2 - Texas Tech University

2 - Texas Tech University

Chapter 2 Developing Marketing Strategies and a Marketing Plan McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Learning Objectives Learning Objective 2.1 Define a marketing strategy. Learning Objective 2.2 Describe the elements of a marketing plan. Learning Objective 2.3 Analyze a marketing situation using SWOT analyses. Learning Objective 2.4 Describe how a firm chooses which consumer group(s) to pursue with its marketing efforts. Learning Objective 2.5 Outline the implementation of the marketing mix as a means to increase customer value. Learning Objective 2.6 Summarize portfolio analysis and its use to

evaluate marketing performance. Learning Objective 2.7 Describe how firms grow their business. 2 McGraw-Hill Education PepsiCo 3 McGraw-Hill Education Craig Barritt/Getty Images What is a Marketing Strategy? A marketing strategy identifies: A firms target market. A related marketing mix.

The bases on which the firm plans to build a sustainable competitive advantage. 4 McGraw-Hill Education Exhibit 2.1: Macro Strategies for Developing Customer Value McGraw-Hill Education Jump to Appendix 1 long image description 5

Customer Excellence Retaining loyal customers Providing outstanding customer service 6 McGraw-Hill Education TAO Images Limited/Alamy Stock Photo Operational Excellence Efficient

operations Excellent supply chain management Strong relationship with suppliers 7 McGraw-Hill Education Product Excellence Provide products with high perceived value and

effective branding and positioning. Bloomberg Businessweeks top global brands: Apple, Google, Microsoft, Coca-Cola, Amazon, Samsung, Toyota, Facebook, Mercedes, IBM 8 McGraw-Hill Education Sean Gallup/Getty Images Locational Excellence Especially important for retailers and service

providers. Many say, The three most important things in retailing are location, location, location. Competitive advantage based on location is not easily duplicated. Starbucks makes it difficult for competitors to enter a market and find good locations. 9 McGraw-Hill Education Multiple Sources of Advantage A single strategy (low prices or excellent service) is usually not enough to build a sustainable competitive advantage. Southwest Airlines Provides good service at a good value (on-time flights that are reasonably priced)

10 McGraw-Hill Education PROGRESS CHECK (1 of 3) 1. What are the various components of a marketing strategy? 2. List the four macro strategies that can help a firm develop a sustainable competitive advantage. 11 McGraw-Hill Education Exhibit 2.2: The Marketing Plan

McGraw-Hill Education Jump to Appendix 2 long image description 12 Step 1: Define the Business Mission PepsiCos Mission Statement: To provide consumers around the world with delicious, affordable, convenient and complementary foods and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats. Cokes Mission Statement: To refresh the world To inspire moments of optimism

and happiness To create value and make a difference. 13 McGraw-Hill Education Step 1: Conduct a Situation Analysis Using SWOT Analysis Internal Strengths Internal Weaknesses External Opportunities

External Threats 14 McGraw-Hill Education Exhibit 2.3: Examples of Elements in a SWOT Analysis (1 of 2) Pepsi McGraw-Hill Education Environment

Evaluation Positive Negative Internal Strengths Brand product portfolio Strong celebrity endorsers Dedication to charitable and social causes Large marketing

budget Weaknesses Relies heavily on Walmart Relatively lower brand awareness Public scrutiny over practices Low profit margins External Opportunities Health food segments Expansion due to acquisitions

Ready-to-drink tea and coffee market growth Bottled water Threats Water scarcity Changes to labeling regulations Increase competition 15 Exhibit 2.3: Examples of Elements in a SWOT Analysis (2 of 2) CocaCola

McGraw-Hill Education Environment Evaluation Positive Negative Internal Strengths High market share Strong brand Strong global

presence Excellent customer loyalty Supply chain Weaknesses Low diversification Few healthy beverages External Opportunities Emerging countries Diversifying products Bottled water

Threats Water scarcity Potential market saturation Changes to labeling regulations Increasing competitors Sources: SWOT analysis of Pepsi, Strategic Management Insight, February 15, 2013, http://www.strategicmanagementinsight.com/ 16 Step 3: Identifying and Evaluating Opportunities Using STP Segmentation

Targeting Positioning 17 McGraw-Hill Education Exhibit 2.4: Hertz: Market Segmentation Illustration Segments Segment 1 Segment 2

Segment 3 Segment 4 Segment 5 Single thrill seekers and gear heads on vacation Business customers and families who prefer a

luxurious ride Environmentally conscious customers Families Commercial customers Green Collection SUV/

Minivan/ 4x4 Commercial Van/Truck Ford Cargo Van Adrenaline Collection Cars Offered Prestige Collection

Corvette ZHZ Infiniti QX56 Toyota Prius Toyota RAV4 Chevrolet Camaro Cadillac Escalade

Ford Fusion Ford Explorer 18 McGraw-Hill Education Market Positioning Choose which segments to pursue, then how to position within those segments. Define the marketing mix variables so target customers have a clear, distinctive, and desirable understanding of the product compared to competition.

Hertz positions itself as a quality car and truck rental company that is the first choice for each target segment. 19 McGraw-Hill Education Step 4: Implement Marketing Mix and Allocate Resources Product and Value Creation Price and Value Capture Promotion and

Value Communication Place and Value Delivery 20 McGraw-Hill Education Product and Value Creation Successful products and services are those that customers perceive as valuable enough to purchase. 21 McGraw-Hill Education

Source: Dyson, Inc.; Stockbyte/PunchStock RF Price and Value Capture Price is what the customer is willing to pay for a product they perceive as good value. McGraw-Hill Education digitallife/Alamy Stock Photo 22 Place and Value Delivery The product must be readily accessible when and where the customer wants it. Dyson provides product and place value.

Where are Dyson fans available? 23 McGraw-Hill Education Promotion and Value Communication IMC: Integrated Marketing Communications Advertising Personal selling

Sales promotion Public relations Direct marketing Online marketing (including social media) 24 McGraw-Hill Education Step 5: Evaluate Performance Using Marketing Metrics A metric is a measuring system that quantifies a trend, dynamic, or characteristic. Metrics are used to explain why things happened and also project the future.

Social and Mobile Marketing 2.1: Proctor & Gamble (P&G) devised a strategy to calculate the returns on Snapchat campaigns. 25 McGraw-Hill Education Evaluating Performance Who is accountable for performance? Performance Objectives, Marketing Analytics, and Metrics Financial Performance Metrics Portfolio Analysis 26

McGraw-Hill Education Exhibit 2.6 Boston Consulting Group Matrix P&G Website McGraw-Hill Education Jump to Appendix 3 long image description 27 Which Quadrant? 28

McGraw-Hill Education PROGRESS CHECK (2 of 3) 1. What are the five steps in creating a marketing plan? 2. What tool helps a marketer conduct a situation analysis? 3. What is STP? 4. What do the four quadrants of the portfolio analysis represent? 29 McGraw-Hill Education Growth Strategies Exhibit 2.7: Markets/Products and Service Strategies

McGraw-Hill Education Jump to Appendix 4 long image description 30 Market Penetration Existing marketing mix, Existing customers Marvel used a market penetration strategy by expanding the distribution of its films: Theaters Xfinity DVDs (in a variety of retail locations)

31 McGraw-Hill Education Market Development Current Products or Services New Markets What can a company do to continue to grow in a difficult retail environment? 32 McGraw-Hill Education Product Development New product or service Current target market

33 McGraw-Hill Education Netflix/Photofest Diversification New product or service New market segment Related vs. unrelated diversification 34 McGraw-Hill Education PROGRESS CHECK (3 of 3) 1. What are the four growth strategies?

2. What type of strategy is growing the business from existing customers? 3. Which strategy is the riskiest? 35 McGraw-Hill Education Marketing Chapter 2 The End

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