Marketing Strategy

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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

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.

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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 

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

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.) 

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 leader

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. 2. 3. 4. Counterfeiter ± sells fake look-alikes Cloner ± emulates with slight variations Imitator ± Copies with slight variations 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 Attacker (smaller) Frontal Attack

Defender (bigger)

Contraction Defense

Position Counteroffensive Defense Guerilla Attack Mobile Defense

Flank Attack

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