Note on Marketing

Strategy
By Aryans
Swathi Vadarevu
Anand
Sandana
Vishnoo
Seshadri
Vinod Elumalai
Peter Drucker's view

Business has only 2

major functions :

Marketing and
Innovation
• Marketing is the method through which a firm
creates "value" for its customers.

• Value- how ? by meeting customer's needs

• Firms need to define themselves not by the

product they sell but by the value they provide
for their customers.
 Marketing strategy

Selecting a target market and Specifying the plan for the

determining the desired marketing activities to
positioning of product in target achieve the desired
customers’ minds positioning
 custome
rs

contex compa
t ny
Five
"C's"

collabora competit
tors ors
Questions based on the 5C's

Customer Needs What needs do we seek to satisfy?

Company Skills What special competence do we possess to meet

those needs?
Competition Who competes with us in meeting those
needs?
Collaborators Who should we enlist to help us and how do
we motivate them?
Context What cultural, technological and legal
factors limit what is possible?
Helps in

1. Specification of a target market

2. Desired positioning
3. Marketing mix
4. Customer acquisition
5. Retention strategies and driving a firms'
profitability
Target Market Selection and Product Positioning

● Specification of target markets is the first step of marketing

strategy development

● The two key questions here are:

1. Which potential buyers should the firm attempt to serve? –

Through Segmentation

2. How much customization should the firm offer in its programs,

i.e., at which point on the continuum from will the firm
construct plans?
Market Segmentation

Markets can be segmented in a variety of ways.

Among the most widely used bases are:

1. demographic (e.g., age, income, gender,
occupation)
2. geographic (e.g., nation, region of country, urban
vs. rural)
A firms target market decision must consider :

1. The firm’s comparative strengths and weaknesses vis-a-vis

competition given the target market’s purchase criteria.
2. The firm’s corporate goals and the fit of the segment with these
goals.
3. The resources necessary to market successfully to the target
segment.
4. The need for/availability of appropriate collaborators to market
successfully.
5. The likely financial returns from the segment.
A good positioning statement must
be formed in order to penetrate
into the target market
Marketing mix-

Set of activities of any firm's

marketing program.
Elements of Marketing mix-

 Product Planning
 Pricing
 Branding
 Channels of Distribution
 Advertising
 Promotions
 Packaging
 Servicing
 Market Research
 Product

Place 4 Ps Price

Promotion
Product – Marketing Mix
 Product
Definition

First step in product decision making – "What the product is?"

Marketing strategy can developed if we think in the terms of "What value are we providing for
customer?".

Example:
Product Line planning decisions-

Product Line Breadth

How many Different Lines of products will the company offer?

Product Line Length

How to cater to various Price points ?

Product Line Depth-

How many Types in a same product?

Product Line Breadth

Product Line Length

Product Line Depth

Factors influencing Product line decisions-

1. Customer Is satisfied + profit for firm – Win-win situation

2. If its "differentiated" in comparison to competitor products in terms of Total Benefit

to the customer

3. Impact of the product on the product line – will it add Value or substitute the
product line itself?

4. Impact on Brand/company's reputation

Individual Item decisions

Decisions about an individual product must be taken considering the

company's entire product line as one is inter related to another.

Types of decisions:
 Delete item from product line
 Reposition the product within the product line
 Improve current product performance and strengthen its current
position
 Introduce new product into current product line
 Introduce new product and establish a new product line
 The New Product Development Process

Involves a five-step process of:

A. Opportunity Identification

B. Design

C. Testing

D. Product Introduction

E. Life Cycle Management

Place – Marketing Mix
 Place: Marketing Channels

Network via which a product reaches the market

In other words- How a firm is "in touch " with its customers
from demand generation to physical delivery of the product.
Functions of a marketing channel

 Product Information
 Product Customization
 Product Quality Assurance
 Lot Size (e.g., the ability to buy in small quantities)
 Product Assortment (refers to breadth, length, and width of product lines)
 Availability
 After-Sale Service
 Logistics
The channel design has an option whether or not to include a particular person /
set of persons , but the tasks remain unchanged.

Recommended approach – develop customer driven systems and management

mechanisms which will perform based on needed functions.

2 Major decisions here are:

channel design channel management

 Channel design

"whether we need to reach the customer directly/ indirectly or in both ways?"

Other major considerations –

Channel length decisions

1. Account concentration
2.Degree of control and importance of direct customer contact

Channel Breath decisions

1. Intensity of firm presence in market-
2. Selective approach
As a product becomes more well known, there is a
tendency to become less selective in distribution

Firms need to be flexible – this is more difficult

due to legal impact and other elements
 Channel Management

All parties in the marketing system want the product to “do well.”
•Conflicts can arise from
a. Difference in Manufacturers' priorities
b. Lack of proper segregation of activities

•Channel management is a day-to day process and not a one stop solution-Good
communication and well drafted contracts and solve the conflicts to a great
extent and help the firm to function smoothly.
Promotion – Marketing Mix
Reasons 6 M’s Model
Market - to whom

Mission - objectives

Message - content

Media - means

Measurement - effect

Money -  the budget

Non Personal Selling
Advertising in media is effective

PROCESS
 Public Relations Sales Promotion
Non paid communication 

Ex. press release , seminars, speech, guest on radio or TV

programs.

Short term inducement for

sales promotion
Direct marketing
Direct marketing to households is another option
A direct mail piece can be customized to the household
based on
Samples
1. History or the purchase by customer
2. Demographic data available

Coupons
A catalogue of the company's products information can be
given along with that.

Contest
Push and Pull Strategy

Push strategy Inducing the retailer to close the deal, where the
advertisement just brings an awareness to the
consumers

Pull strategy The advertisement will insist the consumer to buy

the product and a retailer can just make the product
conveniently available to the consumer

Today a company can gain its competitive advantage by

communicating on various mediums like :
● Event sponsorship
● Tele-marketing
● Websites
● Sponsoring on others websites, and so on.
Pricing – Marketing Mix
Definition
● Pricing is the only revenue-generating element in the marketing
mix.
● By using the previous 3 P’s of marketing, the customer values the
product.
● Based on it, a monetary assumption is added to estimate that
value.
● The role of pricing is to capture some of that value to drive profits.
Pricing Basis and Objective

● In most situations, cost acts as the basis. But there are exceptions.
Objective: Short Term or Long Term?
Strategy:
● Skimming Strategy: Paying a higher price for a lower valued product. Useful for
gaining short term profit. Eg, hardcover books at $30 initially for the impatient and
dropping to $7 for the identical book in softcover about a year later.
● Penetration Strategy: . Fixing a lower price for a future high valued product to gain
more customers and market share. Using for gaining profit in the long term. Eg: Jio
Pricing Basis and Objective
Price Customization
● Based on customer value, prices can be customized
● Eg: For a HNI Client, charging a customized brokerage percentage by a broking firm.
● Legal and logistical constraints can cause hindrance.
It can be achieved by:
● Developing a new product line (hardcover/softcover in books)
● Locational advantage in pricing (charging lower prices in only certain locations)
● Varying prices based on
 Observable Buyer characteristics (charging lower prices to upgraders than new
customers in software)
 Observable transaction characteristics (Discounts offered to large volume transactions)
Price Leadership
● A price leader is a firm that exercises control in determining the price of goods and services in a
market.
Types of Price Leadership
● Barometric model
 Adapts to changing market conditions better than competitors.
 “If you can’t beat them, join them”
● Dominant firm
 Controller of prices due to high market share
 Smaller firms have to adjust prices to retain their market share
 Example: Asian Paints
● Collusive model
 Group of market leaders colludes to set prices
 Exists only in Oligopoly market
 Analysis underlying
Marketing Strategy
Formulation – Marketing Mix
 Analysis underlying Marketing Strategy
Formulation

Customer
Company
● The 5Cs:
Competitor
Collaborators
Context
5Cs – In Detail:

 Customer Analysis:
 In depth analysis of customer’s purchase & usage patterns
 A Decision Making Unit (DMU) – 5 roles
 Decision making Process (DMP)

 Company Analysis:
 Corporate strengths & weakness
 Resources
 Goals & Objectives

 Competitor Analysis:
 Current & Potential
 SWOT
 Objectives & Strategies
5Cs – In Detail:

 Collaborator Analysis:
 Suppliers
 Distributors
 Alliance & partners

 Context Analysis:
 Regulation and government
 Social and cultural
 Legal
 Technology
Questions
&
Feedback