Marketing Strategy

Jon Kitto
jkitto@theibam.co.uk
Key Elements of Mission
Statements
Not just the mission as a "wish".
Purpose and values of the organization
Which business the organization wants to be in
(products or services, market) or who are the
organizations primary "clients" (stakeholders)
Which are the responsibilities of the organization
towards these "clients"
What are the main objectives which support the
company in accomplishing its mission
Mission vs. Vision
A Mission statement: tells you what the
company is now. It concentrates on the
present; it defines the customer(s), critical
processes and it informs you about the
desired level of performance.
A Vision statement: outlines what a
company wants to be. It concentrates on the
future; it is a source of inspiration; it
provides clear decision-making criteria.
Objectives

Business
Objectives

Marketing
Objectives

Product Price Place Promotion

Objectives Objectives Objectives Objectives
The strategic planning gap

70

60

50 (£60M) Corporate objective

Sales
(£m)

40 New strategies gap The

(£45M) Revised forecast
planning
30 gap

20 (£30M) Initial forecast

10
Operations gap

Time (years)
Objectives should be ...

 ... Hierarchical ... SMART

 ... Quantitative  Specific
 ... Realistic  Measurable
 ... Consistent  Achievable
 Results-oriented
 Time-bounded
 Ansoff’s Growth Matrix
Products

Existing New

Existing Market Product

Penetration Development
Markets
Market
New Development Diversification
Product market strategy
Product
Current New

Market 1 Product 3
Current
penetration development
Market
Market 2 4
New Diversification
Souce: Ansoff

extension

Product
Existing New

Existing 1 4
RIS
Market K
New 2 16
Porter’s generic strategies

STRATEGIC ADVANTAGE

Uniqueness perceived Low cost

by customer position
STRATEGIC TARGET

OVERALL
Industry-
DIFFERENTIATION COST
wide
LEADERSHIP

Segment
FOCUS
only

Source: Porter
 Strategic choice

DEVELOPMENT
STRATEGIES
Source: Johnson & Scholes

GENERIC ALTERNATIVE ALTERNATIVE

STRATEGIES DIRECTIONS METHODS
• Cost leadership • Do nothing • Internal
• Differentiation • Withdrawal development
• Focus • Consolidation • Acquisition
• Market penetration • Joint
• Product development development
• Market development
• Diversification
Approaches to developing
sustainable competitive
advantage
Superior product benefit
Perceived advantage
Low-cost operations
Legal advantage
Superior contacts
Superior knowledge
Scale advantages
Offensive advantages
Source: Davidson, 1977
Barriers to implementation
Culture
Power and politics
Analysis, not action
Resource issues
Skills
Product Development &
Management
Jon Kitto
jkitto@theibam.co.uk
Anatomy of a Product

Core

Tangible
Augmented

Potential
The product life-cycle
Sales and profits (£)

Sales
(b) Cycle-recycle pattern

Sales volume
Profit Initial
cycle Recycle

Introduction Growth Maturity Decline

Time

(a) Growth-slump-maturity pattern (c) Scalloped pattern

Sales volume

Sales volume

Time Time
The Product Life-cycle
B
Sales
Sales and profits (£)

Profits

Time
I G M D
Diffusion of Innovation
Actors & Agents (Victoria University)
Everett Rogers
BCG’s Growth Share
Matrix
High
SOURCE: Adapted from Hedley (1977), p. 12

20 STARS QUESTION MARKS

18 (problem children)
16 Modest Large
+ or -
Market growth

14 negative
cash flow cashflow
12 um w
t im flo
10 CASH COWS Op sh DOGS
8 ca
Large Modest
6
positive + or -
4 cashflow cash flow

2
10x 1x 0.1x
Low
High Relative market share Low
GE multifactor matrix
Business strengths
Strong Medium Weak
Industry attractiveness

th s
High

g
row ni
n
g a r
o r e
f r
st fo
Medium

v e ly
In e
c tiv a w
le dr
e
se ith
g t /w
na s
a ve
Low

M a r
H
Shell directional policy
matrix
Business’ competitive capabilities

Prospects for sector profitability

Unattractive Average Attractive

Phased Double
Weak

Disinvest
withdrawal or quit
Average

Phased Custodial Try

withdrawal growth harder

Growth
Strong

Cash Leader
generation leader
The Booz Allen Hamilton
Classification of New
Products
 New to the world
 New sector development
 Additions to existing lines
 Improvements and revisions to
existing lines
 Repositioning
 Cost reduction through product
modification
The Role of NPD
 Avoid product obsolescence
 Ensure match with environmental conditions
 Enable the organisation to compete in new
and
developing sectors
 Reduce dependence on vulnerable product
sectors
 Match the competition
 Fill excess capacity
 Achieve greater long term growth and profit
The NPD process
Idea generation

Initial screening

Concept
development

Business evaluation

Product development

Product launch
Why Brand?
For differentiation & recognition
To add value to a naked commodity
Easier to promote
Helps market segmentation
Can help boost share price
Easier to integrate - sales promotion,
personal selling & packaging
Can help corporate image
Brand Strategies

Manufacturers Brand
 Cadbury’s, Ford, Coca-cola
Multi - Branding (Individual Brand Name)
 Proctor & Gamble
 Tide, Daz, Dreft, Ariel
Price Brand
 Tesco ‘Value’
Private/own Label
 Boots, Sainsbury’s
Generic
 ‘No Frills’ Products
BRAND DEVELOPMENT
INCREASED SALES INVEST IN
BUILD AWARENESS
COST EFFICIENCIES NEW BRAND
OF ATTRIBUTES
VOLUME BUILDING

BRAND SALES GROW SALES INCENTIVE

RETAILER CONCENTRATION PROGRAMME, TRADE
VOLUME BUILDING PROMOTION, P.O.S
IMPROVED PRODUCTS

RETAILERS BRAND RECOGNITION

WIDER DISTRIBUTION LIST AND CUSTOMER
NETWORK BUILT UP BRAND DEMAND FOR BRAND
Packaging
Contain
Protect
Inform
Differentiate
Environmental considerations
‘Silent salesperson’