Marketing ManagementMarketing Management

Sabita Mishrasabita_mishra@yahoo.com

Marketing Strategy(To Create Competitive Advantage)

Tomorrow never happens by chance. It is planned. And those who are prepared, benefit the most

To succeed in a futuristic environment, one requires a strategy.

To face up to the challenges, firms need to have a strategic orientation and engage them selves in planning and implementing of marketing strategies

Challenges of strategic orientation

A •Understanding markets

B •Finding market niches

C •Product and service planning

D •Distribution

E •Managing for results

Understanding Markets

Starting point of analysis is the market and the structural changes that is taking place in the market

Gaining strategic perspective of the market requires skilful analysis of the trend and how they affect the market size and demand for the firms product

Fluctuating economy results in enhanced competition in the industry

Threats to Competition

New entrants into the market - domestic and international

Later poses a serious threat to some of the giants in the industry in the form of better ability to serve customers and offer lower prices

Threat to competition also emanates from new strategic alliances or mergers being forged by industries

These changes in the inter firm rivalry alter the structure of the industry and present new set of opportunities and threat to firms

This makes it important to take a fresh look at the market as well as long term view of the market

Finding Market Niches

As market evolves and customer needs become more defined, the marketer need to adopt a segmental approach

Careful analysis and planning prepares a marketer in carving niches in the marketplace and penetrating and protecting the company from competitive onslaughts

Today these niches are becoming more and more apparent where price, service, convenience and technology are some of the examples of niches in the market

Today's technologies enables firms to adopt mass customization strategies which can give them the benefit of niche marketing and also economies of scale

The challenge is whether the firm can identify these niches and adopt a mass customization strategy to simultaneously serve most of them without compromising on quality of price

Product and Service Planning

In this era of standardized technology, we embrace more and more undifferentiated products

The tangible difference between one brand and the other gets diminished if not eliminated and products are going to become intangibles

Basis of differentiation between one firm and the other will continue to be their offer and the challenge is not only to add value but to reinvent the clue package for the customer

This involves analysis of the customer’s perception of the firm’s brand or that of the competitor’s and the areas in which the customer is dissatisfied with the firm’s brand and the competitors

Product and Service Analysis Involves the Following

What are the services the customers are looking for and does the current product and its offerings competitively satisfy the customers

How can the brand equity be enhanced?

Is the brand positioning valid? Is the message still effective in motivating customers. In other words, will consistency in the brand positioning help strengthen the brand.

Are brand extensions possible and what are it limits

Are there new and emerging uses, use situations or users that the firm is currently not aware of.

What is the position of the competitor’s product and the brand in the life cycle

Are there any new technologies available that will add value to the product for the customer of make it convenient and also reduce current overall cost thereby helping in reducing its final price

Distribution

The success of a firm also depends upon its ability to make the product available at the right place at the right time and in right quantities

With today’s technology, distribution pattern has changed making it easier for firms to keep track of their inventory positions in different markets

Structural changes in distribution is another important factor in strategic marketing

Managing Results

With pressure on costs, price and margins, it becomes important to make effective utilization of every money spent in marketing

Effective analytical skills are required to maximize return on investments when planning marketing investment

In order to accomplish strategic analysis as highlighted by Keinchi Ohmae, strategists have to think strategically and for that it is important to have a strategic and inquisitive mind that can frame the right questions which leads to conducting an objective situation analysis

Therefore, in order to have an effective business and marketing strategy, it is important to think it through and take a strategic perspective of the market.

Strategy – Concept & Definition

One view of strategy is that it is a deliberate search for an action plan that

will develop a firm’s competitive advantage and help augment it and this

search is an

•Iterative process•Begins with the recognition with where you are, what you have now, where you want to go and how much time you have to reach there•The focus here is on competitive advantage and the assumption in this thinking is intensive inter firm rivalry within an industry and the firm’s environment being an increasingly complex one

Corporate Strategy as Defined by Kenneth R. Andrews

Strategy is the pattern of decision in a company that determines and reveals its objectives, purposes or goals, produces the principal policies and plans for achieving these goals and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers and communities…..”

Corporate Strategy

Corporate strategy can thus also be defined as:

•Having three essential elements namely goals, significant policies, major action sequences•Well thought plans to handle future scenarios where the action plans may be general or specific•As a ploy, it is a specific maneuver intended to outwit an opponent or competitor•It is a pattern visible in a stream of actions, that a firm undertakes to strengthen its position in the marketplace which is reflected in the firms behavior whether intended or not•As a matter of fact most realized strategies are a combination of intended or emergent strategies where emergent strategies are dictated by market forces and involves developing a fit between the organization and its external environment such that it is able to gain and maintain a sustainable advantage•It also involves understanding the orientation and structure of an organization along with creating a shared perspective of the environment by employees at different levels in the organizational hierarchy

Steps in Strategizing

PROBLEM DEFINITION

DATA ANALYSIS

PATTERN RECOGNITION

DESIGINIG SOLUTION

PLANNING/BLUPRINTINGING

EXECUTION AND IMPLEMENTATION

PROBLEM RESOLUTION

Criteria for Effective Strategizing • Defining goals and objectives• Thorough understanding of the problem• Understanding the orientation and structure of the market leading to an effective

fit between and organization and its external environment• Setting a time frame• Conceptualizing• Strong and committed leadership• Effective risk assessment and management• Effectively collecting relevant data• Effective data analysis and detecting patterns• Analyzing and correlating patterns• Effectively designing and formulating solutions• Effectively allocating resources to form a viable solution• Anticipate changes in the environment• Anticipating unpredictable factors and effectively planning for the predictable ones

leading to a viable solution

Criteria for Effective Strategizing• Conceptualizing it as an integrative action plan that helps in strengthening its

linkage with the external environment• Planning• Ploy and Positioning• General or specific well thought out plans to handle future scenarios• Effective maneuvering action plan to gain an edge over competition• Translate plans into actions through effective execution and implementation

leading to a visible stream of actions that a firm undertakes to gain a competitive edge over its competitors

• Anticipate emergent strategies that are dictated by market forces• Effective intended strategies that translate into action plans• Convert tactics into strategy such that short term solutions and adaptive action are

strategized into long term realignment and action plan leading to an effective solution such that what happens to be tactical today can lead to permanent solution through effective strategizing

• Formulating good policies through effective planning

Trend Analysis and Forecasting• Forecasting is a technique of anticipating future problems and events• Involves making detailed analysis of the past and the present• Provides an idea about possible events of the future• Involves both assessing the future and making provision for it• Makes planning possible where it is used as a premise for planning and

awakens management against business cycles, minimizes risks, and reveals managements weaknesses if any to face in the future

• Ensures coordination and involves joint effort of all departments in the concern, creates team spirit, unity and coordination in the efforts of the subordinates

• Facilitates contact and helps in exercising control

Importance of Forecasting

• Forecasting helps in:– Making both long and short term planning

possible– Ensures coordination– Facilitates control

Classification of Forecasting

• Classification of forecasting can be done according to space and time

• It may take the form of business or economic forecasting • It may be long or short term• Short term forecasting predicts up to a maximum of two years• Intermediate range covers three to five years• Long range projections have a minimum time span of of five

years into the future• At any given time there is only one level of industry marketing

expenditure• Market demand corresponding to this level is market forecast

Methods commonly used for long term forecasting

• Time series analysis• Correlation• Econometric modelsMost popular are time series and correlation

Time Series Analysis

• Company’s own industry and sales data from previous years

• Decomposing this time series and then estimating sales for the next time period is called time series analysis

• To use this method the marketer should have time series for ten years

Time Series Decomposition

• Additive approaches• Multiclative approaches• Sales over a period of time period as a function of trend,

cyclicality , seasonality and erratic factors• A common function form expressing it is

O = T x C x S x I• Where T = trend component, • C = Cyclical component, • S = Seasonality component and • I = Irregular or erratic factors

Aggregate approach

• Aggregate approach, sales is seen as the aggregate effect of all these variables and is symbolically depicted as

O = T + C + S + I Where • T = trend component, • C = Cyclical component, • S = Seasonality component and • I = Irregular or erratic factors

Correlation Method

• Y = f ( X1, X2, X3, …………..Xn)• Where Y = Sales in volume or monetary terms• And X1, X2, X3, …………..Xn are independent demand variables• This method is increasingly being used today• It is commonly believed today that the sale of a product is a

function of several variables like price, advertising expenditure, distribution expenditure, personal disposable income etc…

• Problems are too few observations, too much correlation among independent variables, violation of normal distribution assumptions, two way causations and emergence of new variables.

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Conclusion

Thank You!!!!