Last version published: 13/03/2023 11:45
Publication number: ELQ-22737-22
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Bowman's Strategy Clock Template
A pricing & marketing strategy framework template to position products & services and determine appropriate strategies.
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Bowman's Strategy Clock is a marketing model outlined in 1997 in the book "Competitive and Corporate Strategy" (https://www.amazon.fr/Competitive-Corporate-Strategy-Cliff-Bowman/dp/0256214239 ) written by two economists, Prof. Cliff Bowman, and David O. Faulkner.
Depending on a company's business objectives, the model helps marketers envision strategic positioning options for their products/ services as to offer the best competitive advantage on market. The model positions products/services on two dimensions:
- perceived value
This leads to 8 marketing strategies stemming from the reference offer (center of the clock).
1/ Focused Differentiation: Increase Price, Increase Perceived Value (1:30 o'clock)
-> Here the correlation between price and perceived value is quite clear. This strategy is the most preferred bu luxury brands, who can even try to increase price more than the perceived value (e.g.: Patek Philippe, Rolex, Rolls Royce, Ferrari...). The key here is to make products that are incredibly different from competition, but also far less accessible (high prices), to create a sense of exclusivity.
2/ Differentiation: Same Price, Increase Perceived Value (12:00 o'clock)
-> This is the favourite positions for strong brands (e.g. Apple, Starbucks, Nike, Google, Microsoft etc.). The pricing remains similar to competition, but the level of innovation and differentiation provided is incredibly high. This enables to gain market share and strong customer loyalty at a rapid rate, eliminating competition. (E.g: Apple introducing the Iphone).
3/ Hybrid: Decrease Price, Increase Perceived Value (10:30 o'clock)
-> This strategy are for businesses capable of reducing price in markets where product/service differentiation remains relatively important, possible and not too costly. (e.g: Ikea)
4/ Low Price: Decrease Price, Same Perceived Value (9:00 o'clock)
-> Low Price strategies are generally associated with business that have high production volumes, given the low-profit margins associated. Making your products cheaper than competition thanks to economies of scale enables market share gains and higher profits. (e.g. : EasyJet, Amazon Web Services, Free Mobile...)
5/ "No Frills": Decrease Price, Decrease Perceived Value (7:30 o'clock)
-> Only Price is the "possible" differentiating factor to maintain or gain market-share, products on market lack differentiation potential. This strategy is generally applicable on markets with products/services of inferior quality, with large sales volumes, were customers are essentially motivated by price. (e.g. : Toilet Paper, Milk, Dacia Cars)
6/ Loss of Market Share: Same Price, Decrease Perceived Value (6:00 o'clock)
-> This strategy can be considered as the "disaster recipe", as diminishing perceived value while keeping the same price does not make any sense. No "sensible" customer would accept such a choice. However, such a strategy can be self-imposed by quick market changes, notably by the arrival of one or more competitors, providing a differentiating perceived value at a rate that makes it practically impossible for any company to adapt. (e.g. Blackberry phones after the arrival of the iPhone).
7/ Monopoly Pricing: Increase Price, Decrease Perceived Value (4:30 o'clock)
-> When you are the only player on a market, and your objective hence becomes to maximise profits, maximising price while decreasing the value (limited options etc.), is a recipe for financial success. Customers are stuck with what the monopoly player decides. Luckily, most countries put in place policies to limit such monopolies, including imposing fines and price brackets. (e.g. Microsoft in the 90s was the only viable option on computers, and kept their prices high - this led many years later to a 1.3 billion USD fine by the European Union)
8/ Risky High Margins: Increase Price, Same Perceived value (3:00 o'clock)
-> This is a risky position to take. Indeed, increasing prices on competitive markets, while not providing extra perceived value, pushes consumers to look for alternatives. As a temporary market exit strategy to "milk the cow", it could be smart, but there is no way back.
Strategies 6 to 8 are considered destined for failure, and should not be chosen by leaders looking to maximise long term business value.
Given the success of the marketing model, I decided to build a universal template that marketers and business leaders can use to evaluate the position of their current and future strategies, as to make investment/divestment decisions on certain strategies.
By plotting the relative increase /decrease of Price or Perceived value on a graph, a company can easily have a quick picture of what has been done and needs to be done (see Excel Model).
This slide can be useful to present in board rooms to Marketing Directors or CEOs, to explain evolutions of the marketing strategy due to market changes or to adjusted business objectives.
The Best Practice is:
- an editable Microsoft PowerPoint Template Slide
- 1 attached Excel Model to plot the graph on the Clock
- with an online & offline 13 step-by-step methodology, with pedagogical illustrations for each step.
Should you have any questions on using this top tier Strategic Management Template slide and framework, you're welcome to reach out to me via Private Message.
Note: this model is a more elaborated response to Porter's Generic Strategies, which you can find a template of here:https://www.eloquens.com/tool/nN2XTgVl/strategy/competitive-advantage-strategies/porter-s-generic-strategies-matrix-template
⭐️ Bundle of 18 Strategy Consulting Frameworks (including this one): https://www.eloquens.com/tool/a7rgt4Bb/strategy/management-consulting-templates-and-frameworks/classic-strategy-frameworks-template-slides-bundle
⭐️ Bundle of 12 Strategic Planning Frameworks (including this one): https://www.eloquens.com/tool/JzrAIjAl/strategy/strategic-planning-templates-models/strategic-planning-frameworks-models-bundle
⭐️ Bundle of 23 Commercial Due-Diligence Model Templates (including this one): https://www.eloquens.com/tool/QQ2gHk3J/strategy/due-diligence-templates/m-a-mergers-acquisitions-commercial-due-diligence-cdd-models-templates-and-frameworks-bundle
⭐️ Bundle of 6 Pricing Strategy Framework Templates (including this one): https://www.eloquens.com/tool/rmzLSr1k/tim-demoures/pricing-strategy-frameworks-bundle
This Best Practice includes
1 PowerPoint Template Model + 1 Attached Excel Model + 1 Online 13 Step-by-Step Methodology
Tim Demoures offers you this Best Practice for free!
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