Professional Documents
Culture Documents
STRATEGY
-PROF.
O.T.S
NAMBIAR
“DESCRIBE THE
ELEPHANT”
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MARKETING STRATEGY
Marketing
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a process that
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can allow level
an organization to
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concentrate its limited resources on
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the greatest opportunities to increase
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sales and achieve a Sustainable
competitiveadvantage . A marketing
strategy should be centered around
the key concept that
customer satisfaction is the main
goal.
APPLE
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NIKE
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AMERICAN EXPRESS-
“DON’T LEAVE HOME
WITHOUT IT”
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AVIS
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CALIFORNIA MILK
PROCESSOR BOARD
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Everything Else, There's
MasterCard.
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U.S MARINES--THE FEW .THE
PROUD
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MC-DONALDS
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SALES MARKETING
childhood, mother's
advice on neem tumeric
MTR..traditional recipes
Gorej Almirah
for modern busy
consumer in covenient, wedding gift
hygine form
Asian
paints..festivals
like Pongal
Charms and close up
Heralding the arrival of a vicks...emotional bond
new youth culture between mother and
Life Buoy...family soap son.
Big small functional Matiz failed..big and
attribute.Johns Umbrella small confusion
succeeded Maruti van ,,,spacious
Lubricant..we sell more car ,family car
by selling less ,affection,family ties
revived it.
What is Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
Goods/services
Industry Market
(a collection (a collection
of sellers) of Buyers)
Money
Information
March 12, 2000 Private & Confidential 32
Marketing = ?
Marketing is the sum of all activities that take you to a
sales outlet. After that sales takes over.
Marketing is all about creating a pull, sales is all about
push.
Marketing is all about managing the four P’s –
product
price
place
promotion
Marketing Convenience
Mix
Place
Product
Customer
Solution Price Promotion
Customer Communication
Cost
March 12, 2000 Private & Confidential 34
Difference Between - Sales &
Marketing ?
Sales
trying to get the customer to want what the
company produces
Marketing
trying to get the company produce what the
customer wants
Based on :
Needs, Wants, Desires / demand
Customers
Company Competition
CUSTOMER IS . . . . .
Internal Environment
Business
Mission
Stateme
nt
Objectiv
es
Situation
or SWOT
Analysis
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product Place/Distribution
Promotion Price
Implementation
Evaluation,
March 12, 2000 Private & Confidential
Control 54
Marketing Environment
Why a product like radio
declined and now once again
emerging as an entertainment
medium ?
Technology ?
Government policy ?
Economic
Economic
Product
Product Physical / Natural Conditions
Distribution Conditions
Distribution
Promotion
Promotion
Price
Price
Competition
Competition Target Market
Political
Political&&
Legal
LegalFactors
Factors
Technology
Technology
Environmental
Scanning
PRODUCTS
Consumer Industrial
Services
Products Products
A
A specific
specific version
version of
of aa product
product
that
that can
can be
be designated
designated as as aa
Product
Product Item
Item distinct
distinct offering
offering among
among anan
organization’s
organization’s products.
products.
A
A group
group of
of closely-related
closely-related
Product
Product Line
Line product
product items.
items.
All
All products
products that
that an
an
Product
Product Mix
Mix organization
organization sells.
sells.
Good Transportation
Computers
Mythbuster – Technology
alone does not deliver,
helps people do.
• Technology ?
• Brand ?
Learning Objectives:
• Understand the channel structure and the linkages between the
buyer and the seller
• The Channel Design (11 C’s)
• Selection of Intermediaries
• Channel Management
• International Shipment
- Documentation
- Support Agencies for international shipment
• Importance of Distribution Channels
• Channels configurations
- Consumer goods
- Industrial goods
- Services
• In international distribution, The firm sells to it’s customers
- Through its own sales force
- Through independent intermediaries
- Through an outside distribution system with regional/global
coverage
• Channels structure should be designed to manage
- Physical flow of goods and services
- Transactional flows
- Information flows
• Channels Design
- Customer Characteristics
- Distribution culture
- Competition
- Company objectives (for market share and profitability)
- Character (nature of product, positioning of the product)
- Capital (financial requirement)
- Cost (cost incurred in maintaining the channel)
- Coverage (intensive, selective, exclusive distributions)
- Control (product/service presentations, quality, image)
- Continuity
- Communication
• The concept of channel captain and power
- Reward
- Coercive
- Legitimate
- Referent
- Expert
• Type of “Distance” that cause communication problem
- Social Distance
- Culture Distance
- Technological Distance
- Time Distance
- Geographical Distance
• Selection of Intermediaries
Agent
Foreign (Direct)
- Brokers
- Manufacturer’s Representative
- Factors
- Managing Agents
- Purchasing Agents
Domestic (Indirect)
- Brokers
- Export Agent
- EMCs
- Webb-Performance Association
- Commission Agents
Distribution
Foreign (Direct)
- Distribution/Dealers
- Import Jobbers
- Wholesalers/retailer
Domestic (Indirect)
- Domestic wholesalers
- EMCs
- ETCs
- Complementary marketers
Types of Distributors
- Indirect Exporting
- Direct Exporting
- Integrated Distribution
• Sources for finding Intermediaries
- Govt. Agency
- Private Sources
• Criteria for Screening Intermediaries
- Performance
- Professionalism
• Distributors agreement includes
- Contract duration
- Geographic boundaries
- Compensation
- Products and conditions of sale
- Communication between parties
• Channel management
- Coordination
- Long term relationship
• Factor in channel management
- Ownership
- Geographic, culture and economic distance
- Difference in rules of law
• Gray Market (Parallel Imports)
- Why Gray markets occur
- How to handle Gray markets
• Typical reasons for termination of channel relationship
- Change in international marketer’s distribution strategy
- Lack of performance by the intermediary
- Make the terminators conditions explicit in the agreement
Documents Required for International Shipments
• Documents required by U.S Government
- Shipper export declaration
- Export license
• Commercial Documents
- Commercial Invoice
- Packing list
- Inland bill of lading
- Dock receipt
- Bill of lading
- Insurance Certificate
- Shipper’s declaration of dangerous goods
• Import Documents
- Import license
- Foreign exchange license
- Certificate of Origin
- Consular Invoice
- Customs Invoice
• Support Agencies for International Shipments
- Freight forwarder
- Customs broker
- Common carrier
The Marketing Mix
The Marketing Mix
The Marketing Mix
• Pricing Strategy
• Importance of:
– knowing the
market
– elasticity
– keeping an eye
on rivals
Image copyright: www.freeimages.co.uk
Pricing Strategies
Pricing Strategies
Penetration Pricing
Penetration Pricing
• Price set to ‘penetrate the market’
• ‘Low’ price to secure high volumes
• Typical in mass market products –
chocolate bars, food stuffs, household
goods, etc.
• Suitable for products with long anticipated
life cycles
• May be useful if launching into a new
market
Market Skimming
Market Skimming
• High price, Low volumes
• Skim the profit from the
market
• Suitable for products that
have short life cycles or
which will face
competition at some point
in the future (e.g. after a
patent runs out)
• Examples include:
Playstation, jewellery,
Many are predicting a firesale in digital technology, new
laptops as supply exceeds DVDs, etc.
demand.
Copyright: iStock.com
Value Pricing
Value Pricing
• Price set in
accordance with
customer
perceptions about
the value of the
product/service
• Examples include
status
products/exclusive Companies may be able to set prices
products according to perceived value.
Copyright: iStock.com
Loss Leader
Loss Leader
• Price Inelastic:
• % change in Q < % change in P
• e.g. a 5% increase in price would be
met by a fall in sales of something less
than 5%
• Revenue would rise
• A 7% reduction in price would lead to a
rise in sales of something less than 7%
• Revenue would fall
Influence of Elasticity
• Price Elastic:
• % change in quantity demanded > %
change in price
• e.g. A 4% rise in price would lead to sales
falling by something more than 4%
• Revenue would fall
• A 9% fall in price would lead to a rise in
sales of something more than 9%
• Revenue would rise
Product
Product
• Methods used to
improve/differentiate
the product and increase
sales or target sales more
effectively to gain
a competitive advantage e.g.
– Extension strategies
– Specialised versions
– New editions
– Improvements – real or
otherwise!
– Changed packaging
– Technology, etc.
Image copyright: www.freeimages.co.uk
Promotion
Promotion
• Strategies
to make the
consumer aware
of the existence
of a product
or service
• NOT just
advertising
Place
Place
• Internal
• External
Internal reasons
• Trade
• Consumer
Trade promotion
• Stimulate purchase
• Induce trial
• Create new users
• Increase repurchase from
occasional customers
• Reward loyal customers
Forms of trade promotion
• Bulk discounts
• Free materials
• Display windows
• Shelf hiring
• Lucky draws
• ‘Mystery’ customer
• Redistribution incentives
• Shop salesmen incentives
Forms of consumer promotion
• Free samples
• Free gifts
• Coupons
• In-packs
• Price packs
• Price-offs
• Sweepstakes
• Bundling offers
SP spurs action because they
are supposed to run for a
limited time
Promotion Strategy
Advertising Strategy
Sales Promotion Strategy
Interactive/Internet
Marketing
Direct Advertising
Marketing
Promotion
Components
Personal Sales
Selling Promotion
Public
Relations
U. S. Annual Expenditures (billions)
$600
Sales Promotion
Personal Selling
$400
Advertising
$200
0
INTERNET Brand Advertising On-Line Has Taken
FEATURE Off
SEARCH WORKS
Google and Yahoo! Have demonstrated the power of the Web by using customers’ search queries to
connect them with advertisers.
CUSTOMERS ARE ONLINE
More than half of American households have always-on Net connections. And the Web reaches
millions at the office. The Big Three portals—Yahoo, AOL, and MSN—reach a combined 50 million
a day–-twice the TV audience of a World Series game.
VIDEO ROCKS
The adoption of broadband, which can handle videos, lets advertisers put TV-like ads online. Longer
spots by BMW and Adidas have reached cult status. As demand for video soars, portals sell choice
slots in advance, much like TV’s up-front sales.
FEEDBACK IS INSTANT
Marketers and online publishers have tools to track an ad’s performance in real time allowing them to
make quick adjustments if customers aren’t clicking. This turns the Net into a vast marketing lab. And
as video grows, it becomes a test bed for TV ads.
CUSTOMERS LEAVE TRAILS
It was an empty promise during the dot-com days, but now advertisers have the technology to follow
customers, click by click, and to hit them with relevant ads. The upshot? No wasted money peddling
dog food to cat owners.
Source: Stephen Baker, “The On-Line Ad Surge,” BusinessWeek, November 22, 2004, 79.
DESIGNING THE PROMOTION STRATEGY
MARKET TARGETING AND POSITIONING
STRATEGIES
COMMUNICATION
OBJECTIVES
ROLE OF PROMOTION
COMPONENTS
Advertising Sales Promotion Public Relations Personal Selling Direct Marketing Interactive/ Internet
Marketing
PROMOTION
BUDGET
Coordination
PROMOTION COMPONENT with Product,
STRATEGIES Distribution,
and Price
INTEGRATE AND IMPLEMENT PROMOTION Strategies
COMPONENT STRATEGIES
EVALUATE EFFECTIVENESS OF
PROMOTION STRATEGY
Illustrative Communications Objectives
Need Recognition
Finding Buyers
Brand Building
Evaluation of Alternatives
Decision to Purchase
Customer Retention
Deciding the Role of the Promotion
Components
Market Target(s)
Desired Positioning
Role of Promotion in Positioning
Product Characteristics
Stage of Life Cycle
Situation Specific Factors
Determining the Promotion Budget
Follow the
Competition
Budgeting Methods
Features Limitations
Percent of Sales Percent of Sales
Fixed percent of sales, often based on past The method is very arbitrary. Budget may be
expenditure patterns. too high when sales are high and too low
when sales are low.
Avoiding fragmentation
Difficulty in evaluating productivity
Differences in priorities
Separate organizational units
Assigning integration responsibility
Illustrative Factors Affecting Promotion
Strategy
Advertising/ sales Balanced Personal selling driven
promotion driven
Distribution
Channel Direct
Expense/Response Relationships
Allocation
Impact on Brand Equity
Integration of Promotion Components
Effectiveness of the Strategy
ADVERTISING STRATEGY
Target Audience
Advertising
Objectives
Advertising Budget
Creative Strategy
Create awareness
Change attitude(s)
Increase Sales
Generate profits
Alternative Levels for Setting Advertising
Objectives
Increasing Uncertainty
About Impact on
Purchasing Behavior
Type of Objective
• Exposure
• Awareness
• Attitude
Change
• Sales
Budget
Determination
Media/ Creative
Scheduling Strategy
Decisions
The Vuitton Machine*
Inside the world’s biggest, most profitable luxury brand
BENCHMARKING VUITTON
Brand 2003 SalesPercent Operating
Billions Change* Margin
Louis Vuitton $3.80 +16% 45.0%
*At constant rate of exchange **Gucci division of Gucci Group Data: Company reports. BW
Advertising
(How to communicate intended
positioning to buyers and others
influencing the purchase.)
Television
Radio
Magazines
Online
Website
Outdoor
Relative access
to the target
audience
Favorable zone
Unfavorable zone
Relative cost of
reaching the target
group(s)
Advertising Agencies in Perspective
Target Audience
Advertising Objectives
Advertising Budget
Creative Strategy
Advertising
Agency
Advertising Media and
Programming
Controlled Recall
Tests Tests
SALES PROMOTION STRATEGY
SALES PROMOTION
Source: Brian Grow, “The Great Rebate Runaround,” BusinessWeek, December 5, 2005, 34, 36, and 37.
Sales Promotion Activities and Targets
Jerry Jose
"Growth has no limit at Reliance.
I keep revising my vision.
Only when you can dream it, you can do
it."
Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 - July 6, 2002
Foundation
• Chemical Engineer
from the University
of Bombay and
pursued MBA from
Stanford University,
USA.
• Joined Reliance in
1981 and initiated
backward
integration from
textiles into
polyester fibers and
further into
petrochemicals
Mukesh Ambani
• Anil D Ambani
joined Reliance in
1983 as Co-Chief
Executive Officer,
and was centrally
involved in every
aspect of the
company’s
management over
the next 22 years.
Anil Ambani
“This is our effort to take financial
instruments to rural masses and give them
an opportunity to invest in various financial
products like mutual funds, stocks and gold
coins and secure their lives and other
valuables by taking adequate insurance
cover.
Reliance Money
• agriculture to retail.
a pan-India presence
20 trained sales
associates attending
to the customers.
Provide direct
employment to 5
lakh young Indians
and indirect job
opportunities to a
million people
Future
an auto-centre