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Developing MarketingDeveloping MarketingStrategies and PlansStrategies and Plans
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Three Vs Approach toThree Vs Approach to
MarketingMarketing
Define the value segment
Define the value segment
Define the value proposition
Define the value proposition
Define the value network
Define the value network
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Porters Value ChainPorters Value Chain
Tool for identifying ways to createTool for identifying ways to createmore customer valuemore customer value
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Porters GenericPorters Generic
StrategiesStrategiesOverall Cost Leadership
Differentiation
Focus
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BenchmarksBenchmarks
Organizationalcosts
and
performance
measures
Competitorcosts
and
performance
measures
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Core Business ProcessesCore Business Processes
Market-sensing processMarket-sensing process
New-offering realization processNew-offering realization process
Customer acquisition processCustomer acquisition process Customer relationshipCustomer relationship
management processmanagement process
Fulfillment management processFulfillment management process
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Characteristics of CoreCharacteristics of Core
CompetenciesCompetencies
A source of competitiveA source of competitive
advantageadvantage
Applications in a wide variety ofApplications in a wide variety of
marketsmarkets
Difficult to imitateDifficult to imitate
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The Strategic PlanningThe Strategic Planning
GapGap
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Ansoffs Product-MarketAnsoffs Product-Market
Expansion GridExpansion Grid
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VideoVideo
Ansoffs matrixAnsoffs matrix
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DiversificationDiversification
Concentric DiversificationConcentric Diversification
New Products( Synergy with old) New CustomersNew Products( Synergy with old) New Customers
Horizontal DiversificationHorizontal DiversificationNew Products..Current CustomersNew Products..Current Customers
Conglomerate DiversificationConglomerate Diversification
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SWOT AnalysisSWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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SWOT AnalysisSWOT Analysis
StrengthsStrengths ((InternalInternal) ) The internal competenciesThe internal competenciesof the company. What do we do well. Think noof the company. What do we do well. Think notin terms of products, but more of methods. Forin terms of products, but more of methods. For
example, Wal-mart has great inventoryexample, Wal-mart has great inventory
operations that leads to the ability to chargeoperations that leads to the ability to charge
lower prices. HUL has Mega Brandslower prices. HUL has Mega Brands
WeaknessesWeaknesses((InternalInternal) What does our) What does ourcompany not do well. Is there high employeecompany not do well. Is there high employee
turnover? Are we lacking in product design?turnover? Are we lacking in product design?Poor signal strength of Idea mobilesPoor signal strength of Idea mobiles
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SWOT AnalysisSWOT Analysis
OpportunitiesOpportunities ((ExternalExternal) What opportunities) What opportunitiesexist in the market that our company can takeexist in the market that our company can takeadvantage of. 3G spectrum, Biotechnologyadvantage of. 3G spectrum, Biotechnology
ThreatsThreats ((ExternalExternal) What events and trends in) What events and trends inthe market may threaten the way we do business.the market may threaten the way we do business.This can include the emergence of competitors,This can include the emergence of competitors,demographic changes and economic forces. Ban ondemographic changes and economic forces. Ban onPlastic Bags in DelhiPlastic Bags in Delhi
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Five Forces AnalysisFive Forces Analysis
The Five Forces Analysis allows the manager toThe Five Forces Analysis allows the manager to
discover opportunities and threats within thediscover opportunities and threats within themarket.market.
Rivalry How strong is the competition? Is itRivalry How strong is the competition? Is it
monopolistic or are there many competitors?monopolistic or are there many competitors?E.g. Pepsi-CokeE.g. Pepsi-Coke
Power of Suppliers How much influence doPower of Suppliers How much influence do
the suppliers have over business operations?the suppliers have over business operations?
Are there multiple suppliers? E.g. IntelAre there multiple suppliers? E.g. Intel
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Five Forces AnalysisFive Forces Analysis Power of Buyers How much influence do the buyersPower of Buyers How much influence do the buyers
have over the business operations? How dependant arehave over the business operations? How dependant arethey on your product?they on your product?
Threat of New Entrants How easy is it for potentialThreat of New Entrants How easy is it for potential
competitors to enter this industry? Entry of Royal Cola,competitors to enter this industry? Entry of Royal Cola,
Icelings in the marketIcelings in the market
Threat of Substitutes Are there other products that canThreat of Substitutes Are there other products that can
substitute for your product? Ex: Airplane travelsubstitute for your product? Ex: Airplane travel
replacing trains.replacing trains.
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It is aIt is a portfolio planning modelportfolio planning model which is basedwhich is based
on the observation that a companys business unitson the observation that a companys business units
can be classified in to four categories:can be classified in to four categories:
StarsStars
Question marksQuestion marks
Cash cowsCash cows
DogsDogs
It is based on the combination of marketIt is based on the combination of market
growth and market sharegrowth and market share
BCG MATRIXBCG MATRIX
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Market ShareMarket Share
Market share is the percentage of the totalMarket share is the percentage of the totalmarket that is being serviced by your company,market that is being serviced by your company,measured either in revenue terms or unit volumemeasured either in revenue terms or unit volumetermsterms..
Relative Market ShareRelative Market Share
RMS =RMS = Business unit sales this yearBusiness unit sales this year
Leading rival sales this yearLeading rival sales this year
The higher your market share, the higherThe higher your market share, the higherproportion of the market you control.proportion of the market you control.
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Market Growth RateMarket Growth Rate
Market growth is used as a measure of aMarket growth is used as a measure of amarkets attractiveness.markets attractiveness.
MGR = Individual sales - individual salesMGR = Individual sales - individual sales
this year this year Individual sales last yearIndividual sales last year
Markets experiencing high growth are onesMarkets experiencing high growth are oneswhere the total market share available iswhere the total market share available is
expanding, and theres plenty of opportunityexpanding, and theres plenty of opportunityfor everyone to make money.for everyone to make money.
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STARSSTARS
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STARSSTARSHigh growth, High marketHigh growth, High market
shareshare Stars are leaders in business.Stars are leaders in business.
They also require heavy investment, toThey also require heavy investment, to
maintain its large market share.maintain its large market share.
It leads to large amount of cashIt leads to large amount of cash
consumption and cash generation.consumption and cash generation.
Attempts should be made to hold theAttempts should be made to hold themarket share otherwise the star willmarket share otherwise the star will
become a CASH COW.become a CASH COW.
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CASH COWSCASH COWSLow growth , High market shareLow growth , High market share
They are foundation of the company and oftenThey are foundation of the company and often
the stars of yesterday.the stars of yesterday.
They generate more cash than required.They generate more cash than required.
They extract the profits by investing as little cashThey extract the profits by investing as little cashas possibleas possible
They are located in an industry that is mature,They are located in an industry that is mature,
not growing or declining.not growing or declining.
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Low growth, Low marketLow growth, Low market
shareshare Dogs are the cash traps.Dogs are the cash traps.
Dogs do not have potential to bringDogs do not have potential to bringin much cash.in much cash.
Number of dogs in the companyNumber of dogs in the company
should be minimized.should be minimized.
Business is situated at a decliningBusiness is situated at a declining
stage.stage.
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High growth , Low marketHigh growth , Low market
shareshare Most businesses start of as Question marks.Most businesses start of as Question marks.
They will absorb great amounts of cash if theThey will absorb great amounts of cash if the
market share remains unchanged, (low).market share remains unchanged, (low). Why question marks?Why question marks?
Question marks have potential to become starQuestion marks have potential to become star
and eventually cash cow but can also become aand eventually cash cow but can also become a
dog.dog.
Investments should be high for question marks.Investments should be high for question marks.
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VideoVideo
BCG MatrixBCG Matrix
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ExerciseExercise
Company : FIFACompany : FIFA
Draw its BCG MatrixDraw its BCG Matrix
Product MarketShare
Market Growth
Kaka 54% 10%
Messi 40% 25%
Villa 15% 30%
Dunga 10% 5%
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GE MatrixGE Matrix
Developed by McKinsey & Company inDeveloped by McKinsey & Company in
1970s.1970s.
GE is a model to perform businessGE is a model to perform business
portfolio analysis.portfolio analysis.GE is rated in terms of GE is rated in terms of MarketMarket
Attractiveness & Business StrengthAttractiveness & Business Strength
Enlarged & Sophisticated version ofEnlarged & Sophisticated version ofBCG.BCG.
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Classification
MarketA
ttractivene
ss
Strong Medium Weak
Low
Medium
High
Business Strength
5.00 1.002.333.67
5.00
3.67
2.33
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Annual market growth rateAnnual market growth rate
Overall market sizeOverall market size
Historical profit marginHistorical profit margin
Current size of marketCurrent size of market
Market structureMarket structure
Market rivalryMarket rivalry
Demand variabilityDemand variability
Global opportunitiesGlobal opportunities
Market AttractivenessMarket Attractiveness
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Current market shareCurrent market share
Brand imageBrand image
Brand equityBrand equity
Production capacityProduction capacity
Corporate imageCorporate imageProfit margins relative to competitorsProfit margins relative to competitors
R & D performanceR & D performance
Managerial personalManagerial personal
Promotional effectivenessPromotional effectiveness
Business StrengthBusiness Strength
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VideoVideo
The Five Competitive Forces That ShapThe Five Competitive Forces That Shap
http://videos/The%20Five%20%20Competitive%20Forces%20That%20Shape%20Strategy.mp4http://videos/The%20Five%20%20Competitive%20Forces%20That%20Shape%20Strategy.mp4http://videos/The%20Five%20%20Competitive%20Forces%20That%20Shape%20Strategy.mp48/7/2019 Session 3-4 Marketing Strategies
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PESTEL AnalysisPESTEL Analysis
A systematic way of looking at the externalA systematic way of looking at the externalfactors which potentially impact thefactors which potentially impact the
organizationorganization
PoliticalPolitical
EconomicEconomic
Socio-CulturalSocio-Cultural
TechnologyTechnology EnvironmentalEnvironmental
LegalLegal
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PESTELPESTEL
PoliticalPolitical : Global , Regional, National: Global , Regional, National
Tax PoliticsTax Politics
Labor Market PoliticsLabor Market Politics
Development in trade and industryDevelopment in trade and industry
Agricultural PoliticsAgricultural Politics
Public InterferencePublic Interference
Trade Political ConditionsTrade Political Conditions
Foreign Trade RegulationsForeign Trade Regulations
Social Welfare PoliciesSocial Welfare Policies
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PESTELPESTELEconomic :Economic :
Business cyclesBusiness cycles
Interest ratesInterest rates
Money supplyMoney supply
Inflation ratesInflation ratesUnemploymentUnemployment
Disposable incomeDisposable income
Private consumption and available incomePrivate consumption and available income
Other costsOther costs
Development of the rate of exchangeDevelopment of the rate of exchange
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PESTELPESTELSocio-CulturalSocio-Cultural
Demographic conditionsDemographic conditions
Change in values / attitudesChange in values / attitudes
Change in lifestyleChange in lifestyle
Attitudes toward work / spare timeAttitudes toward work / spare time
Education conditionsEducation conditions
Work environment conditionsWork environment conditions
Health conditionsHealth conditions
Change in income distributionChange in income distribution
Social mobilitySocial mobility ConsumerismConsumerism
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Population andPopulation and
DemographicsDemographics PopulationPopulation
growthgrowth
Population agePopulation age
mixmix Ethnic marketsEthnic markets
EducationalEducational
groupsgroups
HouseholdHousehold
patternspatterns GeographicalGeographical
shiftsshifts
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Needs and TrendsNeeds and Trends
Fad
Trend
Megatrend
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PESTELPESTEL
TechnologicalTechnological
Development in R&DDevelopment in R&D
New patents and productsNew patents and products
Knowledge tool and technique used to transform inputKnowledge tool and technique used to transform input
(Raw Material, Information) into output (Product and(Raw Material, Information) into output (Product and
Service)Service)
Speed of technology transferSpeed of technology transfer
Government spending on researchGovernment spending on research
Rates of obsolescenceRates of obsolescence
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PESTELPESTEL
EnvironmentalEnvironmental
EcologyEcology
Pollution conditionsPollution conditions Green EnergyGreen Energy
Energy conservationEnergy conservation
Waste handlingWaste handling Environmental protection lawsEnvironmental protection laws
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PESTELPESTEL
LegalLegal
Labor market legislationLabor market legislation
Product safety and approvalsProduct safety and approvals Competition lawsCompetition laws
Employment lawsEmployment laws
Product safetyProduct safety
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VideoVideo
Kotler on Marketing during EconomicKotler on Marketing during Economic
UncertaintyUncertainty
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ProjectsProjects
Groups to submit their titles/productGroups to submit their titles/product
details by this Fridaydetails by this Friday
Go for some new businesses/Go for some new businesses/
productsproducts
Explore your creativityExplore your creativity
xamp examp e
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xamp examp eMaha-BaliMaha-Bali
Current Scenario - CarrierCurrent Scenario - Carrier
ComplexitiesComplexities
Types of Bikes with respect to carriersTypes of Bikes with respect to carriers
Bikes with no carriersBikes with no carriers
Bikes with carriers an unfavorable productBikes with carriers an unfavorable product
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Bike with no carriersBike with no carriers
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Bike with no carriersBike with no carriers
There has to be a pillion rider toThere has to be a pillion rider tocarry the luggage.carry the luggage.
If hanging on handle, bike becomesIf hanging on handle, bike becomes
unstable.unstable.
A lot of difficulties for rider during theA lot of difficulties for rider during the
entire trip.entire trip.
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Bike with carriersBike with carriers
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Bike with carriersBike with carriers
Cost of accessory.Cost of accessory.
Comfort problem of the pillion rider.Comfort problem of the pillion rider.
Problems in traffic.Problems in traffic. Problems in balancing (even whenProblems in balancing (even when
not carrying any luggage).not carrying any luggage).
Unnecessary increase in weight.Unnecessary increase in weight. Unnecessary waste of spaceUnnecessary waste of space
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MahaBali Our ProductMahaBali Our Product
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Different Views of ourDifferent Views of our
ProductProduct
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Features Of Our ProductsFeatures Of Our Products Foldable shelves.Foldable shelves.
Three sides and a base for carrying purpose.Three sides and a base for carrying purpose.
Can carry 5-7 kg in each side (Overall 20 Can carry 5-7 kg in each side (Overall 20
30).30). Acts as a cushion in the absence of luggage.Acts as a cushion in the absence of luggage.
Comfortable for the pillion rider in the absenceComfortable for the pillion rider in the absence
of luggage.of luggage.
Cost effective.Cost effective.
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Benefits Of Our ProductsBenefits Of Our Products
FoldableFoldable FlexibleFlexible
InexpensiveInexpensive
Space effectiveSpace effective
Volume efficientVolume efficient Less weightLess weight
pillion rider friendlypillion rider friendly
WashableWashable
Easy to manufactureEasy to manufacture
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Target CustomersTarget Customers
Rural Markets (U.P.)Rural Markets (U.P.) Small TownSmall Town
Lower middle classLower middle class
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Inventory requirements andInventory requirements and
Production Costs for singleProduction Costs for single
unitunit
Cloth Cloth 1.51.5metres Rs 25metres Rs 25
Velcro 2metres Rs 12Velcro 2metres Rs 12
Tailoring Rs 55Tailoring Rs 55
Total cost Rs 92Total cost Rs 92
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Marketing PlanMarketing Plan
AA marketing planmarketing plan is the centralis the central
instrument for directing andinstrument for directing and
coordinating the marketing effort.coordinating the marketing effort.
It operates at a strategic andIt operates at a strategic and
tactical level.tactical level.
Le els of a MarketingLevels of a Marketing
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Levels of a MarketingLevels of a Marketing
PlanPlan
StrategicStrategic
Target marketingTarget marketing
decisionsdecisions
Value propositionValue proposition
Analysis ofAnalysis of
marketingmarketingopportunitiesopportunities
TacticalTactical
Product featuresProduct features
PromotionPromotion
MerchandisingMerchandising
PricingPricing
Sales channelsSales channels ServiceService
Strategic Planning,Strategic Planning,
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Strategic Planning,Strategic Planning,Implementation,Implementation,
and Control Processesand Control Processes
PlanningPlanning
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PlanningPlanning Corporate PlanningCorporate Planning
Ranbaxy plan for 25% growth in its revenue in 2010Ranbaxy plan for 25% growth in its revenue in 2010
Division PlanningDivision Planning
Pharma division plan to have a growth of 30%Pharma division plan to have a growth of 30%
Generics division plan to grow by 40%Generics division plan to grow by 40%
Business PlanningBusiness Planning
Mature product business plan to grow by 15%Mature product business plan to grow by 15%
New product business plan to grow by 30%New product business plan to grow by 30%
Product PlanningProduct Planning
Growth for Volini gel is projected at 20%Growth for Volini gel is projected at 20%
Marketing InformationMarketing Information
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Marketing InformationMarketing Information
SystemSystemAA marketing information systemmarketing information system consistsconsistsof people, equipment, and procedures to :of people, equipment, and procedures to :
GatherGatherSortSort
AnalyzeAnalyze
Evaluate, and distributeEvaluate, and distribute
needed, timely, and accurate information toneeded, timely, and accurate information tomarketing decision makers.marketing decision makers.
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Internal Records andInternal Records and
Marketing IntelligenceMarketing Intelligence
Order-to-Payment
Cycle
Databases,
Warehousing,Data Mining
Marketing
IntelligenceSystem
Sales
InformationSystem
St t I M k tiSteps to Impro e Marketing
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Steps to Improve MarketingSteps to Improve Marketing
IntelligenceIntelligence
Train sales force to scan for new developmentsTrain sales force to scan for new developments
Motivate channel members to share intelligenceMotivate channel members to share intelligence
Network externallyNetwork externally
Utilize a customer advisory panelUtilize a customer advisory panel
Utilize government data resourcesUtilize government data resources
Purchase informationPurchase information
Collect customer feedback onlineCollect customer feedback online
Sources of CompetitiveSources of Competitive
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Sources of CompetitiveSources of Competitive
InformationInformation
Independent customer goods andIndependent customer goods and
service review forumsservice review forums
Distributor or sales agent feedbackDistributor or sales agent feedback
sitessites Combination sites offering customerCombination sites offering customer
reviews and expert opinionsreviews and expert opinions
Customer complaint sitesCustomer complaint sites
Public blogsPublic blogs
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