Strategic Marketing: -

Vivek Birla
Objectives:
• Competitive Forces & Identifying
Competitors
• Designing Competitive Strategies
• Trends in Company Organization
• Marketing Organization
 Competitive Forces
Five Forces Determining Segment Structural Attractiveness

Threat of:
1. intense segment
rivalry
2. new entrants
3. substitute products
4. buyers’ growing
bargaining power
5. suppliers’ growing
bargaining
power
Identifying Competitors
• Industry Concept of Competition:
– Number of Sellers and Degree of Differentiation
– Entry, Mobility, Exit Barriers
– Cost Structure
– Degree of Vertical Integration
– Degree of Globalization
• Market Concept of Competition
– Objectives
– Strengths and Weaknesses (Share of Market, Mind, Heart)
– Reaction Patterns
Designing Competitive Strategies

Hypothetical Market Structure

Market Leader strategies

Expanding the total Market

- New users
- New uses
- More usage

Expanding Market share

THE BCG GROWTH-SHARE MATRIX

It is a portfolio planning model which is based on the observation

that a company’s business units can be classified in to four
categories:
 Stars
 Question marks
 Cash cows
 Dogs

It is based on the combination of market growth and market

share relative to the next best competitor.
Defending Market share

– Defense Strategies
• Position Defense (building superior brand power:
J&J Baby Oil)
• Flank Defense( Protection of Weak Front: Rasna
launched ‘Orchy’ for export market to check
TANG-Kraft Food)
• Preemptive Defense (attack before the enemy
starts: LG with DTH TV in rural Market)
• Counteroffensive Defense (Respond with a
counter attack: HLL in washing powder)
Contd..

• Mobile Defense( go to new territories)

– Market broadening ( Shifting focus to generic
need: Cadbury forays in dessert additive market
with Choco Sauce product)
» Principle of the objective( Cleary defined achievable
objective)
» Principle of mass( attack on enemy weakness)
– Market diversification
• Contraction Defense
– Planned contraction
(Strategic withdrawal: HLL Strategy on Power
Branding)
 Market challenger strategies

Defining the strategic objective and opponents:

- Itcan attack the market leaders;
- It can attack firms of it’s own size that are not
doing the job and are underfinanced
- It can attack small, local and regional firms

Choosing a general attack strategy:

- Frontal Attack (Coke & Pepsi)
- Flank Attack ( Private Insurance)
- Encirclement attack (Private Airlines)
- Bypass Attack( Kwality Walls)
- Guerrilla Attack (Cigarette Cos)
Designing Competitive Strategies
– Choosing a Specific Attack
Strategy
• Price-discount
• Lower price goods
• Prestige goods
• Product proliferation
• Product innovation
• Improved services
• Distribution innovation
• Manufacturing cost reduction
• Intensive advertising promotion
Market-Follower Strategies:
• Innovative imitation
(Product imitation)
• Product innovation
• Four Broad Strategies:
– Counterfeiter
– Cloner
– Imitator
– Adapter
Market Nicher Strategies:
– High margin versus high
volume
– Nicher Specialist Roles
• End-user specialist  Product-feature
– Value-added reseller
specialist
• Vertical-level specialist
 Job-shop specialist
• Customer-size specialist
 Quality-price
• Specific-customer specialist
• Geographic specialist specialist
• Product or product-line specialist  Service specialist
 Channel specialist
Trends in Company Organization

Main responses of companies to a changing environment

– Reengineering
– Outsourcing
– Benchmarking
– Supplier partnering
– Customer partnering
– Merging
– Globalizing
– Flattening
– Focusing
– Empowering
Marketing Organization
– Product- or Brand-Management Organization
• Product and brand managers have these tasks:
– Develop a long-range and competitive strategy for
the product
– Preparing an annual marketing plan and sales
forecast
– Working with advertising and merchandising
agencies to develop copy, programs, and campaigns
– Stimulating support of the product among the sales
force and distributors
– Gathering continuous intelligence on the product’s
performance, customer and dealer attitudes, and
new problems and opportunities
– Initiating product improvements to meet changing
market needs
The Product
Manager’s
Interactions
Marketing Organization
– What steps can a CEO take to create a market and customer
focused company?
1. Convince senior management of the need
2. Appoint a senior marketing officer and
a marketing task force
3. Get outside help and guidance
4. Change the company’s reward measurement and system
5. Hire strong marketing talent
6. Develop strong in-house marketing training programs
7. Install a modern marketing planning system
8. Establish an annual marketing
excellence recognition program
9. Shift from a department focus to a
process-outcome focus
10. Empower the employees
Thank You

Vivek Birla