Marketing Strategies and Decision-Making Term Paper

Pages: 2 (858 words)  ·  Style: MLA  ·  Bibliography Sources: 1  ·  File: .docx  ·  Topic: Business - Advertising

Marketing Strategies and Decision Making

Summary and Analysis of Porter

According to Michael Porter, "operational effectiveness (OE) means performing similar activities better than rivals perform them," while strategic positioning means performing different activities than one's competitors, or performing similar activities in unique ways (Porter 1996, p.62) While it might always seem to be in an organization's interest to do things cheaply and better, the question is relative -- cheaper and better than what competing organizations, and what level of product value? And what does the target customer think is better -- is the customer price-sensitive, looking for convenience, or have unique needs? What are rivals NOT providing the customer?

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Porter wrote his 1996 article when TQM, time-based competition, and benchmarking were the obsessions of American industry, as Americans strove to compete with Japanese manufactures by maximizing operational efficacy. In "the 1980s, with rivals operating far from the productivity frontier, it seemed possible to win on both cost and quality indefinitely," but without this luxury, hard strategic choices are required (Porter, 1996, p.63). Porter reminds the reader that Japanese companies often suffer low profit margins, as result of their emphasis on operations alone and insufficient concern about market segmentation. Ultimately, the "more benchmarking companies do, the more they look alike" to the consumer (Porter, 1996, p.64). Creating a successful and competitive marketing strategy is about being different (Porter, 1996, p. 64).

TOPIC: Term Paper on Marketing Strategies and Decision-Making Assignment

Take, for example, variety-based positioning, which does not mean offering more variety, necessarily. Rather, it means that the choice of product or service varieties rather than customer segments the company addresses is unique. Jiffy Lube International, for instance, has a value chain that "produces faster service at a lower cost" in contrast to standard auto repair shops that offer a wider range of services. This enables consumers to obtain oil changes from Jiffy Lube, and to go other repair shops for more complicated automotive services (Porter, 1996, p.66). A second basis for marketing positioning is that of serving most or all the needs of a particular group of customer, called "needs-based positioning," which "comes closer to traditional thinking about targeting a segment of customers" like Ikea's targeting of value-sensitive consumers (Porter, 1996, p.66).

A third and rarer basis for positioning is that of segmenting customers who are accessible in different ways, although their needs are similar to those of other customers (Porter 1996: 67). Porter calls this access-based positioning and cites Carmike Cinemas, which caters to small-town audiences as an example, and gives them value-priced movies but with less selection (and also less sophisticated offerings) a more recent example… [END OF PREVIEW] . . . READ MORE

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