3. Marketing as per Peter Drucker – the aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Chartered institute of marketing– marketing as the process of discovering, expecting and suiting the customer needs and at the same time making profits. Marketing…… 3
4. In Greek – strategos means to lead. To be successful in business an organization should plan to utilize available resource. Strategy helps organization to realize its mission and be successful. Strategy………. 4
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7. What to do.. What not to do… Who the customers are… What requirement of theirs to be met… At what price… Strategy………. Specifies… 6
8. Scope --- Type of businesses , Industries, market segments (company operates or plans to).. Goals --- Specific goals and objectives of the organization. Resource allocation --- Human & Financial. Optimal utilization of available resources. Sustainable competitive advantage --- comes from strength & core competence of organization. Synergy --- Combined effort of various group working together. Components of Strategy…. 7
14. Competitive strategy refers to how a company competes in a particular business. Competitive strategy is concerned with how a company can gain a competitive advantage through a distinctive way of competing. Competitive Strategy 13
15. Sustainable competitive advantage is the focal point of your corporate strategy. It allows the maintenance and improvement of your enterprise's competitive position in the market. It is an advantage that enables business to survive against its competition over a long period of time. Competitive Advantage of Corporate ……….. 14
16. Hilton & Marriott Vs La Quinta Motor inns Marketing strategy & competitive advantage -- CS 15
17. Success in business depends on VISION & Competitive advantage. Vision vs. Mission Vision –where the co. expects to be in future. Mission –Basic purpose for which the co. is in business. Marketing strategy & Competitive advantage…. 16
18. Business can achieve comp. Advantage by.. Focus on customers.. Analysis of requirements of buyers.. Identify gaps in service provided by the competitor product/ service.. Identifying unmet requirements.. To find opportunities.. Customer satisfaction analysis.. Competitive advantage.. 17
19. Competence is the ability to perform a specific task, action or function successfully. Success of an organization lies in identifying its ability to identify, develop, and take advantage of its core competences.. Competence.. 18
20. Provide access to wide variety of market. Contributes by providing benefits which are perceived important by customer. Difficult for competitors to imitate. Core Competence advantage.. 19
21. The link between the core competences and final product is CORE PRODUCT. Honda Engines -- CS Core Competence 20
22. Capability-based strategies Evaluation of these capabilities begins with a company capability profile, which examines a company's strengths and weaknesses in four key areas: managerial marketing financial technical Core competencies can be defined as the unique combination of the resources and experiences of a particular firm. It takes time to build these core competencies and they are difficult to imitate. Critical to sustaining these core competencies are their: Durability - their life span is longer than individual product or technology life-cycles. In transparency - it is difficult for competitors to imitate these competencies quickly. Immobility - these capabilities and resources are difficult to transfer. Core competence vs. capabilities 21
23. Can be defined as factors external to the system , yet have a affect on the system. Cs –KFC Marketing Enviorment 22
25. Identify the info. Required by the organization. Collection of info. Analysis of Info. Communicating results. Making decisions. Environment scanning 24
27. DPM…… Directional Policy Matrix Leader - major resources are focused upon the SBU. Try harder - could be vulnerable over a longer period of time, but fine for now. Double or quit - gamble on potential major SBU's for the future. Growth - grow the market by focusing just enough resources here. Custodial - just like a cash cow, milk it and do not commit any more resources. Cash Generator - Even more like a cash cow, milk here for expansion elsewhere. Phased withdrawal - move cash to SBU's with greater potential. Divest - liquidate or move these assets on a fast as you can. 26
29. dogs are cash traps because of the money tied up in a business that has little potential. Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. Stars generate large amounts of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate; therefore the cash in each direction approximately nets out. As leaders in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate, and thus generate more cash than they consume. BCG matrix…… 28
45. PLC Develop strategy Turn around strategy Stabilize strategy Harvesting strategy 36
46. Strategies for the differing stages of the Product Life Cycle Introduction. --The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution. Growth. -- Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilize. Maturity.--Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilize. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media. Decline.-- At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting. 37
50. 41 Consumer Needs & Motivation Motivation is the driving force within individuals that impels them to action The driving force is produced by state of tension, which exists as a result of an unfulfilled need. Previous Learning Goal or Need Fulfillment Unfulfilled Needs, Wants & Desires Behavior Tension Drive Cognitive Processes Tension Reduction
51. Consumer Package Goods (CPG) market that adopt the theory of running their business centered around Consumer, Shopper & Retailer needs. Marketing departments spend quality time looking for "Growth Opportunities" in their categories by identifying relevant insights (both mindsets and behaviors) on their target Consumers, Shoppers and retail partners. Growth Opportunities emerge from changes in market trends, segment dynamics changing and also internal brand or operational business challenges. The Consumer-Centric Business 42
52. Segmentation is a process of dividing the market into distinct subunits of customers with similar needs. (ATM… personalized banking)… Segmentation Market segment & positioning Mature & Declining markets J&J baby care products for adults Emerging markets( united breweries. Sab miller VS. Sappora Growth markets Mobile services -VAS 43
53. Positioning by attributes- Colgate for 12 hr protection, Volvo cars for safety, Positioning by price … Ariel as premium product,. Tide as low price product Positioning by product use … Sony Erricsson W800i as walkman.. Positioning by product user --- pink RAZR as designer item. Positioning by product class --- rolex as best expensive watches Positioning with respect to competition -- Oil of olay vs. dove Positioning Strategy…. 44
54. Customer analysis Price sales Ability to recall price –low. Similar price amongst competitors.. Low price perceived by some as poor quality 45
55. Cost plus strategy---production cost + variable cost + profit margin. Target pricing strategy--- target return pricing:: to achieve target return on target achievement. Early cost recovery ---maximum profit return from the product at the earliest. Pricing strategy 46
56. Customer loyalty is widely accepted as being worth nurturing, but what are the main business factors that directly influence the loyalty of your customers? Customer loyalty 47
59. Analysis customer needs. There buying pattern. Ways in which they can be satisfied. Analysis use full in :: Identify the competition in the market. To identify ,why customer choose one product over the other. To analysis the present strategies of the co. vis. Competition. Customer analysis 50
61. Laid back competitors. Aggressive competitors. ( HUL Pepsodent 102 % better) Selective competitors. Unpredictable competitors. Types of competitors 52
62. Identifying customers—who and how they are served. Identify current & potential competitors. Collect information about each competitor. Conduct in-depth analysis of each competitor. Comparison with competitors. Competition analysis 53
63. simple consistency - first order fit between each activity and the overall strategy reinforcing - second order fit in which distinct activities reinforce each other optimization of effort - coordination and information exchange across activities to eliminate redundancy and wasted effort How is competitive advantage implemented? 54
64. Difference in ORG. buying & individual buying… Org. buying involves multiple individuals in decision process. Governed by rules & standards. Organization buying behavior 55
65. Users.- who will use the purchase product. Buyers.-responsibility & authority for negotiating Influencers.-influence directly or indirectly ORG. decision process Deciders.-take final decision. gatekeepers.-control info. In buying centre Buying centre 56
67. Dividing the market into subunits of customers of similar needs… Then to identify the most profitable product segments and services that the ORG. can cater to…. Segmentation 58
68. Customers response to product , positioning. Segments should respond differently to companies products. Action ability of segment-(focus on target buyers ¬ waste resource). Financial strength of the segment. Stability of segment—( financially attractive). Requirement of effective segmentation 59
69. Single seller or company controls the goods & service-prevents others from entering. E.g. – De beers control 90% of diamond mkt. Monopoly segment 60
70. Exists when few players are in market. Entry barriers like huge investment. E.g. –aluminum production ( Nalco, Balco, hindalco,) Opec.…… Oligopoly 61
71. Case study Amul Pizza`s An unlikely entrant has stirred the pizza market in India. Indian company Amul, well known for its milk products, has introduced a pizza for 20 rupees (41 US cents), or one-third that charged by competitors. Amul is one of the largest food cooperatives in the world and carries immense financial and advertising clout. Its parent company, the Gujarat Cooperative Milk Marketing Federation (GCMMF), turned around 25 billion rupees last year. And even though they may not admit it, competitors have started tightening their belt, in different ways. …………….. Segmentation Invasion positioning & repositioning 62
72. Identify and serve small but very profitable segment. Identify specific & personalized needs of customer & fulfill them. Long term relation with customers & provide them the best service. Maybach Niche segment 63
74. Who there customers are & who will purchase?? SUBWAY……targeting strategy… Cadbury …. Rich & creamy chocolate… for weight conscious customers…. “Under 99 cal” Targeting strategy 65
75. Undifferentiated strategy..same marketing mix for all segments…e.g…South west airlines.. Same fare for all ..spot bookings only ..no advance reservations. Concentrated strategy…effort on a single segment…House of chanel- makes hand bags and perfumes…no advt. for bags& perfumes , are made on order only. Differentiated startegy….different strategy for two or more segments…Horlicks for sick persons as health drink & mothers and children--- a pleasurable nourishing drink . Targeting startegy 66
76. Positioning enables the customer to differentiate between competing products… Kinetic Zing…transport need for college going youngsters.. designed to reflect the needs & life style of the segment… Zing rock series .. Dual tone colors…cell phone charger point..mobile holder..cola can holder Positioning startegy 67
77. Positioning strategy -- recall. Positioning by attributes- Colgate for 12 hr protection, Volvo cars for safety, Positioning by price … Ariel as premium product,. Tide as low price product Positioning by product use … Sony Erricsson W800i as walkman.. Positioning by product user --- pink RAZR as designer item. Positioning by product class --- rolex as best expensive watches Positioning with respect to competition -- Oil of olay vs. dove 68
78. 1.Revamped position strategy Initially –basic product Attain maturity –add one or two features. 2. Break free position strategy… changing the way the product is consumed. Dettol soap—anti septic soap –all purpose anti bacterial soap. position strategy…cont.. 69
79. Identify competitor. Customers perception & evaluation. Competitor's position. Analyzing customer Market research techniques….. position strategy.. Implementation ??? 70
