Marketing Strategy

Read:

Chapter 2, p63-65

Chapter 3, p90-92

Chapter 18, p552-553, 560-570

Introduction to

Marketing

Marketing Strategy

• Company Analysis

• Competitive Situation Analysis

• Developing Competitive Strategies

• Conducting a SWOT Analysis

MICRO

marketing environment

Customers

Company

Competitors

MACRO

marketing environment

Economic

Technological

Political and legal

Socio-Cultural

Forces that Shape the Marketing Environment

Natural

Demographic

VISION

To be internationally recognised as the leading retailer of luxury goods and services.

MISSION

To indulge our customer with an exceptional shopping experience, by offering quality products and services through our people and business partners.

OUR VALUES Customer first We make it happen We are progressive We partner for success

PEOPLE We invest in comprehensive staff training programmes We instill a culture of excellence and customer-centric philosophy We are committed to developing our multi-cultural talents Our people are passionate and committed to delivering value everyday

Purpose

How

Who

Competitive Advantage

An advantage over competitors gained by offering consumers greater value than competitors do.

– What is the source of that advantage?

– Is it easily replicated?

• Financial strength

• Production flexibility

• Channel relationships

• Distribution dominance

• Patents

• Technical capability

• Loyal customer base

(ADNOC)

(Fisher and Paykel)

(Toyota)

(Coca-Cola)

(GlaxoSmithKline)

(Boeing)

(Apple Macs)

Company Analysis - Company Resources

Direct competitors produce or sell a product that is identical or highly similar within the same market

Indirect competitors offer substitute products that fulfil the same need

Identify Direct and Indirect Competitors

• Purpose – To predict future competitive moves – To identify areas of competitive vulnerability – To predict competitors’ reactions to your strategy

• Framework for competitor analysis:

Competitor Analysis

Company’s Current or Planned Strategy

Competitor 1’s Strengths and Weaknesses

Competitor 2’s Strengths and Weaknesses

Target Market

Product

Place

Promotion

Price

Competitive Barriers

Likely Response

Proctor and Gamble: Disposable diaper market in Japan

Slide 8

The Industry

Jockeying for

Pos i tion among

cu r rent compet i tors

Bargaining

power of

customers

Bargaining

power of

suppliers

Threat of

substitute

products

Threat of

New

Entrants

Industry Analysis - Porter’s 5 Forces

The Industry

Bargaining

power of

cu s to m ers

Bargaining

power of

suppliers

Threat of

su b stitute

products

Threat of

New

Entrants

Consumer Products Industry Analysis

Weak buyer

power of end

user

Strong buyer

power of

retailers

Some costs in

switching

supplier

Large volume

important to the

supplier

Strong

Limited

The Industry

Bargaining

power of

cu s to m ers

Bargaining

power of

suppliers

Threat of

su b stitute

products

Threat of

New

Entrants

Consumer Products Industry Analysis

Known brand

provides some

advantage

Large capital

investment

needed

Chance of small

producer superior

product but retail

barriers

Store-brand

private labels

Low

Med

ium

Cost Leadership

= become low cost

producer in industry

Differentiation

= be unique along some

dimensions that are

valued by buyers

Cost Focus

= become low cost

producer in a segment

or group of segments

Differentiation Focus

= be unique in a

segment or group of

segments

Broad

Target

Lower Cost Differentiation

Narrow

Target

Basic Competitive Strategies

• Market Leader

• Market Challenger

• Market Follower

• Market Nicher

• Expanding the total demand

• Protecting market share

• Expanding market share

• Full Frontal Attack

• Indirect Attack

• Follow closely

• Follow at a distance

• Target by special user, place, quality-price or service.

• Multiple niching

Competitive Positions

Associated Strategies

Internal

Strengths

Weaknesses

External

Opportunities

Threats

Strategic Planning – SWOT Analysis

Simple Rules for Successful SWOT Analysis

– Be realistic.

– Be comprehensive (use print/web resources, such as www.businessballs.com/swotanalysisfreetemplate.htm)

– Be specific.

– Prioritise the issues you identify.

– Have the courage to dream. Where could you go in the future? Brainstorm.

– Compare your practice with that of your competition. What do you do better? What do you do worse?

– Keep it short and simple.

– Recognise that SWOT is subjective. To minimise this issue: All team members prepare a SWOT and compare results.

Source: adapted from http://www.frycomm.com

SWOT Analysis – Tips for Audit Assignment

• Marketers should assess the company mission and resources and understand competitive advantage

• A direct competitor is a company marketing the same product an indirect competitor markets to the same need

• Competitor analysis requires analysis of own company and competitor’s 4Ps, competitive barriers and likely responses to each others actions

• Industry analysis requires analysis of 5 forces within the industry (ie supplier power, customer power, rivalry, new entrants and substitutes)

• Basic competitive strategies are based on whether you target broadly or narrowly and whether you focus on cost or differentiation

• The competitive position you hold within the market should determine the strategies you take.

• How to conduct a SWOT

What did we learn today?

Slide 17

Assign own brand, 2 direct and 1 indirect competitors: 1. Identify the competitive advantage of the brand. 2. Using the framework for competitor analysis

identify the target market, product, price, promotion, place and competitive barriers faced by the brand.

3. Of the four basic competitive strategies identify the one the brand uses.

4. Identify the competitive position and possible associated strategy the brand uses.

Before next class…