Marketing Strategy

1. Segmentation
2. Managing Customer Relationship
3. Milieu Analysis
1. Segmentation
• Corporate Strategy to Marketing Strategy
• Strategic Segmentation & SBU
• SBU Marketing Strategy
•
Corporate Strategy  Marketing Strategy

1. Similarities
2. Distinction
3. Different levels of Corporate activity:
-Business Portfolio
-Strategic Business Unit (SBU)
-Market Segment
-Milieu
-Customer
-Project
Corporate Strategy  Marketing Strategy

Any examples?

Level Tata L&T

Business Portfolio

Strategic Business Unit

(SBU)
Market Segment

Milieu

Customer

Project
Corporate Strategy  Marketing Strategy

Level Tata L&T

Business Portfolio Motors or Vehicle Construction

Strategic Business Unit Car (HCV, MCV, etc.) Building & Factories
(SBU) (Road, Rail, Transmission,
etc.)
Market Segment Hatchback, Mini Sedan, Airport (Tall Residential,
Commercial, Factory, etc.)
Milieu Central Govt-Min. of Civil
Aviation (State Govt,
Defence, Pvt. Cos.)
Customer AAI (GVK, GMR, Oman,
etc.)
Project Chennai Airport
Expansion
Corporate Strategy  Marketing Strategy

Corporate activity: Marketing activity:

-Business Portfolio -Market Segment
-Strategic Business -Milieu
Unit (SBU) -Customer
-Project
Distinction:

Corporate Strategy Marketing Strategy

Top down approach Bottom up approach
Strategists see Marketers see
homogeneity i.e. the heterogeneity i.e. the
common points in the differences in the
Businesses or SBUs customers or users
Strategic tools provide Marketing decisions
general orientation require much more
details

 Therefore the need of separate detailed

Marketing Strategy analysis !!!
Marketing Segmentation : simple model

Typical market:
Say “Flats” in India
(in nos. in 2018-19)
Marketing Segmentation : “Flats” in India
(in ‘1000 nos. in 2018-19)

1rk 1bhk 2bhk 3bhk Luxury

NORTH

WEST

SOUTH

EAST
Marketing Strategy (within SBU) : advanced model…
Marketing Strategy (within SBU) : advanced model…
• This is the model used for mapping the Application required
(in the selected market Segment) with the Company’s
competence.

• 3 principal dimensions:
- Company’s Competencies & Resources
- Choice of Market Segments or Customers
- Company’s Offer to Market segment or Customers

• Note: ‘Project’ may replace ‘Customer’ !

• Many iterations required; Horizontal & Vertical!

Marketing Strategy (within SBU) : advanced model…
Company’s Competencies & Resources
• Competency = core strength or capability

• Competency + Resources = Ability to make OFFER.

• Resources : Tangible & Non-tangible

• Tangible Resources : Physical elements like Plant &
Machinery, Human Resources, Capital, Trademarks,
Contracts.
• Non-tangible Resources : Project Management, Knowledge,
Skill, Project Experience, Partnerships.
Marketing Strategy (within SBU) : advanced model…
Company’s Competencies & Resources

1) Competencies & Resources linked to Technology: Production

facility, Technically trained manpower, Technical knowledge.

2) Competencies & Resources not linked to Technology: Project

Management, Ability to mobilize, Site experience, Project
Logistics.

3) Competencies & Resources found in other Organizations:

Joint Venture, Partnership, Vendor.
Marketing Strategy (within SBU) : advanced model…
Choice of Market Segments or Customers
Phase 1 : Describe and Analyse
-objectives of Segmentation?
-criteria of Segmentation?
Phase 2 : Understand and explain
-Multiple iterations
-Quantification
-detailed analysis
Phase 3 : Make choices
-select segments
-select Customer / Project
-select geographical zone & milieu.
Marketing Strategy (within SBU) : advanced model…

Company’s Offer to Market segment or Customers

• Offer includes : Technical components, Service elements,

Financial components.

• Global Offer : for the Segment  Mostly general/technical

• Specific Offer : for the Customer or Project  Techno

commercial
2. Managing Customer
Relationship

• Customer Relationships management: Portfolio matrix

approach
• Case: Ardus

• Developing a Portfolio of Customer Relationships

Customer Relationships management: Portfolio matrix
approach

• Need for such system  the allocation of the firm’s limited

resources between Customers and/or Projects.

• Portfolio concept  based on BCG matrix

• Mapping of Customer/Project on a 2-parameter graph like :

Customer Attractiveness & Competitive Position.

• The aim  to utilize funds from the “cash cows” to develop

“stars” & strengthen “question marks” !!!
Case study: Ardus
Developing a Portfolio of Customer Relationships
Developing a Portfolio of Customer Relationships
Strategy of Customer Relationships

X-axis : strength of relationship

Managing the Customer Relations during Independent-
of-any-project stage :
Milieu Analysis: for relationship network

1. Sociogram : The origin

2. Case study : Loiret milieu – Antolini Company
3. Analysing the Milieu
4. Actors portfolio matrix
Sociogram : the origin
Sociogram : the origin

1. Sociogram: graphical representation of the milieu

to understand the actors and the network.
2. Sociogram are used to depict the Relational
Positioning.
3. Such representation is used in Project marketing
to figure out further course of action.
Case study: Loiret milieu – Antolini Company
Milieu Sociogram
Actors portfolio matrix
Screening Projects
1. Case: The Catalu shipyard
2. Intelligence Systems
3. Network analysis
4. Screening methods
5. Choosing Entry mode
6. Choosing Projects
Intelligence Systems
Two levels of the Intelligence system:
1. Independent of any project level
• To identify project opportunities or ideas within the
milieu or clients.
• Follow up on the opportunity suitable to our Company.
• Continue making RELATIONAL INVESTMENTS.
• Gather Information through – Construction sector
Conferences, magazines or news-letters !

2. Pre-tender level
• To find out relevant info like – decision makers,
consultants, budget, non-business actors, interest
groups, user groups.
• Make judgement whether PARTICIPATION possible in
Tender specs & terms or ANTICIPATION !
Network analysis

• Mapping or Network analysis at the project level with the

Customer as central figure.
• Make judgement or interpretation based on correct
representation of the relational position.
• Generate various scenarios based on various
interpretations and then make response plans ready. Like
Plan A, Plan B,..
• Weakness of Catalu  no direct relation with Whorcop or
no intermediary developed to do the needful !!!
Network analysis
Screening methods

• It is the formal procedure during pre-tender to decide whether the project is

suitable and worth bidding.
• In case its worth bidding then need to decide whether:
‐ to go ahead with Tender Participation with full efforts.
‐ to make further relational investments & consolidate
the position.
‐ to allocate required funds & resources for the above
activities.
‐ To decide upon ENTRY MODE (i.e. co-contractor/ main
contractor /sub-contractor) at the earliest if required.
• Very important stage since Participation, Relational investments & Bidding are
all expensive and time consuming.
Screening methods
• Mostly screening done (Portfolio matrix method) with:
Y-axis : Project Attractiveness
X-axis : Competitive Strength

• Project Attractiveness based on:

1. Project interest
2. Business perspective

• Competitive Strength
1. Functional position
2. Relational position
Screening methods
Screening methods
Screening methods
Screening methods
Screening methods
Other methods: (Mostly based on subjective thinking of the
decision makers)
1. Based on the size i.e. the budget
2. Based on the chances to win !
3. Multiple repeats of screening GO/NO-GO  may be
earlier NO-GO becomes GO after few months !!
4. Extreme Customer-oriented logic  All project
requirements of a particular Customer have to be bid for
the sake of RELATIONSHIP !!!
Choosing Entry mode
• Decision whether to bid ALONE or in a CONSORTIUM.
• To be decided during screening procedure.
• Based on Portfolio matrix (Project Attractiveness &
Competitive Strength)
• Choice:
1. Sole i.e. the main contractor
2. Main contractor alongwith co-contractor
3. Sub-contractor
4. Supplier of material only
5. Supplier of labour only
Choosing Entry mode
Proactive Co-development
1. Case: The Medellin Underground Project
2. Construction and Customer solution
3. Consultative Selling
4. Constructing Projects
5. Creative Offer
6. Joint Construction
7. Project De/Re-construction
 Construction and Customer solution
Benefits of Co-development (Customer + Supplier) of the Project requirement:

1. For Customer:
• Free of cost professional advise on the subject, since the Suppliers
are the masters in the subject.
• Suppliers/Contractors have execution experience which even the
Consultants lack.

2. For Suppliers:
• The earlier the Supplier/Contractor get involved the greater are
their chances of winning the order.
• Could be ready with strategies much ahead of the competition.
Construction and Customer solution
 Construction and Customer solution

1. Independent of any project:

• In this stage Supplier tries to create “Demand” for the Customer.
• Develops Relational position within the milieu.

2. Pre-tender stage:
• Supplier tries to get involved with Client/Consultants in the
construction taking place.
• Wants to influence the specs and Terms & conditions.

3. Tender preparation:
• Wants to write the specs and Terms & conditions to his advantage.
• All relationships in the network to be mobilized to achieve the
same.
 Consultative Selling

Product Selling  Systems Selling  Solution Selling  Consultative Selling

Upgradation
Product : Only item/material
System : Product + accessories
Solution : System + Installation + Warranty
Consultative : Getting involved in the customer’s
decision making process as if Customer’s employee.

*What is the most important factor due to which “Consultative Selling”

possible?
 Consultative Selling
Customer intimacy
 Consultative Selling

Customer intimacy: possible when both the depth of interaction & the
breadth of the interaction are maximum !!!

The depth of interaction:

Indicates the level of the supplier’s involvement and the customer’s
willingness to interact.

The breadth of interaction:

Indicates the extent of supplier/customer contacts from simple
sale/purchase to providing benefits of complex networks i.e. relational
position.
 Constructing Project

• Supplier provides fairly detailed OFFER for “pseudo project” to the

customer.
• Considers similar standard project with assumptions if required.
• Includes details like – technical, commercial, financial, and relational
components.
• This approach’s benefits 
1. Increase in understanding and clarity of the
Supplier and therefore of the customer.
2. Expedites customer’s decision making.
3. Supplier is able to exercise more influence on the
terms, specs, and therefore his MARGINS !!!
Creative Offer
 Joint Construction

• Joint Construction alongwith external resources/expertise.

• During the pre-tender phase, if required, develop external
resources/expertise to improve the chances !
• Such practice mostly in:
1. Technical level
2. Financial level
3. Human level
Project De/Reconstruction
Project De/Reconstruction
Formulating the Offer

1. Types of an Offer
2. The 4-dimensions of an Offer
3. The Architecture of the Offer
4. Organizational Implications
5. Introduction to COUNTER-TRADE
Classification of Offer

1. Types of Offer – Based on the “time period” when provided

2. The 4-dimensions of an Offer – from the Seller’s perspective

3. The Architecture of the Offer – from the buyer’s perspective

 1. The types of an Offer

S. no. Temporal Stage Type of Offer

1 During independent of project stage Standard / Pseudo Offer
2 During pre-tender stage Budgetary Customised Offer
3 While submitting the bid as per tender Offer as per the tender
 1. The types of an Offer

During independent of project stage  Standard / Pseudo Offer

1. Offer is a COMPLEX procedure

2. Understand the needs of Various actors business & non-business involved 

Each actor has varying needs & expectations !

3. Many Unknowns  Buyers (Who?) ; Expected Value (What?) ; Timing (When?) ;

Project delivery (How?)

 1. The types of an Offer
During pre-tender stage  Budgetary Offer

1. Client makes Budget or Estimate.

2. Since the project is finalised  Budgetary but

customised Offer required by the Client !

3. To expedite the best way  provide an Offer with

ASSUMPTIONS so that client could do ESTIMATION !!
2. The 4-dimensions of an Offer
 2. The 4-dimensions of an Offer
1. Technical offer: Techno-commercial proposal/quotation/core offer for Product & Services in
BOQ and Specs, alongwith scope and terms & conditions.

2. Financial offer:
‐ Financial terms i.e. price, payment terms, variation formulae, etc.
‐ Contract conditions i.e. legal terms, guarantees, roles,
responsibilities, liabilities.
‐ Project finance if applicable i.e. various debts, export guarantees,
countertrade, bond issue, concession arrangements, etc.
‐ Financial arrangements i.e. Build Own Operate (BOO), Build Own
Operate Transfer (BOOT), etc.
 2. The 4-dimensions of an Offer
3. Political offer:
• Offer made for towards building-up Political position.
• Mention Local investments within the milieu for fulfilling the above.
• Including all Understanding with local partners/vendors.
• Corporate Social Responsibility.

4. Societal offer:
• Modern democratic governments are formed by citizens
• Citizens are part of Society  therefore very important to address to Citizen’s
demands !
• Action taken towards users, residents, civilian groups with interests,
environment issues, etc.
• Society decides  What has to be done?
• Politicians decide  How it has to be done?
2. The 4-dimensions of an Offer
 3. Architecture of the Offer

• The Architecture of the Offer is from client’s perspective; whereas the

4-dimesions from supplier’s perspective.

• classification based on the way each part of the offer targets

respective actor in the client’s network.

• It consists of all solutions from Supplier+network to add value to

client+network respectively.
3. Architecture of the Offer
 3. Architecture of the Offer
OCC: Offer based on Core Competencies i.e. the main techno-
commercial offer.

OSOCC: MANDATORY Offer

Offer supporting OCC = OCC + offer for peripheral items & services. Eg.
Accessories, Spare parts, Logistics, Technology, etc.

OSC1 & OSC2: OPTIONAL Offer

Offer supporting client.
OSC1 (related to OCC): e.g. Maintenance, Training programs, etc.
OSC2 (not-related to OCC): e.g. Marseilles Case study (to improve
relational position thru addressing Societal & Political needs)
 3. Architecture of the Offer

OSN: Offer supporting Clients’ network.

OCC + Broad-based Offer supporting client+network;
Consists of multiple arrangements including both related to OCC & not-
related to OCC.
Eg.:
1) Large defence deal with multiple contracts (may include agreements
in non-defence sectors).
2) High speed Rail from Japanese partnership.
 4. Implications on Organization

Implication on the Supplier (due to broadening of scope) :

1. More interdependence with the customer being created  with

purpose of long term relations !
2. Radical change in marketing approach  more Technical
competence and corresponding Human resources.
3. Developing new Capability  of handling new
services/products/vendors as the need be !!
4. Bring in key account approach  willingness to fulfil most
requirements of the client !!!
5. Introduction to COUNTER-TRADE
 5. Introduction to COUNTER-TRADE

Countertrade : form of international exchange wherein the import is

linked to export in a reciprocal fashion. The perspective is for short term.

Offset : Its an approach for industrial participation and collaboration for

developing the business value. The perspective is for long term.
Eg. Rafael Dassault Aerospace shall develop local vendors in partnership
to manufacture supply component parts for the fighter aircrafts for the
IAF. The agreement enjoys sovereign guarantee of the French govt.
 5. Introduction to COUNTER-TRADE

Advantages of Buyer Seller

OFFSET for 
1.Technology transfer 1.Goodwill generation.

2.Boost in local industry 2.Long term engagement

may result in more
3.Increase in job business in future.
opportunities