Marketing Strategy
What is marketing strategy?
O 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
O Ansoff’s matrix
O Porter’s Low cost v. Differentiation
O Porter’s 5 forces
Ansoff’s matrix
Ansoff
O Can address degree of risk, but can
oversimplify level of risk
O Strategies are not mutually exclusive – a
company can do all 3!
O Useful tool for deciding on strategic
direction, but it does not take competitors
into account
Market penetration
O Or:O Consolidation
O Withdrawal
O Do nothing
Porter’s Generic Strategies
Porter’s generic strategies
O Low cost v. Differentiation
O Search for sustainable competitive
advantage
O Cost leadership
O Differentiation
O Focus (target particular market segment)
Effectiveness of marketing
strategies - Porter
O Is there a significant advantage to the business?
O Lower costs compared to competitors
O Clear differentiation
O Can strategy be maintained over a long period of
time? (sufficient time to reap reward?)
O Does strategy appeal to sufficient numbers of
customers for business to reach targets
O Is there conflict within the organisation?
O Remember external (exogenous) factors
Porter’s 5 Forces
O New entrants
O Substitute products
O Power of buyers
O Power of sellers
O Level of competition between firms
Entering international
markets
O Restrictions to free trade
O E.g. NAFTA – North American Free Trade
Agreement
O Exchange rate movements
O Different cultures
O Political situation
O Accessing information
O Finance & regulatory systems
Effectiveness of marketing
strategies
O Degree of conflict within the organisation
O Barriers to communication, leadership, etc.
O Cost of entering markets
O Industry standards, regulation, quality control
issues
O Quality of market analysis
O Internal communications
O Exogenous (external) factors
O Economy, government change, new legislation,
weather, competitors’ response, interest rate
changes, etc.