LOGO

By-Vaibhav Raj Dixit

Roll no .36
MBA Gen(sec A)
 What is Marketing Strategy?
 A Marketing Strategy is an integrated set of choices
about how we will create and capture value, over long
periods of time. Marketing strategy is a process that
can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales
and achieve a sustainable competitive advantage. A
marketing strategy should be centred around the key
concept that customer satisfaction is the main goal.

 A marketing strategy combines product development,

promotion, distribution, pricing, relationship management
and other elements; identifies the firm's marketing goals,
and explains how they will be achieved, ideally within a
stated timeframe
 Types of Strategies.

Differentiation- oriented strategies.

Price oriented strategies
 Differentiation- oriented strategies
Here the firm seeks to be unique on some
aspects which are valued by the customer.
It charges an appropriate premium price
for the unique attributes.
They can be of many types :-
 Strategies with emphasis on product.
 Strategies with emphasis on
place/distribution/channel.
 Strategies with emphasis on promotion.
Differentiation with emphasis on product
Here the firm differentiates itself from its
competitors on the basis of product.
Product includes attributes like
functionality, packing convenience,etc.it
can also include service offered and
experience delivered.
E.g.- Intel, EBay, Gillette
Shampoo sachets, small sized soft drinks
and what not.
Kingfisher airlines(on basis of service)
 Differentiation with emphasis on Distribution

 The companies these days set up 3 tier distribution

system and reach villages for selling their products. Like
Shakti by HUL and e-choupal by ITC.These are the 2
leading projects set up for the potent rural market
exploitation.
Differentiation with emphasis on promotion
 Companies rely on their power of promotion to wage differentiation.
They have all other positives but they rely more on psychological
appeals prestige and status issues. e.g. Dove, Lux , coke, Nike
have high image appeal. And having them makes the customer part
of the image.
 Price-Oriented Strategies
 The firm takes advantage of the low cost and
sells as a low cost brand and enjoys an overall
cost leadership in the industry
 E.g. Maruti 800. it created a price oriented
strategy. Its early entry ,large production
capacity, lower initial investment, high level of
indigenous components made it the market
leader because it lets it to deliver cars at lower
prices. And Nirma
 if a company doesn't get cost leadership ,it
cannot compete on basis of prices.
 NOW A DAYS
The companies are not leaders in the
market by just cost leadership of
differentiation. They have to mix both in
order to strike the right balance and be the
leader for e.g. Dell Computers and
Tropicana juices.
 The BCG matrix
 The BCG matrix  is a chart that had been created by Bruce Henderson for
the Boston Consulting Group in 1968 to help corporations with analysing
their business units or product lines. This helps the company allocate
resources and is used as an analytical tool in brand marketing, product
management, strategic management.
LOGO

Porter’s generic strategies

3 game plans
 Porter’s generic strategies
1. Overall cost leadership – business works
hard to achieve lowest production &
distribution costs so that it can price lower
than competition & win a large market
share. Firms pursuing this strategy must be
good at engineering, purchasing,
manufacturing & physical distribution (they
need less marketing skills). Problem is
competition operating with even lower costs
(e.g. the Chinese Dragon!).
 Porter’s generic strategies

2. Differentiation – business concentrates on

achieving superior performance in an
important customer benefit area valued by a
large part of the market. So the firm seeking
quality leadership must make products with
best components, put them together
expertly etc. (It’s a Sony!).

 Intel inside, idiot outside!

 Porter’s generic strategies

3. Focus – business focuses on 1 or more narrow

market segments, gets to know these
segments intimately & pursues either cost
leadership or differentiation within the target
segment (niche marketing).
 SWOT Analysis

 S – Strength
 W – Weakness
 O – Opportunities
 T – Threats
 Remember - SW are internal, OT are external
 GE Model
 Each business is rated in terms of market attractiveness & business strength.
Companies are successful to the extent that they enter attractive markets &
possess the required business strengths to succeed in those markets. If 1 of the
factors is missing, the business will not produce outstanding results (strong
company in unattractive market or weak company in attractive market will not do
well).
 Dealing with competition
 Porter’s Model:
1. Threat of intense segment rivalry – segment
unattractive if it contains numerous strong &
aggressive competitors
2. Threat of new entrants – most attractive
segment has high entry & low exit barriers.
3. Threat of substitute products – segment
unattractive when there are actual/potential
substitutes for product (placing limit on prices).
4. Threat of suppliers’ growing bargaining power
 Porter’s Model
3. Threat of buyers’ growing bargaining power –
segment unattractive if buyers possess strong
bargaining power
 Dealing with competition - market leader
 Expanding total market –
1. New users – market penetration, new-market
segment, geographical expansion
2. New uses – soap/cream
3. More usage - shampoo
 Dealing with competition -
market leader
 Defending market share –
1. Position defense – make the brand
impregnable (Heinz)
2. Flank defense – P&G (Tide)
3. Preemptive defense – Seiko with 2300 watch
models, has left nothing to chance!
4. Counteroffensive defense – Frontal, flank or
pincer
 Dealing with competition -
market leader
5. Mobile defense – through a) broadening
(Reliance from petrochemicals to petrol, LPG
etc) & b) diversification into unrelated
industries (Tata)
6. Contraction defense – Withdrawing from non
core areas (HLL from agrovet etc.)
 Dealing with competition -
market leader
 Expanding market share – Best example is
P&G, thru:
1. Customer knowledge
2. Product innovation
3. Quality
4. Line/Brand extension/Multibrand
5. Heavy advertising/sales promo
6. Aggressive sales force etc
 Dealing with competition –
market challenger
1. Frontal attack
2. Flank attack
3. Encirclement attack – grand offensive on
several fronts
4. Bypass attack – diversifying into unrelated
products/new markets/new technologies
5. Guerilla warfare - Shivaji
 Market follower
1. Counterfeiter – sells fake look-alikes
2. Cloner – emulates with slight variations
3. Imitator – Copies with slight variations
4. Adapter – adapts from leader & improves
 Market nicher
 Before you look for a niche in the market, make
sure there is a market in the niche.
 Instead of being a follower in a large market, it is
sometimes better to be a leader in a small
market
 Example – Logitech has become the king of
niche markets by making every variation of
computer mouse!
 Encirclement

Flanking Defense

Preemptive
Defense Contraction
Defender
Frontal Defense
Attacker (bigger)
(smaller)
Attack Position
Counteroffensive Defense
Guerilla Attack

Mobile Defense
Flank Attack