Strategic Marketing & Development of Competitive advantage

Strategic Marketing

Strategic Planning
Strategic Planning: The process of developing & maintaining strategic fit between the organisations goals & capabilities and its changing market environment/ opportunities
Continuous Must for survival Top management decisions High impact decisions Irreversible

Strategic Planning
Environmental Understanding

Strategic Planning
Mission/ Vision: A statement of purpose on What the organisation wants to achieve in the larger environment. Framed by asking what is our business? Who are our customers? What we value?.... Market oriented mission tells what need is satisfied Product oriented mission tells what business you are in

Strategic Planning
Market oriented Mission/ vision Connecting people We provide the worlds best online search engine Product Oriented mission We sell the communication devices We help you organise the worlds information & make it universally accessible and useful To produce entertainment & information creatively, innovatively and profitably

To make people happy

Strategic Planning
Activity Environmental Understanding Walt Disney American households were getting smaller, with dual income, reduced socialisation & entertainment and higher spending capacity. A large opportunity for entertainment products. To make people happy by producing entertainment & information creatively, innovatively & profitably To grow 5% compounded annually in existing products for the next 5 years. To create new product / entertainment line that will contribute 10% of the total revenue in next 5 years. Current: Comics, Movies, Channel, Theme Parks & Merchandising New: Gaming Marketing Strategy Financial Strategy HR Strategy Operations Strategy IT Strategy

Mission & Vision Setting Company Objective

Business Portfolio

Functional Strategies

Managing Marketing Strategies

Market Analysis Marketing plan Marketing Implementation Marketing Control

Managing Marketing Strategies

Managing Marketing Strategies

Marketing Analysis
projections & outlook.)

The market in general (size, growth, Companys SWOT Value Chain Portfolio Analysis Competitor Analysis

SWOT
O&T Comes from external environment (macro) S&W Comes from the internal environment (micro) Use Paretos principle to find out the most critical impacting factors Classify them as SWOT Use TOWS matrix to develop strategies

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

SWOT - Hero
Strength Well developed distribution especially rural Rising fuel cost Concern for pollution Increase in bike usage Opportunities weakness Love for foreign brands Competitive pressure Poor product development experience Shorter PLCs

Threats

Value Chain Analysis

Value chain: A series of value adding activities that serve to create & deliver value to customers Value network: network made of company, suppliers, distributors. Customers who partner each other in enhancing value chain

Value Chain Analysis

Value Chain Analysis Value Network

Value Chain Analysis - Garments

Cotton cultivation Spinning & Dyeing Weaving Stitching Branding Retaining

Value Chain Analysis - Garments

Cost 10 20 70 130 250 600 Activity Cotton cultivation Spinning & dyeing Weaving Stitching Branding Retailing Value added 10 20 20 40 150 150 Selling profits price 20 70 130 250 600 900 10 30 40 80 200 150

Portfolio Analyses
Individually analyses the strength of brands/ products/ product lines based on certain parameters Gives a better understanding of the individual product contribution Mainly used for strategic discrimination Commonly used BCG Matrix & GE Business Screen

BCG Matrix

BCG Matrix
Characteri stics Sales Costs Profits Future scope PLC Stage Star High / increasing Very high Low / moderate Very high Growth / maturity Invest & grow Cash Cow High / decreasing Low Very High Lower Maturity / decline Harvest / milk Question mark Low / increasing High / moderate Low High / low Introductio n / growth Invest / grow Dog Low / decreasing Moderate / low Low Low / nil Failed introduction / decline divest

Strategy

G E Business screen

Competitor Analysis

Competitor Analysis
a group of products, brands whose consumptions are not completely independent of each other Direct Indirect Potential

Competitor Analysis Strategic groups

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?

determination of what benefits customers value & how they rate the relative value of various competitive offers

Competitor Analysis Strategic groups

Blue ocean strategy: creation of uncontested market space there by making competition irrelevant. Eg: Gillette

Marketing Planning
Involves deciding the overall marketing strategy, programs and control in order to attain the marketing objectives, there by attaining the organizational objective It indicates the marketing departments contribution towards the attainment of organizational objective Aligned with other departmental plans

Marketing Planning

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 how to fully utilize them What are the basic weakness & threat and how to overcome them

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

Marketing Planning - strategies

Directional strategies Growth
Concentration vertical / horizontal Diversification concentric / conglomerate

Stability
Pause / maintenance / profit

Retrenchment
Turn around Captivation divestment

Marketing Planning - strategies

Evolution of marketing strategies Entrepreneurial Formulated
involves visualizing an opportunity and constructing and i mplementing flexible strategies involves developing formal marketing strategies and followi ng them closely

Intrapreneurial

involves the attempt to reestablish an internal entrepreneu rial spirit and refresh marketing strategies and approaches

Marketing Planning - strategies

Generic Competitive strategies Porters

Marketing Planning - strategies

Basic Competitiveness Michael Treacy and Fred Wiersema suggest companies can gain leadership p ositions by delivering superior value to th eir customers in three strategies or value disciplines:
Operational excellence Customer intimacy Product leadership

Marketing Planning - strategies

Operational excellence refers to a company providing value by leading its industry in price and convenience by reducing costs and creating a lean and efficient value delivery system Customer intimacy refers to a company providing superior value by segmentin g markets and tailoring products or services to match the needs of the targeted customers Product leadership refers to a company providing superior value by offering a continuous stream of leading edge products or services. Product leaders are open to ne w ideas and solutions and bring them quickly to the marke t.

Marketing Planning - strategies

Competitive positions Market leader - largest, usually first entrant, 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 segment others ignores

Marketing Planning - strategies

Market leader strategies Expand total demand Cadbury Protect market share Intel Expand market share - Gillette

Marketing Planning - strategies

Growth strategy Ansoffs Matrix

Marketing Planning - strategies

Market challenger Full frontal attack Indirect attack Market follower strategy Market nicher strategy (market/ product/ customer/ marketing mix)

Marketing Planning - strategies

Balancing the orientation

Marketing Planning - strategies

TOWS Matrix

Marketing Planning - strategies

Financial & Marketing Might Slow responsiveness

Shorter PLCs

Constant Innovation & NPD introduction Customer Driving Marketing

Intrapreneurial Marketing

Entry of Internati onal Brands

Introduction of International Lines

Pre Emptive Tactics

Marketing Implementation & control

Develops 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

Marketing Return on Investment

Marketing investment Marketing Returns

Increased customer satisfaction Increased customer attraction Increased customer retention Increased customer LTV Increased brand equity Increased sales & profits

Return on Marketing investment

PLC

PLC
.

PLC
Assumptions
Products have a limited life Products pass through different stages posing different challenges, opportunities & problems to the marketer sales, 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

Product Life-Cycle Patterns

.

DVD Players

FM Radio

Small Cars

PLC
.

PLC Marketing Characteristics

CHARACTERISTICS

INTRODUCTION

GROWTH

MATURITY

DECLINE

SALES

LOW

FAST GROWTH

SLOW INCREASE/ STAGNATE LOW / -VE REDUCING LOW MAXIMUM LATE MAJORITY

DECLINING

SALES GROWTH COSTS EXPENSE/INCO ME RATIO PROFITS CUSTOMERS

HIGH HIGH HIGH -VE INNOVATORS

HIGH HIGH/REDUCIN G MEDIUM +VE EARLY MAJORITY/ ADOPTERS FEW

-VE LOW LOW DECLINING LEGGARDS

COMPETITORS

NIL

MOST

SHAKE OUT

PLC Marketing Strategies

STRATEGIES

INTRODUCTION

GROWTH

MATURITY

DECLINE

PROMOTION ADVERTISING SALES PROMOTION PRICE

CREATE AWARENESS & INDUCE TRIAL PROMOTE TRIAL EG: SAMPLING HIGH COST PLUS

CREATE BRAND PREFERENCE PROMOTE HIGHER USAGE. EG: 3+1 LOWERING PRICES

EMOTIONAL BRAND PURSUATION REWARD USERS. EG: GIFT REDUCING/ COMPETETIO N BASED PRICING FULL PRODUCT LINE MAXIMUM REACH AND DISTRIBUTIO N STRENGTH

TOP OF THE MIND AWRENESS NIL

LOW FOR HIGH VOLUMES & STEALTH PRICE INCREASES PRODUCT PRUNING COSTLY CHANNELS ARE WEEDED OUT

PRODUCT

BASIC PRODUCT

PRODUCT VARIENTS MULTIPLE CHANNELS TO INCREASE REACH

DISTRIBUTION

RESTRICTED BUT TARGETED REACH

PLC Marketing Strategies

STRATEGIES

INTRODUCTION

GROWTH

MATURITY

DECLINE

TYPES ADVERTISING FINANCIAL STRATEGY

ABOVE & BELOW THE LINE ADS INVEST TO GROW

MORE ATL, LESS BTL REINVEST EARLY PROFITS TO ATTAIN MARKET LEADERSHIP

ATL DOMINATED RETURNS REAPING AND INVESTING IN NEWER PRODUCTS MAXIMUM MANPOWER WITH SLOW DECLINE FULL PRODUCTION AND BEST ECONOMIES OF SCALE

POS BTL ADS DOMINATED MILKING AND COST REDUCTION. DIVESTITURE ALSO DONE REDEPLOY MANPOWER TO OTHER NEWER PRODUCTS CAPACITY SHIFTING TO NEW PRODUCTS AND CONTRACT MANUFACTURING

HR

BUILD MULTI TASK TEAMS

MANPOWER INCREASES

PRODUCTION

FLEXIBLE PRODUCTION TO MATCH DEMAND, IDLING OF CAPACITY

INCREASED PRODUCTION BASED ON SALES FORECAST

Marketing IS, Intelligence & Research

Marketing IS, Intelligence & Research

Evolution TPS MIS DSS ESS

Marketing IS, Intelligence & Research

Marketing IS, Intelligence & Research

Marketing IS, Intelligence & Research