Strategic Market Analysis: Top-Down and Bottom-Up Approaches
George S. Day, 1980, 80-105
Strategic analysis of a company's market.
Type of report
Author's analysis and ideas.
To examine differences in the way corporate-level planners and marketing managers at the product level define markets and to suggest ways of integrating these two approaches to improve strategy.
Builds ideas on previous theories of market definition and illustrates points with examples.
- Corporate level managers or planners tend to view markets as arenas of profitable competition where corporate resources can be used to achieve an advantage. They are interested in strengths and weaknesses relative to competition, cost advantages of serving particular market segments, ways to exploit new technologies or other company resources, and long-term plans.
- Product-level or market managers tend to take the market as given and look for market niches where the company can be successful in the short term. They are more concerned with positioning the company's offering, targeting customer segments, and filling unmet customer needs.
- An integrated approach that balances the production and cost-oriented "topdown" approach with the customer-oriented "bottom-up" approach can yield more meaningful strategic insights into the company's markets and avoid the blind spots inherent in each approach.
- The integrated approach is useful for designing a strategic planning framework that links the traditional strategic business unit (SBU) with the narrower product-market unit (PMU).
Businesspeople who are involved in preparing and/or using strategic marketing plans. Related MSI Research
Other publications include Abell, "Competitive Market Strategies: Some Generalizations and Hypotheses," and "Alternative Strategies for Strategy Research in Marketing"; Day and Shocker, "Identifying Competitive Product-Market Boundaries: Strategic and Analytic Issues." A study by Palesy on Implementing Strategic Market Planning Systems is in progress.
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