STRATEGIC MARKETING

Comprehensive Marketing-Plan Model

External
Audit

Long- Generat Implem

Term e, ent
Vision Evaluat Strategi
& Objectiv
es e, es:
Mission Select Mgmt
Strategi Issues
es
1
4 5 6

Internal
Audit

Strategy Formulation Strategy Implementation Strategy 2

Evaluatio
STRATEGIC MARKETING
Strategy
Formulation

Vision & Mission

External Opportunities &

Threats
Internal Strengths &
Weaknesses

Long - Term Objectives

Alternative Strategies

Strategy Selection

3
 STRATEGIC MARKETING
Issues in
Strategy
Formulation

4
STRATEGIC MARKETING
Strategy
Implementation

Annual Objectives

Policies

Employee Motivation

Resource Allocation

5
 STRATEGIC MARKETING
Strategy
Implementation

6
STRATEGIC MARKETING
Strategy
Evaluation

Internal Review

External Review

Performance Metrics

Corrective Actions

7
 STRATEGIC MARKETING
Strategy
Evaluation

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall8

 STRATEGIC MARKETING

Strategic Marketing Plan is

Gaining and Maintaining
Competitive Advantage

“Anything that a firm does

especially well compared to
rival firms”

9
 STRATEGIC MARKETING
Strategic Marketing - Plan
Model
1 . Identify Existing

•Vision
•Mission
•Objectives
•Strategies
•

10
 STRATEGIC MARKETING
Strategic Marketing - Plan
Model
2 . Audit external environment
3 . Audit internal environment
4 . Establish long - term objectives
5 . Generate , evaluate , and select
strategies
6 . Implement selected strategies
7 . Measure & evaluate performance

11
 STRATEGIC MARKETING

STRATEGIC MARKETING
Chapter 1
ION & VISION STATEM
 STRATEGIC MARKETING

What Do We Want to Become? VISION

What Is Our Business? MISSION

Importance of Vision and Mission

Statements

Components of a Mission Statement 13

 STRATEGIC MARKETING
Vision

“The last thing IBM needs right

now is a vision.” (July 1993)

“What IBM needs most right now is a

vision.” (March 1996)

– Louis V. Gerstner, Jr., CEO, IBM Corporation

14
 STRATEGIC MARKETING

Vision

“ What do we want to
become? ”

15
 STRATEGIC MARKETING

Vision

Clear
Business
Vision

Comprehensive
Mission
Statement

16
 STRATEGIC MARKETING

Vision Statement Examples

Tyson Foods’ vision is to be the world’s

first choice for protein solutions
while maximizing shareholder value.

17
 STRATEGIC MARKETING

Vision Statement
Examples

General Motors’ vision is to be the

world leader in transportation
products and related services.

18
 STRATEGIC MARKETING

Vision Statement
Examples

PepsiCo’s responsibility is to
continually improve all aspects of
the world in which we operate –
environment, social, economic –
creating a better tomorrow than
today.

19
 STRATEGIC MARKETING

Vision Statement
Examples
Dell’s vision is to create a company
culture where environmental
excellence is second nature.

20
 STRATEGIC MARKETING

Mission Statements

“ What is our business? ”

21
 STRATEGIC MARKETING

Mission Statements

•Enduring statement of purpose

•Distinguishes one firm from another
•Declares the firm’s reason for being

22
 STRATEGIC MARKETING

Mission Statements
Also referred to as :

•Creed statement
•Statement of purpose
•Statement of philosophy
•Statement of business principles

23
 STRATEGIC MARKETING

Mission Statements

Reveal what an organization wants to

be and whom it wants to serve.

Essential for effectively

establishing objectives and
formulating strategies

24
 STRATEGIC MARKETING

Developing Vision &

Mission

Clear mission is needed before

alternative strategies can be
formulated and implemented

25
 STRATEGIC MARKETING
2 . Produ
cts or 3 . Marke
1 . Custo Servic ts
mers es

4 . Techn
Mission ology
9 . Emplo
yees Components

5 . Survi
val ,
8 . Publi Growth ,
c Profit
Image 7 . Self - 6 . Philo s
Concep sophy
t

26
 STRATEGIC MARKETING

Mission Statement
Examples
We aspire to make PepsiCo the world’s(3)
premier consumer products company, focused on
convenient foods and beverages(2). We seek to
produce healthy financial rewards for
investors(5) as we provide opportunities for
growth and enrichment to our employees(9), our
business partners and the communities(8) in
which we operate. And in everything we do, we
strive to act with honesty, openness, fairness
and integrity(6).

27
 STRATEGIC MARKETING

Mission Statement
Examples
Dell’s mission is to be the most successful
computer company(2) in the world(3) at
delivering the best customer experience in
markets we serve(1). In doing so, Dell will
meet consumer expectations of highest
quality; leading technology(4); competitive
pricing; individual and company
accountability(6); best-in-class service and
support(7); flexible customization
capability(7); superior corporate
citizenship(8); financial stability(5).

28
 STRATEGIC MARKETING

Mission Statement
Examples

Proctor & Gamble will provide branded

products and services of superior quality
and value(7) that improve the lives of the
world’s(3) consumers. As a result, consumers(1)
will reward us with industry leadership in
sales, profit(5), and value creation, allowing
our people(9), our shareholders, and the
communities(8) in which we live and work to
prosper.

29
STRATEGIC MARKETING
 STRATEGIC MARKETING

STRATEGIC MARKETING
Chapter 2
EXTERNAL ANALYSIS
 STRATEGIC MARKETING
External Assessment

“It is not the strongest of the species

that survive, nor the most intelligent,
but the one most responsive to change.”
– Charles
Darwin

Purpose of External
Audit
–Identify
•Opportunities
•Threats
STRATEGIC MARKETING

Purpose of External
Audit
–Identify
•Opportunities
•Threats
STRATEGIC MARKETING
 STRATEGIC MARKETING

External Audit – Sources

of Information
•Internet
•Libraries
•Suppliers
•Distributors
•Salespersons
•Customers
•Competition
 STRATEGIC MARKETING

Performing External Audit –

Variables
•Market share
•Breadth of competing products
•World economies
•Foreign affiliates
•Proprietary account advantages

36
 STRATEGIC MARKETING

Performing External Audit –

Variables

•Price competitiveness
•Technological advancements
•Interest rates
•Pollution abatement
 STRATEGIC MARKETING
Performing External Audit

Long - term Orientation

Measurable
External
Factors Applicable to
Competing Firms

Hierarchical
 STRATEGIC MARKETING

Industrial Organization
( I / O ) View

– Industry factors more important

than internal factors
nPerformance determined by industry
forces
 STRATEGIC MARKETING
I / O Perspective Firm Performance

Industry
Properties

Economies of Scale

Barriers to Market Entry

Product Differentiation

Level of Competitiveness
STRATEGIC MARKETING
 STRATEGIC MARKETING

Social , Cultural ,
Demographic , and
Environmental Forces
Major Impact –
•Products
•Services
•Markets
•Customers
 STRATEGIC MARKETING

Social , Cultural ,
Demographic , and
Environmental Forces
Facts
•World population approaching 7
billion
•World population = 8 billion
by 2028
•World population = 9 billion
by 2054
•U.S. population < 300 million
 STRATEGIC MARKETING
Social, Cultural, Demographic, and
Environmental Forces

•Trends
–More American households with people
living alone
–Aging Americans – affects all
organizations
–Population shift to the south and west
–Decimation and degradation of the
natural environment
 STRATEGIC MARKETING

Social , Cultural ,
Demographic , and
Environmental Forces

Global trends
•China’s labor rates less than Mexico
•China provides more site location
incentives than Mexico

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

45
 STRATEGIC MARKETING
Social , Cultural ,
Demographic , and
Environmental Forces
21 st Century
Trends
•More educated consumers
•Aging population
•Minorities more influential
•Local rather than federal solutions
 STRATEGIC MARKETING
Key Social , Cultural , Demographic , and
Environmental Variables

Childbearing rates

Number of special interest groups

Number of marriages & divorces

Number of births & deaths

Immigration & emigration rates

 STRATEGIC MARKETING

Social , Cultural , Demographic ,

and Environmental Forces

Actuarial Rates

Per Capita Income

Monitor Key
Variables
Attitudes Toward Business

Avg . Disposable Income

 STRATEGIC MARKETING

Social , Cultural , Demographic ,

and Environmental Forces

Consumer Behavior

Ethical Concerns
Monitor Key
Variables
Attitudes Toward Saving

Racial Equality
 STRATEGIC MARKETING

Social , Cultural , Demographic ,

and Environmental Forces

Avg . Educational Level

Governmental Regulation
Monitor Key
Variables Attitudes Toward Customer
Service

Attitudes Toward Quality

 STRATEGIC MARKETING

Social , Cultural , Demographic ,

and Environmental Forces

Waste Management

Air & Water Pollution

Monitor Key
Variables
Ozone Depletion

Endangered Species
 STRATEGIC MARKETING

Political , Governmental ,
and Legal Forces

Government Regulation
Key opportunities &
threats
nAntitrust legislation
nTax rates
nLobbying efforts
nPatent laws
 STRATEGIC MARKETING
Key Political , Governmental , and Legal
Variables
Regulation/deregulati
on
Tax law changes

Special
tariffs

Voter participation
rates
 STRATEGIC MARKETING
Key Political , Governmental , and Legal
Variables ( cont ’ d )

Number of patents

Changes in patent laws

Environmental protection laws

Equal employment legislation

Government subsidies
 STRATEGIC MARKETING
Key Political , Governmental , and Legal
Variables ( cont ’ d )

Anti-trust enforcement

Global relationships

Import/export regulations

Political conditions

Location and severity of terrorist activity

 STRATEGIC MARKETING

Technological Forces

Major Impact –
•Internet
•Communication
 STRATEGIC MARKETING
Competitive Forces

Collection & evaluation of data on

competitors is essential for successful
strategy formulation
 STRATEGIC MARKETING
Competitive Forces
Identifying Rival
Firms
•Strengths
•Weaknesses
•Capabilities
•Opportunities
•Threats
•Objectives
•Strategies
 STRATEGIC MARKETING
Key Questions Concerning Competitors

Their strengths

Their weaknesses

Their objectives and strategies

Their responses to external variables

heir vulnerability to our alternative strategies

 STRATEGIC MARKETING
Key Questions Concerning Competitors
( cont ’ d )

ur vulnerability to strategic counterattack

Our product/service positioning

ntry and exit of firms in the industry

ey factors for our current position in industry

Sales/profit rankings of competitors over time

 STRATEGIC MARKETING
Key Questions Concerning Competitors
( cont ’ d )

ature of supplier & distributor relationships

The threat of substitute products/services

Should we keep our strategies secret from

employees and stakeholders?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

61
 STRATEGIC MARKETING

Competitive Forces
7 Characteristics of Most
Competitive U . S . Firms :

1 . Market share matters

2 . Understand what business you
are in
3 . Broke or not , fix it
4 . Innovate or evaporate
 STRATEGIC MARKETING

Competitive Forces
7 Characteristics of Most
Competitive U . S . Firms :

5 . Acquisition is essential to
growth
6 . People make a difference
7 . No substitute for quality

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

 STRATEGIC MARKETING

The Five-Forces Model of Competition

 STRATEGIC MARKETING
The Five - Forces Model

Rivalry Among Competing Firms

nMost powerful of the five forces
nFocus on competitive advantage of
strategies
 STRATEGIC MARKETING
The Five - Forces Model

Potential Entry of New

Competitors
nBarriers to entry are important
nQuality, pricing, and marketing can
overcome barriers
 STRATEGIC MARKETING

The Five - Forces Model

Potential Development of
Substitute Products

nPressures increase when consumers’

switching costs decrease
nFirm’s plans for increased capacity &
market penetration
 STRATEGIC MARKETING
The Five - Forces Model

Bargaining Power of Suppliers

nLarge number of suppliers & few

substitutes affects intensity of
competition
nBackward integration can gain control
or ownership of suppliers
 STRATEGIC MARKETING
The Five - Forces Model

Bargaining Power of Consumers

nCustomers concentrated or buying in

volume affects intensity of
competition
nConsumer power is higher where products
are standard or undifferentiated
 STRATEGIC MARKETING
Conditions Where Consumers Gain
Bargaining Power

•If they can inexpensively switch

•If they are particularly important
•If sellers are struggling in the face
of falling consumer demand
•If they are informed about sellers’
products, prices, and costs
•If they have discretion in whether and
when they purchase the product
 STRATEGIC MARKETING
Industry Analysis : The External
Factor Evaluation ( EFE ) Matrix

Summarize & Evaluate

Economic Demographic Governmental

Social Environmental Technological

Cultural Political Competitive

 STRATEGIC MARKETING
HOW TO DEVELOP AN EFE MATRIX
1 . Identify a list of KEY external factors ( critical
success factors ).

2 . Assign a weight to each factor , ranging from 0 ( not

important ) to 1 . 0 ( very important ).

3 . Assign a 1 - 4 rating to each critical success factor to

indicate how effectively the firm ’ s current strategies
respond to the factor . ( 1 = response is poor , 4 = response
is extremely good )

4 . Multiply each factor ’ s weight by its rating to determine

a weighted score .

5 . Sum the weighted scores .

STRATEGIC MARKETING
STRATEGIC MARKETING
STRATEGIC MARKETING
 STRATEGIC MARKETING
Industry Analysis EFE

Total weighted score of 4.0

•Organization response is outstanding
to threats and weaknesses

Total weighted score of 1.0

nFirm’s strategies not capitalizing on
opportunities or avoiding threats
 STRATEGIC MARKETING
Industry Analysis EFE

Important –

Understanding the factors used in the

EFE Matrix is more important than the
actual weights and ratings assigned.
 STRATEGIC MARKETING
Industry Analysis : Competitive
Profile Matrix ( CPM )

Identifies firm’s major

competitors and their strengths &
weaknesses in relation to a
sample firm’s strategic positions
 STRATEGIC MARKETING

CPM
•Competitive profile matrix is an essential
strategic management
tool to compare the firm with the major
players of the industry .

•Competitive profile matrix show the clear

picture to the firm about
their strong points and weak points relative
to their competitors .

•The CPM score is measured on basis of critical

success factors , each
factor is measured in same scale mean the
weight remain same for
every firm only rating varies . The best thing
about CPM that it
 STRATEGIC MARKETING
CPM ( Conti …)
Critical Success Factors
Critical success factors  are extracted after deep analysis of
external and internal environment of the firm. Obviously there are
some good and some bad for the company in the external environment
and internal environment.The higher rating show that firm strategy is
doing well to support this critical success factors and lower rating
means firm strategy is lacking to support the factor.

Rating
Rating in CPM represent the response of firm toward the critical
success factors. Highest the rating better the response of the firm
towards the critical success factor ,rating range from 1.0 to 4.0 and
can be applied to any factor. There are some important point related
to rating in CPM.
Rating is applied to each factor.
•The response is poor represented by 1 . 0
•The response is average is represented by 2 . 0
•The response is above average represented by 3 . 0
•The response is superior represented by 4 . 0
 STRATEGIC MARKETING
CPM ( Conti …)
Weight
Weight attribute in CPM indicates the relative importance of factor to
being successful in the firm’s industry. The weight range from 0.0
means not important and 1.0 means important, sum of all assigned weight
to factors must be equal to 1.0 otherwise the calculation would not be
consider correct.

Weighted Score
Weighted score value is the result achieved after multiplying each
factor rating with the weight.

Total Weighted Score

The sum of all weighted score is equal to the total weighted score,
final value of total weighted score should be between range 1.0 (low)
to 4.0(high). The average weighted score for CPM matrix is 2.5 any
company total weighted score fall below 2.5 consider as weak. The
company total weighted score higher then 2.5 is consider as strong in
position.The other dimension of CPM is the firm with higher total
weighted score considered as the winner among the competitors
•
STRATEGIC MARKETING
 STRATEGIC MARKETING
Industry Analysis CPM

Important –

Just because one firm receives a 3.2

rating and another receives a 2.8 rating,
it does not follow that the first firm
is 20 percent better than the second.
 STRATEGIC MARKETING

STRATEGIC MARKETING
Chapter 3
INTERNAL ANALYSIS
STRATEGIC MARKETING
Chapter Outline
The Nature of an Internal Audit

The Resource-Based View (RBV)

Integrating Strategy & Culture

STRATEGIC MARKETING
Chapter Outline (cont’d)

Management

Marketing

Opportunity Analysis
STRATEGIC MARKETING
Chapter Outline (cont’d)

Finance/Accounting

Production/Operations

Research & Development

 STRATEGIC MARKETING
Chapter Outline (cont’d)

Management Information Systems

The Internal Factor Evaluation (IFE) Matrix

 STRATEGIC MARKETING

Key Internal Forces

Distinctive Competencies :

§Firm’s strengths that cannot be

easily matched or imitated by
competitors
 STRATEGIC MARKETING
Key Internal Forces

Distinctive Competencies :

§Strategies designed to improve on a

firm’s weaknesses and turn to
strengths
 STRATEGIC MARKETING
Internal Audit

Parallels process of external

audit
•Information from:
•Management
•Marketing
•Finance / accounting
•Production / operations
•Research & development
•Management information systems
 STRATEGIC MARKETING
Internal Audit

Key to Organizational Success

Coordination & understanding among

managers from all functional areas
 STRATEGIC MARKETING
Resource Based View ( RBV )

Three All-Encompassing Categories

1.Physical resources
2.Human resources
3.Organizational resources
 STRATEGIC MARKETING
U.S. Versus Foreign Cultures

To successfully compete in world

markets, U.S. managers must obtain a
better knowledge of historical,
cultural, and religious forces that
motivate and drive people in other
countries.
STRATEGIC MARKETING
 STRATEGIC MARKETING
Management

Functions of Management

1.Planning
2.Organizing
3.Motivating
4.Staffing
5.Controlling
 STRATEGIC MARKETING
Management
Stage When Most
Function Important

Planning Strategy Formulation

Organizin Strategy Implementation

g
Motivatin Strategy Implementation
g
Staffing Strategy Implementation

Controlli Strategy Evaluation

ng
 STRATEGIC MARKETING
Management

Planning

§Beginning of management process

§Bridge between present & future
§Improves likelihood of attaining
desired results
 STRATEGIC MARKETING
Management

Forecasting

Establishing objectives

Planning Devising strategies

Developing policies

Setting goals
 STRATEGIC MARKETING
Management

Organizing

§Achieves coordinated effort

§Defines task & authority
relationships
§Departmentalization
§Delegation of authority
 STRATEGIC MARKETING
Management

Organizational design
Job specialization
Job descriptions
Job specifications
Organizing Span of control
Unity of command
Coordination
Job design
Job analysis
 STRATEGIC MARKETING
Management

Motivating

§Influencing to accomplish specific

objectives
§Communication – major component
 STRATEGIC MARKETING
Management

Leadership
Communication
Work groups
Motivating Job enrichment
Job satisfaction
Needs fulfillment
Organizational change
Morale
 STRATEGIC MARKETING
Management

Staffing

§Personnel management
§Human resource management
 STRATEGIC MARKETING
Management

Wage & salary admin.

Employee benefits
Interviewing
Hiring
Staffing Discharging
Training
Management development
Affirmative action
Labor relations
 STRATEGIC MARKETING
Management

Controlling

§Establishing performance standards

§Ensure actual operations conform to
planned operations
§Taking corrective actions
 STRATEGIC MARKETING
Management

Quality
Financial
Sales
Controlling Inventory
Expense
Rewards
Sanctions

107
 STRATEGIC MARKETING
Marketing

Customer Needs/Wants for Products/Services

1.Defining
2.Anticipating
3.Creating
4.Fulfilling
 STRATEGIC MARKETING
Marketing
Marketing Functions

1 . Customer analysis
2 . Selling products / services
3 . Product & service planning
4 . Pricing
5 . Distribution
6 . Marketing research
7 . Opportunity analysis
 STRATEGIC MARKETING
Marketing

Customer surveys
Consumer information
Market positioning
Customer strategies
Analysis
Customer profiles
Market segmentation
strategies
 STRATEGIC MARKETING
Marketing

Advertising
Sales
Selling Promotion
Products / Services Publicity
Sales force management
Customer relations
Dealer relations
 STRATEGIC MARKETING
Marketing

Test marketing
Brand positioning
Planning Devising warrantees
Product / Service Packaging
Product features/options
Product style
Quality
 STRATEGIC MARKETING
Marketing

Forward integration
Pricing Discounts
Credit terms
Costs
 STRATEGIC MARKETING
Marketing

Warehousing
Channels
Distribution
Coverage
Retail site locations
Sales territories
Inventory levels
Transportation
 STRATEGIC MARKETING
Marketing

Data collection
Marketing Data input
Research Data analysis
 STRATEGIC MARKETING
Marketing

Assessing costs

Assessing benefits
Opportunity
Analysis Assessing risks

Cost/benefit/risk
analysis
 STRATEGIC MARKETING
Marketing
Opportunity Analysis

1 . Are markets segmented effectively?

2 . Is the organization positioned well
among competitors?
3 . Has the firm ’ s market share been
increasing?
4 . Are the distribution channels
reliable & cost effective?
5 . Is the sales force effective?
 STRATEGIC MARKETING
Marketing
Opportunity Analysis

6 . Does the firm conduct market

research?
7 . Are product quality & customer
service good?
8 . Are the firm ’ s products / services
priced appropriately?
9 . Does the firm have effective
promotion , advertising , and
publicity strategies?
 STRATEGIC MARKETING

Marketing
Opportunity Analysis

10 . Are the marketing , planning , and

budgeting effective?
11 . Do the firm ’ s marketing managers
have adequate experience and
training?
 STRATEGIC MARKETING
Finance / Accounting

§Determining financial strengths

& weaknesses key to strategy
formation
 STRATEGIC MARKETING
Finance / Accounting
Finance/Accounting Functions

1 . Investment decision ( Capital

budgeting )
2 . Financing decision
3 . Dividend decision
 STRATEGIC MARKETING
Production / Operations

Production/Operations Functions

§Process
§Capacity
§Inventory
§Workforce
§Quality
STRATEGIC MARKETING
 STRATEGIC MARKETING

Research & Development

Research & Development Functions

§Development of new products before

competitors
§Improving product quality
§Improving manufacturing processes to
reduce costs
 STRATEGIC MARKETING
Management Information
Systems

Purpose

§Improve performance of an enterprise

by improving the quality of
managerial decisions
 STRATEGIC MARKETING
Internal Factor Evaluation (IFE) matrix
It is a strategic management tool for auditing or evaluating major strengths and weaknesses in
functional areas of a business. IFE is use for internal audit of functional area of business such as
finance, marketing, IT, operations, accounts and others depend upon the nature of business and
its size.

Internal Factors

Internal factors are extracted after deep internal analysis of the company. Internal factors are
divided into two categories namely strengths and weaknesses.

Strengths: Strengths are the strong areas or attribute of the company, which are used to
overcome weakness and capitalize to take advantage of the external opportunities available in the
industry.

Weakness: These are the weak factors which needs to be improved in future otherwise if they
exposed to the competitors they can take the advantage of it.
 STRATEGIC MARKETING
Rating

The range of rating starts from minimum 1.0 which is worst and maximum 4.0 which is the
best factor of the company.
Rating is applied to each factor.
Major weakness is represented by 1.0
Minor weakness is represented by 2.0
Minor strength represented by 3.0
Major Strength represented by 4.0

Weight

Weight attribute in IFE matrix indicates the relative importance of factor to being successful in
the firm’s industry. The weight range from 0.0 means not important and 1.0 means important,
sum of all assigned weight to factors must be equal to 1.0 otherwise the calculation would not be
consider correct.

Weighted Score

Weighted score value is the result achieved after multiplying each factor rating with the weight.
 STRATEGIC MARKETING
Total Weighted Score

The sum of all weighted score is equal to the total weighted score, final value of total weighted
score should be between range 1.0 (low) to 4.0(high). The average weighted score for IFE
matrix is 2.5, any company total weighted score fall below 2.5 consider as weak. The company
total weighted score higher then 2.5 is consider as strong in position.
 STRATEGIC MARKETING
Steps to develop IFE Matrix
1.List key internal factors as identified in the internal audit process. Use a total of from ten to
twenty internal factors, including both strengths and weaknesses. List strengths first
and then weaknesses. Be as specific as possible, using percentages, ratios, and comparative
numbers.

2.Assign a weight that ranges from 0.0 (not important) to 1.0 (all important)to each factor.
The weight assigned to a given factor indicates the relative importance of the factor to being
successful in the firm’s industry. The sum of all weights must equal 1.0.

3.Assign a 1 to 4 rating to each factor to indicate whether that factor represents a major
weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a
major strength (rating = 4). Note that strengths must receive a 4 or 3 rating and
weaknesses must receive a 1 or 2 rating. Ratings are thus company based, whereas the
weights in Step 2 are industry based.

4.Multiply each factor’s weight by its rating to determine a weighted score for each variable.

5. Sum the weighted scores for each variable to determine the total weighted score for the
organization.
STRATEGIC MARKETING
There are few examples of internal factors of the company.

Strengths
qStrong marketing and promotion
qBest product quality
qStrong Financial condition
qHigh Market Share
qHigh value assets

Weakness
qHigh cost operations
qManufacturing cost is high
qHigh employee turnover rate
qExpensive products
qLoss in joint venture
STRATEGIC MARKETING
STRATEGIC MARKETING
 STRATEGIC
STRATEGIC MARKETING
MARKETING

STRATEGIC MARKETING
Chapter 4
STRATEGIES IN ACTION
 STRATEGIC MARKETING
Types of Strategies

Forward
Integration

Vertical
Integrati Backward
on Integration
Strategie
s

Horizontal
Integration
 STRATEGIC MARKETING
Forward Southwest Airlines selling tickets
Integration through Galileo

Backward Hilton Hotels could acquire a large

Integration furniture manufacturer

Horizontal Huntington Bancshares and Sky

Integration Financial Group merged
 STRATEGIC MARKETING
Types of Strategies

Market
Penetration

Intensive Market
Strategie Development
s

Product
Development
 STRATEGIC MARKETING
Market McDonald’s selling millions of “Shrek
Penetration the Third” items to a healthier image

Market Burger King opened its first

Development restaurant in Japan

Product Google introduced “Google

Development Presents” to compete with
PowerPoint
 STRATEGIC MARKETING
Types of Strategies

Related
Diversificati
on

Diversifi
cation
Strategie
s

Unrelated
Diversificati
on
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Related MGM Mirage is opening its first non-
Diversification casino luxury hotel

Unrelated Ford Motor Company entered the

Diversification industrial bank business

Retrenchment Discovery Channel closed 103 mall-

based and stand-alone stores
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Types of Strategies

Retrenchment

Defensive
Strategie Divestiture
s

Liquidation
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Divestiture Whirlpool sold its struggling Hoover

floor-care business to Techtronic
Industries

Liquidation Follow Me Charters sold all of its

assets and ceased doing business
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More Strategies.
There are five significant strategies to consider when planning your marketing approach. Position
yourself as a;
1.Market Leader,
2.Challenger,
3.Follower,
4.Niche marketer
5.Form an alliance to attack the market with increased power.

1. Market Leader: Maintain your position as market leader in one of three ways.
First; expand the total market by increasing the total number of users.

Second; defend your current share of the market. You can enhance your product offerings,
as in as a supermarket adding banking services or video rental. Another option is to reduce
weak products or services and build up the strongest ones.

Third; expand your market share by aggressively attacking your competitor through a
variety of strategies. Offer coupons, promote sales and advertise benefits your competitor
doesn't have, such as longer shop hours or more personalized service.
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2. Market Challenger: If you are the challenger in the market, look for a small, unmet need
that your business can fill. (Daihatsu Cuore)

3. Market Follower: As a market follower, capitalize on a market already identified and

researched by your competitors. Watch your competitors for weaknesses, and then provide
better solutions such as longer store hours or free training. Good examples include full-service
restaurants offering take-out or delivery, interior design service included with furniture
purchase.

4. Market Niche: Becoming a niche marketer enables you to research and respond better to a
smaller, fine-tuned segment. This works especially well for small companies who are nimble
and able to make quick decisions in reaction to market trends. Serve the demographic of
women ages 55 to 70. As a consultant, choose the niche of selling only to engineering
consulting firms in the $3 to $5 million revenue range.

5. Alliance Marketing: Strengthen your marketing by partnering with a product, service or

company that is compatible with, but not a competitor of, your business. Your child care center
may partner with any number of after-school activities to offer an enriched experience. Talk
with karate studios, dance studios and gyms.
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Emphasis on New Product - Market Growth
Heavy No Emphasis
Emphasis
Prospector Analyzer Defender Reactor
Units with strong Units primarily
core business, concerned with
Co actively seeking maintaining a
st to expand into differentiated
Units primarily related product- position in mature Units with no
mpetitLe concerned with markets with markets clearly defined
ive ad attaining growth differentiated product-market
rategyer through aggressive offerings development or
sh pursuit of new competitive
ip product-market strategy
opportunities

Units with strong Units primarily

core business, concerned with
actively seeking maintaining a low -
Di to expand into cost position in
ff related product- mature markets
er markets with low -
en cost offerings
ti
at
io
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BCG Growth - Share Matrix
1.Star: Leader [i.e. high market share] of high growth market is called star.
These SBUs are net user of cash, because they always require heavy investment to finance rapid
growth and to sustain market share. When the product comes to mature stage, then the growth
slow down and they turn to cash cow.

2. Cash Cow: Cash cows are low growth but high market share (Market leader) businesses or
products.
Their high earnings, coupled with their depreciation, represent high cash inflows and they need
very little in the way of reinvestment. And thus, they are the net provider of cash. Surplus cash
are used for Research and Development and to support other SBUs that need investment.

C. Question mark: Products in a growth market with low market share are categorized as
Question Mark.
Because of growth, these SBUs require a lot of cash to hold their market share and let alone to
increase it. If nothing is done to increase the market share, a Question mark will simply absorb
large amount of cash in the short run and later, as growth slow down, become a dog. Thus, unless
something is done to change its perspective, it becomes a cash trap.

Management has to decide which question marks should try to build into stars and which should
be phased out.

D. Dog: Dog are low growths, low market share SBUs. They may generate enough cash to
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BCG Growth Share Matrix
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