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Strategy in Marketing Professor Lawrence Feick University of Pittsburgh Outline What is marketing strategy? Framework for marketing strategy External analysis: environmental scanning Internal analysis: core skills of the firm SWOT: matching the external and internal Portfolio models

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Strategy in Marketing

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Strategy in Marketing

Professor Lawrence Feick

University of Pittsburgh


Outline

  • What is marketing strategy?

  • Framework for marketing strategy

  • External analysis: environmental scanning

  • Internal analysis: core skills of the firm

  • SWOT: matching the external and internal

  • Portfolio models


Marketing strategy

  • Answers basic questions:

    • to whom will we sell?

    • what will we sell, how will we sell it?

  • Focus on:

    • target market selection

    • marketing mix design


Marketing strategy formulation

  • External analysis (looking outside the firm)

    • environmental scanning

    • environmental management

    • identifying opportunities and threats

  • Internal analysis (looking inside the firm)

    • mission and objectives

    • key skills, resources of the firm

    • identifying strengths and weaknesses


External analysis:The key environments

  • Socio-cultural environment

  • Economic environment

  • Technological environment

  • Political-legal environment

  • Competitive environment


External analysis:The socio-cultural environment

  • Demographics

    • age, education, marital status, race, etc.

  • Culture

    • US culture, subcultures, foreign cultures

    • pop culture, style, fashion, conventional wisdom

    • ideas, movements, causes

  • How is this environment changing?


Life expectancy at birth by sex, US by year


Racial (ethnic) characteristics of the US, percentages by year


Percent distribution of origin of US naturalized citizens by year

Source: US INS


External analysis:The economic environment

  • GDP and business cycles

  • Personal income

  • Inflation

  • Unemployment


External analysis:The technological environment

  • Creation of substitutes for the product category (e.g., marketing myopia examples)

  • Changes in the product or product usage

  • Changes in the production, service, or support process

  • Changes in distribution channels

  • Changes in promotion, media


External analysis:The political-legal environment

  • Government laws and regulations

    • Maintaining a competitive market

    • Protecting consumers

  • Industry self-regulation

  • Litigation


External analysis:The competitive environment

  • Who is our competitor?

    • brand-level competition

    • product category-level competition

    • want-level competition

  • Open markets and increased competition

    • global connections

    • emphasis on exports

    • virtual marketing


External analysis: recap

Economic

Environment

Socio-cultural

Environment

Technological

Environment

Firms,

Consumers,

Competitors,

and Products

Political-legal

Environment

Competitive

Environment


External analysis: recap

  • Five external environments change continually

  • Changes create opportunities and challenges in new and existing markets

  • Marketers’ key jobs:

    • environmental scanning, forecasting, adaptation

    • environmental management (if possible)


Internal analysis

  • Motivation: how does the firm choose from among all of the opportunities in the environment?

  • Examples

    • Microsoft

    • Federal Express


Internal analysis:Mission

  • The self-defined description of the business the firm is in; why the firm exists

  • Usually includes mention of

    • customer groups served

    • customer needs met

    • technology employed

  • Constrains marketing strategy choices


Mission statement example

  • Intel: Do a great job for our customers, employees, and stockholders by being the preeminent building block supplier to the computing industry.


Internal analysis:Organizational objectives

  • Define sought after benchmarks

  • Usually specific about time and quantity

  • Often involve sales, profits, numbers of customers, customer satisfaction, etc. or hoped for changes in these

  • Constrains marketing strategy choices


Internal analysis:Strengths and weaknesses

  • Assessment of skills, resources, competencies of the firm

  • What do we do exceptionally well, what not so well?

  • What assets (e.g., patents, image, brands, people) do we have that give us an advantage?

  • How do we compare to competition on these?


SWOT

  • Combining the results of internal analysis (SW) with external (OT)

  • Build on strengths to take advantage of environmental changes

  • Manage weakness that are made greater by environmental changes


Recap: marketing strategy

  • Outcome of SWOT analysis:

    • a focus on who: which target markets?

    • a focus on how: what marketing mix will move them?

  • Key to success: consistency

    • with the target market and mix

    • among elements of the mix


Aside: Portfolio models

  • Purpose: assess each of the firms businesses using internal and external criteria

  • Two examples:

    • Boston Consulting Group Growth/Share Matrix

    • GE Business Screen


BCG Growth/Share Matrix

Fast Growth

10%

Slow Growth

High Relative Share

1.0

Low Relative Share


BCG Growth/Share Matrix

Fast Growth

C

10%

Slow Growth

A

B

High Relative Share

1.0

Low Relative Share


GE Business Screen

High

Industry Attractiveness

Green

Yellow

Medium

Red

Low

Strong

Average

Weak

Business Strength


Portfolio models: Summary

  • Assumptions

  • Uses

  • Limitations


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