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2 - Marketing Strategy Fundamentals

The document outlines the fundamentals of marketing strategy and its importance for long-term financial performance, emphasizing growth in market size and share, better pricing, and cost reduction. It highlights key principles such as customer heterogeneity, change, reaction, and limited resources, along with market segmentation methods in B2B contexts. Additionally, it discusses criteria for selecting fundamental strategies related to target markets, product concepts, and positioning to ensure competitive advantage and financial viability.

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31 views

2 - Marketing Strategy Fundamentals

The document outlines the fundamentals of marketing strategy and its importance for long-term financial performance, emphasizing growth in market size and share, better pricing, and cost reduction. It highlights key principles such as customer heterogeneity, change, reaction, and limited resources, along with market segmentation methods in B2B contexts. Additionally, it discusses criteria for selecting fundamental strategies related to target markets, product concepts, and positioning to ensure competitive advantage and financial viability.

Uploaded by

burnsburner29
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Marketing Strategy Fundamentals

Why is marketing Strategy Key to Long-Term Financial Performance


- Grow market size  new products and services, lower prices.
- Grow market share  improving products and services than competitors, increase loyalty
to retain and steal customers with acquisition strategies.
- Better prices and margins  Improving loyalty, brand image, relationships, products,
targeting of high margin customers.
- Reduce costs  WOM, brand, relationships, retain with loyalty.

Environment for Marketing Decisions


- Economic, Competitive, socio-cultural, Political, Legal, Technological

Framework for Analysis

Key Principles of Marketing Strategy


- All customers differ.
o Customer heterogeneity is variation among customers in terms of their needs,
desires, behaviours.
o May be latent or hidden.
o Mange through effective segmentation, targeting and positioning.
- All customers change.
o Customers desires/needs for most products and services change overtime or due
to specific events.
 Customers need change: cars, clothes, food, financial services,
healthcare as consumers age.
 Trigger events: marriage, kids, jobs change, finances, move, graduation.
 Industries/markets change: experience curve, diffusion, competitive
responses, overproduction.
o Customers’ needs vary not only due to inherent differences in people
(heterogeneity) but also as people and markets change (dynamic).
o Segmentation and targeting: Analyse lifecycle changes/customer dynamics.
- all customers react.
o Limitation
o Innovate better with more R&D
o Reduce prices.
o “Lock-in” suppliers with important materials
o Strategies:
 Build barriers to be occupied.
 Customer care, build loyalty, retain customers.
 Continue to innovate.
- All resources are limited.
o Trade-offs
 Advertising vs salespeople vs discounts vs channel coops vs R&D vs
online.
 Many “messages” are mutually exclusive  High status and low price or
high performance and economical.
 Short vs long term trade-offs.
o Strategy
 Have clarity in marketing strategy.
 Manage resource trade-offs effectively.
 Marketing metrics, financial metrics, budget size and allocation, time
horizon.
- Integrating these four key principles of marketing strategy are essential.

Ways to segment markets (B2B)


- Geographic
o Global/regional similarities vs dissimilarities
- Demographics
o SIC Code
o Size of firm
o Ownership (Pvt vs Govt)
- Product Specification
o Efficiency
o Productivity
- Account-based
o Top, medium, low

Criteria for Selection of Fundamental Strategy: Target Market, Product Concept,


Positioning
- Goodness of match: Product possibilities vs market needs & wants.
o Where do we get best fit between possible product authorities and market wants?
- Competitive advantage
o Where do we have the greatest advantages over competition?
 Includes product superiority, cost advantages, etc.
- Segment attractiveness
o Growth, size, competition, etc.
- Ease of access
o Marketing access, competitive resistance.
- Financial
o It all boils down to the bottom line.

Procut Life Cycle and Consumer Adoption of New Products


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