LIRA UNIVERSITY
MARKETING MANAGEMENT
MBA 1104
TOPIC 6: MARKETING STRATEGY
SUB TOPICS
1. Introduction to Marketing Strategy;
2. Objectives of Strategy Formulation;
3. Strategic Planning;
4. The BCG Matrix.
INTRODUCTION TO MARKETING
STRATEGY
Marketing Strategy is a plan of reaching out to selected
target market with products/services.
• “Strategy” is a Greek word “Stratēgia” meaning “Art of a troop
leader” (how a commander fights war);
• Max McKeown (2011) defined it as “Shaping the future & attempt
to get to a desirable end with available means".
• So it is about setting future target & deciding on how to achieve it;
• Therefore in marketing:
1. The future target is Swapping Value – to satisfy identified customer
needs;
2. How to achieve that is Marketing Strategy – how to deliver the value.
Types of Marketing Strategies
Three main types for swapping value:
1. Marketing Segmentation – grouping consumers with
similar needs (Consumer Behavior);
2. Marketing Mix – how to handle the process of swapping
value (the 4 Ps of marketing – Product, Price, Promotion &
Place);
3. Relationship Marketing – how to manage good relations
with the market environment for sustainability of the
business (customers, competitors, government, development
partners, community, etc).
OBJECTIVES OF STRATEGY
FORMULATION
Main Objective: To reach out to selected target market & swap
value.
• Swapping value involves solving identified Customer Problem &
making profits to solve Business Problem;
Specific Objectives:
1. Supplying Appropriate Solutions – value to customers;
2. Efficient use of Resources – for relevance in the industry;
3. Increasing Sales & Profitability – for business success;
4. Sustainable Competitive Advantage – to manage competition;
5. Good Marketing Relations – for good Corporate Social
Responsibility (CSR).
1. Marketing Segmentation
Is grouping consumers with similar needs/wants into a
common market to be properly served.
• Objective is to be able to deliver the expected value;
• Swapping value can only be achieved by providing the
appropriate offer to the common needs;
• Allows for proper allocation and use of limited resources for
serving consumers;
• Now very important because of growing diversity in tastes of
modern consumers.
Types of Segmentation
1. Undifferentiated – appealing to the whole market with
one offer;
2. Differentiated – dividing target market into subsets of
consumers with common needs (consumer behavior) e.g.
Faculties in LU;
3. Concentrated – product is developed and marketed for a
very well defined and specific segment of the consumer
population (Executive MBA);
4. Multi-Segment – serving two or more well-defined
segments e.g. Faculties in LU brought together one
administrative setup.
2. Marketing Mix
Marketing Mix is a strategy composed (mixer) of elements of
marketing to satisfy needs and wants of consumers.
• Objective is actual delivery of the expected value to customers;
• Main elements are:
1. Product – what is required by customers (value to customers),
2. Price – what customers will pay in return (value to business),
3. Promotion – informing customers about the product (value),
4. Place – where & how customers can access the product.
• Services have three extra relevant elements:
5. People – delivery is through people contact. Who should be involved?
6. Processes – the way it is delivered (Design, Quality, Delivery,
Management)
7. Physical Evidence of Delivery – materials, physical communication
(language, verbal signs), physical environment.
Key Factors
1. Product Factors:
• Product Life-Cycle – Growth-Maturity-Decline Phases with respective
influence on customer response & purchase;
• Product Mix – complement of offer that customer needs;
• Product Development – creating new product qualities or completely
new products in response to this changing status.
2. Pricing Factors:
• Value of exchange – swapping of value;
• Competitors’ Price – consumer’s view of prices of competing
products;
• Competing Products Attributes – consumer's view of competing
values;
• Business View/Policy – on profitability and sustainability;
• Legal/Regulatory Value – market regulatory view/policy by
government and other regulatory bodies.
Key Factors
3. Promotion Factors/Tools:
• Advertising – communication using media (radio, TV, Internet, print, billboards etc);
• Public Relations – communication with the public (press releases, exhibitions,
conferences, seminars, trade fairs, events, etc);
• Personal Selling – direct personal presentation, demonstration or sale to consumers
usually away from a fixed retail location;
• Sales Promotion – publicizing offer through media or non-media marketing
communication.
4. Place Factors:
• Nature of Product - Technical, customized or complex products are often sold by
specialist distributors who have the required technical skills;
• The Market - Geographic spread, Customer demand, Distribution channels &
intermediaries, Competition;
• The Business – Size, Scope of operation, Resources available, Marketing Objectives,
Distribution network;
• Regulatory Issues - Procedures & limitations by regulators and government.
3. Relationship Marketing
Is managing good relationships with relevant marketing
partners.
• Objective is to develop trust in the market for sustainability;
• It goes beyond conventional customer service to other longer term
goals:
1. Customer Satisfaction – effective handling of customer need;
2. Customer Retention – ensuring the customers remain with you & satisfied;
3. Customer Relationships – how to interact with your customers;
4. Long Term Value of Customer – the value customers give to you over
time;
5. Other Communication – beyond marketing messages;
6. Public Relations – interaction with general public.
• With growth of internet and mobile platforms, relationship marketing
has continued to evolve, develop and become very critical to
marketing organizations.
Tasks Involved
1. Tracking & analyzing each customer – preferences,
activities, tastes, likes, dislikes, and complaints;
2. Maintaining database of repeat customer activities – in
the Marketing Information System (MIS) of the company. Such
customer activities may include:
1. How they buy the products – their own strategy to access the
product;
2. Options they choose – for the purchase;
3. How they finance the purchase;
4. Appreciation & Complaints.
3. Computing customer likely preferences & trends – in
the future This information is used for decision making &
better planning.
STRATEGIC PLANNING
Strategic Planning is developing way forward (plan) of
long term nature.
• Involves a long-term approach of about 5 to 10 years;
• Involves developing strategic focus of the business:
1. Vision – position in the future,
2. Mission – mandate of the business,
3. Objectives – what to be achieved towards mission & vision,
4. Strategies – what to be done to achieve the objectives,
5. Outputs – results to be achieved along the way,
6. Main Activities – actions towards the outputs;
• This should be based on findings of environmental analysis
(internal & external - SWOT Analysis).
Levels of Strategic Planning
Three main levels of strategy that are typically used by organizations in
marketing.
1. Level 1: Corporate Strategy
Outline exactly what businesses you are going to engage in, and how you plan
to enter and win in those markets. It answers the foundational question of what
you want to achieve (growth, stability, sustainability);
2. Level 2: Business Strategy
Slightly more specific and usually relate to the smaller businesses within the
organization. This level focuses on how you’re going to compete (customer
handling, product/service leadership, lowest total cost). What’s the
differentiation based on?
3. Level 3: Functional Strategy
Day-to-day strategy that is going to keep you in the right direction. It is also the
Market level strategy that focuses on how you’re going to grow (market
penetration, market development, product or service development,
diversification)
The Three Level Strategy
Strategic Planning Process
Is a process of handling the strategic management of a
business over long period of time (5 years and above)
1. Strategic Analysis – analyzing the environment;
2. Strategic Direction Setting – setting the Strategic Focus:
Vision, Mission, Main Objective & Main Activities;
3. Strategic Formulation – setting strategies;
4. Strategic Implementation – putting strategies into action;
5. Strategic Evaluation – appraisal of actions taken.
Marketing process should also be incorporated into this process to
handle the related strategic marketing issues (3 Marketing
Principles).
Remember Marketing Process
1. Market Environment Analysis – to understand associated
marketing factors involved;
2. Buyer Analysis – to understand the Buyer Behavior;
3. Company Analysis – to understand Company Behavior
(capacity);
4. Marketing Planning – to develop Marketing Strategies;
5. Marketing Evaluation – to check on performance.
• This process helps to generate the Marketing Plan to be
incorporated into the Strategic Planning of the business;
• It should also be incorporated in the 3 Levels of Strategic Planning
(Corporate, Business & Functional);
• This is to make relevant contribution towards achievement of the
overall strategic focus of the business.
Factors for Good Strategic Planning
1. Experience – where are you from (what do you know)?
2. Direction – where do you want to go?
3. Current Situation – where are you now?
4. Desired Outcome – what do you want to achieve to be there?
5. Action Steps – what should to achieve outcome?
6. Deadline – when to be done (timeframe)?
7. Monitoring & Evaluation – what has been achieved so far as
per the plan?
In marketing it involves generating marketing answers to those
questions in terms of the 3 principles of marketing to develop the
Marketing Plan of the business.
Developing Strategic Plan
Is developing key features/contents of the plan.
1. Vision Statement – direction to be reached;
2. Mission Statement – your mandate/purpose;
3. Company Values – guiding principles;
4. Main Goals – outcomes along the way;
5. Main Objectives – to be achieved towards goals;
6. Strategies – how to operate towards objectives;
7. Performance Indicators – evidences of performance;
8. Main Actions – long term activities/strategies.
The marketing plan should be developed with the Marketing
Plan incorporated.
THE BCG MATRIX
Is The Boston Consulting Group’s product portfolio
matrix (BCG Matrix)
• Designed to help with long-term strategic planning to help a
business consider growth opportunities based on its products;
• Can be done by reviewing the portfolio of the products to
decide where to invest, to discontinue or to develop products;
• Based on growth rate of the product in terms of:
1. Market Share – cash generation to the business,
2. Market Growth Rate – cash growth and usage.
• It is divided into 4 quadrants of products based on analysis of
market share and relative market share.
Quadrants of Products
1. Dogs – products with low growth or market share.
E.g: basic household: salt, sugar, soap;
2. Question Marks or Problem Child – products in high
growth markets with low market share;
E.g: Business Degrees?
3. Stars – products in high growth markets with high market
share.
E.g: EMBA?
4. Cash Cows – products in low growth markets with high
market share.
E.g: Medical?
The Matrix
BCG Matrix Guide
Matrix Product Guide
Dog Aim to remove any dogs from your product portfolio as they
Products are a drain on resources.
Question As the name suggests, it’s not known if they will become a
Mark star or drop into the dog quadrant. They often require
Products significant investment to push them into the star quadrant.
The challenge is that a lot of investment may be required to
get a return. It’s not always easy to spot the future star and
this can result in potentially wasted fun.
Star Can be the market leader though require ongoing
Products investment to sustain. They generate more ROI than other
product categories.
Cash Cow ‘Milk these products as much as possible without killing the
Products cow! Often mature, well-established products.
Application Guide
For proper application (success) it is recommended as
follows:
1. The matrix is more relevant to larger businesses with
multiple services and markets;
2. But smaller businesses can apply it to their
products/services to boost leads and sales.
END
