MOS 2320 Lecture 4

Chapter 2: Developing Marketing Strategies and a Marketing Plan
What 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