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Marketing Strategy - An Overview

By

Dr. Ravindra Pratap Gupta

Strategic Market Management 7th Edition David AakerISSUED IN PUBLIC INTERESTAdvisable

All material in slides need not be understood.Use your current working environment andexperience to relate to situations. Errors andomissions regrettable. Subject to corrections onBeing brought to noticeQuote-1

Indian Connotation of Marketing

Maha+Racketing &Mar+Kutting- Dr Ravindra Pratap GuptaContentsDefinition-MarketingRole of MarketingScope of MarketingDefinition-Marketing ManagementDifference between Sales & MarketingDifference between Strategy & TacticsMarketing Strategy-Hierarchy LinkageDefinition-Marketing StrategyWhat is Competitive Advantage?A Viable Marketing StrategyKey Elements of Marketing Strategy FormulationFor designing marketing Strategy Orgnaisations need to answerMarketing Strategy aligned with-The Business VisionMarket Strategy Inputs & OutputsStrategic Planning ProcessMarketingMarketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals --American Marketing AssociationRole of MarketingPrimary Role of Marketing is to stimulate potential aggregate demand and thus enlarge the size of the market.Another important role which marketing plays is that it helps in the discovering of entrepreneurial talent.Scope of MarketingTask of creating, promoting and delivering goods and services to consumers & businesses.Marketers are skilled in stimulating demand for companys products.Marketing managers seek to influence the level, timing, and composition of demand to meet the organizations objective.

Scope of Marketing.Marketing people are involved in marketing 10 types of entities IdeasGoodsServicesExperienceEventsPersonsPlacesPropertiesOrganisationsInformationMarketing ManagementMarketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.Difference Between- Sales & MarketingSales-trying to get the customer to want what the company producesMarketing-trying to get the company produce what the customer wantsMarketing is all about creating a pull, sales is all about push. Marketing is all about managing the four Ps productprice Placepromotion

Difference between Strategy and TacticsStrategies-Companies long term plan. Tactics-Companies Short term plans

Strategic Plan Outlines the broad framework and guidelines for the businessTactical PlanPresents the Operational Details or implementation aspects for reaching strategic goalsMarketing Strategy-Hierarchy LinkageHierarchy of goals and objectives

Organizational Goals and ObjectivesMarketing Goals and ObjectivesMarketing Mix Goals and ObjectivesMarketing Mix Element Goals and ObjectivesMarketing Strategy-Defined A statement of how a brand will achieve its objectives. The strategy provides decisions and direction regarding variables such as the segmentation of the market, identification of the target market, positioning, marketing mix elements, and expenditures. A marketing strategy is usually an integral part of a business strategy that provides broad direction to all functions. (Source: American Marketing Association)

Marketing Strategy is a series of integrated actions leading to a sustainable competitive advantage.-John Scully

What is Competitive Advantage?Resources+Capabilities = Competitive Edge

Competitive AdvantageCompetitive advantage is a companys ability to perform in one or more ways that competitors cannot or will not match. --Philip Kotler

14Must have a clearly defined market Must have a good match between corporate strengths and market needsMust have significant positive differentiation in the key success factors of the businessA Viable Marketing StrategyKey Elements of Marketing Strategy FormulationThe strategic 3 Cs Customers, Competitors & the CorporationEnvironment analysis -- PESTStrategic Marketing DecisionsWhere to competeHow to competeWhen to compete

16A-Mei, the Taiwanese pop diva sang the Taiwanese anthem at President Chen Shui-bians May inauguaration (2000) and raise a political storm. China withdrew her Sprite soft drink ads from TV, newspapers and billboards across the country, almost jeopardising her contract with Coca-cola. Spokesman for Coca-cola was quoted as saying that the company was informed of the withdrawal a day before A-Mei even performed at the inauguration.

Puyuma pop star, A-Mei, in a recent Sprite commercial, dances and sings in the old colonial powers quarter of Shanghai. She sings a chorus of "give me true feeling" in Mandarin to promote the product of an American multinational corporation. This ad and her music videos are screened on Hong Kong's TVB, MTV, and on channels of Rupert Murdoch's Star TV Group. Bit 2 In an August 1999 article "China's crazy about A-Mei" by New York Times News Service reporter Seth Faison, A-Mei is described as being "Taiwanese" and No. 1 in China. Feth describes A-Mei's sell out concerts in Beijing as "overpowering any consideration of the current battle over" Taiwan's sovereignty. This is in reference to the latest spat between Taiwan and the PRC due to President Lee's "state to state" relations comments. Bit 3 The shifting images of A-Mei (Chinese name Chuang Hui-mei) are quite market responsive. She has been called a "pop diva", Taiwan's Mariah Carey and other related labels. She is a superstar by regional commercial criteria, her 5 CDs released thus far having sold millions of copies along with concert videos and VCDs. Her brand of cultural products has become well known throughout East Asia. She has large advertising contracts with Fuji Film and Sprite. In general, she's done well commercially. For Designing Marketing Strategy-Organisations need to answerWhat is our business?What is the value to the customer?What will be our businessWhat should be our business

As connoted by Peter DruckerMission(Action)CorePurposeCoreValueMarketing Strategy aligned with-The Business VisionBusinessVision18Vision & Mission Linkage-Marketing StrategyWhat business are you in?-Mission

Mission statement-Alignment of Marketing Strategy

Statement of marketing strategyIndicates product, market scopeShows growth factorShows differential advantageShows management orientationMarket Strategy Inputs & OutputsExternal AnalysisCustomer AnalysisCompetitor AnalysisMarket/submarket AnalysisEnvironmental AnalysisInternal AnalysisPerformance AnalysisDeterminants of strategic options Strategic Analysis OutputsStrategy Identification, Selection, and Implementation6 Steps to Strategic PlanningSituational Analysis (SWOT)Threats/OpportunitiesDeveloping the Corporate Mission After SWOT Organization needs to figure out where it wants to go and what it wants to do?For Corporate Mission Organizations needs to answerReason for Existence & Responsibility to Stake HoldersCustomer NeedsRole of R & DNumber of Product Offers in each Product CategoryTypes of Diversification Planned by Management

Organisation must have its marketing , its innovation objectives, its productivity objectives, profit objectives and its social objectives

Determining the Business CompositionCore BusinessVenture in to related areasVenture in to Entirely new areasPursue some BusinessSell or Hire off some business Determining the Business CompositionProduct-Market Growth DirectionsVertical IntegrationMarketPenetrationProduct ExpansionDiversificationSource: H. Igor Ansoff, Strategic Diversification, Harvard Business Review, September-October 1957, pp.113-24MarketExpansionPresentMarketsNewProductsPresentProductsNewMarketsForming & Analyzing Strategic Business Unit (Profit Centre)SBU defined on Bases ofNeed the business is attempting to meetThe end users to be servedThe product offerings that will serve customer needs

Analysis of SBU is done using some of approaches as Boston Consulting Group Matrix

Forming & Analyzing Strategic Business Unit (Profit Centre)BCG Matrix StarsSome cash useFuture cash cowProfitable in highly Competitive MktCash CowsGenerate cash for?, StarsProfitable in Declining MktDogsLow or no cash useWhen to divest orLiquidate? MarksHigh cash use? Is to build or notNot gained footholdNeed lot of spendingTo buildRelative Market Share10x1.5x.1x(log scale)Market GrowthRate22%10%0%Business Unit Objectives & StrategyObjectives of SBUTo Build , Maintain, Harvest or DivestStrategies Can aim atStrengthening a weak business unit Capitalizing on a strong one

Michael Porter has suggested 3 Generic StrategiesOverall cost leadership-aims at cutting production and distribution cost so that prices can be brought below competitionDifferential Strategy-concentrating on an important & desired customer benefit. A company can be a style leader, a service leader or a quality leaderFocus-Concentrating on a small manageable market to achieve cost and differentiation within a smaller group of customers

Developing the marketing StrategyTarget Market SelectionThree Action AreasWhether to sell to the entire market or concentrate on a portionDetermining when an existing target market strategy needs to be modifiedDeciding to stop serving a particular target marketSetting Marketing ObjectiveSalesMarket ShareContribution to profitGetting new customer groups Strengthening brand imageBuilding customer awareness & attitudesEducating customers about brand features and uses

Demand ForecastingMarket Potential, Market Forecast, Sales Potential, Sales ForecastSales ForecastingExecutive Judgment, Sales force Composite, Survey of Buyer intentions, Trend Analysis

Developing the Marketing ProgrammeStrategic Decision AreasMarketing Mix-4 PsProductPricePlace Promotion

The 4 Ps & 4CsMarketingMixProductPricePromotionPlaceCustomerSolutionCustomerCostCommunicationConvenienceStrategy Decision AreasProductProduct DesignProduct DevelopmentProduct VarietyQualityFeaturesPackagingBrandingServicesWarranties

Strategic Market Management 7th Edition David AakerStrategy Decision AreasCostCompetitive PriceDiscount & AllowancesCredit Period & Terms

PriceStrategic Market Management 7th Edition David AakerStrategy Decision AreasChannel SelectionChannel CoverageInventory ManagementStorage & WarehousingDistribution LogisticsPlaceStrategic Market Management 7th Edition David AakerStrategy Decision AreasAdvertisingSales Promotion Publicity Public RelationsPersonal SellingDirect Marketing??????PromotionStrategy Decision AreasTwo more Ps to Plan & watchPoliticsPublic Opinion

Developing Marketing Programme and Follow-upDeveloping Marketing ProgrammeAll MARCOM tools to be worked as IMC budgetAdvertisingSales PromotionPersonnel SellingPR & PublicityDirect Marketing

Follow-up by Sales Analysis Iceberg Principle & 80/20 PrincipleMarketing Cost Analysis Profitability of Marketing StrategyQuote-2

"The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is not getting the right questions." Dr Ravindra Pratap GuptaStrategic Market Management 7th Edition David AakerQuestionsQ 1) Define Marketing Discuss its role & Scope. Define Marketing Management, Marketing Strategy, Competitive Advantage, Marketing Mix?Q 2) What do you understanding strategic planning. Discuss the 6 steps in strategic planning?

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