Marketing Management is the analysis, planning, implementation and control of activities designed to establish, strengthen and maintain beneficial exchanges with target customers in order to achieve the goals of the organization.
Among corporate strategies distinguish the following.
Portfolio Strategies allow quite effectively addressing the issues of managing various areas of the enterprise in terms of their place and role in meeting the needs of the market and investing in each of the areas. Portfolio strategies are ways to allocate limited resources between business units of an enterprise using criteria for the attractiveness of market segments and the potential capabilities of each business unit.
Enterprise resource management on the basis of economic directions of market activity is carried out using the matrices of the Boston Consulting Group (BCG) and Gee I. McKenzie.
1. The Boston Advisory Group (BCG) Matrix was developed in the late 1960s.
The matrix describes a situation that requires a separate approach in terms of capital investment and development of a marketing strategy.
Possible strategies:
"stars" - maintaining leadership;
"cash cows" - getting the maximum profit;
"difficult children" - investment, selective development;
"dogs" - leaving the market.
The G.I. McKenzie Matrix (Market Attractiveness/Strategic Position of the Enterprise) is an enhancement to the BCG Matrix by McKinsey for General Electric. The matrix allows you to make more differentiated strategic marketing decisions on the effective use of the enterprise's potential, depending on the level of market attractiveness.
So, the portfolio approach to developing strategic marketing decisions is based on:
clear structuring of activities by markets, products, divisions;
development of specific indicators to compare the strategic value of areas;
matrix representation of the results of strategic planning.
Growth Strategies provide an opportunity to answer the questions in which direction the company should develop in order to better meet the requirements of the market, as well as whether there are enough own resources for this or whether it is necessary to make external acquisitions and diversify its activities. The growth of an enterprise is a manifestation of the types of business activity of an enterprise, which is based on the following opportunities:
limited growth - intensive development at the expense of own resources;
acquisitions of other enterprises or integrated development, including vertical and horizontal integration;
diversification - organization of other areas of activity.
Growth strategies - a model of enterprise management by choosing the types of its business activity, taking into account internal and external opportunities.
Growth strategies are determined by the Ansoff matrix, the external acquisition matrix and the new BCG matrix.
1. The Ansoff matrix allows you to classify products and markets depending on the degree of uncertainty about the prospects for selling products or the possibility of penetration of this product into a particular market.
2. The matrix of external acquisitions (field of activity / type of strategy) allows you to implement:
choice of an integrated or diversified way of enterprise growth;
assessment of the place of the enterprise in the production chain, depending on how different areas of the market correspond to its potential
3. The new BCG matrix allows you to consider the growth opportunities of an enterprise based on strategic decisions taken taking into account two indicators:
cost/volume effect - based on taking into account the "experience curve" (doubling the speed of production costs are reduced by 20%);
product differentiation effect - based on taking into account the "product life cycle", when the product must undergo constant changes and improvements.
Competitive Strategies determine how to provide the enterprise with competitive advantages in the market in terms of greater attraction of potential consumers and what policy to choose in relation to competitors. Competitive advantage- those characteristics of the enterprise's market activity that create a certain superiority over competitors, which is achieved with the help of competitive strategies that help the enterprise retain a certain market share.
The following strategies are used to solve this problem.
1. According to the general competitive matrix of M. Porter, the competitive advantage of an enterprise in the market can be ensured in three ways:
A) product leadership based on product differentiation. Particular attention is paid to the sale of branded products, design, service and warranty service. B) Price leadership provided in the case of a real possibility of the enterprise to reduce the cost of production. B) Niche leadership associated with focusing product or price advantage on a narrow market segment.
2. Competitive advantage can be achieved based on the analysis of competitive forces using the model of competitive forces proposed by M. Porter
3. Possible strategies for achieving and maintaining the competitive advantage of an enterprise in the market are presented in the matrix of competitive advantages
2. Marketing management at the functional level (market segmentation, selection of target segments, positioning and repositioning, development of a marketing mix) and instrumental level (management of goods, price, distribution channels and communication marketing tools).
Functional marketing strategies are the main marketing strategies that allow an enterprise to select target markets and develop a set of marketing activities specifically for them.
There are three areas of marketing strategies at the functional level:
1) Strategies market segmentation(allow you to select market segments segmented according to various criteria). There are three areas:
strategic segmentation;
product segmentation;
competitive segmentation.
The basis of strategic segmentation is the allocation of strategic business zones (SHZ) at the corporate level, as a result of which the basic markets in which the enterprise intends to operate are determined.
Strategic segmentation allows you to ensure the economic, technological and strategic growth of the enterprise.
2) Strategies target market form a marketing mix that provides the enterprise with a solution to the problems of increasing sales, achieving a certain market share and forming a positive attitude towards the company's products in the selected segment. Marketing segmentation reveals the possibilities of different market segments in which the seller has to act. After that, the firm needs to decide how many segments to cover and how to determine the most profitable segments for it. A firm can use three market coverage strategies: undifferentiated marketing, differentiated marketing, and concentrated marketing. When choosing a market coverage strategy, the following factors should be considered: 1) company resources. 2) degree of homogeneity of the product. 3) stage of the product life cycle. 4) degree of market homogeneity. 5) competitor marketing strategies. You should choose a segment that is attractive not only in itself, but for work in which the company has the necessary business prerequisites.
3) Positioning strategies(make it possible to find an attractive position of the company's products in the selected market segment relative to competitors' products in the eyes of potential consumers). Taking into account the positions occupied by competitors, what place can the company claim? She has two possible paths. The first is to release a product similar to one of the competitors and start fighting for market share. The second, most tempting way is to develop your own product (service), which is not yet on the market - a large high-speed model. The firm will win over all consumers.
Marketing mix A set of controllable marketing variables that a firm uses in combination to elicit a desired response from its target market. The marketing mix is everything a firm can do to influence the demand for its product. Numerous opportunities can be grouped into four main groups: product, price, methods of distribution and promotion.
The third direction in the classification of marketing strategies is the division of marketing strategies based on ways to increase the effectiveness of marketing efforts. This group is called by some authors. instrumental marketing strategies, allowing the company to choose how best to use the individual components of the marketing mix in the target market. Among them are distinguished:
product strategies that ensure that the range and quality of the company's goods correspond to the utility expected from them by potential consumers in the target market;
pricing strategies to convey information about the value of the product to consumers;
distribution strategies that make it possible for consumers to organize the availability of the company's goods at the right time, in the right place;
promotion strategies that help inform consumers about the beneficial properties of all elements of the marketing mix.
All marketing tasks that the company decides at the corporate level can be divided into the following groups: 1. Definition of the company's mission. 2.selection of SHE 3.assessment of the current situation of SHE and determination of goals and alternatives for the development of SHE 4.formation of a portfolio of products and markets for SHE.
In the structure of the tasks to be solved at the corporate level, there is a separate formation of marketing strategies. Strategies at the corporate level determine the way to interact with the market and harmonize its potential. They are aimed at expanding and creating new areas of business. activities of the enterprise, to a deeper study of the needs of consumers and the search for ways to most effectively meet them.
The role of the corporate mission (fig.):
corporate mission
vision of the goal
General business strategy
· Str-I funkt.divisions
1) the formation of a corporate mission forces the management of the enterprise to reconsider the factors underlying its activities;
2) understanding the corporate mission helps to get a broad panorama of the business;
3) corporate mission is of great importance for communication both within the organization and outside.
Options, cat. must match the corporate mission:
1) The mission should be expressed in relatively simple definitions and in a form that is easy to understand; 2) the mission should be based on the task of satisfying the interests and needs of consumers; 3) there should be a clear answer why consumers will buy the goods of this and not another corporation.
5. Marketing strategies of the enterprise at the corporate level (growth strategies, portfolio strategies)
At the corporate level, there are three groups of marketing strategies: portfolio, growth strategies and competitive. All of them are formed on the basis of the use of individual brand-x models that allow you to present the activities of the enterprise and analyze its position in the market in the structure of ODA-x indicators, har-x main. elements such as the enterprise and its product, the consumer and competitors operating in the market.
Portfolio Strategies e.g. on the form of the most effective combination of SCHE in the structure of the enterprise. Portfolio analysis presents in a matrix form the results of research into individual areas of the enterprise's activities and allows you to assess the possibilities of their growth and development.
Main portfolio models:
-assortment analysis model (matrix of the Boston Consulting Group BKG) evaluates the existing range. The policy of the enterprise (the analysis is carried out in the structure of indicators of market share and growth rates of the industry).
"Stars" - maintaining leadership, "cash cows" - maximizing profits, "Difficult children" - investing and selective development, "Dogs" - leaving the market or low activity;
-model G-and-McKinsey allows for a comprehensive analysis of the position of the enterprise in the market, firstly, in the structure of the characteristics of the enterprise (indicator - the competitive status of the company), and secondly, the target group of buyers (market) with which it currently works (attractiveness of the market). It is a modification of the BCG model.
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- pinning model, which allows to identify the ratio of the size of the market (its capacity) and the share occupied by the enterprise on it;
-commitment model, which makes it possible to assess the depth of penetration of competing firms into the market (the assessment is carried out in the structure of an indicator of the competitiveness of an enterprise in relation to its market share)
Potential leader - high concurrency of the offered product/service, but a small market share;
Today's leader is a high show-le conk-stee with a large market share;
Little-known enterprises - the quality of which does not suit consumers, low market share, a small market share;
A serious competitor is enterprises that have a high share of consumers of goods / services, but their quality does not completely satisfy consumers, because the conk-sti is low;
-buyer/seller model evaluates the existing pricing policy and prospects for increasing/decreasing the cost of certain types of goods/services (an enterprise is assessed in the structure of the profitability indicator of investments invested in the development of a product/service and the ratio of its price and quality)
The profitability indicator is determined by the following overview:
ROI (return on investment) = income from the sale of the product / investment in the product.
There are several possible solutions to the problem here:
The best cost of a service is its minimum cost; below the average cost, equal to the average amount, or equal to the amount that the buyer is willing to pay for it.
Growth Strategies belong to the group of strategies that allow the enterprise or its individual agricultural enterprises to make the right decision regarding their development. There are 3 possible directions for growth:
Organic growth, characterized by development at the expense of the enterprise's own resources;
Integrated growth characterized by the acquisition of other businesses (vertical/horizontal integration);
Diversified growth, characterized by diversification into other areas of activity.
Growth Strategies: Ansoff matrices, external acquisitions matrix, new BCG matrix.
Ansoff matrix. To identify the opportunities for intensive growth, I. Ansoff suggested using a convenient technique called the “network of product and market development”.
The choice of strategy depends on the degree of market saturation and the company's ability to constantly update production. Two or more strategies may be combined.
External Acquisition Matrix represents the dependence of 2 parameters: area of activity and type of strategy, allows you to develop a company's line of conduct for possible acquisitions. It allows you to more accurately determine the place of the enterprise in the structure of its production chain, as well as determine those external market development opportunities through which the company's potential can be realized.
New BCG matrix allows you to make strategic decisions based on two indicators: the effect of costs (profit) and the effect of volume differentiation. The cost-to-profit effect is based on the experience curve, the product differentiation effect is based on the fact that the product must undergo constant changes.
Specialized activity is based on the strong effect of both components (the company makes a profit by increasing the output of standardized products and at the same time differentiating the design, design, ergonomics, i.e. the appearance of products).
The strategy of concentrated activity takes into account the high effect of costs (volume) with a low level of the effect of product differentiation.
In the area of fragmented activities, the strategy takes into account the possibility of a strong differentiation effect (used at the initial level of production, potentially unpromising products, or in the case of developing highly differentiated products.
The way out of a hopeless situation lies in changing the nature of the enterprise's activities, developing new directions.
Competitive strategies at the corporate level pursue the goal of providing a competitive advantage of the enterprise in the market relative to competing firms. Competitive advantage- these are the characteristics of the market activity of an enterprise that create a definite superiority over competitors. Opportunities to achieve competitiveness are determined on the basis of an analysis of competitive forces. The model of competitive forces proposed by M. Porter allows enterprises to know and skillfully use some of the rules of competition.
Competition among existing companies is aimed at achieving a more advantageous position in the market. It is necessary to take into account the traditional actions of competitors (changes in advertising, assortment, packaging). It is also necessary to foresee possible changes in the intensity of competition associated with the new situation on the market, the active actions of competitors (the desire to become a leader).
The competitive advantage of an enterprise can be achieved in three main ways.
Product leadership is based on the policy of product differentiation. The focus is on improvement of goods, by giving them greater consumer utility, i.e. all parameters that are included in the company conc-sti parameter . Main goal- this is an increase in the value of a product for consumers, which is accompanied by the fact that he is ready to pay a higher price for the product he needs.
The combination of high price and high price creates "market power" of the product. It protects the company from competitors, ensures the stability of the market position. Marketing challenge at the same time, it consists in constantly monitoring consumer preferences, controlling their “value”, as well as the lifetime of the differentiation element corresponding to this value.
Price leadership ob-Xia on the basis of the ability of the enterprise to reduce the cost of production. Prospect plays a dominant role. Particular attention is paid to investment stability, product standards, cost management, cost control, etc. Niche leadership associated with focusing product or price advantage on a narrow market segment.
Possible strategies for achieving and maintaining the competitive advantage of an enterprise in the market are presented in the matrix of competitive advantages. The company will determine this for each prospective SHP.
6.. Analysis of the current situation of SHP. Strategic business units. Integrated use of marketing models (competitive strategies.).
at the corporate level:-analysis of the enterprise; assessment of the causes of low (high) efficiency of work; formulation of strategic goals and alternatives of the company;
There are three groups of brand strategies at the corporate level: portfolio strategies; growth strategies; competitive strategies.
Strategic business unit (SHE) is an independent division of the enterprise, responsible for a separate product range focused on a specific market, with a manager who is endowed with full responsibility for integrating all functions into a strategy.
Each SHE has specific target market; certain assortment group of products; control over their resources; own strategy; clearly defined competitors in the market; a clear distinctive advantage of the product relative to its main competitors.
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The marketing goal of each SCHE there should be a focus on consumers and the development of such a marketing program that would encourage consumers to purchase the service of this particular enterprise, and not its competitors. It is generally accepted that CXE marketing is a collection of 5 basic subsystems, sequentially interconnected:
I-> SVP-> KM-> O-.> K
Where I is a study of the market for goods and services; SVP - segmentation, selection, positioning; CM - marketing complex (a set of main components: product, price, methods of distribution of goods and services, promotion methods); O - provision; K - control (obtaining feedback, evaluating the results, reviewing and improving the SVP strategy and CM tactics).
The basis of strategic planning of the company's activities is strategic marketing. It can be represented as the following sequence of actions:
Definition of strategic economic units (SHE);
Setting marketing goals;
Comprehensive analysis of the situation for SHE (analysis of the environment of marketing, an-z activities of the enterprise);
Development of a strategic marketing plan;
Development of marketing tactics.
Structure model for analyzing the current position (ATP) of an enterprise in the market of goods and services:
ATP \u003d (K, P, E, PPR, D, ROI / ROS) (1)
K - competitiveness of the PRN (product-market direction); P - the attractiveness of the PRN; E - market capacity; PPR - market growth prospects; D - market share; ROI / ROS - return on investment / return on sales.
In the structure of marketing models, the following two groups of ATP models can be distinguished:
Models of the first level (ATP I), which are used to calculate individual indicators (conk-sti indicator, market capacity, market attractiveness, etc.);
Models of the second level (ATP II), which allow for a comprehensive assessment of several indicators (in terms of market attractiveness and product concurrency, market capacity and market share occupied by the company, etc.).
ATP I models are not universal for all areas of activity. The inclusion of one or another model in the analysis complex depends on which of the methods for calculating individual indicators included in the complex models of ATP II is more effective, taking into account the specifics of the conducted MI.
Models of ATP II are universal for all areas of activity.
ATP includes the following steps:
1 step. Use the G-and-McKinsey matrix. For all types of SHP, indicators of conk-sti and attraction are calculated. They allow you to determine:
Is this or that SHP competitive;
According to what positions of the conk-sti indicator does the enterprise lose to the main competitors.
2 step. The matrix "Reinforcement" is used. For all types of PRN, indicators of capacity (or market potential) and market shares are calculated. It allows you to visually assess (in units of rubles) the market capacity and correlate it with the possibilities of own production and the prospects for increasing sales volumes, comparing the market capacity and the market shares occupied by competing enterprises.
3 step. The model "Commitment" is used, which determines the commitment of buyers of enterprises and the goods and services they produce in the form of a comparison of the company's concurrency index with its market share.
Step 4. Uses the BCG matrix. It allows you to correlate the growth rate of the industry or sales of goods / services with the market share occupied by the enterprise. At the same time, the zone of low growth rate is understood as the growth rate of the industry below 1. By building the BCG model, we got an idea of the position of the assortment produced by the enterprise in order to form preliminary conclusions about which agricultural enterprises are promising and which are not in terms of market growth rates and their share in total sales volume.
Step 5. Uses the "Buyer / Seller" matrix, which allows not only to determine the level of profitability, but also to correlate it with the assessment by consumers of such an important indicator as the "price / quality" ratio of the sale of goods / services, shows the possibility of raising prices in case of low profitability of agricultural enterprises, at the same time, the price / quality ratio does not worsen.
Step 6 Construction of the Model: a matrix of combinations of subjective assessment by the person making the decision on SHP and the results of the assessment of SHP using a set of models. This step allows you to correlate the objective and subjective assessments of SHP.
7. Marketing management at the functional level. Strategic Marketing: General Provisions
At the functional level marketing strategies are developed that allow the company to select target markets and develop a set of marketing efforts for them. The task of strategic marketing includes market segmentation, which includes the selection of target markets for the goods / services of the enterprise, the selection of appropriate market segments and the positioning of goods and services in selected market segments. To do this, the marketing service of the enterprise must determine the basic principles for identifying target market segments, with the help of which target segments are described, the main characteristics of goods / services are formed, arising from the requirements and selected target market segments. The latter form the basis for positioning the company's goods/services in a particular market segment.
It should be noted that the initial information for solving the problem of strategic marketing is the results obtained in the hodge of solving the first three groups of problems of the algorithm (corporate level - mission, goals, tasks; functional level - strategic marketing; instrumental level - tactical level). Market segmentation, positioning of products / services is carried out on the basis of the strategic goals that the company has formulated for itself.
8. Marketing management at the functional level. Buying behavior and models of its presentation. Market segmentation, segmentation models
Market segmentation- this is a division of the market into sections of groups of buyers according to various criteria (characteristics of consumers, purchase motives, distribution channels, forms of sale, market geography, competitors, etc.). segments differ from each other in the nature of consumer demand and in their response to the marketing efforts of the enterprise.
The need for segmentation is determined by market pressure (e.g. growth - the complication of segmentation models, e. recession - the collapse of segments, as consumers move to a lower level of satisfaction of their needs).
Market segmentation methods:
1) Segmentation method by benefits based on the consumer behavior model. It is planned to pass in sequence 3 stages:
1.determining the benefits that interest consumers and assessing their importance;
2.determining differences in lifestyle, grouping consumers according to these estimates;
3. Determination of whether the benefit segments contain different perceptions of the product and competing brands.
The focus is on the benefits that the consumer seeks from the product, they determine the perception and evaluation of alternatives.
2) Method for constructing a segmentation grid used at the macro-segmentation level to identify underlying markets. A combination of variables characterizing the functions of consumers and technologies is considered. Based on the significance analysis, the main segments are identified that give the highest percentage of preferences.
3) Multivariate classification method. The essence lies in the simultaneous multidimensional (automatic) classification of signs of consumer behavior. It is based on assumptions: people who are similar to each other in a number of ways (demographic, social-ec-x, psychographic) are united into one type of people. The degree of similarity in people belonging to the same type should be higher than the degree of similarity in people belonging to different types.
4) Grouping method with It consists in a sequential breakdown of the totality of objects into groups according to the most significant features. In this case, one of the features stands out as a backbone. Subgroups are formed in which the significance of this feature is much higher than in the entire set of potential consumers of this product.
5) Method of functional maps involves a "double" segmentation: by products and by consumers. Such cards can be single-factor and multi-factor.
What segment is this product designed for and what are its functions. parameters correspond to the needs of consumers.
The basis for the selection of any segment market is its attractiveness. The market segment should be homogeneous in terms of response to marketing efforts.
Segment requirements:-capacity; -availability; -sustainability; -profitability; -compatibility; -efficiency; -security.
The evaluation of the attractiveness of the segment is the result of determining the attractiveness of the market, the con-STI of the product, as well as other indicators in the structure of the models.
The segment must be capacious and measurable, since it is necessary to determine its real capacity and growth potential.
Availability, as a characteristic of the possibility of building an adequate sales network, using tools to promote and stimulate sales, is one of the most important parameters in assessing the choice of a segment.
Grade sustainability The group is determined through the time and form of its existence in a form corresponding to the distinguished features of segmentation.
Profitability estimated through the rate of return, ROI, etc.
An important characteristic yavl. compatibility segment with markets currently occupied by competitors, how they will respond to our company's efforts to promote the product.
Efficiency- how all the structures of the enterprise ready to work in the selected segment, whether the potential will be fully realized.
Correct calculation of the following 2 indicators most often allows an enterprise to select a segment:
-potential demand- the maximum possible amount of demand that can be presented to consumers (it is necessary to measure: the size of the potential group, the potential number of sales in natural units and in value terms);
-real demand- the amount of the actual sale of goods for a certain period, expressed in physical terms.
the stimulus-response model shows how marketing and environmental stimuli penetrate the minds of buyers and cause a specific reaction to a purchase.
The task of marketers is to identify the relationship between marketing incentives and the response of buyers to them. (how do buyer characteristics influence purchases? how do buyers make purchasing decisions?).
Their purchases are influenced by cultural, social, personal and psychological factors. Most factors are beyond the control of market participants. Kotler offered a detailed model of the principles of segmentation of end-user markets.
Segmentation principles:
Geographic - region, county, city, density, climate;
Demographic - age, gender, family size, life cycle stages of the family, income level;
Psychographic - social class, lifestyle, personal type.
Behavioral - acquisition style, buyer status, desired benefits, degree of perception, attitude.
Geographic principle: the enterprise chooses: either to concentrate activity on one or several geographic segments, or to act simultaneously in all segments, not paying attention to differences in the needs and requirements of customers due to their geographical location.
Demographic Principles personal order: with age, changes occur in the range and nomenclature of purchased goods and services. It is necessary to determine the target characteristics of the family and develop products corresponding to the interests and targeted marketing plans.
Psychographic principle: the type of occupation of a person influences the character of the purchased goods. Market participants tend to identify occupational groups whose members show an increased interest in its goods and services.
Motive (motivation)- a need that has become so urgent that it forces a person to look for ways to satisfy it.
- 1. Creation of a system of relations with interested groups of the enterprise.
- 2. Definition of the corporate mission of the enterprise.
- 3. Creation of a balanced system of goals and indicators of the degree of their achievement.
- 4. Definition of the SBU of the enterprise.
- 5. Allocation of resources between SBUs.
The enterprise has an economic portfolio consisting of several SBUs. SBUs differ both in terms of potential and current financial parameters. Enterprise management needs to rationally allocate resources between SBUs. The decision on the allocation of resources is preceded by an analysis of the economic portfolio of the enterprise according to two complex indicators: the attractiveness of the SBU market and the competitiveness of the SBU.
The complex indicator "Attractiveness of the SBU market" includes the following partial indicators: market capacity, growth prospects, sharpness of competition, profitability, level of state regulation, sensitivity to general economic fluctuations.
The complex indicator "Competitiveness of the SBU" includes: the market share of the SBU, profitability, competitiveness of the marketing complex, organizational flexibility, and innovative potential.
When analyzing the business portfolio of an enterprise, it is necessary to:
- 1. identify trends in the development of the SBU in order to present opportunities and threats in the dynamics of the life cycle;
- 2. assess the balance of the portfolio, since in the long term the company needs to maintain a balance between SBUs that generate income and SBUs that require investment;
- 3. Determine the strategic objectives for each SBU (for example, star - market expansion; cash cow - maintaining sales levels).
The principle of portfolio analysis was proposed by Peter Drucker, who found that most goods, as well as their markets, can be divided into six main types.
- 1) Tomorrow's breadwinners are new goods that are costly to produce today but will be profitable in the future.
- 2) Today's breadwinners are goods that provide most of the profits of the enterprise.
- 3) Intermediate category - products that can show good results if they are radically transformed.
- 4) Goods of yesterday - goods that in the past occupied leading positions, but are losing their leadership.
- 5) Trailing behind - goods that will never reach the planned sales level, unless cataclysms occur.
- 6) Fiasco - goods that should have been liquidated long ago.
This principle is embedded in modern methods of analyzing the economic portfolio of an enterprise.
The main methods of analysis of the economic portfolio of the enterprise.
1. BCG growth/market share matrix (developed in the early 70s of the 20th century.)
Using the BCG matrix, the economic portfolio of an enterprise is analyzed by two variables: "Market growth rate" and "Relative market share" Fig.10.
Relative market share (competitor share/SBU share).
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Difficult child. |
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Milch cow |
Fig.10. BCG matrix.
At the same time, the “Market Growth Rate” characterizes the attractiveness of the SBU market for the enterprise, and the “Relative Market Share” characterizes the competitiveness of the SBU. It is believed that the high market share of SBU, firstly, means the advantage of SBU over competitors in terms of costs, which follows from the "experience curve". Secondly, a high market share means a high popularity of SBU products among buyers, which potentially leads to an increase in profits.
The matrix consists of 4 quadrants.
- 1. Cash cows (today's breadwinners) - SBUs (products) with a high share in slow-growing markets. Their market share is high, hence they are highly profitable. These SBUs do not need any special investment. Therefore, Cash Cows make a major contribution to the accumulation of resources for the development of SBUs in rapidly growing markets.
- 2. Stars (tomorrow's breadwinners) are leaders in fast growing markets. Considered as a priority direction for investing resources.
- 3. Difficult children (intermediate category) - low share in fast growing markets.
- 4. Dogs - low share in slow growing markets, or shrinking markets.
Disadvantages of the BCG matrix.
- § market growth rates do not always reflect true business prospects, since even a rapidly growing market can become oversaturated with goods, focused on low prices, and as a result, SBU profits may decrease;
- § market share does not adequately reflect the competitiveness of SBU;
- § this model assumes that SBUs are completely autonomous, however, if two divisions have close production or marketing ties, then the elimination of the dog can lead to a weakening of the star's position;
- § this model is static;
- § This model is applicable only in a growing economy.
- 2. McKinsey Combined Portfolio Model. (designed to overcome the limitations of the BCG model).
The considered method allows to analyze both existing and new (potential) markets of the SBU of the enterprise according to two complex indicators - the attractiveness of the market and the competitiveness of the enterprise.
The attractiveness of the SBU market can be judged by the following variables: total market capacity (potential), key segment capacity (potential), annual growth rate of the overall market, annual growth rate of key segments, probability of further market growth, demand sensitivity to price, demand sensitivity to purely marketing (branding, service, distribution) factors, seasonality, cyclicality, market power of suppliers, market power of buyers, competitor strategies (competitive advantages), the likelihood of new competitors, the danger of substitutes, entry barriers to the market, profitability, public attitudes and social trends, laws and government regulation, pressure from influential groups and authorities.
The competitiveness (current and future) of an enterprise can be judged by: the dynamics of the enterprise's market share; dynamics of profitability; technical and technological equipment; marketing, R&D and production opportunities in the field of innovation; quality; price; distribution; service; image.
The McKinsey model describes the attractiveness of the market and the competitiveness of the enterprise using a 3/3 matrix (Fig. 11).
High. Average. Low.
Market attractiveness
Fig.11. Combined McKinsey Model
Comprehensive indicators: market attractiveness and competitiveness (strategic potential) can be calculated using the weighted average method.
- 1. The position is the best. The goal is to expand the market and strengthen the position of the SBU on it.
- 2. Goal - growth in line with the expansion of the market through additional investment.
- 3. Over time, the position of the SBU may worsen. Investments are needed to increase the competitiveness of the SBU.
- 4. The goal is the generation of funds (SBU should provide profit and not require investments).
- 5. The goal is cautious development, as SBE does not have a strong position in a market that is not very attractive.
- 6. The goal is to divide the SBU into two parts, one part receives priority in investments, and the other loses them altogether.
- 7. The goal is the gradual removal of the SBU (gradual switching of resources to other directions).
- 8. Similarly with the 7th position.
- 9. The goal is to remove the SBU.
The advantage of the combined portfolio model is that, unlike the BCG model, it takes into account not two, but many factors that determine the strengths and weaknesses of the enterprise, its opportunities and threats in the future. Therefore, the combined portfolio model allows you to better assess the current situation of the SBU and outline the ways for the development of the enterprise.
Flaws.
- § The complexity of the model.
- § Subjective assessments and, consequently, ambiguity of the results.
As a result of the analysis of these models, it can be concluded that the combined model is more advanced, since it allows not only to evaluate the existing economic portfolio of the enterprise, but also possible ways to increase it (development of new markets).
6. Use of synergy.
The considered models of the economic portfolio of an enterprise do not take into account the relationship between SBUs. However, the interconnections between the SBU certainly exist and are a source of increasing the efficiency of the enterprise as a whole. Therefore, when allocating resources among SBUs, it is necessary to take into account the possibility of synergy.
Synergy means that the total result exceeds the sum of its constituent factors. That is, two SBUs acting together will achieve greater results than they are functioning autonomously.
Synergy allows the company to accelerate the introduction of innovations, increase sales, reduce production and management costs. Potential synergies exist at every link in the value chain.
Value chain - information about the need, R&D, logistics, production, distribution, marketing reinforcement. Examples of how to use synergy: joint R&D department, centralized training activities, joint marketing research, information and knowledge sharing, joint purchasing, etc.
7. Planning a competitive strategy.
Planning a competitive strategy is preceded by a study of the competitive situation in the industry in which the company operates. The study is conducted from the position of profitability (attractiveness) of the industry for the enterprise.
Research objectives.
- 1. Determine the current state of the industry.
- 2. Determine the prospects for the development of the industry.
- 3. Assess the comparative competitiveness of the enterprise.
- 4. Determine the directions for creating and increasing the competitive advantages of the enterprise, in accordance with the development of the industry and its own capabilities.
- 5. Determine the overall competitive strategy of the enterprise.
To solve the 1st and 2nd, you can use Porter's industry model (Fig. 12).
Porter's model highlights the factors that determine the average profit of the industry. The ability of an enterprise to make a profit above the current level depends on its competitive advantages, which, in turn, are determined by business opportunities, that is, the development opportunities of the industry and, in accordance with them, the capabilities of the enterprise.
An assessment of the comparative competitiveness of an enterprise can be carried out according to the following indicators: profitability, market share, marketing mix. Based on the results of assessing the competitiveness of the enterprise, options for creating and developing competitive advantages are selected.
Rice. 12. Porter model.
Topic 3. Marketing management at the corporate, functional and instrumental levels
Plan:
1. Marketing management at various levels of the company
2. Analysis of the economic activity of the company.
3. Development of company growth strategies
1. Marketing management at various levels of the company.
Marketing strategies are mode of action to achieve marketing goals. There are marketing strategies developed by the enterprise at three levels:
Corporate;
functional;
Instrumental.
Corporate strategies marketing determine the way to interact with the market and harmonize the potential of the enterprise with its requirements. They are aimed at solving problems related to the process of increasing the volume of entrepreneurial activity, efforts to meet market demand, the creation of new areas of activity, stimulating the initiative and creativity of enterprise employees to better understand the needs and meet consumer needs, etc. Corporate strategies determine ways to better use of enterprise resources to meet the needs of the market.
There are three groups of marketing strategies at the corporate level:
1. Portfolio strategies make it possible to effectively address the issues of managing various areas of an enterprise's activity in terms of their place and role in meeting the needs of the market and investing in each of the areas.
2. Growth strategies provide an opportunity to answer the questions in which direction the company should develop in order to better meet the requirements of the market, as well as whether there are enough own resources for this or whether it is necessary to go for external acquisitions and diversify its activities.
3. Competitive strategies determine how it is possible to provide an enterprise with competitive advantages in the market in terms of greater attraction of potential consumers and what policy to choose in relation to competitors.
Functional Marketing Strategies- are the main marketing strategies that allow the company to select target markets and develop a set of marketing efforts specifically for them.
There are three areas of marketing strategies at the functional level:
1. Market segmentation strategies allow an enterprise to select market segments that are segmented according to various criteria.
2. Positioning strategies make it possible to find an attractive position for the company's products in the selected market segment relative to competitors' products in the eyes of potential consumers.
3. The marketing mix strategy forms a marketing mix that provides the enterprise with a solution to the problems of increasing sales, achieving a certain market share and forming a positive consumer attitude towards the company's products in the selected segment.
Instrumental Marketing Strategies allow the enterprise to choose how best to use the individual components in the marketing mix to increase the effectiveness of marketing efforts in the target market. Accordingly, four groups of marketing strategies can be represented at the instrumental level:
1. Product strategies ensure that the range and quality of the company's products correspond to the utility expected from them by potential consumers in the target market.
2. Pricing strategies allow you to bring information about the value of the product to consumers.
3. Distribution strategies make it possible to organize for consumers the availability of the company's goods "at the right time and in the right place."
4. Promotion strategies inform consumers about the beneficial properties of all elements of the marketing mix.
2. Analysis of the economic activity of the company.
Marketing practice considers a "portfolio" as a set of, as a rule, independent business units, strategic units of one company, firm (by analogy with the placement of capital in the financial sector).
"Portfolio Analysis"("portfolio analysis") allows you to present in a matrix form the results of a study of the activities of the enterprise in order to determine their subsequent growth and increase the profitability of its strategic units. At the same time, production growth is determined by the development of demand and sales, which leads to a decrease in resource costs per unit of output. Growth is also associated with the stages of the life cycle of goods on the market. As for profitability, studies (PIMS-project) show that it is significantly related to the market share occupied by the enterprise.
"Portfolio Strategies"- these are ways of distributing limited resources between the business units of an enterprise using criteria for the attractiveness of market segments and the potential of each business unit.
Enterprise resource management based on the choice of economic areas of market activity is carried out using:
BCG matrices; matrices J. Mackenzie.
In the most general form, they are based on a combination of assessments of marketing opportunities and the internal potential of the enterprise (its business units).
Developed in the late 1960s by the Boston Consulting Group (BCG), the matrix is a particular manifestation of the overall portfolio approach. Marketing growth opportunities are indicated by indicators of the rate of change in demand for the company's products as indicators of market attractiveness. Internal potential as an indicator of competitiveness and profitability is presented in the BCG matrix as a relative market share of an enterprise (a business unit in a market segment) compared to its main competitors
Fig.1. BCG matrix
Demand growth rates are calculated according to the sales of a particular product in a particular market segment. For the demand growth rate axis, the baseline separating high and low growth demand could be the rate at which the product is sold in the market, or a weighted average of the growth rate of demand across the different market segments where the business operates.
Market share is determined in relation to the most dangerous competitors or to the market leader. For the market share axis, the dividing line passes through "I". If the ratio of the share of the enterprise to the share of competitors is below 1, then it is low. If more than 1, then the share of the enterprise is high.
The two-dimensional matrix BKG "growth / share" is used mainly to assess the choice of strategic areas for the development of an enterprise and assess the investment needs experienced by individual business areas (products, markets, divisions). Each of the four quadrants describes a significantly different one. a situation that requires a separate approach in terms of both capital investment and the development of a marketing strategy. Strategies are possible:
"Stars" - maintaining leadership;
"Cash cows" - getting the maximum profit;
"Difficult Children" - investment and selective development;
"Dogs" - leaving the market or low activity.
The task is to ensure the strategic balance of the portfolio by developing economic zones that can provide free cash, and zones that ensure the long-term strategic interests of the enterprise.
In practice, the redistribution of resources between economic areas often leads to conflicts. So, the manager of "Dogs" will strive to hold on, "Cash Cows" - to be indignant, and "Difficult Children" - to be shy, etc.
The real usefulness of the matrix lies in the fact that its use allows you to determine the position of the enterprise as part of a single portfolio, structure problems, and generate promising strategies. Fast-growing destinations need capital investment, while slow-growing destinations have a surplus of funds. You can calculate the share of each direction in the volume of sales and the amount of profit. The advantage of the BCG matrix is that it uses quantitatively measured indicators, it is visual and expressive.
At the same time, the use of the matrix is limited, since it gives results only in relation to stable conditions and for a limited range of indicators, moreover, in industries with mass production, where certain patterns of development are manifested. In addition, the conclusions from the analysis of the "portfolio" provide a general orientation that requires further clarification. For example, it is not possible to evaluate zones that are in the middle position, although in practice this is often required. Outside of the analysis are such indicators as the instability of the situation, marketing costs, product quality, investment intensity, etc.
G-I-Mackenzie Matrix
More opportunities for choosing strategic marketing decisions at the corporate level are provided by the multidimensional matrix of G-I-Mackenzie (“attractiveness of the market / strategic position of the enterprise”). It allows you to make more differentiated strategic marketing decisions on the effective use of the potential of the enterprise, depending on the various levels of market attractiveness.
This matrix was proposed by McKinsey, having improved the BCG matrix during the implementation of a project commissioned by General Electric. (Hence its name: G-I-Mackenzie.) It significantly increases the number of factors involved in the assessment, covers the average level of economic zones. Makes it possible to use it in conditions of unstable development.
Strategic position
Rice. 2. Matrix J. Mackenzie
Concept of functional marketing
Marketing is classified according to various parameters: by geographical characteristics, by field of activity, by type of product, by socio-economic gradation, etc. In particular, according to the degree of marketing development, there are three types:
- distribution marketing (this is the trading activity of an enterprise, which includes sales, sales, logistics and advertising);
- managerial marketing (the concept of managing the development, production and sale of goods, in which the basis for decision-making is market information);
- functional marketing.
Definition 1
Functional marketing is understood as a set of organizational and commercial functions of a company that are associated with production, sales of products, market research, pricing and product policy, as well as sales promotion.
Many studies prove that in some cases, in particular, in the production of industrial products, consumer marketing tools are not used. For such products, functional marketing is more suitable.
Functional marketing includes:
- study of the functions of products and the need for it;
- setting tasks and conditions for their solution and implementation;
- identification of the degree of satisfaction of the real need by competing companies;
- defining a segment for new products;
- identification of requirements for the quality of production, for the design of the product, i.e. creating a product idea.
The main functions of marketing in the company
Definition 2
Marketing functions - separate types, directions of marketing activities that can function independently.
Marketing as a market concept of management and sales performs four groups of functions:
- analytical;
- production;
- marketing;
- management and control.
The first function includes market research, i.e. regular collection of information about market conditions, consumer research, study of the structure of companies (buying firms, competing firms, intermediary firms, supplier firms), studying the product structure, as well as assessing the internal environment of the organization.
The second function is aimed at organizing the production of new products, developing new technologies, which is a competitive advantage and a success factor. This leads to a monopoly position of the company in the market and the possibility of obtaining high profits. Also, the production function contributes to the organization of logistics, namely the purchase of the necessary raw materials, materials and resources. In addition, this function allows you to manage the quality and competitiveness of finished goods that meet all requirements and standards.
The sales function or sales function includes:
- organization of the goods distribution system (a set of functions for processing orders, loading and unloading, forming stocks in a warehouse, storage and transportation);
- organization of service at a high level (directly affects the image of the company, attracts and retains customers, contributes to commercial success);
- conducting a product and pricing policy (an effective policy in the field of assortment formation and sales planning, the selling price of products allows us to evaluate the effectiveness of all stages of the company's production and marketing activities).
The last function is aimed at the implementation of strategic and operational planning, without which the implementation of marketing functions is impossible. It is also the information support of the marketing management system in the company, a complex of marketing communications that provides the organization with an active impact on the environment. And the last is the organization of marketing control, which is the final stage in the process of making and implementing managerial decisions.
Functional level marketing management
Marketing management is carried out at several levels: corporate, functional and instrumental. The corporate level involves the development of portfolio strategies, growth strategies and competitive strategies. Instrumental level - marketing mix management: product, price, distribution channels, promotion.
The functional level includes:
- market segmentation;
- selection of target segments;
- positioning and repositioning;
- development of a marketing mix.
Remark 1
At the functional level, marketing strategies are developed that allow the company to select target markets and develop a marketing mix for each. The marketing department must determine the basic principles for identifying target segments, the main characteristics of goods and services that meet market requirements. This serves as the basis for the subsequent positioning of the company.
At the functional level, there are three areas of marketing strategies:
- market segmentation strategies;
- target market strategies;
- positioning strategies.
The first types of strategies allow you to select parts of the market that are segmented according to various criteria. In this case, there are strategic, product and competitive segmentation.
Target market strategies create a 4P marketing mix that helps a company achieve its goals of growing sales, achieving a specific market share, and creating a favorable attitude towards the goods manufactured by the organization.
Within this group of strategies, the company can adopt the following:
- undifferentiated marketing;
- differentiated marketing;
- concentrated marketing.
The choice of a particular strategy depends on the following factors:
- the company's resources;
- degree of market homogeneity;
- stage of the product life cycle;
- degree of product homogeneity;
- marketing strategies of competing companies.
Positioning strategies allow the company to find an attractive position of products in the selected market segment in the eyes of potential buyers relative to competitors' products. In this case, the company can choose two options. First, launch a product that can be similar to competitors' products, and then compete for market share. Secondly, you can develop your own product or service, i.e. a completely new product to attract and win over its consumers.