Company Marketing Strategy Module 6 Sc

7/28/2019 Company Marketing Strategy Module 6 Sc

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COMPANY MARKETING

STRATEGY

MODULE 6

Source: Marketing Management , V.S.Ramaswamy, S.Namakumari


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STRATEGY

Is Direction & SCOPE of an organization over a

long term, which achieves ADVANTAGES for

its organization through its CONFIGURATION

OF RESOURCES within a CHALLENGING

ENVIRONMENT to meet the needs ofMARKET

and to fulfill STAKE HOLDERS expectations


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Strategic planning

Strategic planning is management task

concerned with the growth and future of a

business enterprise on a long term basis


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Nature, importance and scope of

strategic planning

Serves as a road map for the corporations

Lays down growth objectives of the firm and alsoprovides strategies in achieving them

Serves as a hedge against the uncertainityoccurring in the future

Ensure firm remains a prepared organization

Helps firm to understand trends in advance Provides best feasible, possible fit between the

firm and the external environment


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.Nature, importance and scope of

strategic planning

Ensures firms businesses, products and

markets are chosen wisely

Ensure best utilization of firm resources

Helps develop competitive advantage and

core competency

Prepares firm not only to face the future buteven to create and shape the future

Draws from both intuition and logic


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Concerns of Strategic Planning

Direction of growth

Extent of growth

Pace of growth Timing of growth


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Strategic planning, implementation

and control process


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Corporate and division strategic

planning

All corporation undertake four planning

activities

Defining corporate mission

Establishing strategic business units

Assigning resources to each SBU

Assessing growth opportunities


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Illustration 1

APPLE Inc.

Motto: Think Different Mission: Apple is committed to bring the best

computing experience to students, educators,

creative professionals and consumer aroundthe world through its innovative hardware,

software and internet offerings


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Illustration 2

Google Inc.

Mission: to organize the worlds informationand make it universally accessible and useful


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Mission Statement

Its organizational purpose of existence

It mainly comprises of

Key market

Contribution Distinctive factor


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Defining the BUSINESS

Business is defined as a process of satisfying

the customer needs

Ex: cloth business, automobile business, hotel

business


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Large organizations manage a diverse form of

business

Each business is categorized into different

STRATEGIC BUSINESS UNITS (SBU)

These SBU categorization helps to develop

different objectives, plans, strategies to excel

in the specific field of business and meet the

organization goal, mission


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Strategic Business Units (SBU) of TATA

TATA MOTORS

TATA CONSTRUCTIONS

TATA COMMUNICATIONS TATA BEVERAGES

TATA RETAILING

TATA HOSPITALITY


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Defining the OBJECTIVE of a firm

Objectives are clearly defined target

Specific

Measurable

Achievable

Realistic

Time


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Corporate strategy of ITC

Planning period: 2000-2005

Corporate objective: income should double from present Rs 6000 crore PA, Return On Nett Worth should reach 22%

Business/ product: Cigarettes and Tobacco

Market Posture: Hotel & Tourism, Packaging & Printing, Paper, FMCG

Growth Vector: expansion of Cigarette unit through intensification andintegration, expansion in hotel business,, divestment of troubled businesslike agri-business, financial business

Competitive advantage: In Cigarettes ( strength in tobacco farming, strongbrand), In Hotels ( connection with Sheraton, this will be used to

strengthen Welcome Group)

Source: Marketing Management, V.S.Ramaswamy & S.Namakumari, pg-123


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Analytical models used in Appraising

Business Portfolio..

BCG MATRIX (BOSTON CONSULTING GROUP)

GE Multifactor portfolio planning Matrix

SWOT Analysis


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BCG MATRIX


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STARS

They are net users of resources

A star need good deal of investment supportas it operates in a high growth market

It normally doesnt bring immediate profitsbut holds out great potential in the future


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QUESTION MARKS

They too are net users of resources

Unlike star future is un-certain

High risk category


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CASH COWS

Revenue generator

High profit

Low investment


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DOGS

Business with weak market share

They are cash traps ( Liabilities to theorganization)


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GE Matrix


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Sony/

Samsung

android

phone

Nokia with

symbian

software

Intex entering

into cell phone

business

Motorola

Mahindra

in two

wheeler

segment


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Factors that affect Market

Attractiveness

Market size

Market growth

Market profitability Price trends

Competitive intensity/ rivalry

Opportunity to differentiate the product Distribution structure


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Factors that affect Competitive

strength (Business Position)

Strength of assets and competitiveness

Relative brand strength

Market share Customer loyalty

Distribution strength


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SWOT Analysis


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Segmentation, Targeting &

Positioning


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Market Segmentation

Market segmentation is thesubdividing of a market intodistinct subsets of customers.

Segments

Members are different betweensegments but similar within.


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Segmentation Marketing

Definition

Differentiating your product and marketing

efforts to meet the needs of different segments,

that is, applying the marketing concept to

market segmentation.


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Primary Characteristicsof Segments

Basescharacteristics that tell us why segments

differ (e.g. needs, preferences, decision processes).

Descriptorscharacteristics that help us find andreach segments.

(Business markets) (Consumer markets)

Industry Age/Income

Size Education

Location Profession

Organizational Life styles

structure Media habits


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A Two-Stage Approach

in Business Markets

Macro-Segments:

First stage/rough cut Industry/application

Firm size

Micro-Segments:

Second-stage/fine cut Different customer needs, wants, values within macro-segment


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Variables to Segmentand Describe Markets

Consumer IndustrialSegmentation Needs, wants benefits, Needs, wants benefits, solutions to

Bases solutions to problems, problems, usage situation, usage rate,usage situation, usage rate. size*, industrial*.

Descriptors Age, income, marital status, Industry, size, location, currentDemographics family type & size, supplier(s), technology utilization,

gender, social class, etc. etc.

Psychographics Lifestyle, values, & Personality characteristics ofpersonality characteristics. decision makers.

Behavior Use occasions, usage level, Use occasions, usage level,complementary & complementary & substitutesubstitute products used, products used, brand loyalty, orderbrand loyalty, etc. size, applications, etc.

Decision Making Individual or group Formalization of purchasing(family) choice, low or high procedures, size & characteristicsinvolvement purchase, of decision making group, use ofattitudes and knowledge outside consultants, purchasingabout product class, price criteria, (de) centralizing buying,sensitivity, etc. price sensitivity, switching costs, etc.

Media Patterns Level of use, types of Level of use, types of media used,media used, times of use, time of use, patronage at trade shows,etc. receptivity of sales people, etc.


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Segmentation

If youre not thinking segments, youre not

thinking. To think segments means you

have to think about what drives customers,

customer groups, and the choices that are

or might be available to them.

Levitt, Marketing Imagination


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STP as Business Strategy

Segmentation Identify segmentation bases and segment the market.

Develop profiles of resulting segments.

Targeting Evaluate attractiveness of each segment.

Select target segments.

Positioning Identify possible positioning concepts for each target segment. Select, develop, and communicate the chosen concept.

to create and claim value


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..

.

D

.

.

....

Segmentation (for Carpet Fibers)

A,B,C,D:Location of

segment centers.

Typical members:

A: schools

B: light commercial

C: indoor/outdoorcarpeting

D: health clubs

Distance betweensegments C and D

.

..

. ..

Strength

(Importance)

Water Resistance

(Importance)

....

... .

A

....

....

. .

.

...

...

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.

....

.... CB

Perceptions/Ratings for one respondent:Customer Values

.


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....

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.

.

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. .

Water Resistance

(Importance)

Targeting

Segment(s) to serve

....

... .

..

....

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.

.Strength

(Importance)


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Product Positioning

.Comp 1

Comp 2

Us

Water Resistance

(Importance)

Positioning

. .Strength

(Importance)

....

... .

. .

.

.

.....

.

..

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.

. .

....

....

. .

.

.


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A Note on Positioning

Positioning involves designing an offering sothat the target segment members perceive it ina distinct and valued way relative to

competitors.

Three ways to position an offering:

1. Unique (Only product/service with unique

feature)2. Difference (More than twice the [feature] vs.

[competitor])

3. Similarities (Same functionality as [competitor];lower price)


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Behavior-Based Segmentation

Traditional segmentation

(eg, demographic,

psychographic)

Needs-based segmentation

Behavior-based segmentation

(choice models)


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Steps in a Segmentation Study

Articulate a strategic rationale for segmentation (ie, why arewe segmenting this market?).

Select a set of needs-based segmentation variables mostuseful for achieving the strategic goals.

Select a cluster analysis procedure for aggregating (ordisaggregating customers) into segments.

Group customers into a defined number of differentsegments.

Choose the segments that will best serve the firms strategy,

Documents

Company Marketing Strategy Module 6 Sc