Marketing Strategy PGDMM

Marketing Strategy
S. No Reference No Particulars Slide

From-To
1 Chapter 1 Introduction to Marketing 4-21
2 Chapter 2 Concept of Strategy 22-41
3 Chapter 3 Strategic Intent of a Business 42-61
4 Chapter 4 External Environment and Industry Analysis 62-83
5 Chapter 5 Internal Environment and Organisational Analysis 84-103
6 Chapter 6 Customer Value, Corporate and Business Strategies 104-127
7 Chapter 7 Competitive Strategies 128-151
8 Chapter 8 Marketing Strategies 152-175
9 Chapter 9 Developing Strategies for Consumer and Industrial Market 176-199
10 Chapter 10 Marketing Strategies and Marketing Mix 200-224
11 Chapter 11 Branding Strategies 225-249

Course Introduction
• A strategy is a long-term plan to achieve certain objectives. A marketing strategy is a

marketing plan designed to achieve marketing objectives of an organisation.
• Effective marketing begins with a well-informed marketing strategy. A good marketing
strategy helps an organisation to define their vision, mission and business goals and ways of
achieveing them.
• A marketing strategy helps to put the right mix of marketing approaches in place so that sales
and marketing activities can be inserted together effectively in an marketing plan.
• A successful marketing strategy depends on understanding customers, what they need and
how they can be convinced to purchase products or services.
Chapter 1: Introduction to
Marketing
Chapter Index

From-To
1 Learning Objectives 6
2 Topic 1 Defining Marketing 7-9
3 Topic 2 Essential Concepts of Marketing 10-17
4 Topic 3 Concept of Marketing Mix 18
5 Let’s Sum Up 19
• Explain the concept of marketing
• Define the essential concepts of marketing
• Discuss the concept of marketing mix
1. Defining Marketing
• According to the American Marketing Association, “Marketing is the process of planning

and executing the conception, pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individual and organisational objectives”.
• According to the marketing guru Philip Kotler, “Marketing is typically seen as the task of
creating, promoting, and delivering goods and services to consumers and businesses; it is
defined as a societal process by which individuals and groups obtain what they need and want
through creating, offering, and freely exchanging products and services of value with others”.
Objective of Marketing
Some of the marketing objectives of an organisation are as follows:
• Creating demand for the products by identifying the needs and wants of customers: The
consumers get familiar with the usage of products through different promotional programs,
such as advertising and personal selling.
• Increasing the market share of the organisation: The marketing efforts such as promotion
create product awareness in the market.
• Building the goodwill of the organisation in the market: Every organisation tries to earn a
good reputation in the market by providing quality goods to its customers.
Nature of Marketing
Elements of the marketing mix are also referred by the term 4Ps, shown as follows:
Promotion
Place 4Ps Product
Price
1. Essential Concepts of Marketing
• Marketing includes various key concepts that a marketer needs to know.

• Without the knowledge of these concepts, it is not possible to meet customers’ expectations
and organisational objectives.
• The principal concepts of marketing are based on the product created by the organisation.
• Marketing is a business function that deals with promoting and selling products and services.
• In order to effectively implement marketing strategies, you need to understand the concepts of
marketing.
Market
• A market refers to a place where a business is carried out or where actual buying and selling of
products take place.
• The term market does not necessarily denote any particular place for buyers and sellers.
• The market can also be a virtual place where buying and selling are done through the Internet.
• According to H.E. Mitchell, “Market, for most commodities, may be thought of not as a
geographical meeting place but as getting together of buyers and sellers in person, by mail,
telephone, telegraph, or any other means of communication”.
Value and Satisfaction

The relationship between product value and customer satisfaction are as follows:
Marketing Channels
There are three kinds of marketing channels that a marketer uses to reach its target customers,
which are as follows:
Communication channels
Distribution channels
Service channels
Competition
Competition can be of three types:
Direct Competition
Indirect Competition
Budget Competition
Target Markets, Segmentation and Positioning

• Target Market: It is not possible for any organisation to serve all markets. The part of the
market where an organisation plans to trade is known as the target market.
• Segmentation: When the marketer selects a portion from the total market and further divides
the selected market into sections, it is known as segmentation.
• Positioning: After identifying the target market, the marketer formulates the marketing
strategies and implements them in order to position a brand. This process is known as
positioning.
Concept of Differentiation in Marketing

An organisation can add differentiated features to its product in terms of product, service,
manpower and image. Based on this, differentiation is categorised as follows:
Product Differentiation
Service Differentiation
Manpower Differentiation
Image Differentiation
Marketing Utilities
There are five types of marketing utilities:
Form
Information Place
Marketing
Utilities
Possession Time
Concept of Marketing Mix
• A marketing mix refers to the 4Ps (Product, Price, Place and Promotion) that are used to
decide the marketing strategy for a product.
• These 4Ps are used to achieve marketing objectives.
• These 4Ps are also referred collectively as a business tool used by marketers to determine a
product or brand offer.
• When the marketing mix is referred in the services market, these 4Ps get expanded to 7Ps.
This happens because of the different nature of services.
Let’s Sum Up
• Marketing forms an integral part of an organisation. Marketing addresses three major

concerns, which are identifying the target customers, satisfying customers’ needs and retaining
the customers.
• The main objective of marketing is to create awareness about products. In marketing, goals
aim at increasing awareness about the product, providing information about the product
features and encouraging customers to buy the product.
• The nature of marketing depends on four main aspects, which are marketing focuses on
customers, marketing deals with product, price, place and promotion, marketing focuses on
satisfying exchange relationships, and marketing happens in a dynamic environment.
Post Your Query
Course related queries are channelized through Blackboard. To post a query relating to this course
presentation please login to Student Zone.
Chapter 2: Concept of
Strategy
Chapter Index

From-To
2 Topic 1 Introduction to Strategy 25-30
Strategic Mapping
3 Topic 2 31-32
Strategic Decision Making

4 Topic 3 33-36
Paradigm Shift in Marketing Strategies -

5 Topic 4 37-38
Marketing Mix: From 4P's to 4A's
6 Let’s Sum Up 39
• Explain the concept of strategy
• Describe strategic mapping and its advantages
• Explain the importance of strategic decision making
• Discuss the paradigm shift in marketing mix strategies
1. Introduction to Strategy
• The concept of strategy was established in the 1960s by Igor Ansoff, known as the father of
strategic management.
• According to Johnson and Scholes, “Strategy is the direction and scope of an organisation
over the long term, which achieves advantage for the organisation through its configuration of
resources within a challenging environment, to meet the needs of markets and to fulfil
stakeholder expectations”.
• A strategy helps an organisation to perform in a better manner and achieve a competitive edge
by providing a platform for it.
Levels of Strategy
Functional Level
Human
Resources
Business Level
Marketing
Corporate Level Business Unit Research &

1 Development
Corporate Business Unit Production &

Office 2 Operations
Business Unit
Finance
3
Concept of Strategic Business Unit (SBU)

In an organisation, SBUs are of two types, which are:
Strategic Business
Units
Multiple-level
Single-level Strategic
Strategic Business
Business Units
Units
Strategy vs. Tactics

• Sometimes a strategy is always confused with tactics.
• However, there are certain differences between the two.
• A strategy refers to a plan to achieve certain desired goals under difficult, challenging and
uncertain conditions.
• On the other hand, tactics refer to a small plan, event, procedure or effort in order to achieve a
desired end or outcome.
• Therefore, a strategy includes a number of tactics.
• For example, the overall strategy for the e-retailer Snapdeal is to create a strong brand image
and reputation. As a part of its overall strategy, the company adopted the tactics of using its
brand name in television shows, such as Big Boss.
Strategy vs. Planning

• Apart from confusions between a strategy and tactics, a strategy is sometimes also used
synonymously with a plan.
• A plan is an outlay of steps taken to accomplish certain objectives.
• There might be one or more than one desired objective to be achieved under a strategy.
• A strategy always deals with the questions ‘what’ and ‘why’ while a plan is always focused on
‘how’.
• A plan always talks about the steps to achieve certain objectives while strategy talks about the
best steps and practices to attain the same.
5P’s of Strategy by Mintzberg

5 Ps of strategy given by Henry Mintzberg are:
Plan
Perspective Ploy
Position Pattern
1. Strategic Mapping
• Strategic mapping refers to a communication tool that states how an organisation creates value
in order to achieve set organisational goals.
• It shows a way of logical step-by-step journey between different strategic objectives in the
form of a cause and effect chain.
• Strategy mapping is done through a diagram that gives a clear picture of organisational
objectives in accordance with its value system.
• It may also be called an element of documentation related to a balanced scorecard.
• Strategy mapping helps in improving the performance and internal perspective of the working
of an organisation and contributes to the learning and growth perspective.
2. Strategic Mapping
Four Perspectives in Strategic Mapping

There are four very popular perspectives, which are:
Financial Perspective
Customer
Internal
Innovation and Learning

1. Strategic Decision Making
• Strategies are developed for long term and determine the future course of an organisation.
• Therefore, strategic decisions play a crucial role in achieving the goals and objectives of the
organisation.
• These decisions entail a substantial expenditure of human and non-human resources.
• Thus, the process of strategic decision making should be performed carefully.
• The strategic decisions of an organisation are taken by its top management.
Types of Strategic Decisions
• In these types of decisions, a

Rational decisions structured, ordered and logical
approach is used.
• These decisions require active

Behavioural decisions participation of employees for
effectiveness.
• These decisions involve solving

Intuitive decisions
problems by using common sense.
Features of Strategic Decisions

There are several features of a strategic decision in an organisation, which are:
Concerning with both efficiency and

effectiveness
Considering the broad range of stakeholders
Integrating various functions in the

organisation
Issues in Strategic Decisions

Strategic decision making has several issues that may arise in an organisation, which are:
Rationality in decision making
Creativity in decision making
Volatility in decision making
Different criteria for making strategic decisions
Individual factors in decision making
Individual versus group decision making

1. Paradigm Shift in Marketing Strategies - Marketing Mix:
From 4P'S to 4A'S
• There have been different strategies used in marketing mix so far.

• 4Ps is one of the most common model of marketing and thus, used by many organisations to
promote their products and increase their sales volume in the past.
• There can still be seen the cases of the 4P model of the marketing mix.
• However, the paradigm has shifted towards 4A model which is a customer centric model.
• Earlier, there was a different model of 4C, which was followed by the 4P model for a long
time.
2. Paradigm Shift in Marketing Strategies - Marketing Mix:
From 4P'S to 4A'S
The paradigm shift in marketing strategies is shown as:
4P's 4C's 4A's

Let’s Sum Up
• The term strategy refers to an action plan that offers guidance to an organisation in attaining
its objectives and achieving success.
• The process of formulating the long-term plans for an organisation is defined as strategic
decision making.
• The concept of strategy was established in the 1960s by Igor Ansoff, known as the father of
strategic management.
• There are three level of strategy, such as corporate level strategy, business level strategy and
functional level strategy
• A strategist is a person who develops strategies for accomplishing the objectives of an
organisation.
Post Your Query
Chapter 3: Strategic Intent of
a Business
Chapter Index

From-To
2 Topic 1 Concept of Strategic Intent 45-48

Vision Statement
3 Topic 2 49-50
Concept of Mission Statement
4 Topic 3 51-52
Difference between Vision and Mission
5 Topic 4 53
Setting Goals and Objectives of Business

6 Topic 5 54-57
Concept of Stretch, Leverage and Fit

7 Topic 6 58
8 Let’s Sum Up 59
• Discuss the concept of strategic intent
• Explain vision statement
• Describe the concept of mission statement
• Explain the difference between vision and mission
• Discuss how to set goals and objectives of business
• Discuss the concept of stretch, leverage and fit
1. Concept of Strategic Intent
• Strategic intent plays a very crucial part in the success of an organisation.

• An organisation, whether large or small, cannot succeed only on the basis of innovation.
• Innovative ideas need to be supplemented with clearly defined long-terms goals and
objectives that depict the future road map for the organisation.
• These long-term goals and objectives should be divided into short-term goals and objectives
and the means to achieve them should be defined by the organisation.
• Professors Hamel and Prahalad defined and popularised the term “strategic intent”.
According to them, “Strategic Intent is an ambitious and compelling dream that provides the
emotional and intellectual energy for the journey to the future.”
The 3Ds of strategic intent are:
• It corresponds to the future course of

Direction action of an organisation.
• It is the feature responsible for

unearthing new avenues, ideas and
Discovery creativity to explore the future of an
organisation.
• It calls for strategic intent to provide

Destiny the direction for the future destination
of an organisation.
Strategic Intent Process

Setting the strategic
intent
Defining the
challenges
Empowering the
strategic intent
Importance of Strategic Intent
Clarity
Focus
Inspiration to employees
Reference point
1. Vision Statement
• The long-term goals of an organisation are defined as its vision. It is what the organisation
aims to be in the future.
• According to Paul Kotter, “Vision is a description of something (an organisation, a corporate
culture, a business, a technology, an activity) in the future.”
• According to Miller and Dess, “Vision is the category of intentions that are broad, all
inclusive and forward thinking.”
• Vision is a dream for a future that materialises when visionaries take action.
• An ideal vision statement includes the organisation’s core values, principles, priorities, plans
and goals.
2. Vision Statement
Features of Vision Statement

Conciseness
Inspirational
Future-focused
Clear
Directional
Value-based
Challenging
1. Concept of Mission Statement
• Mission puts forward the reason for the existence of an organisation and the path to achieve
the vision.
• The mission statement is a written statement that outlays the mission of an organisation.
• A vision is a view of an organisation looking into the future, whereas mission is what an
organisation is and why it exists.
• According to Hunger and Wheelen, “Mission is the purpose or reason for the organisation’s
existence.”
• According to Thompson, “Mission is the essential purpose of the organisation, concerning
particularly why it is in existence, the nature of the business (es) it is in and the customers it
seeks to serve and satisfy.”
2. Concept of Mission Statement
Creating Mission Statement

The process of creating a mission is as follows:
Analysing the
vision statement
Defining the
business
Formulating a
mission
Difference between Vision and Mission
• Mission and vision statements are summaries of the goals and objectives of an organisation.
• A vision statement defines what a company wants to do in the future, whereas a mission
statement outlines what it wants to do now.
• The mission statement is concentrated on the present; it defines the customer(s), critical
processes and also gives information about the level of performance required.
• The vision statement is focused on the future; it provides inspiration and motivation. It not
only defines the future of an organisation but also the future of the industry or society in
which the organisation hopes to bring about change.
1. Setting Goals and Objectives of Business
Features of Objectives
Understandable
Specific time-horizon
Set within the constraints
Measurable and controllable
Form a hierarchy
Difference between Objectives and Goals

Goals Objectives
Broadly stated aims Specific aims
Qualitative in nature Quantitative in nature
Long term Short term
Cannot be measured in most cases Can be measured in most cases

Factors Affecting the Objectives
Environmental forces
Availability of resources
Values of the top management
Awareness of past objectives

Critical Success Factors

• Critical Success Factors (CSF) are the factors that facilitate the growth of an organisation.
• CSFs are defined as the key factors, such as skills or resources, which are imperative for
organisational success.
• The identification of CSFs helps in directing the resources towards those areas where an
opportunity to attain profit is visible to the organisation.
• Key Performance Indicators (KPI) are used for the measurement and evaluation of CSFs. They
help in defining and measuring the progress of an organisation. They also help in giving a
clear picture of what is important for the organisation and the means to accomplish the
objectives.
Concept of Stretch, Leverage and Fit
• When an organisation has fewer resources and more aspirations, a stretch is produced. For
example, when an organisation does not have enough resources to execute projects, it can
apply the concept of stretch. It leads to leveraging the organisation’s resources in the direction
of innovation and persistence.
• Leverage further causes stretching a meagre resource base by concentrating, accumulating and
conserving the resources. It helps in concentrating the stretch and focusing on effective
employment of resources.
• A fit approach, on the other hand, is a situation wherein the organisation’s resources fit or
match with the environment through employment of techniques such as SWOT analysis.
Let’s Sum Up
• Strategic intent lays out the goals, objectives, future direction and the core principles of an
organisation.
• Strategic intent is a programme line that would create a future desirable by an organisation.
• A vision statement defines what a company wants to do in the future, whereas a mission
statement outlines what it wants to do now.
• One of the most important activities of an organisation is setting up the goals and objectives of
business. The objectives should be easy to pursue and should, therefore, be framed
accordingly.
• Financial objectives help an organisation in gaining financial stability, whereas the
achievement of strategic objectives results in a gain in competitiveness.
Post Your Query
Chapter 4: External
Environment and Industry
Analysis
Chapter Index

From-To
2 Topic 1 Concept of Environment 65-67
3 Topic 2 Components of External Environment 68-74
4 Topic 3 Industry Analysis 75-80
5 Let’s Sum Up 81
• Discuss the concept of environment of an organisation
• Discuss the various elements of external environment
• Describe porter’s model of industry analysis
1. Concept of Environment
• The term environment can be defined as the surroundings or conditions in which an individual
or organisation lives or operates.
• In the context of marketing, an organisation operates within an environment that constitutes
several internal and external factors.
• External factors such as political, economic, social, cultural, technological, and legal factors
affect the organisation to a large extent.
• On the other hand, there are some internal factors that affect the operations of an organisation.
Organisational culture, structure, capabilities, and resources are a few internal factors that are
controlled and governed by the organisation itself.
• All these external and internal factors that directly or indirectly affect an organisation are
referred to as environment.
Characteristics of Environment
Major characteristics of the environment surrounding an organisation are:
Complexity
Vibrancy Environment Versatility
Uncertainty
Types of Environment
Environment
External Environment Internal Environment

1. Components of External Environment
The six main components of the external environment are:

Political
Economic
Socio-cultural
External
Environment
Technological
Ecological
Legal
Political Environment
• Factors, such as laws related to public affairs, government policies, fair trade decisions, tax
regulations, and subsidy policies constitute the political environment.
• The political environment might have both positive and negative effects on the organisation.
• Business activities are affected positively by government policies such as tax incentives or
subsidies; whereas strict government regulations or increase in tariffs have a negative impact
on business activities.
Economic Environment
• One of the most important components of the external environment of an organisation is its
economic environment, which includes various macro and micro economic factors.
• National Income (NI), Per Capita Income (PCI), Gross Domestic Product (GDP), employment
level, inflation level, interest rate, and availability of credit are some of the economic factors
that directly affect various industries in a country.
• In addition, foreign exchange rate fluctuations and foreign trade balance also affect the
business activities of an organisation to a large extent.
Socio-Cultural Environment
The various factors that constitute a socio-cultural environment are:
Demography
Social customs
Family structure
Social concerns
Technological Environment
The technological environment of the organisation is influenced by the following factors:
Technological developments
Research and development
Technological impact on the society
Rate of change of technology

Ecological Environment
• Ecological environment signifies the natural environment in which an organisation works. For
example, agro industries are invariably found in places known for agricultural productivity.
• In addition, nowadays, consumers have an increasing concern about global warming and
environmental damage.
• Recent trends suggest an inclination towards eco-friendly products, to reduce environmental
pollution.
• Further, pressure from both government and non-government organisations leads to the
business organisations to reduce their carbon footprint and produce more eco-friendly
products.
Legal Environment
• The laws and the regulatory framework that directly or indirectly affect an organisation are
considered under the legal environment of an organisation.
• Organisations need to follow the laws of countries in which they operate. The regulatory
framework differs across countries.
• Non-conformity with the laws of a country could result in serious consequences for an
organisation.
1. Industry Analysis
Industry Evolution
There are four different trajectories by which industries evolve. Each trajectory poses limits on the
profit generating aspects of a business. The four trajectories are:
Radical changes
Intermediary changes
Creative changes
Progressive change
Porter’s Approach to Industry Analysis

Porter’s competitive forces are:
Threat of new entrants
Bargaining power of the suppliers
Bargaining power of the buyers
Threat of substitute products
Competitive rivalry among the existing competitors

Industry Life Cycle Model

The various stages of an industry life cycle are:
Industry Life Cycle Stages and a Company’s Marketing Strategies:
Marketing strategies followed at the

introduction stage
Marketing strategies followed at the growth

stage
Marketing strategies followed at the

maturity stage
Marketing strategies followed at the decline

stage
Merits and Demerits of Industry Life Cycle

Some merits of Industry Life Cycle :
• Long-Term Approach: Following the industry life cycle approach enables product designers,
service providers, government agents, and individuals to think and plan for the long term.
• Sustainable: The industry life cycle approach brings product and process development under
a more sustainable direction, and improves brand image and value for global market players as
well as small suppliers and producers.
The main drawback of the industry life cycle approach is:
• Limited Applicability: The industry life cycle approach is not applicable in all product
categories.
International Risk Assessment

There are two types of risks in the international environment, which are:
• Political risk: It involves a major risk of unstable government.
• Economic risk: It includes risks of fluctuating foreign exchange, inflation, and per capita
income of countries.
To assess the given risks, an organisation may follow various approaches that include:
• Economist method
• Delphi technique
• Business environment risk analysis
Let’s Sum Up
• All the external and internal factors that directly or indirectly affect an organisation are
referred to as environment.
• The different components of the external environment i.e. political, economic, socio-cultural,
technological, ecological, and legal are abbreviated as PESTEL.
• Factors, such as laws related to public affairs, government policies, fair trade decisions, tax
regulations, and subsidy policies constitute the political environment.
• One of the most important components of the external environment of an organisation is its
economic environment, which includes various macro and micro economic factors.
Post Your Query
Chapter 5: Internal
Environment and
Organisational Analysis
Chapter Index

From-To
2 Topic 1 Concept of Internal Environment 87-90
3 Topic 2 Organisational Analysis 91-93
4 Topic 3 Value Chain Analysis 94-100
5 Let’s Sum Up 101

• Discuss the concept of internal environment of an organisation
• Describe the concept and techniques of organisational analysis
• Elaborate the concept of competitive advantage
• Explain value chain analysis
1. Concept of Internal Environment
The components of internal environment are:
Organisational
Resources
Internal
Environment
Organisational Organisational
Capabilities Competencies
The various internal factors are as follows:

• Mission, vision, and objectives
• Value system
• Management structure and nature
• Internal power relationships
• Human resources
• Organisation’s image and brand equity
• Physical assets and facilities
• Marketing resources
• Financial factors
Organisational Resource Analysis

• Organisational resources can be classified into two types-tangible and intangible.
• Tangible resources include financial, physical, and human resources.
• Intangible resources are patents, copyrights, and intellectual property rights.
• For an organisation to succeed, the availability of all these resources is of paramount
importance.
• The adequacy of resources is strength, whereas the scarcity of resources can be counted as a
weakness for an organisation.
Core Competency
The difference between core competency and distinctive competency are:
Core Competency Distinctive Competency
1. It is a well-performed internal activity, which 1. It is a unique competitive activity that helps
is central to the organisation’s an organisation to perform better than its
competitiveness and profitability. rivals.
2. Examples: 2. Examples:
 Sony: Core competence in miniaturisation  Sharp Corporation: Expertise in flat panel
of products display technology
 McDonald’s: Core competence in delivery  Intel: Expertise in designing and
speed, customer care, and cleanliness manufacturing powerful microprocessors
 Federal Express: Core competence in for PCs
logistics management and customer service  Wal-Mart: Expertise in low cost distribution
and use of state-of-the-art retail technology
1. Organisational Analysis
• Organisational analysis can be defined as a process that identifies the strengths and
weaknesses of different functions of an organisation.
• It enables the organisation in strategy formulation with alignment to the existing opportunities
of the external environment.
• Organisational analysis includes the study of organisational resources, capabilities, core
competencies and value chain analysis of the organisation.
• Organisational analysis helps to determine the factors and their influence on organisational
procedures.
• These factors arise from various resources, behaviour, and methods applied in the
organisation; thereby producing direct impact on organisational capability.
Techniques of Organisational Analysis

The three broad classifications of organisational analysis techniques are:
Internal Analysis
Comparative Analysis
Comprehensive Analysis
Factors Affecting Organisational Analysis
• These factors include the nature of the

Organisation-related business of an organisation, its size,
factors complexity, type of products and services,
technologies, and processes used.
• These are contradictory political forces and

Internal environment-
power games among different departments
related factors
and management members.
1. Value Chain Analysis
• The concept of value chain analysis, introduced by Michael Porter, refers to a set of activities
that creates value for an organisation. These activities involve various stages through which a
product reaches the final customer.
• Porter defined value as “the price that a customer is ready to pay for an offering.”
• The difference between this value and total costs that an organisation bears for providing that
offering is called profit.
• Value chain analysis helps in providing clarity about areas where the strengths and weaknesses
of the organisation lie.
• Porter divided these areas into primary and support activities.
Primary Activities
The major primary activities are:
Inbound logistics
Operations
Outbound logistics
Marketing and Sales
Services
Support Activities
The major support activities are:
Firm infrastructure
Human resource management
Technology development
Procurement
Value Chain Analysis Process

• As a tool, value chain analysis helps in knowing how to create maximum value for customers.
• In a manufacturing business, raw material is used as inputs, and then value is added to turn
them into something of worth to other people.
• Similar to a manufacturing organisation, this idea applies in the service industry too where,
inputs of time, knowledge, equipment and systems is used to create services of real value to
customers.
• Value chain analysis helps in identifying the ways to create value for customers, whether
through products or services.
Value Chain Analysis Process

Value chain analysis is usually a three-step process, which is as follows:
Activity Analysis
Value Analysis
Changes Evaluation and Plan for Action

Benefits and Demerits of Value Chain Analysis

The benefits provided by value chain analysis are:
• Value chain analysis helps in

Identification identifying activities that make up an
organisation’s value chain.

evaluating how value can be increased
Evaluation
by minimising costs and maximising
profit.

recognising how value can be
Recognition improved by innovatively
recombining activities.
Benefits and Demerits of Value Chain Analysis

The demerits of value chain analysis are:
• The format of value chain analysis (as described

in Porter’s model) is basically made for
Applicability
manufacturing businesses and is therefore less
appropriate for other types of business.
• Analysing each and every activity of the value

chain is not an easy task and many people, in
Complexity spite of being aware of the value chain concept,
are not experts in its use.
• The concept is very old and has already been

Usefulness adopted by a number of supply chain and
operations experts.
Let’s Sum Up
• The internal environment consists of resources, competencies, and capabilities that reflect the
strengths and weaknesses of an organisation.
• Analysis of the internal environment helps an organisation to determine its capabilities.
• The components of the internal environment of an organisation consist of organisational
resources, organisational competencies, and organisational capabilities.
• Organisational capability is an organisation’s strength to use its skills to coordinate the
resources and put them to the best productive use.
• Value chain analysis is a tool that helps in knowing how to create maximum value for the
customers.
Post Your Query
Chapter 6: Customer Value,
Corporate and Business
Strategies
Chapter Index

From-To
2 Topic 1 Customer Value 107-110
3 Topic 2 Marketing and Corporate Strategic Planning 111-115
4 Topic 3 Business Units Strategic Planning 116-124

• Discuss the concept of customer value
• Assess corporate strategic planning
• Discuss the concept of business unit strategic planning
1. Customer Value
• Meeting customers’ requirements and creating customer value are the basic aims of marketing.
• Customer value can be defined as benefits that customers receive from products or services in
comparison to their cost.
• These benefits can be in monetary (money saving) or emotional terms like the enjoyment that
a customer gets after buying a product or service.
• However, customer value should not be confused with the value of customers to organisations.
• Customer value is the value that customers receive and not how valuable customers are to an
organisation.
2. Customer Value
Value Chain
• The primary activities are procuring resources or materials in business, called inbound
logistics. These resources are then converted into the final products with the help of proper
procedures/operations. Later, the final products are being shipped called outbound logistics.
Once the products are shipped, they are marketed for sales. The last primary activity is
aftersales services.
• On the other hand, support activities are being carried on by special departments. These
activities involve locating facilities, developing technology, managing human resources and
organisational infrastructure, which include planning, financing, accounting, legal and
governmental issues.
3. Customer Value
Core Competencies
• Core competency is a collective learning of an organisation attained by coordinating various
skills of employees and integrating technologies.
• Core competency is extremely vital in order to get a competitive advantage by any
organisation.
• An organisation can develop core competencies through explicit or tacit knowledge. Explicit
knowledge is easily communicated and identified while tacit knowledge exists in employees’
experience or is inherited in the culture of the organisation. Tacit knowledge enables the
organisation to get and sustain a competitive advantage in the market as this knowledge
cannot be imitated by its competitors.
4. Customer Value
Strategic Planning Process

The stages involved in the strategic planning process are:
Establishment of Strategic Intent
Formulation of Strategies
Implementation of Strategies
Strategic Evaluation and Control

1. Marketing and Corporate Strategic Planning
• Corporate strategy aids in developing objectives, assigning resources, and coordinating with
Strategic Business Units (SBUs).
• It is developed by the top management and includes the board of directors and the Chief
Executive Officer of the organisation.
• It helps in attaining objectives by evaluating all business opportunities available to an
organisation.
• A corporate strategy includes major decisions like mergers, takeovers, liquidation, and
diversification.
• The process of formulating corporate strategy is called corporate strategic planning.
Defining Corporate Vision and Mission

Both vision and mission statements are crucial to an organisation as they:
• Serve as a focal point to recognise the organisation’s aim and direction.
• Develop a standard for assigning organisational resources.
• Aid in inspiring employees so that they are able to make use of resources effectively.
• Ensure the stability of the purpose of the organisation.
• Help in the transformation of goals and objectives to maintain the work structure of an
organisation.
Establishing Strategic Business Units

The characteristics of an SBU are as follows:
• It is a single business or a group of linked businesses.
• It has its own traditional challenges.
• It has the manager who is responsible for the planning and implementation of strategies in
order to generate profits.
Allocating Resources to Each SBU

• Organisations uses various tools like GE/ McKinsey matrix and BCG matrix for the
classification of different SBUs based on their nature and competitive advantage.
• These tools help in determining which products organisations want to produce, which
products are unprofitable and need harvesting, which products are profitable, or which
products are required to hold on to the business.
• The BCG matrix enables an organisation to take investment decisions using a relative market
share and the annual growth rate of the market.
Evaluating Growth Opportunities

There are basically three types of growth opportunities available for organisations, which are:
• These opportunities are looked by

Intensive growth
organisations by expanding their
opportunities
current business.
• These are new business opportunities

Integrative growth
that organisations look for along
opportunities
with current business.
Diversification • The opportunities do not connect

growth opportunities with the current business.
1. Business Units Strategic Planning
• Apart from corporate level, strategic planning is also done for each strategic business unit or
SBU of an organisation.
• At SBU level, strategic planning is done as per the products of the organisation and is focused
on utilising limited resources and competing effectively.
• Business unit strategic planning involves a number of steps.
Business Mission
• The mission of any organisation gives it a reason for its existence.
• A business unit has to state its individual mission within the organisation’s mission.
• An appropriate mission statement not only states the purpose of the existence of a business
exists but it also mentions its values.
• It consists of strategy and scope of the business and standards and behaviour of different
operations in the business unit.
• The business mission covers all these characteristics.
SWOT Analysis
• Strength, Weakness, Opportunity and Threat (SWOT) analysis is considered to be the most
unique technique of situation analysis.
• It was developed in the 1960s at Stanford Research Institute.
• In SWOT, the strengths and weaknesses represent the internal factors affecting the success of
an organisation.
• On the other hand, opportunities and threats depict external factors.
• SWOT analysis enables an organisation to formulate effective strategies by matching its
strengths and weaknesses with opportunities and threats faced by the organisation.
TOWS Analysis
The TOWS matrix is as follows:
Strategies Internal Strengths Internal Weaknesses

Tactics
Actions
External Opportunities S-O Strategy W-O Strategy

(combination of (combination of
strengths and weaknesses and
opportunities) opportunities)
External Threats S-T Strategy W-T Strategy
(combination of (combination of
strengths and threats) weaknesses and threats)
Goal Formulation
• After the SWOT study is done, goals and objectives are formed by an organisation.
• Goals are aligned with the time during which it has to be executed.
• Very high goals should not be created as it becomes difficult to achieve them and very low
goals bring inadequate use of resources.
• Proper inspection of goals should be done so as to avoid issues that prevent organisations in
achieving them.
• Short and long term goals, sales and profit goals, high and low risks, etc. are some of the
goals.
Strategic Formulation
• After defining goals, an organisation needs to plan a course of action to achieve these goals.
This course of action is called strategy.
• Generally, organisations form strategies by analysing the market and determining the level and
type of competition in the market. This helps organisations to develop a strategy to compete
and sustain in the market.
• One of the common tools used by organisations to assess the level of competition in the
market and choose the strategy accordingly is Porter’s Competitive Strategies.
Strategic Formulation
Competitive strategies are used to defeat competitors within an industry and acquire large market
shares. Competitors here are organisations that offer similar types of products or services in the
industry. Michael Porter proposed two competitive strategies that are applicable in any
organisation irrespective of the type or size. These strategies are called generic competitive
strategies, which are explained as follows:
• Lower cost: Here, an organisation can design, produce, and distribute their products or
services at lower costs as compared to their competitors.
• Differentiation: In this, an organisation gives exclusively good quality products along with
excellent features, after sales services, and high customer value.
Strategic Implementation
• Strategic implementation is all about putting an organisation’s strategies into action through
different processes, policies, and programs.
• It includes actions and jobs required to be performed after forming strategies.
• Strategy implementation is important for the growth of an organisation, while on the other
hand, negative results will be seen in an organisation if the strategy implementation fails.
• Both strategy formulation and implementation are connected with each other and have an
effect on one another.
Feedback and Control

Different types of controls are being used by organisations while they implement strategies. Some
of them are as follows:
• This refers to the control used before

Feed-forward control the organisation implements the
strategy.
• This control is exercised when an

Concurrent control
organisation implements the strategy.
• This is used when an organisation

Feedback control
implements the strategy.
Let’s Sum Up
• Customer value is being used in order to assess customer base by organisations. An

organisation can get customers by giving high quality value delivery processes while being
socially responsible.
• In order to create a value for any business, the value chain recognises its five primary and four
support activities.
• The primary activities are procuring resources or materials in business, called inbound
logistics. On the other hand, support activities are being carried on by special departments.
• Core competency is the collective learning of an organisation, attained by coordinating
various skills of employees and integrating technologies.
Post Your Query
Course related queries are channelized only through Blackboard. To post a query relating to this
course presentation please login to Student Zone.
Chapter 7: Competitive
Strategies
Chapter Index
From-To
2 Topic 1 Competitive Forces 131

Identifying and Analysing Competitors
3 Topic 2 132-134
Competitive Strategies for Market Leaders

4 Topic 3 135-138
Competitive Strategies for Others

5 Topic 4 139-146
Consumer-Oriented Strategies
6 Topic 5 147
Resource-Based Strategies
7 Topic 6 148

• Describe the competitive forces of market
• Define the primary competitors
• Analyse the strategies, objectives, strengths, and weaknesses of competitors
• Elaborate on the competitive strategies for market leaders, market pioneers, market
challengers, and market nichers
• Discuss consumer-oriented strategies
• Define resource-based strategies
Competitive Forces
• An industry refers to a group of organisations that offer similar products and services to
customers.
• Every industry faces competition; hence, organisations form their own strategies to face the
competition in order to sustain themselves in the industry.
• Many organisations only consider the competitors that are within the industry and ignore the
other aspects that competitors consider in their assessments.
• An organisation also needs to assess the productivity of a specific industry before getting into
it. Michael E. Porter of Harvard University created a very efficient model for the assessment
of an industry. This model is called Porter’s Five Forces Model. Porter discusses the
probability of an industry that relies on the level of competition in the industry.
1. Identifying and Analysing Competitors
• According to Philip Kotler, “Poor firms ignore their competitors, average firms copy their
competitors, and winning firms lead their competitors.”
• The competitors of an organisation determine its market position, market share and profit.
Thus, it is essential for an organisation to identify its competitors. It is quite easy to find out
one’s main competitors.
• Identifying competitors depends on various factors. For this purpose, an organisation can
analyse its market share relative to other organisations producing similar products or services
in the same category, or manufacture a substitute that belongs to the same industry. In this
way, a leading organisation in the market can keep an eye on its leading rival organisations.
The main objectives of analysing competitors are as follows:

• Identifying those with whom you are competing
• Gathering information about the strategies and plans of the competitors
• Determining the possible reaction of a competitor against any action taken by its rival
• Identifying ways to influence the competitor’s behaviour to the advantage of its rival
organisation
Organisations can assess their competitors through the following:
Strategies used by competitors
Objectives of the competitors
Strengths and weaknesses

1. Competitive Strategies for Market Leaders
• Organisations can be classified on the basis of their role in the market. These roles are that of a
market leader, a market challenger, a market follower, or a market nicher.
• Market leaders are the organisations that dominate an industry and capture the maximum
market share.
• Organisations get to the position of market leaders in an industry because of their high quality
products and services, which consumers keep in mind while buying something.
• However, market leaders need to keep an eye over the market to maintain their position in the
market as any innovation in a product made by competitors may threaten the leader.
Expanding the Total Market

In general, market leaders can depend on two factors for increasing their total market, which are:
Searching for new • This involves attracting new

customers customers to buy products.
• Organisations may expand their total

Increasing the usage
market by increasing the quantity,
of products through
level, or frequency of consumption
existing customers
of their products.
Defending Market Share

Some common defensive strategies that are followed by market leaders to defend themselves are:
Position Defence
Flank Defence
Pre-emptive Defence
Counteroffensive Defence
Mobile Defence
Contraction Defence
Expanding Market Share

To increase its market share, an organisation needs to consider the following:
• Identifying whether competitors have created any anti-trust movement in the market if they
feel that the market leader is gaining a monopoly in the market.
• Ensuring that the market share is not increased through any unfair means that are against the
industry norms and are meant to beat the competitor only.
• Ensuring that the quality of a product, its value, and delivery is not affected while an
organisation tries to increase its market share.
1. Competitive Strategies for Others
• Besides the market leader, the other organisations that come at the second, third, and lower
positions in an industry are termed as trailing organisations.
• Some examples of trailing organisations are Ford, Toyota, Videocon, and Samsung.
• These organisations develop their own strategies as market pioneers, market challengers,
market followers, or market nichers.
Market Pioneers’ Strategies

Market pioneers have various advantages, some of which are as follows:
• Product awareness of a market pioneer is very strong. The brands of market pioneers are easy
to recall. There is excitement and newness about a pioneer organisation.
• The product or service of a latecomer in the industry is automatically compared by the
customer to the products or services of the pioneer organisation. In most of the cases, the
product or service of the latecomer is found to be outdated or unnecessary.
• The pioneer organisation has the opportunity to create a brand strategy that cannot be attacked
by the latecomers.
Market Pioneers’ Strategies

Organisations strive to become the pioneer organisation of an industry. For this purpose, they
formulate pioneer strategies, which include:
• Enhancing the features and quality of an existing product or service while focusing on the
niche market
• Producing a new product by determining the gap between the requirements of the customer
and the products available in the market
• Targeting new and unidentified geographical markets for existing products and services
• Developing new channels of distribution of products or services to access new markets or
better penetrate existing ones.
Market Challenger Strategies

Some of the strategies adopted by market challengers are as follows:
Direct attack
Indirect attack
Envelopment attack
Bypass attack
Guerrilla attack
Market-Follower Strategies
• Market-followers are organisations that adopt the strategies used by market leaders, but do not
challenge them. They neither follow aggressive competitive strategies nor go for new product
innovation. This is because all the organisations in an industry are not able to spend on the
development of a new product, its distribution and on its market promotion.
• Organisations that can invest on all these things get the opportunity to become market leaders
and claim rewards in terms of high profits.
• Others can follow market leaders by copying or making some amendments in the original
products. These are known as market-followers.
Market-Follower Strategies
The strategies used by market followers are:
Copier
Cloner
Imitator
Adapter
Market-Nicher Strategies
Market nichers mostly work on three aspects:
• Identify the gap to create a niche
• Grow the niche
• Protect the niche from other organisations that want to attack it to grab the market
Market-Nicher Strategies
A market nicher frames strategies to protect its niche from competitors, which are:
• It involves the task of determining

Creating Niches
niches in a particular industry.
• It involves adding new niches or

Expanding Niches expanding the present niche by
attracting more customers.
• It means defending niches from the

Protecting Niches
attacks of competitors.
Consumer-Oriented Strategies
The market pull-strategy is basically a customer-oriented strategy, which involves:

• Researching the target consumer before starting product development
• Identifying which consumer needs are not being met by the competitors and developing a
product to meet these needs.
• Using promotional tools like advertising to explain to the customers how the product meets
their needs
• Offering superior customer support
• Renovating the product line to ensure an organisation’s offerings keep up with changing
customer needs.
Resource-Based Strategies
• Every organisation is a collection of unique resources and capabilities, which provide it the
basic strategy and basic means of returns.
• In over-competitive business environment of today, an organisation can be defined as a group
of developing abilities that is enthusiastically managed to pursue above-average returns.
• Therefore, differences in the performances of the organisation are driven mainly from their
unique resources and capabilities instead of the industry’s structural features.
• Resources are the inputs of the production process of an organisation. These resources include
cash, equipment, skilled workers, patents, finance and talented managers.
Let’s Sum Up
• Michael E. Porter of Harvard University created a very efficient model for the assessment of
an industry. This model is called Porter’s Five Forces Model.
• The competitors of an organisation determine its market position, market share and profit.
Thus, it is essential for organisations to identify their competitors.
• Analysing competitors includes two main activities, gaining competitor’s information and
using that information in predicting the behaviour of the competitor.
• Besides the market leader, other organisations that come at the second, third, and lower
positions in an industry are termed as trailing organisations. These organisations develop their
own strategies as market pioneers, market challengers, market followers, or market nichers.
Post Your Query
Chapter 8: Marketing
Strategies
Chapter Index

From-To
2 Topic 1 Concept of Marketing Strategies 155-171
3 Topic 2 Financial Considerations in Evolving the Marketing 172

Strategy

• Describe various marketing strategies
• Implement marketing warfare strategies
• Describe the market growth strategy in various market situations
• Explore the chances of market expansion for an organisation
• Describe Ansoff’s product-market growth strategy
• Explain financial considerations in evolving the marketing strategy
1. Concept of Marketing Strategies
An organisation adopts a process to create a marketing strategy, given as follows:
Reviewing the Setting the

Creating the Planning the Implementing Reviewing the
present marketing
team action the strategy strategy
scenario objective
Porter’s Generic Strategies

Michael Porter has suggested three generic strategies – cost leadership, focus and differentiation.
He defined each generic strategy with the help of two dimensions, which are:
• It implies the supply-side

Competitive dimension that focuses on the
Advantage competitiveness and strength of the
organisation.
• It refers to the demand-side

dimension that focuses on the size
Competitive Scope
and composition of the target
market.
Porter’s Generic Strategies

Porter’s generic strategy model is as follows:
Cost Leadership Differentiation

Broad
Target
Competitive
Scope Focused Cost Leadership Focused Differentiation
Narrow
Target
Low-cost Products/Services Differentiated Products/Services
Competitive Advantage
Marketing Warfare Strategy

The types of marketing warfare strategies are:
Marketing
Warfare
Strategies
Offensive Defensive Flanking Guerrilla

Warfare Warfare Warfare Warfare
Strategy Strategy Strategy Strategy
Goal Attacking Strategy

The types of goal attacking strategies are:
Types of Goal
Attacking
Strategies
Vertical Goal Horizontal Goal Cyclical Goal

Attacking Attacking Attacking
Strategy Strategy Strategy
Market Expansion Strategies

• An organisation adopts market expansion strategies for increasing the speed of growth.
• This is the reason why these strategies are also called growth strategies.
• If an organisation is in business for quite some time, it can benefit from its practices and opt
for expansion strategies.
• Similarly, if an organisation’s resources are lying idle, it may utilise them for expansion
purposes.
Market Expansion Strategies

The different market expansion strategies are:
Expansion through Concentration
Expansion through Integration
Expansion through Diversification
Expansion through Cooperation
Expansion through Internationalisation
Expansion through Digitisation

Boston Consulting Group Matrix

• In the 1970s, the Boston Consulting Group, a global management consulting organisation,
developed the BCG matrix.
• It is also called the BCG growth-share matrix.
• It illustrates the relationship between the rate of growth in business and relative business
share.
• The rate of business growth assists in deciding whether an organisation should stay in that
specific industry or not.
Boston Consulting Group Matrix

The BCG matrix is as follows:
Stars Question Marks

High
Market Growth
Cash Cows Dogs
Low
High Low
Market Share
GE Nine-Cell Matrix
• General Electric with the support of McKinsey & Company for portfolio analysis and brand
marketing developed the GE nine-cell matrix in 1970s.
• It deploys various factors to measure the business strength and industry attractiveness.
• Business strength is measured by factors such as market share, profit margin, market
knowledge, ability to compete and technology, whereas industry attractiveness is measured by
factors such as market growth, competition, resource requirements and environmental, legal
and human factors.
GE Nine-Cell Matrix
The combination of industry attractiveness and business strength is represented in the GE nine-cell
matrix, which is:
Industry Business Unit Strength
Attractiveness
Strong Average Weak
High Grow Grow Hold
Medium Grow Hold Harvest
Low Hold Harvest Harvest

McKinsey’s 7-S Model

• McKinsey 7-S model was created by McKinsey consultants Tom Peters, Robert Waterman and
Julien Philips in 1980s, with the help of Richard Paseale and Anthony G.Athos. Ever since its
launch, educationists and consultants have used it widely.
• The goal of the model was to show how the seven elements of a company, namely, structure,
strategy, skills, staff, style, systems and shared values can be aligned together to achieve
effectiveness in the company. The key point of the model is that all the seven areas are
interconnected, and a change in one area requires change in the rest of the firm to function
effectively.
McKinsey’s 7-S Model

The McKinsey model is as follows:
PIMS Model
The main features of PIMS are as follows:
• PIMS is a database of business strategies used to understand what sort of strategy (e.g. quality,
pricing, vertical integration, innovation and advertising) works best in what sort of business
environment.
• PIMS is a set of data-derived business strategy principles that act as a guide for strategic
thinking and measurement.
• PIMS is a methodology used for identifying business problems and opportunities and
determining the profit potential of businesses.
PIMS Model
The benefits of PIMS are as follows:
• The primary role of the PIMS program of the SPI is to help managers understand and react to
their business environment.
• PIMS assists managers in developing and testing strategies that will achieve an acceptable
level of success.
• PIMS can also serve as a screen such that a business's future direction, a competitor or a
potential acquisition can be evaluated and benchmark performance levels can be measured.
Malcolm Baldridge Model

The parameters to evaluate organisations for the Malcolm Baldrige Award are:
Leadership 9%
Information and Analysis 8%
Strategic Quality Planning 6%
Human Resources Development and 15 %

Management
Management of Process Quality 14 %
Quality and Operational Results 18 %
Customer Focus and Satisfaction 30 %

Ansoff’s Product-Market Growth Strategy

The Ansoff’s product-market growth matrix is as follows:
Existing Products New Products
Existing Market Penetration Product Development

Market
Ansoff’s Product
Market Growth
Matrix
New
Market Market Development Diversification
Financial Considerations in Evolving the Marketing Strategy
• Before selecting a marketing strategy, the organisation needs to check the feasibility of all the
alternatives available by comparing the cost involved in carrying out a strategy and the
expected profit.
• If the cost of undertaking a strategy is less than the expected profit, then the strategy would be
said to be feasible for the organisation and vice versa.
• This process of checking the feasibility is called financial analysis.
• Any incorrect financial business decision may have an adverse impact on the profitability of
an organisation.
• Key financial ratios are necessary for analysing the different aspects of marketing strategies.
Let’s Sum Up
• Marketing strategy can be defined as a strategy that integrates all the marketing goals into a
comprehensive plan. We can say that a marketing strategy is the foundation of the marketing
plan.
• The process of developing the marketing strategy includes creating the team, reviewing the
present scenario, setting the marketing objective, planning the action, implementing the
strategy and reviewing the strategy.
• The different types of marketing strategies include Porter’s generic strategies, the marketing
warfare strategy, goal attacking strategy, market expansion strategies, the BCG matrix, the GE
nine-cell matrix, McKinsey's 7-S model, PIMS model, Malcolm Baldridge model and
Ansoff’s product-market growth strategy.
Post Your Query
Chapter 9: Developing
Strategies for Consumer and
Industrial Market
Chapter Index

From-To
2 Topic 1 Analysing Consumer Behaviour 179-183
3 Topic 2 Buying Decision Process 184-189
4 Topic 3 Organisational Buying and 190

Business Market
5 Topic 4 Stages Involved in the 191-196

Organisational Buying Process

• Discuss the need of analysing consumer behaviour
• Explain the consumer buying decision process
• Define organisational buying and business market
• Discuss the stages involved in the organisational buying process
1. Analysing Consumer Behaviour
The structure of the black box for analysing consumer behaviour is as follows:
Environmental Factors Black box of consumers
Marketing Environmental Consumers’ Decision Consumers’
Stimuli Stimuli Characteristics Process Responses
Product, price, Economic, Attitude, Information Product choice,

place, and technological, motivation, research, brand choice,
promotion political, perception, alternative and purchase
cultural, and personality, and evaluation, timing
demographic lifestyle problem
recognition,
and purchase
decision
Cultural Factors
• Culture is the fundamental element of understanding a customer’s requirements and
behaviour. It is the sum of shared values among the members of a family or a society.
• Customers come from different cultures. Consequently, the response of a customer towards a
particular product is defined by his/her culture.
• Every culture consists of several sub-cultures that provide distinctive identity to its members.
• Sub-cultures involve geographic regions, nationalities, and religion. In other words, sub-
cultures contain the shared values of people on the basis of their locations and life
experiences.
Social Factors
The buying behaviour of consumers is influenced by three main social factors, which are as
follows:
• These are groups that have a face-to-face influence on the
Reference groups attitude and behaviour of consumers, such as friends, co-
workers, religious groups, and aspirational groups.
• The buying behaviour of consumers is largely influenced by

Family
their family members.
Status • Every consumer has a particular status in a society.

Personal Factors
• Buying decisions of consumers can also be influenced by personal factors such as the age,
personality, occupation, ethics, lifestyle, economic condition, and phases in their life cycle.
• These factors have a direct impact on the behaviour of consumers, and therefore, marketers
should analyse these factors closely.
• For example, a growing child may have demand for products like video games, PSP games,
etc. When the same child enters into adulthood, he/she becomes more concerned about
products like iPads, laptops, and mobiles.
Psychological Factors
There are five key factors that influence consumer responses, which are:
Motivation
Perception
Learning
Attitude and self-conception
Memory
1. Buying Decision Process
The five-stage model of the buying decision process is as follows:

Problem Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Post-purchase Behaviour
Problem Recognition
• In this stage, the problem or the need of a particular product is identified through the internal
and external stimuli of a person.
• The internal stimuli may be basic needs such as hunger, thirst, sex, and shelter.
• External stimuli can be a television ad or neighbour’s new car that often drive the possibilities
of making a purchase.
• Thus, marketers need to understand the need factor that drives a consumer close to the
product.
• For example, a consumer feeling hungry plans to purchase something to fulfil his/ her hunger.
Information Search
• Once the problem or need of a person is recognised, he/she goes for searching the information
related to his/her requirements.
• Consumers search for information related to the price, features, quality, and market value of a
product.
• Thus, a marketer has to present all possible information desired by a consumer in the form of
news, advertisement, or websites.
• For example, to satisfy his/her hunger, the consumer searches for the various options available
for food.
Evaluation of Alternatives
• The final decision of purchasing a product or brand is taken by a customer after a detailed
research.
• Evaluation of alternatives involves judging or assessing the all attributes of the required
product.
• While evaluating an alternative, consumers may look for different criteria for tangible and
intangible products.
Purchase Decision
• After searching information about a product, consumers look for several factors, such as brand
name, previous experience, terms of sale, availability of the product, and the payment method
to make a final purchase decision.
• While choosing a product, a person is often influenced by another key factor known as
heuristics, which indicates the mental shortcuts in the decision process.
• In many instances, a person finds it difficult to make a choice based on the acquired
information and then heuristic methods are useful to speed up the solution. Though evaluating
alternatives and attributes in isolation, makes the decision making process easier, consumers
may come across situations where a decision with a detailed discussion would have delivered
a better choice.
Post Purchase Behaviour

• Post-purchase behaviour refers to the experience and satisfaction level of a consumer after
purchasing a product.
• A consumer compares the product with his/her expectations and feels satisfied or dissatisfied.
• As post-purchase behaviour of consumers can highly influence the demand for a certain
product, marketers are cautious about providing a better aftersales service to new/existing
consumers. These services can be warranty, free home delivery, instalment payment, free
installation, etc. Effective post-purchase services let consumers refer the product to others.
For example, a consumer after eating a healthy green salad refers the same to his friends and
relatives.
Organisational Buying and Business Market
Buying Situations
There are various conditions that a business buyer comes across during the purchase of different
products and services. These conditions include the level of pressure created by a purchase need,
availability of time and resources, the size of decision making unit, and the relation with the seller.
An organisation has to deal with different buying situations and has to take appropriate decisions
while purchasing from a business market. These situations can be as follows:
First time buying
Modified re-buying
Non-modified re-buying
1. Stages Involved in the Organisational Buying Process
The stages involved in the organisational buying process are:
Problem Recognition
Need Description and Product Specification
Supplier Search
Proposal Solicitation
Supplier Selection
Problem Recognition
• The primary step in the business buying of a product is to identify the requirement or problem
area. This need can be identified in some operational area of an organisation.
• Employees can identify the need for a particular product in the problem area. Any such
situation that can be solved by the purchase of some goods or services provides a stimulus to
the organisation to make a purchase decision.
• There can be many internal and external factors responsible for recognising a problem.
Internal factors may include decision of expansion, new product development, a need of
material or machinery for on-going production, etc. On the other hand, external factors may
include market trends, competitors’ strategy, influence of sellers’ promotional activities, and so
on.
Need Description and Product Specification

• After identifying the problem, a detailed description of the need should be defined.
• The need should be defined in terms of the possible consequences if the product is not
purchased.
• This stage also involves specifying product requirements in terms of quality, durability, and
cost.
• Product specification is of utmost importance for any buyer organisation. This is because the
actual product value for an organisation can be evaluated only with clear specifications of the
product purchased.
Supplier Search
• After specifying the requirement, the next stage in the organisational buying process is the
supplier search.
• The buyer organisation looks for the best supplier in the market that matches with the
requirements of the organisation.
• The buyer organisation normally approaches trade directories, advertisements for trade, trade
fairs, references from other organisations, and the Internet for searching suppliers.
Proposal Soliticitation
• After searching for the suitable sellers, the buying organisation sends proposals to them for
purchase.
• These proposals are regarding the desired value and benefits, quality standards, and the terms
and conditions of buying.
• On receiving the proposal, sellers respond the buyer organisation, arrange for product demos,
and hold a discussion on product specification.
Supplier Selection
The ranking method of supplier selection has been demonstrated as follows:
Rating Scale
Attributes Value of the Seller A Seller B Seller C Value of each Attribute
Attribute
 Cost of (In per cent)
Buying Good Average Average
40
 Market Image Poor Good Good
of Seller 10
 Product
Quality Average Average Good
20
 Service
Quality Average Average Good
 Value Added 10

Total Poor Good Good
20

Let’s Sum Up
• Consumer behaviour analysis is a study of understanding the way an individual responds to a

product of any brand. It is influenced by various social, cultural, personal, and psychological
factors.
• The buying decision process involves an action that a person undertakes before, during, and
after the purchase of a product. It involves various steps, such as problem recognition,
information search, evaluation of alternatives, and purchase decision.
• To run their businesses successfully, organisations need to not only understand the behaviour
of consumers but also analyse the behaviour of business markets that involve wholesalers,
suppliers, retailers, etc.
Post Your Query
Course related queries are channelized only through Blackboard. To post a query relating to this
course presentation please login to Student Zone.
Chapter 10: Marketing
Strategies and Marketing
Mix
Chapter Index

From-To
2 Topic 1 Segmentation 204-207
3 Topic 2 Target Market Selection Strategies 208-209
4 Topic 3 Strategies for Existing Products 210-212
5 Topic 4 Strategies for New Product Development 213
6 Topic 5 Concept of Price 214-215

Chapter Index

From-To
7 Topic 6 Pricing Strategies 216
8 Topic 7 Distribution Strategies 217-218
9 Topic 8 Strategies for Developing Effective Marketing 219

Communication
10 Topic 9 Marketing Communication Mix 220-221

 Explain the concept of segmentation
 Define target market selection strategies
 Discuss strategies for existing products and new product development
 Discuss the concept of price
 Discuss pricing strategies
 Explain distribution strategies
 Describe strategies for developing effective marketing communication
 Define marketing communication mix

1. Segmentation
• Segmentation is defined as the selection of a particular group of customers that have similar
needs and preferences.
• According to Donald Norman, a Doctorate of Philosophy, “Market segmentation is a natural
result of the vast differences among people.”
• Segmentation helps in understanding the needs of different customers with respect to their
buying behaviour.
• A market is an entity with several diversified customers having distinguished characteristics.
• Organisations focus their energies and resources towards a particular segment of the market.
2. Segmentation
Geographic Segmentation
• In geographic segmentation, a market is divided into different geographical areas on the basis
of cities, states, and countries.
• Study of respective geographical areas is required in this type of segmentation.
• The needs and choices of local inhabitants should be considered before offering a product.
• For example, PVR in Delhi plays movies in Hindi and English; whereas, PVR in Bengaluru
plays movies in Hindi, English, Kannada, Tamil, and Telugu.
3. Segmentation
Demographic Segmentation
Some of the demographic attributes are:
Age
Income
Gender
Social Class
Generation
4. Segmentation
Psychographic Segmentation
Various factors that come under psychographic segmentation are:
• Distinguishes individuals on the basis of their habits,

Lifestyle
income group, and social status.
• Refers to classification of individuals on the basis of

Personality their nature that decides their buying behaviours.
• Affect the attitude of customers towards the product in

Values the long run.
1. Target Market Selection Strategies
Evaluating the Market Segment

The organisation sales volume can be estimated by focusing on the following dimensions:
• Indicates the amount of a product that is

purchased by a customer. In this case, market
Market potential
potential of the targeted segment is
calculated by the marketer.
• Refers to the proportion of market potential

Organisation’s sales
that an organisation expects to gain for a
potential
product.
2. Target Market Selection Strategies
Selecting the Market Segment

Selecting a target segment needs a continuous research. The basic techniques of selecting a market
segment are:
Single segment concentration
Selective specialisation
Product specialisation
Market specialisation
Full market coverage

1. Strategies for Existing Products
Some of the important strategies that organisations can adopt to market their existing products are:
• By adding new features to an existing product,

Make additions to the existing
organisations can make it more attractive to
products
consumers.
• Organisations can make changes in the appearance of

Change appearance their existing products to make them more appealing to
consumers.
• Sometimes customers are not aware of the multiple

Offer multiple uses
uses of a product.
Positioning and its Types

There are mainly two types of product positioning that an organisation can adopt to strengthen its
product base in the market, which are:
• It refers to competing with other brands to gain the

Head-to-head positioning
same target consumer base.
• It refers to chasing new purchasers by offering new

Differentiation positioning features or capacities distinctive from the
competitors’ products.
Product Differentiation Strategies

Product differentiation can be done using the following strategies:
• It refers to some specific channel used by

Differentiating Channel
organisations to promote their brand.
• It refers to the image designed to make the brand

Differentiating Image
stand out from the other brands in the market.
Strategies for New Product Development
To successfully launch a product, an organisation should follow the process of new product
development, which is as follows:
Idea generation
Idea Screening
Concept development
and testing
Business analysis
Product development
Market testing
Commercialisation
1. Concept of Price
Factors Affecting Price
Organisational
Objectives
Pricing
Costs
Objectives
Factors
Affecting
Pricing
Decisions
Legal and
Competition Regulatory
Issues
2. Concept of Price
Pricing Objectives
Sales-oriented
Objectives
Status quo-
Profit-oriented
oriented
Objectives
Objectives
Pricing
Objectives
Pricing Strategies
The various pricing strategies adopted by organisations are:

Differential Pricing
Promotional Pricing
Product line Pricing
New Product Pricing
Psychological Pricing
Competition Pricing
Premium Pricing
Value Added Pricing
Discount Pricing
Economy Pricing
1. Distribution Strategies
• Distribution is a method through which products are made available to customers.

• A product can be made available by an organisation in the market by using various
distribution channels.
• In modern marketing systems, a distribution channel performs various tasks, such as risk
taking, funding, and negotiating on the behalf of manufacturers and customers.
• It is very significant for an organisation to make the product available at the right time to make
its place in the market.
• Some organisations use distribution channels to get a competitive benefit over competitors.
2. Distribution Strategies
The types of distribution channels are:
Direct
Distribution
Channel
Types of
Distribution
Channel
Hybrid Indirect
Distribution Distribution
Channel Channel
Strategies for Developing Effective Marketing
Communication
• An organisation can use various promotional tools to promote its products.

• However, it cannot use any tool in any type of market.
• A proper procedure should be followed to decide the promotional tools that are to be used.
• In addition, a budget should be allotted efficiently to avoid the wastage of financial resources.
1. Marketing Communication Mix
• Marketing communication is usually referred to as ‘promotion’ as it is the most evident P in

the ‘4 Ps’ of the marketing mix.
• Sometimes people treat marketing and promotion as same.
• ‘Promotion’ refers to a part of the total efforts an organisation applies to market its products.
• Both the organisation and the consumer want to satisfy their needs.
• The organisation wishes to expand or sustain its profits, market share and brand equity.
• On the other hand, the consumer desires to reach his or her personal goals.
• Organisations always try to find out the most efficient mix of communication channels to gain
maximum effectiveness and reach to the customers.
2. Marketing Communication Mix
The various tools in a marketing communication mix are:
Advertising
Personal Sales
Selling Promotion
Marketing Communication
Mix
Word-of-
Public
Mouth
Relation
Marketing
Direct Events and

Marketing Experiences
Let’s Sum Up
 Segmentation is defined as the selection of a particular group of customers that have same
needs and preferences in a market.
 In geographic segmentation, a market is divided into different geographical areas on the basis
of cities, states and countries.
 Market segmentation based upon the demographic attributes, such as age, gender, income,
occupation, religion, race, and social class comes under demographical segmentation.
 Segmentation on the basis of lifestyle, values, and beliefs of an individual is referred as
psychological segmentation.
 Behavioural segmentation denotes division on the basis of behaviour of customers towards a
product.
Post Your Query
Chapter 11: Branding
Strategies
Chapter Index

From-To
2 Topic 1 Concept of Brand 229-232
3 Topic 2 Developing Branding Strategy 233-234
4 Topic 3 Concept of Brand Equity 235-236
5 Topic 4 Building Brand Equity 237

Chapter Index

From-To
6 Topic 5 Measuring and Managing Brand Equity 238-239
7 Topic 6 Developing a Brand Positioning Strategy 240-243
8 Topic 7 Differentiation Strategy 244-246

 Explain the concept of brand
 Describe how a branding strategy is developed
 Explain the concept of brand equity
 Discuss how brand equity is built
 Explain how brand equity is measured and managed
 Discuss how brand positioning strategy is developed
 Explain differentiation strategy

1. Concept of Brand
• A brand presents the different dimensions of any product or service, which one cannot find in
other similar category product or service.
• The difference may be in terms of functioning, rationality, or tangibility that is related with
any product or service to signify it as a brand.
• A brand can comprise a name, sign, symbol, colour combination or slogan.
• A brand is nothing but a perception that customers or prospects have about anything; it is an
offering, organisation, person, place, or idea.
• Thus, it is an image put into the minds of customers, which may be either good or bad.
• Brand management involves three processes: creating a promise, making the promise, and
keeping the promise.
2. Concept of Brand
Elements of a Brand
Generally, there are seven elements of a brand, which are:
Brand name
Logos and symbols
Uniform Resource Locators (URLs)
Characters
Slogans
Jingles
Packaging
3. Concept of Brand
Factors Determining Branding Strategies

Some factors that determine branding strategies are:
Market size
Competitive situation
Organisational resources
Product newness
Innovativeness and technology

4. Concept of Brand
Brand Identity
The process of creating a brand identity is as follows:
Review, Research and
Analysis
Define Brand Strategy
Brand Identity
Development
Refinement and
Contextual Application
Identity System and

Guidelines
Logo Implementation
1. Developing Brand Strategy
When an organisation comes up with a strategy to replicate the quantity and nature of exclusive
and ordinary qualities of the products it sells, then it is known as branding strategy. It is a difficult
task to decide how to brand a new product. An organisation generally has three choices to do so.
They are as follows:
• New brand elements can be developed for the new product.
• Some of the existing brand elements can be used for the new product.
• Combination of new and existing brand elements can be used for the new product.
2. Developing Brand Strategy
Co-Branding
There are two types of co-branding, which are:
• It involves utilising a renowned brand as a

production element for the development of an
Ingredient co-branding alternate famous brand. It creates brand equity
for materials and parts utilised with different
items.
• It involves the collaboration of two well-known

brand names in a manner that they together offer
Composite co-branding
the products or services, which they are not able
to provide to customers if they work individually.
1. Concept of Brand Equity
• Brand equity is brand power resulting from the goodwill that a brand has earned over a period
of time.
• It helps an organisation to achieve higher sales volume and more profit.
• Brand equity is created through marketing campaigns.
• An organisation can use its brand equity to launch new products.
• Brand equity is a power of an organisation to charge high prices from customers.
• It helps to differentiate between the perceived value and the inherent value of a product.
2. Concept of Brand Equity
The Differentiation, Relevance, Esteem, and Knowledge (DREK) model is as follows:
Differentiation Relevance
Esteem Knowledge
Building Brand Equity
Building a brand for a new product is a significant decision to be taken by an organisation. Brand
recognition differentiates an organisation and its offerings from others. This is referred to as
‘building brand equity,’ which includes various critical marketing elements into explanation. Thus,
various factors need to be considered at the time of launching a brand. These factors are as
follows:
• Creating a brand needs investment and money for long term.
• Marketers are required to think beyond the name.
1. Measuring and Managing Brand Equity
Brand equity can be determined by:

• Measuring the returns to the shareholders
• Evaluating the brand image for some vital parameters
• Evaluating the earning potential of the brand for the future
• Evaluating an increase in sales volume produced by the brand and comparing it to other
brands in the similar category
2. Measuring and Managing Brand Equity
The steps of managing brand equity are:
Introduction Elaboration Fortification

1. Developing a Brand Positioning Strategy
• According to Kotler, “Positioning is the act of designing the company’s offering and image to
occupy a distinctive place in the minds of the target market.”
• An organisation identifies customer requirements and then positions its product in such a
manner so as to make its product recognisable in the target market.
• Brand positioning gives target customers a reason to buy a certain brand in preference to
others.
• It confirms that all brand actions have a shared aim, which is guided, directed, and delivered
by the reason to buy a certain brand.
• It focuses on all the points of customer contacts.
Points-of-Difference
• Point-of-difference (POD) refers to the attributes or profit, with which a customer can easily
relate a brand.
• Not only this, but POD also includes positive evaluation by customers and their belief that
they could not find those benefits to the same extent in competitive brands.
• POD is based on those attributes or advantages that differentiate the brand with the other
contending brands.
• With POD, the brand shows clear superiority over other brands.
Points-of-Difference
POD is an essential element of positioning statement. POD can also be called as Unique Selling
Proposition (USP) of the brand. The POD for any brand can be judged by the following aspects:
• Price
• Variety
• Features
• Availability
• Convenience
Points-of-Parity
Point-of-Parity (POP) refers to associations that are not necessarily unique to a specific brand but
are common with other brands. For example, all cars have four wheels. These associations can be
categorised in two forms, which are:
• These are affiliations that a customer identifies

Category points-of-parity as an essential part to a genuine and reliable
offering within a particular product category.
Competitive points-of- • These are the associations that are designed to

parity contrast the points-of-difference of competitors.
1. Differentiation Strategy
The optimal benefits that a brand can provide are:

• Importance to the target customer
• Supported by the strengths of the organisation
• Unaffected by the competition
Some of the unique differentiating benefits that make a brand unique one are:
• A distinctive gain to target customers
• Own estimable qualities
• High-end customer service
• A unique purchase experience
• Excellent performance
• Idolised as heritage
• Noble aims or values
Differentiation can be done on various dimensions which are:
• It refers to having an edge with better trained

Personal differentiation
employees.
• It refers to gaining an advantage by designing effective

Channel differentiation and efficient distribution channel coverage, expertise,
and arrangement.
• It refers to making a powerful and influential image for

Image differentiation
the brand.
Let’s Sum Up
 A brand can comprise a name, sign, symbol, colour combination, or slogan.

 Brand management involves three processes: creating, making, and keeping the promise.
 Branding is one of the powerful means to bring a competitive advantage to the organisation.
 Brand image refers to a term that inspires images and recognitions related to style, class,
innovation, quality etc.
 A bundle of features that spot the corporeal and personality aspects of s brand are known as
brand attributes.
Post Your Query

Marketing Strategy PGDMM

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Marketing Strategy PGDMM

Uploaded by

Copyright:

Available Formats

Marketing Strategy

S. No Reference No Particulars Slide

11 Chapter 11 Branding Strategies 225-249

• A strategy is a long-term plan to achieve certain objectives. A marketing strategy is a

S. No Reference No Particulars Slide

2 Topic 1 Defining Marketing 7-9

3 Topic 2 Essential Concepts of Marketing 10-17

4 Topic 3 Concept of Marketing Mix 18

• According to the American Marketing Association, “Marketing is the process of planning

Place 4Ps Product

• Marketing includes various key concepts that a marketer needs to know.

Value and Satisfaction

Target Markets, Segmentation and Positioning

Concept of Differentiation in Marketing

• Marketing forms an integral part of an organisation. Marketing addresses three major

S. No Reference No Particulars Slide

2 Topic 1 Introduction to Strategy 25-30

Strategic Decision Making

Paradigm Shift in Marketing Strategies -

Corporate Level Business Unit Research &

Corporate Business Unit Production &

Concept of Strategic Business Unit (SBU)

Strategy vs. Tactics

Strategy vs. Planning

5P’s of Strategy by Mintzberg

Four Perspectives in Strategic Mapping

Innovation and Learning

Types of Strategic Decisions

• In these types of decisions, a

• These decisions require active

• These decisions involve solving

Features of Strategic Decisions

Concerning with both efficiency and

Considering the broad range of stakeholders

Integrating various functions in the

Issues in Strategic Decisions

Rationality in decision making

Creativity in decision making

Volatility in decision making

Different criteria for making strategic decisions

Individual factors in decision making

Individual versus group decision making

• There have been different strategies used in marketing mix so far.

The paradigm shift in marketing strategies is shown as:

4P's 4C's 4A's

S. No Reference No Particulars Slide

2 Topic 1 Concept of Strategic Intent 45-48

Setting Goals and Objectives of Business

Concept of Stretch, Leverage and Fit

• Strategic intent plays a very crucial part in the success of an organisation.

The 3Ds of strategic intent are:

• It corresponds to the future course of

• It is the feature responsible for

• It calls for strategic intent to provide

Strategic Intent Process

Importance of Strategic Intent

Features of Vision Statement

Creating Mission Statement

Set within the constraints

Measurable and controllable

Difference between Objectives and Goals

Broadly stated aims Specific aims

Qualitative in nature Quantitative in nature