Agenda

To share experience and industry examples that will allow marketers to

look at consumer behaviours and brand performances from different/new
perspective:

1. Rethinking Market Segmentation – Classic vs. Emerging

Challenges
2. Capitalizing on Consumer Insights - Introduction of New
Products
3. The Impact of Beliefs, Perception, Feeling and Attitude on
Consumer Behaviour
4. Consumer Decision Journey – New Paradigm of Consumers as
Promoters
 Market Segmentation
Confectionery and Chocolate Business

For a chocolate/ confectionery company:

1. Segment the market.

2. Organize the marketing department.

Source: Cadbury
Market Segmentation - Product
Market Segmentation – Consumer Behavior

5 Star Crunchy Perk Celebration Meetha

 Rethinking Marketing

Product-Manager Driven Customer-Manager Driven

Many companies still depend on product
managers and one-way mass marketing to
push a product to many customers
What’s needed is customer managers who
engage individual customers or narrow
segments in two-way communications, building
long-term relationships by promoting whichever
of the company’s products the customer would
value most at any given time.
Source: Rethinking Marketing - HBR
 Growing the Core
• Distinctive core: Galaxy Chocolate “your partner in
chocolate indulgence” and featuring smoother product
shapes, more refined taste and sleeker packaging
• Drive distribution through existing and new channels:
Costa Coffee, No. 1in UK, has found new distribution
route using drive through outlets, vending machines at
service stations, and in-school coffee shops
• Offer the core product in new formats or versions: WD40
offers a Smart Straw version of its popular multipurpose
lubricant with a built-in straw that pops up for use

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 Focusing on the Core
• London based Aegis group sold MR firm
Synovate to focus on becoming media and
digital communication specialists
• Levi Strauss phased out its Denizen brand in
Asia to focus on its core Levi’s brand
• A focus on core businesses does not mean
foregoing new market opportunities
• With PC sales steadily declining, Lenovo
focused on smartphones

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 Figure 11.5
Hypothetical Market Structure

40%
10% 20% 30%
Market Leader (Microsoft,
Market Market Market Gatorade, Best Buy,
Nichers Follower Challenger McDonald’s, Visa etc.) –
leads in price changes, new
product introductions,
distribution coverage and
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promotional intensity
 Market Leader

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 Loss of Market Leadership Position
• Kodak in photographic film “Kodak
moment”
• Slowness in transforming to digital
photography, failing to understand how
fast digital cameras became
commodities with low profit margins led
to decline

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 Value for Money

• Maruti Suzuki (Swift, Swift Dzire)

• Domino’s Pizza
• Indigo

• Wal Mart
• British Airways (long haul routes) vs.
Ryan Air and Easy Jet (short haul
routes)
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 Expanding Total Market Demand
(benefits especially for Market Leaders)
When
When the
the total
total market
market expands,
expands, the the
dominant
dominant firm
firm usually
usually gains
gains thethe most.
most. IfIf
Heinz
Heinz can
can convince
convince more
more people
people to to use
use
ketchup
ketchup with
with more
more meals,
meals, or
or useuse more
more
ketchup
ketchup on
on each
each occasion,
occasion, itit will
will benefit
benefit
the
the most
most

New customers

More usage from

existing customers

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 New Customers
• Those who might use it but do not (market
penetration strategy)
• Those who have never used it (new market
segment strategy)
• Those who live elsewhere (geographical
expansion strategy)

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 New Customers
• Market penetration strategy: Sachet price of
Ariel/Surf Excel cut from Rs.3 to Rs.1.50
• New market segment strategy (Honda
Amaze in Diesel segment, Dove Elixir for
premium hair oil segment, Cadbury Dairy
milk, Fair & Lovely in Men’s segment )
• Geographical expansion strategy: Nirma,
Wagh Bakri, Ghari detergent

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 More Usage
• Marketers can try to increase the amount, level or
frequency of consumption
• Boost the amount through packaging or product redesign
– Larger package size increases the amount of product
consumers use at one time
• Frequency of consumption can be boosted through
additional opportunities to use Brand: Diwali/Festival time
painting; Gifting around Diwali/other key festivals ;
Indicating the worn out time e.g. Gillette razor OR
• Pepto-Bismol stomach remedies – holiday campaign
linked it to party festivities and celebrities with the tag line
“Eat, Drink and Be covered.” Similarly, Orbit chewing gum
“Eat, Drink, Chew. A good Clean feeling.” (a substitute for
brushing teeth)
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 More Usage
• Identifying new and different ways to use a
brand: Milkmaid recipes for ice cream, kulfi,
cakes, halwa
• Arm & Hammer baking soda as refrigerator
deodorant, toothpaste, antiperspirant and
laundry detergent

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 Protecting Market Share
• While trying to expand total market size, the
dominant firm must actively defend its
current business: Boeing against Airbus,
Staples against Office Depot, Google against
Microsoft
• Continuous innovation
• The front runner should lead the industry in
developing new products and customer
services, distribution effectiveness, and cost
cutting
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 Pro-active Marketing
• Distinction between responsive marketing,
anticipative marketing, and creative marketing
• Responsive marketer finds a stated need and fills
it
• Anticipative marketer looks ahead to needs
customers may have in the new future
• Creative marketer discovers solutions customers
did not ask for but to which they enthusiastically
respond
• Two pro-active skills a) responsive anticipation
and b) creative anticipation eg IBM, Sony,
Toyota
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 Pro-active marketers
• Are ready to take risks and make mistakes
• Have a vision of the future and of investing
in it
• Have the capabilities to innovate
• Are flexible and non bureaucratic
• Have many managers who think pro-actively

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 Protecting Market Share
Proactive Marketing
•IBM Southwest Airlines
•Starbucks Virgin
•Sony (Walkman) CNN
•Body Shop Federal Express
•IKEA SAP
•Amazon.com Wal Mart
•Swatch Benetton
Market Driving Companies (Pioneering
companies)
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 Six Types of Defense Strategies
• Position Defense—occupying the most desirable market spaces in the
consumers’ minds (e.g., Procter & Gamble—Tide detergent (cleaning);
Crest Toothpaste—cavity prevention; Pampers diapers—dryness)

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 Six Types of Defense Strategies
• Flank Defense—erect outpost to protect a weak front (e.g., Smirnoff attacked
by low-priced competitor Wolfschmidt, Smirnoff introduce Relska to compete
with Wolfschmidt and Popov to sell less than Wolfschmidt); Gain and Cheer
laundry detergent sand Luvs diapers have played strategic offensive and
defensive roles in support of Tide and Pampers brands respectively

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 Six Types of Defense Strategies
• Preemptive Defense—attack first before the enemy starts its offense
(e.g., Bank of America has 16.22K ATMs and 5,858 retail branches providing
steep competition to local and regional brands;
Microsoft announcing plans for new product development – some firms
accused of selling “vaporware”

• Israel hints at pre-emptive strike on Iran

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 Six Types of Defense Strategies
• Counteroffensive Defense—market leader meet the attacker frontally or
hit its flank (i.e., invade the attacker’s main territory so that it will pull back
to defend it) (e.g., FedEx watched UPS successfully invade its airborne
delivery system, FedEx invested heavily in ground delivery service to
challenge UPS on its home turf); Kodak attacking Fuji in Japan ; Goodyear
attacking Michelin in Europe

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 Six Types of Defense Strategies
• Mobile Defense—leader stretches its domain over new territories that can
serve future centers for defense and offense; Market broadening (e.g., BP
recast itself from oil to energy); Diversification (e.g., Reynolds and Philip
Morris moved into new industries—beer, liquor, soft drinks and frozen
foods).

• SPYDER Mobile Firing Unit

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 Six Types of Defense Strategies
• Contraction Defense—giving up weaker territories and reassigning
resources to stronger territories (e.g., Sara Lee spun off products that
accounted for 40% of its profits, such as Hanes hosiery brand, to
concentrate on food brand); HUL divestment (power branding)

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 Figure 11.6 Six Types of
Defense Strategies

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 Factors Relevant to Pursuing
Increased Market Share

• Possibility of provoking antitrust action

• Economic cost
• Pursuing the wrong marketing-mix
strategy
• The effect of increased market share on
actual and perceived quality

9-28
 Figure 11.7
Optimal Market Share

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 Other Competitive Strategies

Market
Challengers

Market Market
Followers Nichers

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 Market Challenger Strategies
• Define the strategic objective and opponents
• It can attack the market leader (e.g., Miller Lite attacked Bud
Lite on product quality); Xerox wrested copy market from 3M
and later Canon wrested large chunk from Xerox by
introducing desk copiers
• It can attack firms its own size that are not doing the job and
are underfinanced
• It can attack small local and regional firms (Some Banks
gobbling up smaller Banks) Reckitt Benckiser in India (Paras)
and Marico buying personal care brands; Dabur (Balsara, Fem
care pharma)
• It can attack status quo (Jet Blue, Ally Bank, Netflix)
• Choose a general attack strategy
• Choose a specific attack strategy
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 General Attack Strategies

Frontal Attack Flank Attack

Encirclement
Bypass Attack
Attack

Guerrilla Warfare
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 General Attack Strategies
• Frontal attack—Matching (e.g., Helene Curtis is good at
convincing the market that “Suave” and “Finese” are equal in
quality but a better value than higher-priced brands)

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 General Attack Strategies
• Flank attack—Geographic (e.g., Internet has siphoned
newspaper readers and advertisers in many markets,
Independent News & Media sells a majority of its 175 newspaper
and magazine titles in cities where the economy is strong but the
Internet is still relatively weak—Ireland, South Africa, Australia,
New Zealand, and India

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 General Attack Strategies
• Encirclement attack--Blitz the territory (e.g., Sun Microsystems
licensed its java software to hundreds of companies and many
software developers to make a stand against Microsoft)

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 General Attack Strategies
• Bypass attack--Unrelated product (e.g. Pepsi rolled out Aquafina
Bottled water before Coke introduced Dasani brand; purchasing
Tropicana to compete with Coca Cola’s Minute Maid; and
Purchasing Quaker Oats Company Gatorade), new
geographically and new technology (e.g., Google used
technological leapfrogging in search to overtake Yahoo)

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 Pepsi buys Gatorade in a Bypass Strategy

8-37
 General Attack Strategies
• Guerilla warfare--Small, intermittent attacks (e.g., Princeton
Review successfully challenged Kaplan Educational Centers for
test preparation)

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 Specific Attack Strategies
• Price discounts • Product innovation—
• Lower-priced goods- improvement or
lower quality breakthrough—3M
• Value-priced goods—low • Improved services—new
price and high quality— or better services--Avis
Southwestern Airlines • Distribution innovation
• Prestige goods—high —developing a new
quality and high price-- channel--Avon
Mercedes • Manufacturing-cost
• Product proliferation— reduction—Lower
large product variety— production costs
Baskin-Robbins • Intensive advertising
promotion—increased
spending

8-39
 Market Follower Strategies
Strategy of Product
Imitation

Cloner
(Emulates): Similar Sounding imitators
Of WhatsApp products; ConAgra Corn Flakes

Imitator
(Copy/Differentiation): TelePizza Chain in
Spain based on Domino’s Pizza Home
delivery idea

Adapter
(Modifies or improves): Japanese Firms

8-40
 Balancing Orientations
• Competitor-centered--
Reactive fighter
• Customer-centered--
focused on Customer
Developments

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 Market Nicher Strategies

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 Niche Specialist Roles

• End-User Specialist • Product-Line

• Vertical-Level Specialist
Specialist • Job-Shop Specialist
• Customer-Size • Quality-Price
Specialist Specialist
• Specific-Customer • Service-Specialist
Specialist • Channel Specialist
• Geographic
Specialist

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 Balancing Orientations

Competitor- Customer-
Centered Centered

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 Marketing Debate

 How do you attack a category leader?

Take a position:
1. The best way to challenge a leader is to
attack its strengths.
or
2. The best way to attack a leader is
to avoid a head-on assault and to adopt
a flanking strategy.

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 Marketing Discussion

 Pick an industry.
 Classify firms according to the
four different roles they might play.
 How would you characterize the
nature of competition?
 Do the firms follow the principles
described in this chapter?

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 Marketing Discussion

 Think about the last new product

you bought.
 How do you think its success will be
affected by the five characteristics
of an innovation?

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