MarketingStrategy

ITESM: Escuela de Graduados en Administración y Dirección de Empresas

June11th, 2009Professor: Fernando Huertafhuertamty@itesm.mx

Marketing Strategies Options

• Market Scope: Deals with the coverage of the market. A Business Unit may serve an entire market or concentrate on one or more of its parts.

• Geographic: Deals with territories in order to serve them.

• Market Entry: Refers to the timing of market entry.

• Market Commitment: Refers to the degree of involment a company seeks in a particular market.

• Market dilution: A company may find reducing a part of its business strategically more useful than expanding it

Market Scope Strategy

• Single-Market Strategy:

– Definition: Concentration efforts in a single segment– Objective: To find a segment currently being ignored or

served inadequately and meet its needs.– Requirements:

• Serve the market wholeheartedly despite initial difficulties or Deals with the coverage of the market.

• Avoid Competition with established firms.

– Expected Results: • Low Cost• Higher Profits

Market Scope Strategy

• Multi-Market Strategy:

– Definition: Serving several distinct markets.– Objective: To diversify the risk of serving only one

market.– Requirements:

• Good market segmentation• Avoid Confrontation with companies serving the entire market.• Avoid Competition with established firms.

– Expected Results: • Higher Sales• Higher Market Share

Market Scope Strategy

• Total-Market Strategy:

– Definition: Serving the entire spectrum of market by selling differentiated products to different segments in the market.

– Objective: To compete across the board in the entire market.

– Requirements: • Employ different combinations of price, product, promotion, and

distribution strategies in different segments.• Top management commitment to embrace entire market.• Strong financial position.

– Expected Results: • Increase Growth• Higher Market-Share.

Market Geography Strategy

• Local-Market Strategy:

– Definition: Concentration of efforts in the immediate vicinity.

– Objective: To maintain the control of the business– Requirements:

• Good reputation in the geographic area• Good hold on the requirements of the market

– Expected Results: • Short term success• Expansion to other geographic areas

Market Geography Strategy

• Regional-Market Strategy:

– Definition: Operating in two or three states or over a region of the country

– Objective: To diversify risk of dependence on one part of a region / To keep control centralized

– Requirements: • Management commitment to expansion• Adequate resources• Logistical ability to serve a regional area

– Expected Results: • Increased growth• Increased market share• Keep up with competitors

Market Geography Strategy

• National-Market Strategy:

– Definition: Operating nationally– Objective: To seek Growth– Requirements:

• Top Management commitment• Capital Resources• Willingness to risk

– Expected Results:• Increase Growth• Increase market share• Increase profitability

Market Geography Strategy

• International-Market Strategy:

– Definition: Operating outside national boundaries.– Objective: To seek opportunities beyond domestic

business.– Requirements:

• Top Management commitment• Capital Resources• Understanding of international markets.

– Expected Results:• Increase Growth• Increase market share• Increase profits

Market Entry Strategy

• First In Strategy:

– Definition: Entering the market before all others.– Objective: To create a lead over competition that will

be difficult for them to match.– Requirements:

• Be willing and able to take risks.• Be technologically Competent.• Struve to stay ahead / Promote heavily• Create Primary demand• Carefully evaluated strengths

– Expected Results• Reduce Cost via experience• Increase growth• Increase Market Share• Increase Profits

Market Entry Strategy

• Early Entry Strategy:

– Definition: Entering the market in quick succession after the leader.

– Objective: To prevent the first entrant from creating a stronghold in the market.

– Requirements: • Superior marketing strategy.• Ample resources.• Strong commitment to challenge the market leader

– Expected Results: • Increase profits• Increase Market Share• Increase Growth

Market Entry Strategy

• Laggard Entry Strategy:

– Definition: Imitator—Entering market with me-too product; (b) Initiator—Entering market with unconventional marketing strategies.

– Objective: Imitator—To capture that part of the market that is not brand loyal. Initiator—To serve the needs of the market better than present firms.

– Requirements: • Market Share Ability /Production Capability• Market Research Ability and ability to generate creative marketing

strategies

– Expected Results: • Increase Short term profits• Putting Market on a new growth path

Market Commitment Strategy

• Strong Commitment Strategy:

– Definition: Fighting off challenges aggressively by employing different forms of product, price, promotion, and distribution strategies.

– Objective: To defend position at all costs.– Requirements:

• Operate optimally by realizing economies of scale in promotion, distribution, manufacturing, etc

• Refuse to be content with present situation or position• Have ample Resource and be willing to take risk

– Expected Results: • Increase growth• Increase profits• Increase market share

Market Commitment Strategy

• Average Commitment Strategy:

– Definition: Maintaining stable interest in the market.

– Objective: To maintain the status quo.

– Requirements: Keep customers satisfied and happy.

– Expected Results: Keep customers satisfied and happy.

Market Commitment Strategy

• Light Commitment Strategy:

– Definition: Having only a passing interest in the market..

– Objective: To operate in the black.

– Requirements: Avoid investing for any long-run benefit.

– Expected Results: Maintenance of status quo (no increase in growth, profits or market share)

Market Dilution Strategy

• Demarketing Strategy:

– Definition: Discouraging customers in general or a certain class of customers in particular, either temporarily or permanently, from seeking the product.

– Objective: To defend position at all costs.– Requirements:

• Monitor Customer time requirements / Ration product supplies• Divert customers with immediate needs to customers with

immediate needs to customers who have a supply of the product but no immediate need for it.

• Find out and suggest alternative products for meeting Customer needs

• Refuse to be content with present situation or position• Have ample Resource and be willing to take risk

– Expected Results: Increase profits / Strong Customer good will and loyalty

Market Dilution Strategy

• Pruning of Marginal Markets Strategy:

– Definition: Weeding out markets that do not provide acceptable rates of return.

– Objective: To divert investments in growth markets.– Requirements:

• Gain good knowledge of the chosen markets• Concentrate all energies on these markets• Develop Unique strategies to serve the chosen markets

– Expected Results: • Long term growth• Improve return on investment• Decrease in market share.

Market Dilution Strategy

• Key Markets Strategy:

– Definition: Focusing efforts on selected markets.– Objective: To serve the selected markets extremely

well.– o divert investments in growth markets.– Requirements:

• Gain good knowledge of the chosen markets• Concentrate all energies on these markets• Develop Unique strategies to serve the chosen markets

– Expected Results: • Increase profits• Increase market share in the selected markets

Market Dilution Strategy

• Harvesting Strategy:

– Definition: Deliberate effort to let market share slide.– Objective: Generate additional cash flow, to increase

short terms earnings , to avoid antitrust action– Requirements: High market share– Expected Results: Sales decline but useful revenues still

come in.

MarketingStrategy

ITESM: Escuela de Graduados en Administración y Dirección de Empresas

June11th, 2009Professor: Fernando Huertafhuertamty@itesm.mx