MARKETING STRATEGIES

Strategies Suggested by Ansoff’s Product-

Market Expansion Grid

 Market penetration
 Market development
 Product development
 Diversification
 Product-Market Growth Matrix

Present products New Products

Present Market Product

Markets
Penetration Developmen
t
New
Market
Markets
Diversification
Development
 The company first considers whether it could gain more market
share with its current products in their current markets, using a
market-penetration strategy. Next it considers whether it can
find or develop new markets for its current products, in a
market-development strategy. Then it considers whether it
can develop new products of potential interest to its current
markets with a product-development strategy. Later the firm
will also review opportunities to develop new products for new
markets in a diversification strategy.
Corporate Portfolio Analysis
 Managers manage portfolio (or collection) of businesses using
a corporate portfolio matrix such as the BCG Matrix.
 BCG Matrix
◦ Developed by the Boston Consulting Group
◦ Considers market share and industry growth rate
◦ Classifies firms as:
 Cash cows: low growth rate, high market share
 Stars: high growth rate, high market share
 Question marks: high growth rate, low market share
 Dogs: low growth rate, low market share

8–5
The BCG Matrix

8–
7
   

STARS QUESTION
MARKS
 

 Jams.  
 Desserts.  Fruitily
 Recipe Mix. Juices.
 

   

CASH COWS DOGS

 

 National
 National Plain
Ketchup.
Masalas.
 National
 Masala Snax.
Pickles.
 
BCG Matrix
High Low
Relative Market Growth Rate
High

?
Low

Relative Market Share

8–10
Five Competitive Forces
 Threat of New Entrants
◦ The ease or difficulty with which new competitors can enter an
industry.
 Threat of Substitutes
◦ The extent to which switching costs and brand loyalty affect
the likelihood of customers adopting substitutes products and
services.
 Bargaining Power of Buyers
◦ The degree to which buyers have the market strength to hold
control over and influence competitors in an industry.

8–
11
Five Competitive Forces
 Bargaining Power of Suppliers
◦ The relative number of buyers to suppliers and threats from
substitutes and new entrants affect the buyer-supplier
relationship.
 Current Rivalry
◦ Intensity among rivals increases when industry growth rates
slow, demand falls, and product prices descend.
Types of Competitive Strategies
 Cost Leadership Strategy
◦ Seeking to attain the lowest total overall costs relative to other
industry competitors.
 Differentiation Strategy
◦ Attempting to create a unique and distinctive product or
service for which customers will pay a premium.
 Focus Strategy
◦ Using a cost or differentiation advantage to exploit a particular
market segment rather a larger market.

8–
14
 Strategy Formulation
Porter’s Generic Strategies

Strategic Alliances
Porter’s Generic Strategies

Overall Cost Leadership

Differentiation

Focus
Porter’s Generic Strategies

 Overall cost leadership aiming to be the lowest cost

producer and/or distributor within their industry. 

 Differentiation Creating a product or service that is

perceived as being unique through out the industry
Focus concentrating on the limited part of the market .
(offering a specialized service in a niche market). He then
subdivided the Focus strategy into two parts: "Cost Focus"
and "Differentiation Focus”.

Cost Focus means emphasizing cost-minimization within

a focused market, and Differentiation Focus means pursuing
strategic differentiation within a focused market.
 PESTLE analysis

 PESTLE is an analytical tool which considers external

factors and helps you to think about their impacts 
 PESTLE analysis
 Is a useful tool for understanding the “big picture”
of the environment in which you are operating

 By understanding your environment, you can take

advantage of the opportunities and minimize the
threats.
 
 This provides the context within which more detailed
planning can take place to take full advantage of the
opportunities that present themselves.
The factors in PESTLE analysis
P – Political
◦ The current and potential influences from political pressures

E - Economic
◦ The local, national and world economic impact

S - Sociological
◦ The ways in which changes in society affect the project

T - Technological
◦ How new and emerging technology affects our project / organization

L - Legal
◦ How local, national and global legislation affects the project

E - Environmental
◦ Local, national and global environmental issues
PESTLE vs. SWOT
 In contrast to a SWOT, PESTLE encourages you to
think about the wider environment and what
might be happening now and in the future which
will either benefit or be of disadvantage to the
organization
 PESTLE
 Political:
◦ Government type and stability

◦ Freedom of the press, rule of law and levels of bureaucracy

and corruption

◦ Regulation and de-regulation trends

◦ Social and employment legislation

◦ Tax policy, and trade and tariff controls

 PESTLE
 Economic:

◦ Current and projected economic growth, inflation and

interest rates

◦ Unemployment and supply of labor

◦ Likely impact of technological or other changes on the

economy

◦ Likely changes in the economic environment

 PESTLE
 Sociological:
◦ Cultural aspects, health consciousness, population growth rate,
age distribution

◦ Organizational culture, attitudes to work, management style,

staff attitudes

◦ Education, occupations, earning capacity, living standards

◦ Ethical issues, diversity, immigration, ethnic/religious factors

◦ Media views, law changes affecting social factors, trends,

advertisements, publicity

◦ Demographics: age, gender, race, family size

 PESTLE

 Technological:

◦ Maturity of technology, competing technological

developments, research funding, technology legislation, new
discoveries

◦ Information technology, internet, global and local

communications

◦ Technology access, potential innovation, replacement

technology/solutions, inventions, research, advances in
manufacturing

◦ Transportation, energy uses/sources/fuels, associated/dependent

technologies, waste removal/recycling
 PESTLE
 Legal:

◦ current home market legislation, future legislation

◦ European/international legislation

◦ environmental regulations, employment law, consumer

protection

◦ industry-specific regulations, competitive regulations

 Environmental:
◦ Ecological

◦ environmental issues, environmental regulations

◦ customer values, market values, stakeholder/ investor values

◦ management style, staff attitudes, organizational culture,

staff engagement
Issues of concern

 The main problem with these external PESTLE factors is

that they are continuously changing

 Therefore PESTLE analysis should include a thorough

analysis of what is affecting the organization or a project
Now, and what is likely to affect it in the Future

 The result of a PESTLE analysis is usually a list of positive

and negative factors that are likely to affect a project
Similar analysis
 Other forms of PEST - PESTLE, PESTLIED, STEEPLE and SLEPT:
Some people prefer to use different flavors of PEST analysis, using other
factors for different situations. The variants are:

 PESTLE/PESTEL: Political, Economic, Sociological, Technological,

Legal, Environmental;

 PESTLIED: Political, Economic, Social, Technological, Legal,

International, Environmental, Demographic;

 STEEPLE: Social/Demographic, Technological, Economic,

Environmental, Political, Legal, Ethical; and

 SLEPT: Social, Legal, Economic, Political, Technological