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Summary Marketing strategy chapter 8 to 18
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summary marketing strategy chapter 8 tm 18 Kotler, P., Armstrong, G., Harris, L. C., & Piercy, N. (2017). Principles of Marketing - 7th European Edition
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Marketing strategy, quarter 3Chapter 18, 8, 9, 10, 11, 12, 13, 14, 15, 16
Chapter 18: creating competitive advantage
To win today’s marketplace:
- Managing products
- Managing customer relationships
- Understanding customers
- Building profitable customer relationships
- Gaining competitive advantage: an advantage over competitors gained by
offering consumers more value. It requires delivering more value and
satisfaction to target consumers than competitors do.
How companies analyse their competitors and develop succesful, customer-value
based strategies for engaging customers and building profitable relationships:
- Competitive marketing strategies: strategies that strongly position the
company against competitors and give it the greatest possible competitve
advantage.
- Competitor analysis: the process of identifying, assesing and selecting key
competitors. Steps in the analysis:
1. Identifying the company’s competitors
2. Assesing competitors’ objectives, strategies, strengths and
weaknesses, and reaction patterns
3. Selecting which competitors to attack or avoid
Identifying: Competitors can include all firms making the same product or
class of products, all firms making products that supply the same service or all firms
competing for the same consumers.
Assesing: objectives like profitablility, market share growth, cash flow, technological
leadership, service leadership. A strategic group is a group of firms in the same
industry with the same strategy, this offers the strongest competition. Strengths and
weaknesses; what can competitors do? Think of benchmarking; comparing products
and processes and find a way to improve quality and performance. Estimate
competitors reaction
Selecting: strong or weak competitors; customer value analysis is an approach
conducted to determine what benefit target customer value and how they rate the
relative value of various competitors. Close or distant competitors. Good or bad
competitors; good ones play by the rules of the industry, bad ones break the rules.
Blue ocean strategy: creating new products, services and/or markets without direct
competition instead of trading in an existing market with competitors.
In the red ocean, everybody is ‘fighting’ with eachother. There is competition.
A competitve intelligence system:
- Identifies competitive information and the best sources of this information
, - Continually collects information
- Checks information for validity and reliability
- Interprets information
- Organises information
- Sends key information to relevant decision makers
- Respond to inquiries about competitors
Marketing strategies:
Entrepreneurial marketing = involves visualising an opportunity and
constructing and implementing flexible strategies.
Formulated marketing = involves developing. As it grows, it will adopt more
developed marketing tools.
Intrepreneurial marketing = involves the attempt to reestablish an internal
entrepreneurial spirit and refresh marketing strategies and approaches.
Michael Porter, four basic competitive strategies. (three winning strategies, one
losing one)
Overall cost leadership: working hard to achieve the lowest production and
distribution costs. Low costs let the company price lower than its competitors
and gain market share.
Differentiation: concentrating on a highly differentiated product line and
programme so it comes across as an industry class leader.
Focus: the company focus its effort on serving a few market segments well
rather than going after the whole market.
Middle of the road (losing one): they are trying to be good in all the three
strategies. Not a clear strategy.
Value disciplines by Treacy & Wiersema. Focus on…
Customer intimacy: providing superior value by segmenting markets and
tailoring products to match the needs of the targeted customers.
Operational excellence: leading the industry by price and convenience,
reducing costs and creating a lean and efficient delivery system. = costs
Product leadership: product leaders are open to new ideas and solutions and
bring them quickly to the market. Providing superior value. = differentiation
Competitive positions
Market leader 40%: the firm in an industry with the largest market share and
leads the market price changes, product innovations, distribution coverage
and promotion spending.
Market challenger 30%: a runner-up firm that is fighting hard to increase its
market share in an industry.
Market follower 20%: a runner-up firm that wants to hold its market share in an
industry without rocking the boat.
Market nicher 10%: a firm that serves small segments that other firms in an
industry overlook or ignore and not being pursued by other firms.
Market leader strategies
- Expand total market; new users, new uses, more usage
, - Protect market share; keep strong customer relationships, continious
innovation, maintain consistend prices that provide value, preventing
weaknesses
- Expand market share; inceasing profitability, producing high quality products,
building close relationships, good service experiences
Market challenger strategies
- Full frontal attack
- Indirect attack
- Second-mover advantage: challenger observes what has made the leader
successful and improves on it.
Market follower strategies
- Follow closely; play along with the competitors
- Follow at a distance
- Keep costs and prices low or quality and services high.
Market nicher strategies
- By customer, market, quality, price and service
- Multiple niching
- Specialization
Balancing customer and competitor orientations: companies need to continuously
adapt strategies to changes in the competitive environment.
Competitor-centred environment: a company whose moves are mainly based
on competitor’s actions and reations. The company is a fighter.
Customer-centred company: a company that focuses on customer
developments in designing its marketing strategies and delivering superior
value to its target customers. Building customer relationships.
Market-centred company: a company that pays balanced attention to both
customers and competitors in designing its marketing strategies.
Chapter 8: products, services and brands: building customer value
Product: anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a need or want
Service: an activity, benefit or satisfaction offered for sale that is essentially intangible
and does not result in the ownership of anything
The experiences are very important. It is much more than a physical thing. When
humans connect with the brand, it add meaning and value to it.
Levels of product
1. Core customer value – what is the customer really buying?
2. Actual product – brand name, quality level, packaging, design, features
3. Augmented product – delivery and credit, product support, warranty, after-sale
service
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