Strategy

Implementation

Lecture 8

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 Strategic Marketing Issues
1. How to make advertisements more
interactive to be more effective
2. How to best take advantage of Facebook
and Twitter conservations about the
company and industry
3. To use exclusive dealerships or multiple
channels of distribution
4. To use heavy, light, or no TV advertising
versus online advertising

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 Strategic Marketing Issues
5. To limit (or not) the share of business done
with a single customer
6. To be a price leader or a price follower
7. To offer a complete or limited warranty
8. To reward salespeople based on straight
salary, straight commission, or a
combination salary/commission

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 Social Media Marketing
 Marketers must get customers involved in the company
website and solicit suggestions in terms of product
development, customer service, and ideas.
 The company should enable customers to interact with the
firm on the following social media networks:
 Facebook
 Google Plus
 Twitter
 LinkedIn
 Instagram
 Pinterest
 Foursquare
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The New Principles of Marketing

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 Market Segmentation
Market Segmentation
subdividing of a market into distinct
subsets of customers according to
needs and buying habits
widely used in implementing
strategies

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 Market Segmentation
Strategies such as market development,
product development, market penetration,
and diversification require increased sales
through new markets and products.

Market segmentation allows a firm to operate

with limited resources because mass
production, mass distribution, and mass
advertising are not required.
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 Market Segmentation
Market segmentation decisions directly
affect the marketing mix variables:

Product Place

Promotion Price
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The Marketing Mix Component
Variables

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Retention-Based Segmentation
Tag #1: Is this customer at high risk of
canceling the company’s service?

Tag #2: Is this customer worth retaining?

Tag #3: What retention tactics should be

used to retain this customer?

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 Alternative Bases for Market
Segmentation
Geographic
Region, country size, city size, density, climate
Demographic
Age, gender, family size, family life cycle, income,
occupation, education, religion, race, nationality
Psychographic
Social class, personality
Behavioral
Use occasion, benefits sought, user status, usage rate,
loyalty status, readiness stage, attitude toward product
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 Product Positioning
Product Positioning
entails developing schematic representations
that reflect how your products or services
compare to competitors' on dimensions most
important to success in the industry
Also called perceptual mapping

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 Product Positioning Steps
1. Select key criteria that effectively
differentiate products or services in the
industry.

2. Diagram a two-dimensional product-

positioning map with specified criteria on
each axis.

3. Plot major competitors' products or services

in the resultant four-quadrant matrix.
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 Product Positioning Steps
4. Identify areas in the positioning map where
the company's products or services could be
most competitive in the given target market.
Look for vacant areas (niches).

5. Develop a marketing plan to position the

company's products or services
appropriately.

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Rules for Using Product Positioning as a
Strategy-Implementation Tool

1. Look for the hole or vacant niche.

2. Don’t serve two segments with the same

strategy.

3. Don't position yourself in the middle of the

map.

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 Product Positioning
An effective product positioning strategy
meets two criteria:

it uniquely distinguishes a company from

the competition

it leads customers to expect slightly less

service than a company can deliver
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 Example of a
Product-Positioning Map

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 Finance/Accounting Issues
1. To raise capital with short-term debt, long-
term debt, preferred stock, or common stock
2. To lease or buy fixed assets
3. To determine an appropriate dividend
payout ratio
4. To use LIFO (Last-in, First-out), FIFO (First-
in, First-out), or a market-value accounting
approach

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 Finance/Accounting Issues
5. To extend the time of accounts
receivable
6. To establish a certain percentage
discount on accounts within a specified
period of time
7. To determine the amount of cash that
should be kept on hand

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 Finance/Accounting Issues
1. Acquire needed capital to implement
strategies.
2. Develop projected financial statements to
show expected impact of strategies
implemented.
3. Determine the firm’s value (corporate
valuation) in the event an offer is received.
4. Decide whether to keep cash offshore that
was earned offshore.
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 Acquiring Capital to
Implement Strategies

Successful strategy implementation often

requires additional capital.

Besides net profit from operations and the

sale of assets, two basic sources of capital
for an organization are debt and equity.

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Projected Financial Statements
Projected Financial Statements
allows an organization to examine the
expected results of various actions and
approaches
allows an organization to compute projected
financial ratios under various strategy-
implementation decisions

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 Corporate Valuation
Methods:
The Net Worth Method
Total Shareholders’ Equity (SE) minus (Goodwill +
Intangibles)
The Net Income Method
Net Income x Five
Price-Earnings Ratio Method
(Stock Price / EPS) x NI
Outstanding Shares Method
# of Shares Outstanding x Stock Price
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 Research and Development (R&D)
Issues
1. Emphasize product or process improvements.
2. Stress basic or applied research.
3. Be leaders or followers in R&D.
4. Develop robotics or manual-type processes.
5. Spend a high, average, or low amount of money on
R&D.
6. Perform R&D within the firm or contract R&D to
outside firms.
7. Use university researchers or private-sector
researchers.

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 R&D Approaches for Implementing
Strategies
Be the first firm to market new technological
products.
Be an innovative imitator of successful
products, thus minimizing the risks and costs
of start-up.
Be a low-cost producer by mass-producing
products similar to but less expensive than
products recently introduced.

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Management Information System (MIS)
Issues
Having an effective management
information system (MIS) may be the most
important factor in differentiating
successful from unsuccessful firms.

The process of strategic management is

facilitated immensely in firms that have an
effective information system.

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