Class notes
MOS 2320 Lecture 4
- Course
- Mos 2320 (MOS2320)
- Institution
- Western
Lecture notes of 8 pages for the course Mos 2320 at Western (Lecture notes 4)
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Chapter 2: Developing Marketing Strategies and a Marketing PlanWhat is a Marketing Strategy?
Identifies:
o (1) A firm’s target market
o (2) A related marketing mix
o (3) The bases upon which the firm plans to build a sustainable competitive advantage
A sustainable competitive advantage is an advantage over the competition that is not easily copied
and thus can be maintained over a long period of time
o Acts like a wall that the firm has built around its position in the market
o Makes it hard for competitors to contact customers inside
o If they have built a wall around an attractive target market, competitors will attempt to break
down this wall
For Nike, its competitive advantage is its strong brand and strong and loyal customer base
o Establishing a sustainable competitive advantage is key to long-term financial performance
Four strategies that focus on aspects of the marketing mix to create and deliver value and to develop
sustainable competitive advantages:
o Customer excellence
Involves a focus on retaining loyal customers and excellent customer service
o Operational excellence
A focus on efficient operations and excellent supply chain management
o Product excellence
Involves a focus on achieving high-quality products and effective branding and
positioning
o Locational excellence
Involves a focus on good physical location and internet presence
Customer Excellence
Achieved when a firm develops value-based strategies for retaining loyal customers and provides
outstanding customer service
Retaining Loyal Customers
Having a strong brand, unique merchandise, and superior customer service all help solidify a loyal
customer base
Having loyal customers is an important method of sustaining an advantage over competitors
o It means customers are reluctant to support competitive firms
o I.e. purchasing Nike apparel for all needs, even if Adidas goes on sale
Viewing customers with a lifetime value perspective rather than on a transaction-by-transaction basis
is key to modern customer retention programs
o I.e. 100$ shoes= 10, 000$ after 100 pairs—must retain loyalty
Can create emotional attachment through loyalty programs
o With these programs, companies can combine membership data with customer purchase data
to develop a deeper understanding of the customer
Often use this data to tailor their offerings to better meet the needs of their loyal
customers
Customer Service (develop reputation)
Marketers may also build sustainable competitive advantage by offering excellent customer service
I.e. Starbucks employees greet customers in a friendly way and makes drinks consistently
, Though it may take a considerable amount of time and effort to build a reputation for customer
service, once a marketer has earned a good service reputation, it can sustain this advantage for a long
time
o Hard for competitors to develop a comparable reputation
Operational Excellence
Another way to achieve a competitive advantage
o Through efficient operations, excellent supply chain management, and strong relationships with
their suppliers
All marketers strive for efficient operations to get their customers the merchandise they want, when
they want it, in the required quantities, and at a lower cost than competitors
Enables firms to provide customers with lower priced merchandise
Achieve efficiencies by developing sophisticated distribution and information systems as well as strong
relationships with vendors
o Vendor relationships must be developed over the long-term
o Generally cannot be undermined by a competitor
Firms with strong relationships may gain exclusive rights to
o Sell merchandise in a particular region
o Obtain special terms of purchase that are not available to competitors
o Receive popular merchandise that may be in short supply
Product Excellence
Occurs by having products with high perceived value and effective branding and positioning
Some firms have difficulty developing a competitive advantage through their merchandise and service
offerings, especially if competitors can deliver similar products/ services easily
Can maintain a competitive advantage by investing in the brand itself, positioning the product by using
a clear brand image, and constantly reinforcing that image through merchandise, service and
promotion
Locational Excellence
Particularly important for retailers and service providers
Most people will not walk or drive very far when looking to buy a cup of coffee
Sustainable because it is not easily duplicated
Tim Hortons and Starbucks have developed a strong competitive advantage with their location
selection
o Have such a high density of stores in some markets that it is very difficult for a competitor to
enter a market and find good locations
Multiple Sources of Advantage
A single strategy, such as low prices or excellent service, is often not sufficient to build a sustainable
competitive advantage
I.e. WestJet provides customers with good value that meets their expectations, good customer service
and maintaining good customer relations
The Marketing Plan
A written document composed of an analysis of the current marketing situation, opportunities and
threats for the firm, marketing objectives and strategies specified in terms of the 4 P’s, action
programs, and projected income statements
o 3 main phases: planning, implementation, control
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