Marketing Strategy explained in 25 Easy Slides for MBA students

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Marketing Strategy

Explained in 25 easy slides

Prepared By Prof S K Palekar S P Jain Institute of Management & Research, Mumbai

More material on the blog : http//marketing-eye.blogspot.com

This will also serve as a handout for the May 2014

Course for PGDM students conducted along with

Prof Atish Chattopadhyay


Section A

A “Better Product”

is not necessarily the answer !

For increasing the revenue from the customer :

A “better product” may automatically come to

your mind. It seems logical too.

Do not fall in this trap. Apart from the fact that what makes a

product “better” depends on which customer you ask, the

reality is that many potential customers are not buying

because you do not offer the right size / packaging, right

financing options, right delivery options, right information,

easier availability, right support etc. Many times these are

faster, cheaper and easier ways to increase the sales.


You must think in 3 dimensions.

And not in only one !

For increasing the revenue from the customer :

You must act on all 3 dimensions

of marketing strategy (MVC)

at the same time.

Many of you are likely to think that the answer to increasing

the sale lies in (1) M = Looking for more customers (2) V =

Creating a better value proposition (3) C = Finding better way

to connect to the customers. while it works in isolation too, it

is best when all 3 are aligned with each other and focused on

the customer. See next 3 slides.

You must act on all 3 dimensions “MVC” - 1

A better value proposition (New Product) (New Feature)

(Lower Price) works more if the “M” and “C” are also aligned

and adjusted to it.

When Hindustan Unilever introduced a low priced

detergent, they made it clear it is for a different “market”

(Nirma User for whom price is important) and put it through

a different “connect” (separate channel of distributors).

They tried, but could not succeed in fighting Nirma using

their existing value proposition (Surf) and their existing

channel (provision stores channel).


A new method to “Connect” works more if the “M” and “V”

are also aligned and adjusted to it.

When you introduce an e-commerce channel like a Flip-Kart

you will essentially be catering to the “market” (M) of young

and urban who have access to a fast internet connection, of

those who have confidence to pay money on the net and

those who do not want to spend time on the road and in the

shop for traditional shopping.

This understanding is essential to In such a case the products

you display will be for the young and trendy and not for the

conservative and mature audiences.


If you want to attack a new “market” (M), it is necessary to

ensure that the value proposition you want to use is found

attractive by the market and also the connect mechanism is

suitable for the given market.

When Titan, known as a mass marketer of watches, decided

to cater to the jeweler watches segment, they developed a

new brand Tanishque which had its own design language (V)

and its own set of showrooms (C).


The Process of Marketing


The output of marketing is profit for the company and

satisfaction for the customer. If BOTH are not generated, it is

not marketing.

The input to marketing is “sensing and discovering” which

customers, competitors and collaborators you must choose

and which environmental trends you must ride and which you

must avoid. You should never even look at a marketing strategies

and plans which do not address these points based on facts.

It costs a company less than 2% of sales to do find the above (

yellow bold letters) but without it, the other 98% costs are

likely to be misdirected.


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How The Process of Marketing Helps the whole company

CEO takes back-end business decisions like these only when the CMO takes front-end decisions (MVC) of the marketing strategy

Machinery / Technology People / Skills Materials / Processes Networks Work systems Locations / Offices Finances


The Best Practice in Marketing

Step 1 : Recognize All The Possible Customers In The Market.

Is it clear to you that each type needs a different treatment / marketing mix ?

Customers who

never used ERP

software because

the company is

small and simple

Customers who

used only basic

ERP system and are unhappy

Customers who

used additional

modules (CRM,

SCM , MRP) but

are not happy

Customers who

used additional

modules and are

happy

Customers who

never used ERP

in spite of havng

the necessary

size and

complexity

Customers who

used only basic

ERP but are

happy

Step 2 : Select the “Most Attractive” Customer type for you.

Are you made for each other ?

Customers who

never used ERP

software because

the company is

small and simple

Customers who

used only basic

ERP system and are unhappy

Customers who

used additional

modules (CRM,

SCM , MRP) but

are not happy

Customers who

used additional

modules and are

happy

Customers who

never used ERP

in spite of havng

the necessary

size and

complexity

Customers who

used only basic

ERP but are

happy

Step 3 : Create MVC tingle around the chosen customer.

Customers who

used only basic

ERP but are

happy

Since they are happy with their source of

software, plan to connect through the

same company by having a commission

arrangement with them

Since they are happy with the basic ERP

module, they would like to have more

functionality from the same user

interface their employees are already

trained in. “Now go to the next level

without having to train the whole

organizaton all over gain!”

See how the 3 aspects of

the strategy are aligned

to each other

Step 4 : Create a separate organization structure dedicated

to operating this MVC tingle and specializing in it

IDEAL

Separate sales

Separate marketing

Separate supply chain

Separate finance

Separate support function

Separate CEO

IN REALITY : MIS ALIGNED AND UN FOCUSED APPROACH

A new market (green) has emerged but is not addressed well. The company

is trying to sell the same value proposition through the same connection

(channel). Another market (blue) has emerged and there is a separate value

proposition and connect For it but , in spite of the size of the blue market

being as much as The red, it is getting less resources. And in any case the

same organization is catering to all these 3 markets.

The Right Approach to 3 different markets

3 markets, 3 strategies, 3 organizations.

There are many ways

by which you can classify

customers / markets.

There are many common ways.

The Best Classification of Customers happens when you classify by what the customers respond to

Generic strategies Quality, Price, Customization. Example : Shirts : Quality (Arrow), Price (Cambridge),

Customization (Tailor)

Who buys Toys : Bought by the child, bought by parents

For what purpose chocolates : self use, for gifting

There are other ways too but remember the best way is when it tells you which customers you need to aim for and by doing what

Generic Market Types

COST LEADERSHIP

Buy me because I am inexpensive

PRODUCT LEADERSHIP

Buy me because I am the best of all

CUSTOMER PROXIMITY

Buy me because I can customize for you

How To Write Marketing Strategy

External Analysis ( Who are the players ? What is the terrain?) 1. Attractive Customers / Attractive Uses

2. Competitors we must fight,

3. Collaborators we must ally with

4. What trends support and which ones oppose

Primary Value Creation ( How do we use our resources ) 5. Positioning statement Marketing Mix

6. Who will do what : what we will do ourselves , where we will use partners

Our process of connecting / engaging with the main players 8. Customers : mass or niche, hunt or gather

9. What will be our touch points and their sequence

10. How do we : locate, contact, convince, close, transact, maintain contact

Company’s Relevant Assets ( Resources Strength ) (War Chest) 3. Tangible (financial) and Intangible ( Human, Relational, Structural)

Thank You

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