2. What is STRATEGY?
A campaign to win in a competitive
situation, taking into account your
resources, your competition’s resources
and the nature of the battlefield to obtain a
sustainable competitive advantage.
3. What is Marketing Strategy?
It means deliberately choosing a different
set of activities to deliver a unique mix of
value to the target market.
Two components of marketing strategy
– Target market selection (STP)
– Selection of marketing mix variables
4. “if you don’t know where you are going, all
roads will take you there!”
Strategy provides the directions!
5. The Essence of Strategy!
Choosing to perform activities
differently than rivals do to create
a sustainable competitive
advantage!!
What does Southwest Airlines do?
6. Example: Southwest Airlines
If you get your passengers to their
destinations when they want to get there,
on time, at the lowest possible fares, and
make darn sure they have a good time
doing it, people will fly your airline.
7. Activity Map of Southwest
Low prices
Frequent
Departures
Lean
and
productive crew
Point-to-Point
flights
Limited
Passenger
Amenities
High aircraft
utilization
No
meals
No
assign.
seats
No
transfers
No
connections
Standard
fleets
Limited use
of travel agents
Automatic
Ticketing
machines
High
employee
compensation Emply. Stock
ownership
Flexible
Union
contracts
15 min.
turnaround
8. What is Strategy?
A game plan to win in a competitive situation.
– Know yourself - your resources, your abilities, your
strengths, your weaknesses
– Know your competition - how will they react to
you, their strengths, weaknesses
– Identify a plan that leads to SUSTAINABLE
COMPETITIVE ADVANTAGE.
– To win - look at both the big picture as well as
execution details.
9. Marketing: A Brief History
Production Era (Ended in the 1920s)
– Can we produce enough of the product
Sales Era (ended in the late 1940s)
– Find a way to sell what we produce
Marketing Era (today, but ever changing)
– What do customers want and how do we
provide it for them at a price to make a profit.
10. “The business enterprise has only
two basic functions — marketing
and innovation.”
Peter Drucker
11. Internal vs. Market Orientation
Internal View External View
Persuade customer to
buy what company
produces Focus
Produce what customer
wants to buy
Generic product,
production process, and
delivery system
Augmented product,
customer benefits, and
market segments
Lowest deliverable cost Competitive
Advantage
Superior customer value
Volume, cost, profit
margins Objectives
Profitable use of resources,
market position, customer
satisfaction, and loyalty
Short-term, reactive
Time
Horizon
Medium and long-run
view of threats and
opportunities
12. What is marketing?
Gathering, monitoring, analyzing information
– Environment
– Customers
– Competitors
Interacting with all areas of organization, sharing
information
Developing, implementing, and controlling strategic
marketing plan, based on information
Creating satisfying exchanges
13. Marketing
Manager
Marketing
& Sales
R & D
Other internal
information
sources
Finance &
Accounting
Production
Consultants
& Advisors
Competition
Consumers
Other
Organizations
Other
Publics
Suppliers
Retailers &
Wholesalers
Marketing Role
14. What is Market Orientation?
Superior ability to understand, attract, and
keep valuable customers.
Externally oriented culture
Capabilities in market sensing,
market relating, and anticipatory
strategic thinking
Adaptable and coherent organizational
configuration of culture, capabilities, and
processes
15. Elements of Market Orientation
Shared
Knowledge
Base
Configuration
Focus on superior
customer value
Coherence of structure
& systems
Adaptability
Culture
is
externally
oriented
Capabilities
Market sensing
Market relating
Strategic thinking
Superior
Ability to
Understand,
Attract, and
Keep
Valuable
Customers
Customers Competitors
Channels Collaborators
17. Why does market orientation
lead to greater profits?
Cost and investment efficiency
Employee satisfaction
Price premium
Revenue growth
Competitive preemption
18. But….
Have to be truly market driven!!
Superior ability to understand markets
Sense emerging opportunities
Anticipate competitors’ moves
Make fact-based decisions
Superior ability to attract and keep customers
Deliver superior value
Encourage loyalty
Leverage market investments
19. Impediments to Being
Market Driven
Being oblivious to market
Becoming compelled by the market
Feeling superior to the market
20. Market Driven Culture
Market-Driven Organization Self-Centered Organization
All decision start with the customer
and opportunities for advantage
We’ll sell to whoever will buy
Quality is defined by customers
Quality is conformance to internal
standards
The best ideas come from living
with customers
Customers don’t know what they
want
Employees are customer advocates
Customer relations are problems for
the marketing dept
Customer loyalty is key to
profitability
Customer data are a control
mechanism and channels are
conduits
Customer knowledge is a valuable
asset and channels are value adding
partners
New accounts (conquests) are what
matters
21. Market Driven Culture
Market-Driven Organization Self-Centered Organization
No sacred cows—cannibalize
yourself
Protect the existing revenue stream
Learn from mistakes Avoid mistakes
Market research is decision
insurance
Market research is a justification
tool
Paranoia about competitors is
healthy
We can live with our competitors
The behavior of competitors can be
anticipated and influenced
Competitors are unpredictable
We know more than the
competitors
If competition does it, it must be
good
23. Customers What needs do we satisfy?
Company
What special competence do we
possess to meet those needs?
Competitors
Who competes with us in meeting
those needs?
Context What environmental factors limit us?
Collaborators Who should we enlist to help us?
The 5 C Strategic Analysis
Framework
24. Schematic of the Marketing Process
Based on Robert Dolan’s Note on Strategy, HBR Press
CollaboratorsCustomers ContextCompany Competitors
Segmentation
Target Mkt
Selection
Positioning
Product Place Promotion Price
Acquisition Retention
PROFITS
Notes de l'éditeur
How does SWA achieve this mission?
Low fares through cost control: standard fleet, point to point flights, limited amenities, no middlemen
On time departures: no connecting hassles, quick turnaround time, no seat assignments, un-congested airports (small cities or smaller airports of large cities)
Good time: employee morale, personalities given importance, informal dress code, recruiting policies; internal promotion schemes; employee stock ownership, flexible work schedule
A few main activities that link together, and others that feed into the main activities to reinforce them. The extent of sustainable competitive advantage lies in the number of linkages across different activities, since the more coherent the strategy (the better the fit), the more difficult it will be for competitors to imitate the strategy.