session 3-4 marketing strategies

8/7/2019 Session 3-4 Marketing Strategies

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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
http://the%20ansoff%20matrix.flv/http://the%20ansoff%20matrix.flv/http://the%20ansoff%20matrix.flv/


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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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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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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.mp4


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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

session 3-4 marketing strategies

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