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Strategic Marketing & Development

of Competitive advantage

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Strategic Marketing

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Strategic Planning Strategic Planning: The process of

developing & maintaining strategic fitbetween the organisations goals &capabilities and its changing market

environment/ opportunities Continuous

Must for survival

Top management decisions

High impact decisions

Irreversible

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Strategic PlanningEnvironmental

Understanding

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Strategic PlanningMission/ Vision: A statement of purpose on

What the organisation wants to achieve inthe larger environment.

Framed by asking what is our business?

Who are our customers? What wevalue?....

Market oriented mission tells what need is

satisfiedProduct oriented mission tells what business

you are in

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Strategic PlanningMarket oriented Mission/vision

Product Oriented mission

Connecting people We sell the communicationdevices

We provide the worlds best

online search engine

We help you organise the

worlds information & make ituniversally accessible anduseful

To make people happy To produce entertainment &

information creatively,innovatively and profitably

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Strategic PlanningActivity Walt Disney

Environmental Understanding American households were getting smaller, with dualincome, reduced socialisation & entertainment and

higher spending capacity. A large opportunity forentertainment products.

Mission & Vision To make people happy by producing entertainment & information creatively, innovatively & profitably

Setting Company Objective To grow 5% compounded annually in existingproducts for the next 5 years.

To create new product / entertainment line that willcontribute 10% of the total revenue in next 5 years.

Business Portfolio Current: Comics, Movies, Channel, Theme Parks & Merchandising

New: Gaming

Functional Strategies Marketing Strategy

Financial Strategy

HR Strategy

Operations StrategyIT Strategy

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Managing Marketing Strategies Market Analysis

Marketing plan Marketing Implementation

Marketing Control

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Managing Marketing Strategies

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Managing Marketing Strategies

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Marketing Analysis The market in general (size, growth,

projections & outlook.)

Companys SWOT

Value Chain

Portfolio Analysis

Competitor Analysis

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SWOT O&T Comes from external environment

(macro) S&W Comes from the internal

environment (micro)

Use Paretos principle to find out the mostcritical impacting factors

Classify them as SWOT Use TOWS matrix to develop strategies

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SWOT two wheelers in India Fuel cost macro - mileage

Natural environment macro emission laws Technological environment macro faster

product evolution

Demographic macro usage and preferences Distribution micro market coverage

Image micro influence product purchase

Competition micro sales R & D micro new product developmental

capabilities

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SWOT - HeroStrength weakness

Well developed

distribution especiallyrural

Love for foreign brands

Competitive pressurePoor productdevelopment experience

Rising fuel cost

Concern for pollutionIncrease in bike usage

Shorter PLCs

Opportunities Threats

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Value Chain Analysis Value chain: A series of value adding

activities that serve to create & delivervalue to customers

Value network: network made of

company, suppliers, distributors.Customers who partner each other inenhancing value chain

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Value Chain Analysis

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Value Chain Analysis Value Network

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Value Chain Analysis - GarmentsCotton cultivation

Spinning & Dyeing

Weaving

Stitching

Branding

Retaining

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Value Chain Analysis - Garments

Cost Activity Value

added

Selling

price

profits

10 Cottoncultivation

10 20 10

20 Spinning & dyeing 20 70 30

70 Weaving 20 130 40

130 Stitching 40 250 80

250 Branding 150 600 200

600 Retailing 150 900 150

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Portfolio Analyses Individually analyses the strength of

brands/ products/ product lines based oncertain parameters

Gives a better understanding of the

individual product contribution Mainly used for strategic discrimination

Commonly used BCG Matrix & GEBusiness Screen

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BCG Matrix

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BCG MatrixCharacteristics

Star Cash Cow Questionmark

Dog

Sales High /increasing

High /decreasing

Low /increasing

Low /decreasing

Costs Very high Low High /moderate

Moderate /low

Profits Low /moderate

Very High Low Low

Future

scope

Very high Lower High / low Low / nil

PLC Stage Growth /maturity

Maturity /decline

Introduction / growth

Failedintroduction/ decline

Strategy Invest & grow

Harvest /milk

Invest /grow

divest

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G E Business screen

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Competitor Analysis

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Competitor Analysisa group of products, brands whose

consumptions are not completelyindependent of each other

Direct

Indirect

Potential

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Competitor Analysis Strategic groups

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Competitor Analysis Who are the competitors?

What are their objectives?

What are their strategies? clusters

What is their SWOT?

Whom to attack? Strong vs Weak

Close vs Distant

Good vs Bad

What is the customer value analysis? determinationof what benefits customers value & how they rate the relativevalue of various competitive offers

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Competitor Analysis Strategic groupsBlue oceanstrategy: creation of

uncontested marketspace there bymaking competitionirrelevant. Eg:

Gillette

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Marketing Planning Involves deciding the overall marketing

strategy, programs and control in order toattain the marketing objectives, there byattaining the organizational objective

It indicates the marketing departmentscontribution towards the attainment oforganizational objective

Aligned with other departmental plans

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Marketing Planning

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Marketing Planning Executive summary

Current marketing situation

Define the market, customer, competitor &environment

Product & performance review

Understand your competitors

Review of the 4Ps / SWOT.. of self & competitors

SWOT analysis

What basic opportunity & strength exists and howto fully utilize them

What are the basic weakness & threat and how to

overcome them

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Marketing Planning Objectives & Issues

What company would like to attain

What are the general impediments foreseen

Marketing Strategy

How to achieve the objectives

How to create value for the customer

Action programs

What needs to be done? Who will do it? When will it be

done? How it will be done? Budgets

Controls

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Marketing Planning - strategiesDirectional strategies

Growth Concentration vertical / horizontal

Diversification concentric / conglomerate

Stability Pause / maintenance / profit

Retrenchment Turn around

Captivation

divestment

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Marketing Planning - strategiesEvolution of marketing strategies

Entrepreneurialinvolves visualizing an opportunity and constructing and implementing flexible strategies

Formulatedinvolves developing formal marketing strategies and following them closely

Intrapreneurialinvolves the attempt to reestablish an internal entrepreneurial spirit and refresh marketing strategies and approaches

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Marketing Planning - strategies Generic Competitive strategies Porters

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Marketing Planning - strategiesBasic Competitiveness

Michael Treacy and Fred Wiersemasuggest companies can gain leadership positions by delivering superior value to th

eir customers in three strategies or valuedisciplines:

Operational excellence

Customer intimacy

Product leadership

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Marketing Planning - strategies Operational excellence -

refers to a company providing value by leading its industry

in price and convenience by reducing costs and creating alean and efficient value delivery system

Customer intimacy -refers to a company providing superior value by segmentin

g markets and tailoring products or servicesto match the needs of the targeted customers

Product leadership -refers to a company providing superior value by offering a

continuous stream of leadingedge products or services. Product leaders are open to new ideas and solutions and bring them quickly to the market.

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Marketing Planning - strategiesCompetitive positions

Market leader - largest, usually firstentrant, up to 60% market share

Market challenger runner up trying to

dislodge the leader Market follower runner up trying to

protect its share

Market nicher serves a small segmentothers ignores

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Marketing Planning - strategiesMarket leader strategies

Expand total demand Cadbury Protect market share Intel

Expand market share - Gillette

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Marketing Planning - strategies Growth strategy Ansoffs Matrix

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Marketing Planning - strategiesMarket challenger

Full frontal attack Indirect attack

Market follower strategy

Market nicher strategy (market/ product/customer/ marketing mix)

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Marketing Planning - strategiesBalancing the orientation

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Marketing Planning - strategies TOWS Matrix

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Marketing Planning - strategiesFinancial &

Marketing Might

Slow

responsiveness

Shorter

PLCs

Constant Innovation &

NPD introductionCustomer DrivingMarketing

Intrapreneurial

Marketing

Entry ofInternationalBrands

Introduction ofInternational Lines

Pre Emptive Tactics

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Marketing Implementation & controlDevelops the various activities to implement

the strategy called programs.

What needs to be done

Who will do it

When it needs to be done

How it will be done

Budgets

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Marketing Return on InvestmentMarketing investment

Marketing ReturnsIncreased customer satisfaction

Increased customer attractionIncreased customer retention

Increased customer LTVIncreased brand equity

Increased sales & profits

Return on Marketing

investment

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PLC

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PLC.

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PLC Assumptions

Products have a limited life

Products pass through different stages posing differentchallenges, opportunities & problems to the marketersales, growth and profits vary at each stage

Each stage needs different marketing strategies

Types of PLC

Product class automotives

Product categories steam engines, IC engines,

electrical & hybrid vehicles, fuel cells.

Manufacturer Ford, GM, Honda.

Brand/Product T model, A model, prefect

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Product Life-Cycle Patterns

.

DVD Players FM Radio Small Cars

C

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PLC

.

PLC M k i Ch i i

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PLC Marketing CharacteristicsCHARACTERISTICS INTRODUCTION GROWTH MATURITY DECLINE

SALES LOW FAST GROWTH SLOWINCREASE/STAGNATE

DECLINING

SALES GROWTH HIGH HIGH LOW / -VE -VE

COSTS HIGH HIGH/REDUCIN

G

REDUCING LOW

EXPENSE/INCOME RATIO

HIGH MEDIUM LOW LOW

PROFITS -VE +VE MAXIMUM DECLINING

CUSTOMERS INNOVATORS EARLYMAJORITY/ADOPTERS

LATE MAJORITY LEGGARDS

COMPETITORS NIL FEW MOST SHAKE OUT

PLC M k i S i

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PLC Marketing StrategiesSTRATEGIES INTRODUCTION GROWTH MATURITY DECLINE

PROMOTIONADVERTISING

CREATEAWARENESS &INDUCE TRIAL

CREATE BRANDPREFERENCE EMOTIONALBRANDPURSUATION

TOP OF THEMINDAWRENESS

SALESPROMOTION

PROMOTE TRIALEG: SAMPLING

PROMOTEHIGHER USAGE.EG: 3+1

REWARDUSERS. EG:GIFT

NIL

PRICE HIGH COSTPLUS

LOWERINGPRICES

REDUCING/COMPETETION BASEDPRICING

LOW FOR HIGHVOLUMES &STEALTH PRICEINCREASES

PRODUCT BASIC PRODUCT PRODUCTVARIENTS FULLPRODUCTLINE

PRODUCTPRUNING

DISTRIBUTION RESTRICTEDBUT TARGETEDREACH

MULTIPLECHANNELS TOINCREASE

REACH

MAXIMUMREACH ANDDISTRIBUTIO

N STRENGTH

COSTLYCHANNELS AREWEEDED OUT

PLC M k i S i

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PLC Marketing StrategiesSTRATEGIES INTRODUCTION GROWTH MATURITY DECLINE

TYPES

ADVERTISING

ABOVE &BELOW THELINE ADS

MORE ATL, LESSBTL

ATLDOMINATED

POS BTL ADSDOMINATED

FINANCIALSTRATEGY

INVEST TOGROW

REINVEST EARLYPROFITS TOATTAIN MARKET

LEADERSHIP

RETURNSREAPINGAND

INVESTINGIN NEWERPRODUCTS

MILKING ANDCOSTREDUCTION.

DIVESTITUREALSO DONE

HR BUILD MULTITASK TEAMS

MANPOWERINCREASES

MAXIMUMMANPOWER

WITH SLOWDECLINE

REDEPLOYMANPOWER TO

OTHER NEWERPRODUCTS

PRODUCTION FLEXIBLEPRODUCTIONTO MATCH

DEMAND,IDLING OFCAPACITY

INCREASEDPRODUCTIONBASED ON

SALESFORECAST

FULLPRODUCTIONAND BEST

ECONOMIESOF SCALE

CAPACITYSHIFTING TO NEWPRODUCTS AND

CONTRACTMANUFACTURING

M k i IS I lli & R h

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Marketing IS, Intelligence & Research


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Evolution

TPS MIS

DSS

ESS


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M k ti IS I t lli & R h

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MM 9-14

Documents

Transcript of MM 9-14