MARKETING MANAGEMENT

Assignment 1: Design a marketing plan for an organization of your choice

Assignment 2: Explain how a firm can use cost leadership strategy to gain competitive advantage over
others.

1)Strategic Mngt approach

2)Systems Approach

1)Strategic mgt Approach

-is premised on the understanding that if you cannot understand or measure you cannot manage it

-Every organisation have a vision ,have a strategic view so that you realise opportunities

-your vision then cascade to a mission ie what you are suppose to be doing

-this mission is then achored with values which then results in a strategy ie the game plan which
depends on the competitor e.g Hr strategy ,recruitment strategies,

Strategies: -stability-take what is there

-malability approach-facilitate

-flexibility approach-facilitate compromise

-strategic maps

-these strategies delievered or implemented by dpts that results in Dpt deliverances

-As dpts are compromised with indo you come up with individual deliverances whom you give
performance contracts

-these performance contract are then reduced to individual dashboard by using balance scorecard ,RBM

-A good balance scorecard should have 4 outcomes.

1) happy. Effective. Delight. Create

People. System customers. Shareholder

facilitate. Value

environment
Systems Approach

- make sure that every individual in the organisation contributes to the goals of the individual

Assumption

-performance of an organization can be vely impacted on the of one slopy member . Even if you have
the best manager who leads to success an organisation but the other manager is not performing well
you did not succeed. The success of an org is based on the summation of full performance of all
managers

-the performance of an organization can benefit on exceptional performance of just one member.

CONTEMPORARY ISSUES OF MARKETING

Viewing marketing on a strategic lense

Marketing is about a unique value proposition of clients.This is about gaining competitive advantage but
without using the marketing knowledge.You can innovate from the laboratory push.

-it is about distinctive value chain of activities.Organisation can choose from 3 generic strategies ie cost
effectiveness ,differentiation ,focus

-It is about trade offs -choosing what not to do

-It is about continuity of positioning with continuous improvement

2)Rethinking the supremacy of shareholder theory

- organisations were obsessed with CSR ie corporate social responsibility and are now moving to
corporate shared value.CSV adds money to the

-you do not invest from a sense of charity but becoz you improve your bottom line

-value innovation is about marketing the competition irrelevant by creating uncontested market place

-lnternalise the externalities ie the stakeholders

-Transition and looking beyond CSR to CSV eg the new CEO measured of Profits, Society so is to be
measured. The new CEO is now a triathlete now run a PES race.

-There is transition from corporate philanthropy to focus on the tripple bottom line

-focus is now on core creation or core evolution

Core creation- identify the critical stakeholder and take up with it as it advances .
-focus is now on the knowledge economy

-focus not just on customer satisfaction but also on customer success .Have an interest in customer's
change in the life style.

3)Diversity in marketing teams and executive teams

-marketing or executive management teams are more p if they diverse

-there is emergence of cultural intelligence .We now have a superstar business and marketing
executives who need the 3 IQ, EQ,CQ

4) Peformance based and learning based org

-you would rather reward excellent failure and punish mediocer success because best ideas are
spontentious sparks on the minds that are free from tension.

-excellent failure -analyse the ideas brought up by people who were affected by challenges

-mediocer success

5) The business case for regional integration

-we are too small in market in Zimbabwe so we should think SADC ,COMESA just think beyond the
horizon . Expand your territory .

-However we should maintain clarity on the Z Zimbabwean situation ,politics,policies,sanctions

MARKETING MANAGEMENT

Definition - CIM defines marketing as a management process which identifies , anticipates and satisfy
customer requirements profitably.

-According to the American Marketing Association marketing is a manegerial process which involves
planning the conception, promotion and pricing of ideas and services to create exchanges and satisfy
individual and organisational goals.

-From the definitions it is true that marketing is a process by which individual and groups abtain what
they needed and want through creating and exchanging value with other

- marketing is about managing profitable customer relationships

1) attracting new customers

2) retaining and growing current customers

Understanding the code concepts

1) Need- stats of self deprivation eg if you are hungry you need food

2) Want- the form of need as shaped by anindo eg l want a big jacket

3) Demands - wants and needs which are backed by buying power

4) Marketing offer - combination of product , services , uniform or experiences that satisfy a need or
want

5) Satisfaction- a satisfied customer will buy again and tell others about their experience

6) Exchange- the act of obtaining an object from someone by offering something in return

- one exchange is not the goal , relationships with several exchanges are the goal

Relationships are built through delivering value and satisfaction

7) Market- is a set of potential buyers of a product . Marketing seeks buyers that are profitable.

Marketing management

- it is the art and science of choosing target markets building profitable relationships with them

- the definition includes answers to the two questions

1) what customers will we serve?

2) how can we serve those customers best?

Selecting customers and creating value

Customer management

1) What customers will we serve ?

2) Marketers select customers that can be served profitably

Value position

1) How can we serve these customers best

(a) segment

2) includes the set of benefits or value a company promises to deliver to customers to satisfy their needs
INTERNAL MARKETING

- internal marketing involves motivating customer contact employees and supporting service people to
market as a team to provide customer satisfaction ( Kotler and Armstrong 2010)

- a marketing company would embef the basic principles of marketing such as company vision and
mission , its overarching objectives , it business strategy,marketing tactics ie the marketing mix and
finally how to measure marketing success.

- lnternal marketing was first introduced by Berry et al (1976) and refers to the use of a marketing
perspective for managing the organization's human resources

- past studies have revealed a strong linkage between employees job satisfaction and organisational
superior performance .

- researches also found a significant positive relationaship between employees job satisfaction and
customer perceptions of service quality

- it is expected that satisfied employees deliver better services and this brings customer loyalty.

- consequently having a loyal base of satisfied customers when such a competitive environment
increases revenues , decreases costs and buids market share

- To have satisfied customers , the satisification of employees is necessary

- lnternal marketing should seek to develop the following objectives

1)increasing employee commitment to the organisation

2) increasing employee involvement when the organisation

3) increasing employee motivation and job satisfaction

- organize internal marketing to improve employee effort , commitment , involvement and job
satisfaction
Marketing strategy

-is the process that allow an organisation to concentrate its resources on the greatest opportunities to
create sales and achieve a sustainable competitive advantage

- involves harnessing an organization's resources to meet customer needs through market analysis and
understanding of competitors actions , gvt action together with consideration of technological and other
environmental changes

Strategic marketing plan

- strategic marketing planning involves careful analysis of organisations 's environment, its competitors
and its internal strategies ini order to develop a sustainable plan af action which will develop the
organization's competitive advantage and maximize it when given resource availability.

The Role of Marketing in an organisation

1) lntergrative role

- marketing in the modern organisation should be able to integrate the needs and wants of the
customers and other organisational functions like production , research and development, finance and
HR etc

2)marketing offer

- for the organisation to achieve its objectives it is important that the organisation is able to assemble
the marketing offer called the marketing mix in a way that gives it competitive advantage.

-the concept of Marketing mix involves the deliberate and a careful choice of an organisation's products,
price , promotion and place strategies and policies.

-individually reach of these are important but when all the four and beyond elements of the marketing
mix are properly selected , called ,mixed and deployed in the right proportions they enhance the
product.
Marketing tasks and managing the marketing demands states

1) Negative Demand

- this is where the customers do not want the product and the major part of them may even pay a price
to avoid the product . The marketing task is to analyse why the market dislikes the product .

-Reasons *over projection, competitions * pricing * place or distribution

2) No demand

- target customers may be unaware or uninterested in the product .The marketing task is to find way to
connect the benefits of the product with people's needs and interests

3) Latent demand

- customers may share a strong need that may not be satisfied by any existing product . The task is to
measure the size of the potential market and develop goods and services to satisfy the demand.

4) Declining demand

- this is when the organisation is having a general decline in demand of it products. The marketing task is
to reverse the declining demand through creative remarketing.

5) irregular demand

- many organisations face demands that vary according to seasons , time and region .The task added
synono marketing is used to find ways to alter the pattern eg peak time for cellphones

6) Full demand

Organisations in this demand state are fully pleased with the volume of business .The role of the
marketer is to maintain .The marketing task is to maintain the current level of demand in the face of the
changing customer needs and increasing competition .The organisation must maintain or improve its
quality and contiously measure customers satisfaction

7) Overfull demand

- some organisations maybface demand levels higher than they can handle .The marketing task is to
demarket thus find ways of reducing demand

- you can do selective marketing is select those segments which you can serve profitably

8) Unwholesome demand

-Unwholesome products will attract organised efforts to discourage their consumption eg tobacco it is
hazardous to health . The marketing task is to set people who like something to give it up using such
tools as four messages , price hikes and reduced availability
THE MARKETING MIX

-ln a kitchen a recipe is a catalogue of carefully measured ingredients that are to be assembled in a given
order to produce a given dish

- recipes for seemingly mundane dishes like meatloaf can be amazing diverse

- the marketing mix offers a means by which product ,price , promotion and place variables can be
assembled to meet channel needs

*geographical prices , price differentiation

-but just as the ingredients of a recipe are not thrown together in an arbitrary way , marketing mix
variables are not combined haphazardly.lnstead successful marketers must carefully consider how to
combine those elements to achieve the best strategy outcome

1) The product lngredient

- just like a recipe is a fusion of ingredients , a product is a unique bundle to tangible and intangible
attributes offered to customers

- when it comes to satisfying customers , a product's intangible aspects those properties that cannot be
easily defined of grasped by human hands-are often more important than its tangible characteristics

- The value of exchange relationships is given on the base of both tangible and intangible attributions

- the growing capacity of product offerings has been linked to agile competitive environments.An agile
competitive environment is a market place in which channel members constantly modify and improve
their product offerings to better satisfy changing in customer needs

2) The pricing ingredient

- price is the outmate measure of a good or service's exchange value as agreed upon by the seller or
buyer

- price is important because it directly affects the channel members profitability

- the price should allocate compensation among channel members according to contribution to the
exchange relationship

- it is the only component which brings revenue compared to others which want to be funded

Pricing methods

1) Algonthmic Pricing methods

- a firm's long term survival depends on its profitability .Consequently until profit must exceed unit
operating cost
-Algorithmic pricing models are based on the associations among profiys revenues and volumes

Relationship oriental pricing methods

- pricing strategies do not always have to be comparative , especially when channel settings

- the relationship oriented pricing approach is grounded in a co- operative and collaborative orientation

- relationship pricing may assume many forms however the practice generally involves volume ,
functional and promotional allowance

Volume pricing

- volume pricing provides the quantity discounts to channel members based on purchasing economics
and rewards buyers for large lot size purchase

Functional allowances

- It involves reductions in the list price in exchange for the buyer's agreement to plan specific function

- these allowances involve the performance of logistical function such as transportation , warehouse or
order processing or they may involve the performance of customer service or personal selling functions

- functional allowances account for the value on channel member receives by shifting various functions
to another channel member

Promotional allowance

- these are considerations given to channel partners in exchange for their agreement to provide
promotions to current and prospective customers . These considerations take the form of goods , cash
payments or support services

The promotional ingredient

-promotion involves any form of purposeful common employed by channel members when the intent of
informing , reminding and or persuading prospects and customers regarding some aspect of their
market offering

Promotional objectives

- stimulating sales

- differentiating offerings

- sharing information

- accentuating a market offerings value

- stabilising seasonal demands

- pull strategy aimed directly at ultimate consumer

- push strategy - aimed at intermediary

Place ingredient

- the distribution , logistics and behavioural function that regulate the flow of market offerings between
exchange partners

- the goal is to minimise the cost of those function while maximising customers satisfaction

- A trade off exists between channel cost and the benefits afforded to exchange partners . These trade
offers are linked to the other ingredients in the marketing mix.

Selling concept

- an organisation has to embark

Marketing concept

- emerged in the 1950s and challenged the preceding concepts.lnstead of a product focused "make and
sell" philosophy we shift to the consumer centeral sense and respond philosophy

- lnstead of hunting ,marketing is gardening .Emphasise right product for your customers

- needs have to be met profitably .You should love the customers and not the product

Limitations of the marketing concept

- a number of academics have raised important questions regarding the value of the marketing
concepts.

3 issues has been brought up

a) Marketing concept as an ideology

- Browline and Saren argued that marketing concept haa assumed many characteristics of an ideology or
an article of faith that dominates the thinking of organisations .They recognise the importance of
customer orientation for companies but ask why after such a long time the concept has not been fully
implementedv

- they argue that they are other valid considerations that companies must take into account when
making decisions apart from giving customers exactly what they want

- maeketer' s attention should therefore be focused not only on the propagation of the ideology bt also
on its integration with the demand of other core business function in order to achieve a compromised
between the satisfaction of customers and the achievement of other company requirements
b) Marketing and society

- a second limitation on marketing concept concerns ita focus on individual market transactions .Many
individuals may have their on personal benefits while discounting the social impact on their purchases

- the adoption of Marketing concept will result in the production of goods and services which do not
adequately correspond to society welfare

- providing customer satisfaction is simply a means to achieve a company's profit objective and does not
guarantee protection of the customer's welfare

c) Marketing as a constraint on innovation

- Towber argued that marketing research discourage major innovation .The thrust of his argument was
that relying on customers guide on development of new products has severe limitations .This is because
customers have difficulty articulating need and wants beyond the realm of their own experiences

- this suggest that the ideas gained from marketing research would be modest compared to those
coming from science push of the research and development laboratory

- Alcio Morita , Chairman of Sony brought in to this thinking by saying "our plan is to lead the public with
new products rather than ask them what products they want. The public does not knew what is
possible ,but we do so instead of doing a lot of market research , we before our thinking on a product
and its and try to create a market for it by educating and communicating with the public"

Relationship marketing ( RM)

- it is relatively new paradigm which has the aim of building mutually satisfying long term relations with
key parties is customers , suppliers , distributors, e.t.x

- inorder to earn and retain business ,marketers accomplish this by promising and delivering high quality
goods and services at fair prices go the other parties over time .RM builds strong economic , technical
and social ties among the parties .lt cuts down on transaction costs and time . In most successful cases
transactions move from being negotiated each time to being a matter of routine.

Societal marketing concept

- this orientation recognise that a firm has additional reaponsibilities involving consumerism the struggle
of the poor for subsistence , the marketing of social and cultural services and the day to day function of
the economy and the use and pollution of society's resources

Strategic marketing

- "All man can see the tactics by which conquer but what non of them can see is the strategy by which
great victory is evolved "(Sun Tsu 1963)

* no child labour
* respect human rights

*no pollution of environment

Reasons why good marketing strategy fail

1) Lack of vision

- a man embarking on a journey has a destination in his mind . Similarly , no organisation can set to do
business without clear cut objectives and still hope to succeed

2) Lack of clear goals

- marketing plans with no clear cut goals are difficult to implement , monitor and control. When the goal
is not clear measurement of the results cannot be done

3) Goal shifting

- one of the reasons why good marketing strategies fail is that focusing of Marketing strategy is allowed
to shift over time

4)Poor environmental scanning

- good strategy implementation requires continuous environmental scanning .Trends in both the
internal and external environment must be assessed and their impact to adjust to meet current
environmental demands

- account to Kotler (2000) the company can count on the thing the market place will change and when it
does the company will need to revise and review its implementation , programs , strategies and even
objectives

5) Lacks of ownership

- marketing strategy policy should not be treated as a off event.Lifetime marketing programs ie those
designed to capture customers lifetime loyalty , continue far beyond a campaign's execution and involve
far more than marketing department.

Sales , customer service , operations , administration and office support staff must embrace marketing
goals and practices and take ownership for their success by working to secure unparalled customer
satisfaction

6) Absence of an implementation plan

- for marketing strategy to be successful it must be supported by a comprehensive marketing plan. An

implementation plan shows the road map and how to accomplish the goals and objectives as set out in
the marketing strategy .It stipulates what needs to be done and by whom , when ,what resources are
required.
- the implementation plan should be reviewed at regular intervals to ensure it is still on track

- checklists should be drawn to regularly tick off actioned items and manage outstanding ones

Question : U sing examples from recent corporate failures show reasons why marketing strategies fail.

- Same marketing plans become paper exercises year after year where colourful documents are
produced , files away and forgotten about only to be remembered again the same time a year later
when the whole process has restarted .

7) Lack of communication

- for a marketing strategy to be effective it must identify every stakeholder in the

organisation .Strategies that are left only to the marketing department and excludes all the other
departments will not have any chance of success

- the employees of the organisation must believe in the strategy and implementation mjat build on this
knowledge

- customers often identify organisations with the employees that work for them . Any employee who
does not speak the same language witn the overall marketing strategy will be remarketing the
organisations.

8) Inadequate resources

- marketing strategies should be goal driven and not resources driven . A budget driven marketing
strategy will most often satisfy the budget requirements but not the marketing objectives

9) Pleasing the wrong people

- food marketing strategies can fail if they are directed at the wrong people. Some marketing strategies
are directed at Pleasing management and other stakeholders leaving out the real purpose of the
strategy ie to endavour to satisfy the custome r needs

- So often a strategy emphasises the important of a product of service to customers instead of focusing
on what the customer needs.

10) Overreaching

- a common pitfalls for a marketing strategy and is to try and please everyone . lt is important for a
marketing strategist to analyse the customer traits needs and preferences and select those that the
company can satisfy most at a competitive advantage

- by appealing to a particular niche rather than the general people the marketer will be able to
implement good marketing strategies and programs that bring long term profit returns

11) Lack of professional ethics

- a good marketing strategy must be completements by ethical and committed people who will
implement the plan effectively.

12) Lack of implementation skills

- for a strategy to be successful , competent people with the right skills are required to spearhead the
implementation process.A good strategy is as good as the subsequent implementation process.

- lt is important to recruit the right mix of skills so that the strategy can be accurately articulated and
implemented

13) Lack of team effort

- An organisation whose members are individualistic will not achieve its goals . Team building and
synergy among members is of utmost importance.

- professionalism and fairness is all important to gain trust from the members and to render credibility
to the implementation plan

- employee skills must be complementary .Clear channels of communication must be established.

14)/Lack of feedback and control

What's get measured gets done

- By the same taken strategy being implemented without any mechanism for tracking and monitoring
the results will just meander off track until it is lost completely

- positive results must be enhanced and negative results must be eliminated through taking decisive
action

- good performers must be rewarded accordingly to encourage them to do better

15) External factors

- these relate mostly to government policies and the political ,economic environmental .A clause in
government policy may cause a strategy to be inappropriate and ineffective thus leading ita failure

- the political and economic environment can rander marketing strategy unworkable

- unfavourable political and economic climate can create an unstable environment not conclusive to
business.
STRATEGIC MARKETING PLANNING PROCESS

A vision is as a pen picture of the business of more than 3 years in terms of its likely physical appearance
, sre and activities : lt consider its future products , markets, processes , location etc

- a mission is useful for putting into the spotlight what business a company is presently in and the
customer needs it is endeavoring to serve.

- Pierce and Robinson defined the mission as the fundamental unique purpose that sets the business
apart from other firms of its type and identifies the scope of its operation in production and marketing
terms.

Questions answered by mission

1) What is our business?

2) Who are our customers?

3) Spells the competence you have as an organisation

4) must be future oriented

5) varies from time to time depending on the environment

6) lts time frame is short

Step 1: Situational analysis

-Do an environmental check in 3 layers

- Macro environment PESTLEG

- Task environment - lndusty level

- these players are found when your industry and can influence players in the industry

- internal environment.

- competence in the organisation is core resources

- employers leadership style etc

Environmental scanning

- lt can be broad ranging effort to monitor and interpret social , political , economic , technological and
global events in an effort to spot budding trends and conditions that could eventually impact the
industry
- lt can also be monitoring , evaluation and dissemination of inform from the external and internal
environment to keep people when the organisation informed

- According to Hunger and Wheeler the purpose of environmental scanning is go raise consciousness of
managers about potential developments that would have important inputs on industry conditions
andbpoae new opportunities and threats

Importance of environmental scanning

- to match the organisation's distinctive competence to opportunities in the environment

- to hedge the firm's valuable position against environmental threats

- helps an organisation capitalize on opportunities rather than leave these to competitors

- lt provides an early signal of an impending problem which can be diffused if recognised well in advance

- provides a base of objective qualitative information about the environment that strategies can utilise

Internal environment

- scanning and analysing the external environment for opportunities and threats is not enough to
provide an organisation a competitive advantage

- strategic managers must also look when the organisation itself to identify internal strategic factors ie
those critical strengths and weaknesses that likely to determine if the company will be able to take
advantage of opportunities while avoiding threats

-this internal scanning is often referred to as organisational analysis and is concerned with identifying
and devoling an organisational resources

Mowdo resources determine competitive advantage

1) a company's sustained competitive advantage is primarily determined by its resources

endowment .Grant proposed a 5 step resource based approach to strategic analysis

- identify and classify the firm's resources in terms of strength and weakness

- combine the firm's strength info specific capabilities known as core competencies

- Appraise the profit potential of those resources and competencies inteems of their potential for
sustainable competitive advantage and ability to harvest the profits resulting from the use of those
resources and capabilities

-selective strategy that beat exploits the firm's resources and competencies relative to the external
environment

- identify reaource gaps and invest in upgrading weakness

Steps in analysing the environment

1) Environmental influences audit

- this is an audit of environmental factors that have influences the firm's past and present performances

-the idea is to come up with a possible prediction of future influences

- a PESLEG analysis is done

2) Environmental nature assessment

-it entails answering the following questions

a) how uncertain is the environment?

b) what are the sources of this uncertainty

c) how should this uncertainty be dealt with

3) Key environmental factors

- here management focuses on key environmental factors that impi on the firm's performance such as
structure and nature of the market

- factors considered are consumers , competitors , intermediaries and suppliers

4) Competitive position identification

- this entails an analysis of competitors vis- a-vis the firm via such approaches aa strategic group analysis
and or benchmarking

- An effective competitive analysis would entail answering the following questions :

a) who are our competitors

b) what are their strategies

c) what are their objectives

d) what are their strength and weaknesses

e) what are their reaction patterns

5) Key opportunities and threats

- an analysis of opportunities and threats is carried out on the information acquired in the previous
stages .
- at this stage the firm's current strategy position should now be clear and management should be in a
position to develop strategies that will drive the firm into the future

- the marketing environment is devided into 3 sub environment

a)Micro environment

i) looks at the internal environment of the organisation include the following

- mission and objectives

- resources eg manpower,know how ,capital etc

- management culture and structure

- scanning should be done regularly as changes are always occuring as it exposes the firm's strength and
weaknesses which in turn affects strategy

2) The market environment

- represents the immediate environment outside the enterprise also called the task environment as it
represents the most active and most competitive environment of the firm

- the variables of the market environment are consumers ,competitors ,intermediaries and supplies

3) Macro environment

- consists of the uncontrollable broader variables forma that impact upon a firm's performance

a PESTLEG analysis is done

Macro environmental

a)political / legal environment

- consists of lawa , government agencies and pressure groups that influence the activities of the firm.
These include

- black empowerment issues

- monopolies and emerges commission

- pressure groups AAG , Upfumi kuvadiki etc

- watchdog eg CCZ, ZNCC, CIZ, CFU

b) Economic

- compose of such factors as economic growth consumers income , inflation , monetary and fiscal policy
- the economic environment is also affected by other environments notably the political and
technological environment

c) Technological environment

- the strategist should watch the following technological trends

- accelerating pace of technological changes

- unlimited innovation opportunities

- increased regulations of the technological changes ( enforcement of standards)

d) Demographic ( Social ) Environment

- the following Demographic trends are of concern to strategists

- rapid population growth - population age mix

-Ethnic composition. - education

- household patterns. .- shifts from mass to macro market

e)Physical (natural) environment

- refers to the resources from which the business obtains its raw materials and those environmental
elements to which it discharges its waste .Strategists should track the following physical environment
trends

- continued cost of energy

- increased of pollution

- environmentalism ( government and pressure groups)

f) refers to the basic beliefs , norms and values that are generally held by a particular society .Hofstede G
(1980) simply defines cultures as collective mental programming ,some of the variables to consider are

1) language. 2) religion. 3) material culture

- some cultural values (secondary) do change over time and this has implications to marketers eg the
influences of western culture an African culture

What determines the sustainability of an advantage

-The ability of a firm to use its resources and capabilities to develop a competitive advantage through
core or distinctive competencies does not mean it would be able to sustain it. Two basic characteristics
determines the sustainability of a firm's distinctive competencies .These are durability and imitability.

a) durability is the rate at which a firm's underlying resources and capabilities depreciate and
becomes ,new technology can make a company's distinctive competencies absolete or irrelevant.

b) imitability is the rate at which a firm's underlying resources and capabilities can be duplicated by
others .

STEP 2 OBJECTIVES

- these are the ends which the firm seeks to achieve though it's existence and operations

- the purpose of setting objectives is to convert managerial statements of strategic vision and buy
mission into specific performance targets where the firm's progress can be measured eg we want to
own 60% market share in the nation

STEP 3- STRATEGIES

Types of Marketing strategies

- every marketing strategy is unique but if you abstain from individualising details each can be reduced
into a generic strategy

- strategies based on market dominance

- firm's are classified based on their market share or dominance of the industry typically ther re are 3
types of market dominance strategies ie leader challenger and follower strategy.

Leadership Strategies

- many industries contain one firm that is the acknowledged market leader

- it usually heads the other firms on price changes ,new product introductions ,distribution and
promotional intensity

- the leader may or may not be admied or respected by the other firms .The leader as an orientation
point for competition for a company either to change challenge initiate or avoid

- unless the dominant firm enjoys a legal monopoly its life is not altogether easy .lt must employ
constant vigilance . Other firms keep challenging its strength and try to take advantage of it weaknesses

-the dominant firm which wan to remain number 1 can take action on 3 fronts

1a) the firm mustfind ways to expand the market

b) the firm must protect its market through good defensive and offensive action
c) the firm can try to increase market share further even the market size remains the constant total

- the dominant firm gains most when the market expands .ln general the market should look for new
users ,new uses and more usage of its products

New users

- attract potential customers who are unaware of the product or who are resisting because of its price or
lack of certain features .For the firm to attract new users they can employ the following

1) market penetration strategy

2) geographical expansion strategy

New usage

- markets can be expanded through discovering and promoting new uses for the product
DEFENDING MARKET SHARE

- the dominant firm should continuously defend its current business against rivals. The leader is a large
elephant being attacked by a swarm of bees . The most worthy the market leader should do to defend
its self is continuously being innovative by improving and developing new products and customer
services

Position defense

- the most basic idea of defense is to build an impregnable fortification around one's territory

1) Flanking defense

- the market leader should not only guard its territory but also erect outpost to protect weakerSBUS in
order for counter attacking

- don't leave your flanks exposed

2) Pre- emptive defense

- a more aggressive defense ma is to launch an attack on the enwrmy before it starts it offensive against
the company. Premptive defense assures that anounce of prevention is more than pound of cure.A
company can use guerilla action across the market hitting on competitor here and another there

- sometimes the premptive strike is waged psychologically . The market leader aenda out market signal
to dissuade competitors from attacking . This intimidates the competitor who decides against entering
the production arena

3) Counter offensive defense

- most market leaders when attacked will respond with a counter attack . A leader cannot remain
passive in the face of a competitors' price cuts , promotional blits, product improvement or sales
territory invasion. The strategic choice for the leader is to meet the attacker frontally.

4) Mobile defense

- it involves more than the leader aggressively defending its territory in mobile defense the leader
stretched its domain over new territories that can serves as future centres for defense and offense

- the moves should generate strategic defense enabling it to wither continuous attacks and launch and
retaliatory attacks

- the dominant firm can do market broadening but too much to dilute the company's current
competitive position

Contraction defense
Large companies recognise that they can no longer defend all their territories . Their forces are spread
too thinly and competitors are nibbling away on several frontiers . The best source of action then
appears to be planned contraction ( strategic withdrawals) . Planned contraction is not market
territories and ( redesigning ) reassigning resources to stronger territories .

2) Market challenger strategies

- firms that occupy second ,third and lower ranks in an industry can be called run up or trailing firms.

- they can attack the leader and other competitors in an aggressive bid for furthering their market
share . The strategies which thesw organisation can employ include the following:

Frontal attack

- this is a head on strategy. Attack the opponent strength rather than ita weakness. The outcome
depends on who has more strengths and endurance . ln a frontal attack the attacker matches ita
opponents , products, advertising,pricing etc.

Flank attack

- any enemy's arm is strong wher it expects to be attacked .lt is necessarily less secure in ita flanks and
rear. The major principle modern offensive warfare is concentration of strengths against weaknesses.

Engrciement

- this is an attempt to capture a wide slicw of the enemy's territory through comprehensive blitz attack

- entitlement involves landing and grand offensive on several fronts so that enermy must protect its
front , side and rear simultaneously

By pass attack

- it is an indirect strategy .It means by passing the enermy and attacking easier markets to broaden one's
resource base .This strategy offers 3 lines of approach.

* diversifying into unrelated products

* leap frogging into new technology to supplant existing products

* diversifying into new geographical markets

Guerilla attack

- consist of waging small and intermittent attacks on different territories of the opponent with the aim of
harrasing and demoralising the opponent and eventually secure permanent footholds.

Market follower strategies

- followers prefer to follow rather than challenge the market leader . This is not to say the market
follower Lacks strategies . The market follower must know how to hold customers and win a fair share of
new customers . They are three fellowership strategies which can be used

1) Cloner

-the cloner emulates the leader's products , distribution and advertising. The market doesn't originate
anything but parasitically lives off the market leader's investment . ln the extreme the cloner is a
counterfeiter who produces knowck off of the leader's product

2) lmitators

- copies some things from the leader but maintain differentiation in terms of
packaging ,advertising ,pricing etc. The leader does not mind imitators as long as the imitator does not
attack the leader aggressively

3) Adapter

- take the leader's products ,adapts them and often improves them . The adapter may choose to sail to
different markets to avoid direct confrontations with the leader

Porter's 3 generic Strategies

Introduction

-they are countless variations in marketing strategies that a company may employ mainly because each
company's strategies approach entails customer designed acitions to fit its own circumstances and
industry environment .The custom tailored nature of each company strategy makes the chances remote
that any two companies even companies in the same industry will employ strategies that are alike in
every detail

- this usually depend on 2 reasons

- whether a company's market target is broad or narrow linked to low cost of product defferention

- therefore 3 strategies approaches stand out

Cost leadership strategies

- This strategy involves the achievement of the lowest cost position in an industry . Many segments in
the industry are several and great importance is placed on minimising costs on all fronts

- cost leaders often market standard products that we are believed to be acceptable to customers .For
this to be achieved the firm must ensure that all the cost drives are controlled and monitored

- major cost drives are as follows:

Economies or diseconomies of scale.

- the costs of a particular value chain activity are often subjected to economies or diseconomies of
scale.Economies of scale arise when activities can be performed more cheaply at larger volumes than
small volumes and from the ability to spread out certain cost like R and D , advertising on greater sales
volume.

Learning curve effect

- the cost of performing an activity can decline over time as the experience of company personnel
builds .Learning curve economies can stem from debugging and mastering newly introduced
technologies and finding ways to improve plant layout and workflows and making product design
modification that streamline the assembly process

Links with other activities in the company or industry value chain

- when the costs of one activity is affected by how other activities are performed costs can be managed
downwards by making sure that linked activities are performed in co-operative and coordinated fashion

Vertical integration vs Outsourcing

- ln vertical integration you can negotiate with your suppliers and also create relationships .Outsourcing
creates no relationships eg Bata has control over its distribution network.You can integrate forward or
backwards eg Nestle and dairy farms

First mover advantages

- sometimes the first major brand in the market is able to establish and maintain its brand name at low
costs than later brand rivals

Strategies ,choices and operating decisions

- the decisions you make as a manager can make or break an organisation

- a company's cost can be driven up and down by a fairly wide assortment of managerial decisions

Differentiation strategies

- involves the selection of one or more choice criteria that are used by many buyers in an industry .The
firm the uniquely positions itself to meet those criteria

- differentiation strategies are usually associated with premium prices and higher than average coats for
the industry as the extra value customers .The aim is to differentiate in a way that leads to a price
premium in excess of cost of differentiation

- differentiation gives customers a reason to prefer one product over another and this is central to
strategic market thinking

Focus strategies or niche strategies

- can be either differentiation focus or cost focus .Differentiation focus strategy aims to differentiate
with one or a small number of the target market segments.The special needs of the segments means
that there is an opportunity to differentiate the product offering from the competitors who may be
targeting a broader group of customers

Advantage

-you develop caders - experienced people

- cost focus is where a firm seeks a cost leadership with one or a small number of large market segments
by dedicuting itself to segment.The cost to the user can seek economies that can be ignored or missed
by broadly targeted competitors

The product life cycle

- just like a human being products are conceived ,born ,grow reach old age and die

- a marketing executive should be conversant will all the stages in order to appreciate how to come up
with marketing mix decisions

-PLC can be divided in to several stages characterised by revenue generated by the product. If a curve is
drawn showing product revenue overtime ,it may take one of many different shapes an example is
shown below

- the life cycle concept may apply to a brand or to a category of product.lts duration may be as short as a
few months for a fad item or a century or more for product categories such as the gasoline powered
automobile

- product development is the incubation stage of product life cycle

- there are no sales and the firm prepares to introduce the product

- as the product progress through its life cycle ,changes in the mix usually are required in order to adjust
to the evolving challenges and opportunities

Introduction stage

- when the product is introduced , sales will be low until customers become aware of the product and ita
benefits

- some firms may announce their product before it is introduced , but such announcements also alert
competitors and remove the element of surprise

- Advertising costs typicaly are high during this stage in order to rapidly increase customer awareness of
the product and to target the early adopters
- during the introductory stage the firm is likely to incur additional costs associated with the initial
distribution of the product

- these higher costs coupled with low sales volumes usually make the introduction stage a period of
negative numbers

- during the introduction stage , the primary demand for the product class .The following are some of
the marketing mix implications of the introduction stage.

Marketing mix implications

1) product one or few product ,relatively undifferentiated

Services marketing

Objectives

- define a service

- understand the characteristics of services that distinguish them from products

- understand the challenges of Marketing services

- appreciate the importance of people in the marketing of services

Definition

- a service can be viewed as the action of doing something for someone or something . lt is largely
intangible ( ie not material ) you can not touch it. You cannot see it , hear it , feel it , so a service context
creats ita own series of challenges for the marketing manager since he or she must communicate the
benefits of a service by drawing paralles with imegency and idea that are more tangible .

- as opposed to a service , a product is tangible ( ie material ) since you can touch it or own it . A service
tends to be an experience that is consumed at the point where it is purchase and cannot be owned since
quickly perishws .A person could go to cafe one day and enjoy excellent serviced then return the next
day and have a poor experience

- lnfact many organisations do have service elements to the product they sell.eg the speed with which
someone is intended to courtesy etc

Characteristics of services

1) Lack of ownership

- you cannot own and store a service like you can a product . services are used or hired for a period of
time.

2) intangibility

- you cannot hold or touch a service unlike a product .ln saying that although services are intangible and
experience consumers obtain from the service has an impact on how they will percieve it. What do
customers percieve from customer service? The location inner presentation of where they are
purchasing service

3) inseparability

- service cannot be separated from the service providers . A product when produced can be taken away
from the producer. However a service is produces at it near the point of purchase .Take visiting a
restaurant , you order, waiting and delivery for the meal the service provided by the waitress is all apart
of the service production process and is inseparable , the staff in a restaurant are as a part of the
process as well as the quality of food provided.

Perishability

- services last a specific time and cannot be stored like a product for later use. If travelling by train ,
coach or air the service will only last the duration of the journey. The service is developed and used
almost simultaneously

Heteroginity

- it is very difficult to make each service experience identical. If travelling by plane the service quality
may differ from the first time you travelled by the airline tobthe second because the airhostess is more
or less experienced

The Marketing Mix of a service

- the service marketing mix comprise of 7ps

These include

1) product which is the service

2) price

3) place

4) promotion

5) people

6) process

7)physical evidence

1) People

- an essential ingredient to any service provision is the use of appropriate staff and people

- service is about the people maximizing the power of people to provide customers with a great
experience

- recruiting the right staff and training them appropriately in the delivery of their service is essential if
the organisation wants to obtain a form of competitive advantage

- consumers make judgements and deliver perceptions of the service based on the employees they
interact with
- staff should have the appropriate interpersonal skills , aptitude and service knowledge to provide the
service that customers are paying for

- overuse of technology can lead to dying service , answering devices for phone calls

-striking a balance between technology and people is central to every business as this helps achieve
invisible excellence .

Process

- refers to the systems used to assist the organisation in delivering the service

- think of the process that allows you to obtain an efficient service delivery

- an efficient service will foster consumer loyalty and confidence in the company

Physical Evidence

- where is the service being delivered ? Physical evidence is the element of the service mix which allows
the consumer again to make judgments on the organisation. If you walk into a restaurant your
expectations are of a clear friendly environment.

- Physical evidence is an essential ingredient of the service mix , consumers will make perceptions based
on their sight of the service provision which will have an impact on the organisation's perceptuated plan
the service

Points to note

1) create service adapts and evolves

2) great service is one that customers take for granted

3)Living serving leverages tacit knowledge by understanding ,honouring and responding to the mind,
body and soul of the customer.

4)mind - achieve on meeting of minds

5) body -is complex.Enable customers to make choices

6) Soul- the soul is the inner energy that keeps the mind and body together therefore harness the
collective energy of people and leverage the culture embedded the organisation

The mind

-everything you do , do around the customer and their customers - think of interdepartmental problems
in your organisation's

- earn the trust of your customers and employees

- put people at the centre of everything - technology is the only meant to aid speed ,not to be a barrier
e.g system is down

- empower champions of changes

- nature your supplier chain

- take the long term view

Body

- lt is the physical part that enables the minds to act on its decisions using energy from the soul

- as an organisation focus on the physical structure of people , processes and technologies that allows
customers needs to flow to provide a service outcome how easily this flow occurs , and how
appropriately it is responded to

- How to achieve this :

Energy with customers

Accelerating the customers' opportunities triger customer

Delivering a great service

Co creating the future

Soul

- maximise collective energy

- ensure people can realise their own and their customers needs

- breaking organisational silos

- nature a cooperative mind set

- prompt people to collaborate across boundaries

- leverage organisational culture its like the DNA of a person

- continuously strive in the wider business ecosysts them - this requires being open minded and
adaptable - think of the different cultures across the ward

Questions

Discuss the characteristics of services and their implication to the HR practitioner in helping the
organisation achieve a competitive age
- the characteristics are associated to people employees

- there is need to look / Improve the welfare of employees so that they excellent in delivering the
service

PLC continues

Price- generally high ,assuming a skim pricing strategy for a high profit margin as the early adopters buy
the product and the firm seeks to recoup development cost quickly .ln some cases a penetration pricing
strategy is used and introductory prices are set low to gain market share rapidly

Distribution /place

-should be selective and scaltered as the firm commences implementation of the distribution plan

Promotion

- promotion is aimed at building brand awareness . Samples or trial incentives may be directed toward
early adopters .The introductory promotion also is intended to convince potential resellers to carry the
product

Growth stage

- the growth stage is a period of rapid revenue growth

- sales increases as more customers become aware of the product and its benefits and additional market
segments are targeted

- once the product has been proven a success and customers begin asking for it , sales will increase
further as more retailers become interested in carrying

- the marketing team may expand the distribution at this point. When competitors enter the market
often during the later part of the growth stage, there maybe price competition and or increased
promotional costs inorder to convince consumers that a firm's product is better than that of the
competition

- during the growth stage, the goal is to gain consumer preference and increase sales . The marketing
mix may be modified as follows

product

- new product features and packing options , improvement of product quality

Price

- maintained at high level if demand is high, or increased to capture additional customers

Distribution / place

- becomes more intensive . Trade discounts are minimal if resellers show a strong interest in the product

Promotion

-it is the most profitable

- sales continues to increase in to this stage , they do so at a slower pace

- because brand awareness is strong , advertising expenditure will be reduced competition may result
in reduced market share and or prices

- the competing products may be very similar at this stage , increasing the difficulty of differentiating the
product.The firm places effort into encouraging competitors to switch increasing usage pwr customer,
and converting non- users to customers

- sales promotions may be offered to encourage retailers tobgive the product more shelfspace over
competing products

- during the maturity stage the primary goal is to maintain market share and extend the product life
cycle

Marketing mix decisions may include

i)product

- modifications are made and features are added in order to differentiate the product from competing
products that may have been introduced

ii)price

- possible price reductions in responds to competition while avoiding a price war

iii)distribution / place

- new distribution channels and incentives to resellers inorder to avoid loosing shelf space . can look for
other markets

iv) promotion

- emphasis on differentiation and building af brand loyalty . incentives to get competitors , customers to
switch

Decline stage

- eventually sales begin to decline as the market becomes saturated , the product becomes
technologically obsolete , or customer tastes change . If the product has developed brand loyalty , the
profitability may be maintained longer . unit Costa may increase with the declining production volumes
and eventually no more profit can be made

- during the decline phase , the firm generally has 3 options:

- maintain the product in the hope that competitors will exit . Reduce costs and find new uses for the
product

- harvest it , reducing marketing support and coasting along unt no more profit can be made

- discontinue the product when no more profit can be met or other is a successor product

- the marketing mix may be modified as follows:

Product

The number of products in the product line may be reduced. Rejuvenate surving products to make them
look new again

Price

Prices may be lowered to liquidate inventory of discontinued products . prices may be maintained for
continued product serving a niche market

Distribution

It becomes more selective . Channel that no longer are profitable are phased out

Promotion

Expenditures are lower and aimed at reinforcing the brand image for continued products

Limitations of the product life cycle concept

- the term life cycle implies a well defined life cycle as observed in living organisations , but products do
not have such a predictable life and the specific life cycle curves followed by different products vary
substantially. Consequently , the life cycle concept is not well- suited for the forecasting of product sales

- furthermore critics , have argued that the product life cycle may become self - fulfilling eg if sales peak
and then decline , managers may conclude that the product is in the decline phase and therefore cut the
advertising budget thus precipitating a further decline

- nonetheless the product life cycle concept helps marketing managers to plan ,altemate marketing
strategies to address the challenges that their products are likely to face. It is also useful for monitoring
sales results overtime and comparing them to those of products having a similar life cycle.
SWOT ANALYSIS

- ln order to come up with a unique value proposition strategists are suppose to analyse the strength ,
weaknesses , opportunities and threats within their organisation

- the following are potential resource strengths and competitive capabilities

1) powerful strategy- strength

2)a product that is strongly differentiated - strength

3) strong financial condition - strength

4) strong brand name and image- strength

5) an attractive customer base- strength

6) economies of scale and learning and experience curve advantages - advantage on cost of production-
strength

7) superior technology - strength

8) superior intellectual capital - experts human resources strength

9) cost advantage over your rivals

10) strong advertising promotion capabilities

11) product innovation capabilities

12) good supply chain management capabilities