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L O G O By-Vaibhav Raj Dixit Roll no .36 MBA Gen(sec A)

Marketing Strategy

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Page 1: Marketing Strategy

L O G O

By-Vaibhav Raj DixitRoll no .36MBA Gen(sec A)

Page 2: Marketing Strategy

What is Marketing Strategy? A Marketing Strategy is an integrated set of choices

about how we will create and capture value, over long periods of time. Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centred around the key

concept that customer satisfaction is the main goal. A marketing strategy combines product development,

promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe

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Types of Strategies.

Differentiation- oriented strategies.

Price oriented strategies

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Differentiation- oriented strategies

Here the firm seeks to be unique on some aspects which are valued by the customer. It charges an appropriate premium price for the unique attributes.

They can be of many types :-Strategies with emphasis on product.Strategies with emphasis on

place/distribution/channel.Strategies with emphasis on promotion.

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Differentiation with emphasis on product

Here the firm differentiates itself from its competitors on the basis of product. Product includes attributes like functionality, packing convenience,etc.it can also include service offered and experience delivered.

E.g.- Intel, EBay, Gillette

Shampoo sachets, small sized soft drinks and what not.

Kingfisher airlines(on basis of service)

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Differentiation with emphasis on Distribution

The companies these days set up 3 tier distribution system and reach villages for selling their products. Like Shakti by HUL and e-choupal by ITC.These are the 2 leading projects set up for the potent rural market exploitation.

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Differentiation with emphasis on promotion

Companies rely on their power of promotion to wage differentiation. They have all other positives but they rely more on psychological appeals prestige and status issues. e.g. Dove, Lux , coke, Nike have high image appeal. And having them makes the customer part of the image.

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Price-Oriented StrategiesThe firm takes advantage of the low cost and

sells as a low cost brand and enjoys an overall cost leadership in the industry

E.g. Maruti 800. it created a price oriented strategy. Its early entry ,large production capacity, lower initial investment, high level of indigenous components made it the market leader because it lets it to deliver cars at lower prices. And Nirma

if a company doesn't get cost leadership ,it cannot compete on basis of prices.

Page 9: Marketing Strategy

NOW A DAYSThe companies are not leaders in the

market by just cost leadership of differentiation. They have to mix both in order to strike the right balance and be the leader for e.g. Dell Computers and Tropicana juices.

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The BCG matrix The BCG matrix  is a chart that had been created by Bruce Henderson for

the Boston Consulting Group in 1968 to help corporations with analysing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management.

Page 11: Marketing Strategy

L O G O

Porter’s generic strategies

3 game plans

Page 12: Marketing Strategy

Porter’s generic strategies

1. Overall cost leadership – business works hard to achieve lowest production & distribution costs so that it can price lower than competition & win a large market share. Firms pursuing this strategy must be good at engineering, purchasing, manufacturing & physical distribution (they need less marketing skills). Problem is competition operating with even lower costs (e.g. the Chinese Dragon!).

Page 13: Marketing Strategy

Porter’s generic strategies

2. Differentiation – business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market. So the firm seeking quality leadership must make products with best components, put them together expertly etc. (It’s a Sony!).

Intel inside, idiot outside!

Page 14: Marketing Strategy

Porter’s generic strategies

3. Focus – business focuses on 1 or more narrow market segments, gets to know these segments intimately & pursues either cost leadership or differentiation within the target segment (niche marketing).

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SWOT Analysis

S – StrengthW – WeaknessO – OpportunitiesT – ThreatsRemember - SW are internal, OT are external

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Page 17: Marketing Strategy

GE Model Each business is rated in terms of market attractiveness & business strength.

Companies are successful to the extent that they enter attractive markets & possess the required business strengths to succeed in those markets. If 1 of the factors is missing, the business will not produce outstanding results (strong company in unattractive market or weak company in attractive market will not do well).

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Dealing with competition Porter’s Model:

1. Threat of intense segment rivalry – segment unattractive if it contains numerous strong & aggressive competitors

2. Threat of new entrants – most attractive segment has high entry & low exit barriers.

3. Threat of substitute products – segment unattractive when there are actual/potential substitutes for product (placing limit on prices).

4. Threat of suppliers’ growing bargaining power

Page 19: Marketing Strategy

Porter’s Model3. Threat of buyers’ growing bargaining power –

segment unattractive if buyers possess strong bargaining power

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Dealing with competition - market leader

Expanding total market –

1. New users – market penetration, new-market segment, geographical expansion

2. New uses – soap/cream

3. More usage - shampoo

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Dealing with competition - market leader

Defending market share –1. Position defense – make the brand

impregnable (Heinz)2. Flank defense – P&G (Tide)3. Preemptive defense – Seiko with 2300 watch

models, has left nothing to chance!4. Counteroffensive defense – Frontal, flank or

pincer

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Dealing with competition - market leader

5. Mobile defense – through a) broadening (Reliance from petrochemicals to petrol, LPG etc) & b) diversification into unrelated industries (Tata)

6. Contraction defense – Withdrawing from non core areas (HLL from agrovet etc.)

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Dealing with competition - market leader

Expanding market share – Best example is P&G, thru:

1. Customer knowledge

2. Product innovation

3. Quality

4. Line/Brand extension/Multibrand

5. Heavy advertising/sales promo

6. Aggressive sales force etc

Page 24: Marketing Strategy

Dealing with competition – market challenger

1. Frontal attack

2. Flank attack

3. Encirclement attack – grand offensive on several fronts

4. Bypass attack – diversifying into unrelated products/new markets/new technologies

5. Guerilla warfare - Shivaji

Page 25: Marketing Strategy

Market follower1. Counterfeiter – sells fake look-alikes

2. Cloner – emulates with slight variations

3. Imitator – Copies with slight variations

4. Adapter – adapts from leader & improves

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Market nicherBefore you look for a niche in the market, make

sure there is a market in the niche.Instead of being a follower in a large market, it is

sometimes better to be a leader in a small market

Example – Logitech has become the king of niche markets by making every variation of computer mouse!

Page 27: Marketing Strategy

Attacker(smaller)

Defender(bigger)

PositionDefense

PreemptiveDefense

Counteroffensive

ContractionDefense

Flanking Defense

Mobile Defense

Flank Attack

Frontal

Attack

Encirclement

Guerilla Attack

Page 28: Marketing Strategy