Strategic Opportunity & Marketing Objectives Strategic Opportunity: Ansoff’s Strategic Opportunity Matrix is one of the most commonly used tools to determine a company’s strategic direction. It matches products with markets. The four options are listed above. Decide what the strategic direction is for your product/service. Choose one of the following and explain why you have chosen this direction for your marketing objectives. 1.Market Penetration: 2.Market Development: 3.Product development: 4.Diversification:
Market penetration Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets. Market penetration strategy is used when your business wants to achieve the following. • Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling • Secure dominance of growth markets • Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors • Increase usage by existing customers – for example by introducing loyalty schemes A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.
Market development Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets. There are many possible ways of approaching this strategy, including: • New geographical markets; for example exporting the product to a new country • New product dimensions or packaging: for example • New distribution channels • Different pricing policies to attract different customers or create new market segments
Product development Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets.
Diversification Diversification is the name given to the growth strategy where a business markets new products in new markets. This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks.
Marketing objectives need to be: §Realistic - Objectives have a chance of being met §Measurable - Quantitatively measure if the objective has been met §Time specific - By what time should the objective be met §Compared to a benchmark - The baseline against which the objective will be measured §Consistent with and indicating the priorities of the organization - Flow from the mission statement
Example Marketing Objectives: Athletic Shoes Company
To create 10% brand awareness among our target audience through educating and empowering them with sporting knowledge in the first trimester.
Sell 5000 athletic shoes before the end of the year. We will achieve this by using effective promotional mediums e.g. TV, Radio and Print media.
Obtain 15% market share within the first semester through our loyalty programs.
Be ranked top 3 in the running shoes category before the end of our financial year; we are going to achieve this by creating lasting relationships with our customers.
To increase brand awareness by 20% in the first 12 months through building relationships with schools and higher education institutions.
Sample Marketing Objectives for Morningstar Bakery
Promote the opening of Morningstar Bakery attracting 2,000 new customers by end of three months.
Inform target audience about features and benefits of our gluten free baked goods and its competitive advantage, leading to a 10 percent increase in sales from year 1 to year 2.
Attract 20% of non-gluten customer market into Morningstar Bakery by end of year one.
Sign one famous local celebrity with celiac to increase product awareness by 20% points.
To establish a working storefront for Morningstar bakery within 6 months
To develop the strong presence in the community by supporting one community social objective needed to support sales goals within 6 months.
To develop a full menu by the end of the second quarter.
Place three advertising campaigns in Gluten Free magazines within 3 months.