No Marshmallows, Just Term Papers
MBA 565 – Final Exam
Professor Perry Haan
December 20, 2009
Question 1: A company’s marketing strategy can customer (i.e. you design your strategy by looking primarily at what your customers want) or competitor (i.e. you design your strategy based on the actions of your competitors) oriented. In reality, of course, companies do a little of both. For the following 4 scenarios, identify which of the two strategies should be emphasized and why:
1. A market leader in pharmaceuticals: It is best to emphasize a competitor strategy with this particular industry. Pharmaceutical companies constantly face threat of substitute products. Substitutes place limits on prices and on profits; more for less or the same value for less (i.e. generic products). If technology advances or competition increases in substitute industries, prices and profits will suffer therefore, the industry must center their marketing strategy in response to this possibility.
2. A market follower in a mature market: This strategy should be customer oriented. If hypothetically market followers occupy 20 percent of the market share they would not be in the best position to mount a challenge against a market leader. This may; if undertaken in a marketing strategy, place their 20 percentage share in jeopardy. Also, the company would not want to rock the boat but rather use their resources to build and maintain their customer relationship. The customer-centered company is in a better position to identify new opportunities and set a course that promises to deliver long-run profits. By monitoring customer’s needs, it can decide which customer groups and emerging needs are most important for them to serve; given their resources and objectives.
3. A market nicher (i.e. a company focused on a small market niche) in interior decoration of luxury homes: This type of company should emphasize the competitor marketing strategy. Nichers have three tasks: creating niches, expanding niches, and protecting...