BUSI 406 DIDOW PRINCIPLES OF MARKETING EVALUATING OPPORTUNITIES

BUSI 406 (DIDOW) PRINCIPLES OF MARKETING: EVALUATING OPPORTUNITIES IN THE CHANGING MARKET ENVIRONMENT CHAPTER 3

Today’s Agenda Answer any questions Team Assignments If you have any questions/issues with your team, please see me ASAP – the longer you wait, the less I can help you… Team Assignments are for all 3 Case Assignments and major project Review Guidelines for Marketing Cases Let’s Review Discuss material you read in Chapter 3 of your textbook

Guidelines for Marketing Cases Due date for first team case assignment – Lake Pukati Lodge (pg. 615) is Wednesday, January 29 Prepare an original team 2 page max plus exhibits (12 pt. font, reasonable margin, double spaced text) write-up of the case based only on your own work focusing on: Current situation Analysis of the situation (3 Cs, SWOT) Assess possible strategy options, including no change, and recommend an overall strategy, explain why you recommend this strategy Specific action plan and implementation (Target Mkt, 4 Ps) Highlights from three to five year annual financial pro forma – BEP? Exhibits are good, but optional – may be used for SWOT or 3 to 5 year annual financial pro forma and other material, highlight within 2 page text Biggest piece of advice – do not focus on what is already in the case…tell me something new!

Let’s Review Marketing strategy planning & marketing strategy 3 C’s SWOT, Target marketing & 4 P’s in a marketing mix Attractive Opportunities Breakthrough opportunities Competitive Advantage Four Generic Growth Strategies Market Penetration, Market Development, Product Development, Diversification

Today’s Goals Examine two of the 3 C’s Company objectives & mission statements Competitive environment Review the major trends in the External Market Environment Economic environment Technological environment Political/Legal environment Cultural/Social environment Screening opportunities using the GE Planning Grid and the BCG Growth/Share Matrix

What is Marketing Strategy Planning? Finding attractive opportunities and developing sustainable marketing strategies, and being rewarded financially for doing so. Marketing Strategy Planning involves: 3 C’s: Company, customers, competitors SWOT analysis Marketing Strategy: Specifying a target market and a related marketing mix Target Market: a fairly homogenous group of customers to whom a company wishes to appeal Marketing Mix: the controllable variables (4 P’s) the company puts together to serve this target group Product Place Price Promotion and communication Pro forma Budget: A plan without a budget is not a plan, show me the numbers, expected revenues against expected expenses, plus other outcome metrics

Marketing Strategy Planning Process

Marketing Strategy Planning, Competitors, Company, & External Market Environment (See pages 510 -511, 513) Company • Objectives • Resources Competitors • Current • Prospective External Marketing Environment • Economic • Technological • Political & Legal • Cultural & Social Evaluating Multiple Opportunities • Screening criteria • Planning grids Best opportunities to pursue

The Marketing Environment Resources and Objectives of the Firm Customers Direct Marketing Environment Cultural and Social Environment Political and Legal Environment Competitive Environment Economic Environment External Marketing Environment Technological Environment

Mission Statement A mission statement helps set the course and basic purpose for being. The whole firm should work toward these same objectives.

Mission Statement Exercise A mission statement helps set the course and basic purpose for being. The whole firm should work toward these same objectives.

Company Resources May Enable or Limit Pursuit of Opportunities Financial Strength Producing Capability and Flexibility Marketing Strengths

The Competitive Environment -- Analyzing Competition Competitor Analysis Competitive Advantage Key Concepts Competitive Barriers Competitive Rivals

Competitive Barriers Entry Barriers: how difficult is it to enter the industry? Mobility Barriers: once you’ve entered the industry, there may be some segments that are hard to access. Exit Barriers: how difficult is it to leave the industry?

The Economic Environment Rapid Change Global Economy Key Economic Forces Interest Rates

The Economic Environment

Technological Environment

The Political and Legal Environment – See Exhibit 3 -3 • Key Antimonopoly Laws • Sherman Antitrust Act (1890) • Clayton Act (1914) • • Federal Trade Commission (1914) • • Robinson-Patman Act (1936) • Wheeler-Lea Amendment (1938) • Antimerger Act (1950) • Magnuson-Moss Act (1975) • • • Consumer Protection Agencies Federal Trade Commission (FTC) Food and Drug Administration (FDA) Consumer Product Safety Commission (CPSC) Federal Communications Commission (FCC) Environmental Protection Agency (EPA)

Nationalism

Keeping Competitive in the Changing Cultural & Social Environment

Keeping Competitive in the Changing Cultural & Social Environment

Population Trends Increasing Density Increasing Urbanization

“Diversity Explosion” (William Frey, Brookings Institute, 2014) and the “Next America” (Paul Taylor, PEW Research Center, 2016) highlight how the America of tomorrow will look different from the America of the past…

NC and Southeastern population growth is expected to continue, as is the Southwestern US 2010 Population (in millions) Percent Change by State, 2000– 2010

US Growth Trends Key Trends Graying of America Gen X – fewer in number; Gen Y – tech savvy Diversity Explosion

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Whose Population is Aging the Fastest? Median Age 27 Source: United Nations Population Division. World Population Prospects, the 2008 Revision.

Japan: Face of the Future 28 Source: New York Times, September 2, 1997.

Screening Criteria Narrow Down Strategies Product-Market Screening Criteria Qualitative “Fit” Criteria Quantitative “Data” Criteria

GE’s Strategic Planning Grid Helps Evaluate a Portfolio of Opportunities Industry Attractiveness Low Medium High Medium No Growth Low Business Strengths High Borderline Growth

Analyzing the Current Business Portfolio of Strategic Business Units (SBUs) Using BCG’s Growth Share Matrix Boston Consulting Group’s Growth Share Matrix H Market Growth Rate Star ? ? ? Cow Dog L H Relative Market Share L

Summary Marketing does not take place in a vacuum! Success depends on anticipating changes (both opportunities and threats) in the marketing environment. Marketing can be “reactive or proactive” - which do you want to be?

For Next Class… Please read Chapter 4 “Focusing Marketing Strategy with Segmentation and Positioning” First team case assignment due Wednesday, January 29 Bring one printed copy to turn in to Professor Didow at the start of class