Marketing Strategy What is marketing strategy The positioning

Marketing Strategy

What is marketing strategy? �The positioning and relating of the firm/organisation to its environment in a way which will assure its continued success and make it secure from surprises Igor Ansoff (1918 -2002)

Key strategic models �Ansoff’s matrix �Porter’s Low cost v. Differentiation �Porter’s 5 forces

Ansoff’s matrix

Ansoff �Can address degree of risk, but can oversimplify level of risk �Useful tool for deciding on strategic direction, but it does not take competitors into account

Market penetration �Or: �Consolidation �Withdrawal �Do nothing

Porter’s Generic Strategies

Porter’s generic strategies �Low cost v. Differentiation �Search for sustainable competitive advantage �Cost leadership �Differentiation �Focus (target particular market segment)

Effectiveness of marketing strategies - Porter �Is there a significant advantage to the business? �Lower costs compared to competitors �Clear differentiation �Can strategy be maintained over a long period of time? (sufficient time to reap reward? ) �Does strategy appeal to sufficient numbers of customers for business to reach targets �Is there conflict within the organisation? �Remember external (exogenous) factors

Porter’s 5 Forces �New entrants �Substitute products �Power of buyers �Power of sellers �Level of competition between firms

Entering international markets �Restrictions to free trade �E. g. NAFTA – North American Free Trade Agreement �Exchange rate movements �Different cultures �Political situation �Accessing information �Finance & regulatory systems

Effectiveness of marketing strategies �Degree of conflict within the organisation �Barriers to communication, leadership, etc. �Cost of entering markets �Industry standards, regulation, quality control issues �Quality of market analysis �Internal communications �Exogenous (external) factors �Economy, government change, new legislation, weather, competitors’ response, interest rate changes, etc.