRM EXTERNAL TO FIRM

Perner 9 BUAD 307 OVERVIEW AND STRATEGY SWOT Deciding where to concentrate resources Using strengths and opportunities to compensate for weaknesses and threats

Perner 10 BUAD 307 OVERVIEW AND STRATEGY SWOT—Apple Strengths –Market leading/dominating position –Strong R&D –Strong demand for iPhone Weaknesses –Legal problems (loss of several patent lawsuits) –Large debt –Dependence on the legacy of Steve Jobs for brand image Opportunities –New product introductions –Increasing global demand for smart phones Threats –Android devices (free operating system) –Counterfeiting and industrial espionage –Competition—both on low cost and on innovative features –Declining desktop and laptop markets in developed countries Source: “Apple,” Global Markets Direct SWOT Reports (from Business Essentials), June 1, 2015