Marketing Strategy Unit 2

8/2/2019 Marketing Strategy Unit 2

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Marketing Management

MARKETING STRATEGY

UNIT -2

ByP.S.Venkateswaran


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DEFINITION

Marketing Strategy:

A business firm which attains its goals on

which through proper decisions on Market

segmentation, Targeting, Positioning and

effective use of Marketing mix with Proper

allocation of resources.


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ESSENTIALS OF MARKETING STRATEGIES

1. Consistency

2. Workability

3. Suitability

4. Non risk

5. Availability of resources

6. Time factor


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ESSENTIALS OF MARKETING STRATEGY

1. Marketing Mix

2. Resources of the firm

3. Competition


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KEY DRIVERS OF MARKETING STRATEGIES

Competition

Economic factors(Consumption and spending)

Political factors (TATA- NANO- West Bengal- Singur farmers)

Legal factors

Technological factors (Computer advancement)

Socio Cultural factors


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FORMULATING MARKETING STRATEGY

1. Segmenting the Market

2. Selection of the Target Market

3. Position the Product

4. Apply suitable Marketing Mix


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Strategies for Industrial Marketing

1. BRANDING METHOD

Marketing Mix

Advertising

Trade shows

Proper channel design


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Strategies for Industrial Marketing

2. Marketing Communications

Positioning Statement

Message Development

Building Campaign plan

Guidance to agency

Analyzing and Measuring the results


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Strategies for Consumer Marketing

1. Analyzing and preparing marketing campaign

2. Planning the USP

3. Word of Mouth

4. Stealth Marketing

5. Advertising Programmes (Online)

6. Direct Marketing

7. Personal selling

8. Relationship Marketing


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Strategies for Service Marketing

1. CRM( Kingfisher Airlines- Customer friendly)

2. Internal Marketing (Training & Motivation)

3. External Marketing (Making Promises & Delivery

4. Interactive Marketing (Employees, Contractors,

Agents)


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SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats


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The purpose of SWOT Analysis

It is an easy-to-use tool for developing

an overview of a companys strategic

situation

It forms a basis for matching yourcompanys strategy to its situation


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SWOT is the starting point

It provides an overview of the strategic

situation.

It provides the raw material to do more

extensive internal and external analysis.


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Opportunities

An OPPORTUNITY is a chance for firmgrowth or progress due to a favorablejuncture of circumstances in the business

environment. Possible Opportunities:

Emerging customer needs

Quality Improvements Expanding global markets

Vertical Integration


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Threats

A THREAT is a factor in your companysexternal environment that poses a dangerto its well-being.

Possible Threats: New entry by competitors

Changing demographics/shifting demand

Emergence of cheaper technologies Regulatory requirements


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Opportunities and Threats form a basis forEXTERNAL analysis

By discovering untapped markets, and newproducts or technologies, or identifypotential avenues for diversification.

By examining threats, you can identifyunfavorable market shifts or changes intechnology, and create a defensive posture

aimed at preserving your competitiveposition.


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Threat ofNew

Entrants

Threat of

New

Entrants

Porters Five Forces

Model of Competition


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Threat of New Entrants

Barriers to

Entry

Expected Retaliation

Government Policy

Economies of Scale

Product Differentiation

Capital Requirements

Switching Costs

Access to Distribution Channels

Cost Disadvantages Independent

of Scale


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Bargaining

Power of

Suppliers

Threat ofNew

Entrants

Threat of

New

Entrants

Porters Five Forces



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Bargaining Power of Suppliers

Suppliers exert power

in the industry by:

* Threatening to raise

prices or to reduce quality

Powerful suppliers

can squeeze industry

profitability if firms

are unable to recover

cost increases

Suppliers are likely to be powerful if:

Supplier industry is dominated by afew firms

Suppliers products have few substitutes

Buyer is not an important customer tosupplier

Suppliers product is an importantinput to buyers product

Suppliers products are differentiatedSuppliers products have highswitching costs

Supplier poses credible threat of

forward integration


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Bargaining

Power of

Buyers

Threat ofNew

Entrants

Threat of

New

Entrants

Bargaining

Power of

Suppliers

Porters Five Forces



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Bargaining Power of Buyers

Buyers compete

with the supplying

industry by:

*Bargaining down prices

* Forcing higher quality

* Playing firms off of

each other

Buyer groups are likely to be powerful if:

Buyers are concentrated or purchases

are large relative to sellers sales

Purchase accounts for a significantfraction of suppliers sales

Products are undifferentiated

Buyers face few switching costs

Buyers industry earns low profits

Buyer presents a credible threat ofbackward integration

Product unimportant to quality

Buyer has full information


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Threat of

Substitute

Products

Threat ofNew

Entrants

Threat of

New

Entrants

Bargaining

Power of

Buyers

Bargaining

Power of

Suppliers

Porters Five Forces



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Threat of Substitute Products

Products

with similar

functionlimit the

prices firms

can charge

Keys to evaluate substitute products:

Products with improving

price/performance tradeoffs

relative to present industryproducts

Example:

Electronic security systems inplace of security guards

Fax machines in place of

overnight mail delivery


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Threat of

Substitute

Products

Threat ofNew

Entrants

Threat of

New

Entrants

Rivalry Among

Competing Firms

in Industry

Bargaining

Power of

Buyers

Bargaining

Power of

Suppliers

Porters Five Forces Model of Competition


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Cutthroatcompetition is more likely to occur when:

Rivalry Among Existing Competitors

Numerous or equally balanced competitors

Slow growth industry

High fixed costs

Lack of differentiation or switching costs

High storage costs

Capacity added in large increments

High strategic stakes

High exit barriers

Diverse competitors


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The Five Forces are Unique to Your Industry

Five-Forces Analysis is a framework for

analyzing a particular industry.

Yet, the five forces affect all the other

businesses in that industry.


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Competitor Analysis

The follow-up to Industry Analysis is

effective analysis of a firms Competitors

Competitive

Environment

Industry

Environment


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Competitor Analysis

Assumptions

What assumptions do ourcompetitors hold about the futureof industry and themselves?

Current StrategyDoes our current strategy supportchanges in the competitiveenvironment?

Future ObjectivesHow do our goals compare to our

competitors goals?

CapabilitiesHow do our capabilities compare

to our competitors?

Response

What will ourcompetitors do in thefuture?

Where do we have acompetitiveadvantage?

How will this changeour relationship withour competition?

C i A i


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Future Objectives

How do our goals compare

to our competitors goals?

Where will emphasis be

placed in the future?

What is the attitude

toward risk?

What Drives the competitor?

Competitor Analysis

C i A l i


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What is the competitor doing?

What can the competitor do?

Future Objectives






toward risk?

Current Strategy

How are we currently

competing?

Does this strategy

support changes in the

competitive structure?

Competitor Analysis

C i A l i


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What does the competitor believe

about itself and the industry?

Future Objectives






toward risk?

Current Strategy


competing?Does this strategy


competition structure?

Do we assume the future

will be volatile?

Are we assuming stable

competitive conditions?

What assumptions do our

competitors hold about the

industry and themselves?

Assumptions

Competitor Analysis

C i A l i


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What are the competitors

capabilities?

Future Objectives






toward risk?

Current Strategy






will be volatile?

Are we operating under

a status quo?




Assumptions

What are my competitors

strengths and weaknesses?

How do our capabilities

compare to our

competitors?

Capabilities

Competitor Analysis

C tit A l i


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Future Objectives






toward risk?

Current Strategy






will be volatile?

Are we operating under

a status quo?




Assumptions

Response

What will our competitorsdo in the future?

Where do we have a

competitive advantage?

How will this change our

relationship with our

competition?

Capabilities

What are my competitors

strengths and weaknesses?

How do our capabilities

compare to our

tit ?

Competitor Analysis

Documents

Marketing Strategy Unit 2