Marketing management Strategy

MARKETING STRATEGIES FOR BUSINESS SUCCESS

• The marketing scenario in the world today is changing very rapidly.

• The boundaries of nations are disappearing, technological changes are taking place at the flash of an eye, standards are undergoing changes in no time and so are the fortunes of various organizations.

The Challenge before marketing managers is two fold

• (a) How to fight competition and managers is two fold:

• (b) How to exploit opportunities, grab more market and forge ahead.

Various Definitions of Strategic Management

• Strategic management is an on-going process of analysis, planning and action.

• It attempts to keep an organization aligned with its environment while capitalizing on organization strengths and environmental opportunities and minimizing or avoiding organizational weaknesses and external threats.

Various Definitions of Strategic Management

• Strategic management is also a future-oriented provocative management system.

• Managers who use strategic management skills are seeking a competitive advantage for their organizations and long-term organizational effectiveness.

MARKET-LEADER STRATEGIES

• Expand the total market strategy – The market-leader firms can normally

gain the maximum when the total market expands.

– The focus of expanding the total market depends on where the product is in its life cycle.

– This strategy can be used when a product is in the maturity stage. For example, Japanese increase their car production to enter in various countries.

– Market-leaders can look for new users, new uses, and more usage of its products when the product is in the maturity stage of the product life cycle.

Defending market share strategy

• When the leader firm tries to expand the total market size, it must also continuously defend its current business against enemy attacks.

• For example, Coca-Cola must constantly maintain its guard against Pepsi-Cola.

• Similarly, Bajaj Auto should constantly maintain its guard against L.M.L Scooters.

• In this strategy, the leader firm must keep its costs down, and its prices must be consistent with the value that customers see in the product.

• There are six ways that a market leader might use to protect its market position.

Defending market share strategy

• (a) Position defence–This strategy involves pouring

maximum firm’s resources into its current successful brands.

– To overcome a position defence an attacker therefore typically adopts an indirect approach rather than the head-on attack that the defender expects.

– For example. HLL increased its ad-spend on Clinic and Sunsilk Shampoos and gave heavy promotions through price reduction

Defending market share strategy

• (b) Flanking defences– This strategy both guards the market

positions of leading brands and develops some flank market niches to serve as a defensive corner either to protect a weak front or to establish an invasion base for counterattack, if necessary.

Defending market share strategy

• (c) Preemptive defence

– This defence strategy maneuver involves the launching of an offence against an enemy before it starts an offence. For example, TITAN launched more brands and sub-brands called insignia Collection.

Defending market share strategy

• (d) Counteroffensive defence– This is a strategy of identifying a

weakness in an attacker and aggressively going after that market niche so as to cause the competitor to pull back its efforts to defend its own territory. When a leader is attacked, he may base his counterattack in the attacker’s territory. The attacker has to deploy resources to this territory for defence.

Defending market share strategy

• (e) Mobile defence– This strategy involves the leader’s

broadening and expanding its territories into new market areas by diversifying.

– The leader takes innovation works in both these directions, e.g., a five-star hotel can become foreign exchange dealer. Diversification into related areas is used in mobile defence.

Defending market share strategy

• (f) Contraction defence– This strategy involves retrenching into

areas of strength and is often used in later stages of product life cycle or when the firm has been under considerable attack.

– For example, HLL decided to concentrate on its core business areas, that is soaps an detergents, and has emerged as the clear leader in the toilet industry.

Expanding the market share strategy

• Market leaders can improve their profitability through increasing their market shares.

• Market leaders are successful at expanding their market shares, like HLL, Procter and Gamble, McDonald’s and Titan.

• In conclusion, market leaders who stay on top have learned the art of expanding the total market, defending their current territory, and increasing their market share and profitability.

• Competing with highly aggressive market leaders presents a formidable challenge to all newcomers.

MARKET-CHALLENGER’S STRATEGIES

• The forms that occupy second and third ranks in an industry can be called runner-up or challenging firms.

• Some are quite large like: H.M.T. Wathes, pepsi, and Pepsondent. These challenger firms can adopt one of the two competitive styles.

• They can attack the leader and other competitors in an aggressive bid for increased market share and possible leadership.

• The following strategies can be adopted by market challengers

Defining the strategic objective

• A market challenger must first define its strategic objective which is usually defined as and increase in market share.

• In essence, the challenger can choose to attack in any one of the three types of firms.

These are five possible attack strategies used by successful

market challengers

• Frontal attack

• Flank attack

• Encirclement attack

• A Bypass attack

• Guerilla attack

Frontal attack

• This strategy is used when the challenger masses its competitive forces light up against those of the opponent by attacking its competitor’s strengths rather than its weaknesses.

• For this to succeed. The challenger needs a strength advantage over its opponent.

Flank attack

• This strategy is used when the challenger sets its sights on its target’s weakest points.

Encirclement attack

• It is use only by well-financed forms.

• It involves an attempt to capture a vide slice of the competitors’ market through a grand offensive on several road fronts.

A Bypass attack

• It avoids any belligerent move directed against the competitors; territory.

• Involves bypassing competitors and attacking easier markets.

Guerilla attack

• It involves making small. Intermittent attacks on different territories of the opponent.

• A guerilla attacker uses both conventional and unconventional means of attacking the opponent.

• These might include reflective price cuts, intense promotional bursts and occasional legal actions.

MARKET-FOLLOWER STRATEGEIES

• A market-follower must be careful about how closely it follows an leader and challengers.

• Too close an attack could result in a strong counter-offensive by the leader. The following broad strategies are useful.

• Following closely• Following at a distance • Following selectively

MARKET NICHERS’ STRATEGIES

• Successful market nichers own their success to using of these strategies to gain a solid market presence.

• Market nichers must develop specific tactics to implement their strategic choice to enable them to become market specialists