Professional Documents
Culture Documents
1st Lecture.
Books:
• Strategic marketing management : David aaker, John Wiley
• Marketing : Keegam, moriarty & Dunlan.
1. Internal database.
2. Market research
a. Primary data
b. Secondary data
c. Market intelligence.
2nd Lecture
05-06-2006
Strategic Planning.
Mission statements:
• A statement of the organisation’s purpose what it want to accomplish in the
larger environment
• Mission statement should be
o Realistic
o Specific
o Shout fit the market environment
o Based on the organisation’s distinctive competencies
o Motivating
Market oriented business definitions
• Business portfolio
o The collection of business and product that make up the company.
• Best portfolio
o That best fits the company’s strength and weakness to opportunities.
• A unit of the company that has a separate mission and objectives and that can
be planned independently from other company business
• An SBU can be division, or sometimes a single product or brand.
June 12, 2006
3rd Lecture.
Analysis current business portfolio.
• A unit of the company that has a separate mission and objectives and that can
be planned independently from other company business…
• An SBU can be a division, or sometimes a single product or brand.
Growth here means the growth potential of the product or the company.
Share here means the share in the market.
Market growth
High Low
Relative market share
Star : Swift
Cash cow : Maruti 800
? Mark : Baleno, WagonR
Dogs : Zen, Esteem.
Star:
• High growth
• High share business or market
• Need heavy investment
• Eventually they turn into cash cows.
Cash cows:
• Low growth
• High market share business or products.
• These established & successful SBU’s need less investment to hold their
market shares.
• They produce a lot of cash to pay bill and support other SBU’s
Question Mark:
Dogs:
• Low growth
• Low share business
• Enough cash to maintain business – but not very large source of cash.
Product – Market expansion: We are talking about both market and product.
• Market segmentation:
o Divinding the market into distinct groups of buyers on the basis of
Needs
Characteristics
Behavior.
• Market targeting: The process of evaluating each market segment’s attractive
and selecting one or more segments to enter.
• Market Positioning: Arranging of a product to occupy a clear, distinctive and
desirable place relative to competing product in the mind or target customer.
It is combo of 4P’s
The set of controllable tactical marketing tools – Product, price, place, and promotion –
that the firm blends to produce the response it wants in the target market.
Product Price
Target customer
Intended positioning
Promotion Place
• Promotions:
o Advertising
o Personal selling
o Sales promotion
o Public relations.
• Place:
o Channels of distribution
o Coverage
o Assortments
o Locations
o Inventory- some company may like to have certain advantage by way of
inventory management
o Transportation
o Logistics: combination of transportation, warehousing and distribution.
• Planning
• Implementation
•
5th Lecture
26-06-2006
Probability of success. The opportunity matrix.
Probability of success.
1 2
Alternatives
3 4
Cell 1:
Cell 4:
Cell 2,3:
Organisation advantages:
• Economies of scope: based on the size of organisation.
• Flexibility: it may become the strength for the organisation.
• Competitive stance: many companies enjoys competitive stance. For ex, what
ever business they enter into they wins the market. For ex. WIPRO, it also
entered into the BPO business because it was ongoing thing. It has
successfully captured the market.
• Size:
• Speed of response: for example, the speed of response of Reliance is very less.
If you have any query, it takes a long time for them to response. Its exactly
opposite in hutch, as soon as you call up hutch customer care, within fraction
of seconds, the sms pops up and ask your feed back about the callcenter
person.
• Past performance: it helps you to build your future. For ex: the Reliance and
TATA are able to get the market because of their past performance in the
market.
• Patterns of ownership: for instance Honda, it too 25 years for them to set up
completely owned business in India. It had initially parterned up with Kinetic
and Hero motors to enter into Indian market.
• Reputation: the reputation influences them to enter into the market. It helps in
the distribution channels also. For ex mercedese benz and skoda motors, they
got piles of application for the dealership offers.
• Marketing:
o Customer base: the company with strong customer base, it helps you to
expand your business in any way and into any business. For ex: Reliance,
TATA – cars and salts etc.
o Customer Knowledge: if you have the complete customer behaviour and
other related knowledge it helps to enter into an all together new market.
o New Product skills:
o Pricing: we all see Honda cars in India, it has great demand. When we go
global evaluating to price, its shocking. For instance Honda accord is sold
at 18 lacs, but it is sold at merely 10 lacs in other countries. A reputed
company enjoys the platform of pricing. They even charge exobirate rates,
but still they lead the market.
o Communication and Advertising: The advertisers today don’t accept any
company as their client. The reputed companies have privilege to become
clients of leading advertisers.
o Distribution
o Sales Force: a suitable sales force is essential for the company. A Capable
or efficient sales force helps the company to have advantage of them.
o Service Support
o Goodwill: good will of the marketing department plays a big role in this
regards.
• Research and Development:
o Product technology:
o Patents : if you are holding huge patents in terms of product or process
patents, it giving you a edge competition advantage.
• Production:
o Technology: the cost of production is based on the technology. If you
posses huge of technology you get a competitive advantage.
o Process Efficiency: A process efficiency gives a competitive edge and
advantage and help you in cutting the cost.
o Economies of scale:
o Experience: its experience that helps in betterment of procedure.
o Product Quality: for example, the gillete blade made in china doesn’t sell
better than the gillete blade made in germany. Both hold a different
mindset and reputation. For ex: products made in Germany are too good.
People swear by those product made in germnay and other countries like
japan etc.,.
o Manufacturing flexibility: that is if the company is able to accept the new
technology as and when they come, then it is known as manufacturing
flexibility. It helps the company to grow on this ground.
• Personnel:
o Good management: Worker relation.
o Workforce flexibility:
• Customer Loyalty.
• Channel control: it can become huge competitive advantage. During a
prolonged relation, the company may develop a good relation. The channel
believes what ever the company says.
• Preferential political and legislative treatment:
• Government assistance: a good relation with government would help the
company to demand subsidies. It may get various advantages like get land etc.
• Beneficial tariff and non tariff trade barriers: the refrigerator and the computer
industry enjoy the trade barriers. They claim based on the environmental
friendly background. So they enjoy the local market.
• Cartels: controlling the production activities. For ex: the Apollo tyres with
MRF and other tyre manufactures held up a cartel and decided to control
manufacturing due to slash in price.
• Intro – organizational relationship: ATM’s the icici bank hold relationship
with other banks. You can use any card in any bank’s atm. Another example is
Pringles and Coke tie up in America and Africa.
• Access to preferential and flexible financial resources.
Probability of success
s high low
high e
r
i
o 1 2
u
s
n
e 3 4
low s
s
s
Threat matrix:
Cell 1:
• Threats are serious and have high probability of occurrence
• Strategist needs to monitor developments closely and have a contingency plans
available.
Cell 2&3:
• Threats need to be closely mentioned – incase they become critical
• Contingency plans not necessary.
Cell 4
• Threats are very minor and can be largely ignored.
high low
high i
m Focus on greater
p managerial efforts to Ensure performance doesn’t
o improve fall.
r performance
t
a
n Areas of low priority Rethink current efforts. Is
low c
e
SWOT to TOWS
• One of the the major criticism of swot is that the manager do not come to terms
with strategic choices that the outcomes demand,
• For this reason TOWS has been recommended,
• This would help better integrating with the strategic planning process.
TOWS Framework.
Marketing Audit
Components of Audit
• Marketing environment audit
• Marketing strategy audit.
• Marketing organisation audit.
• Marketing systems audit.
• Marketing Productivity audit.
• Marketing functions audit. (Market research, advertisement etc )
Marketing environment:
The factors and forces outside marketing that affect marketing managements ability to
develop and maintain successful transaction with its target customers.
Micro Environment:-
The forces close to the company that is affecting its ability to serve its customers
• The company: In designing the company’s marketing plans – marketing
management must closely work with other departments and top management
Top Mgt
Purchase
Finance
Marketing Manufacturing
R&D
HR Accounting
• The suppliers: They are an important in the company’s overall customer value
delivery system. They can influence your workers and sometimes become
indispensable. Can lead to
o Delay
o Labour
o Hike in price
• Channel partners: Marketing intermediaries that help the company promote
sell and distribute its goods to final buyers. They include:
o Reseller: wholesale and retailers, have enough power to dictate terms. Can
even shut manufacturers from large markets.
o Physical distribution firms: logistic firms: companies must determine best
way to store and ship goods.
o Marketing service agencies: market research firms, advertising agencies
and media firms.
o Financial intermediaries: banks, credit companies and insurance
companies etc.
• Customer market: Type of customer markets
o Consumer market: personal consumption
o Business market: for further processing or used in production process
o Reseller market: resell for profit
o Government market: For public services
o International market:
• Competitors: Basic definition of marketing is you first create need. Marketing
concept states:- to be successful a company must deliver must deliver better
customer value and satisfaction than its competitors. The company must
therefore
o Gain strategic competitive advantage
o Ensure superior positioning than competitors
o Large firms must use certain strategies which small firms can’t deploy. Ex
Nestle forced their retailers from keeping Cadbury and made Cadbury to
suffer heavy losses.
• Public: Any group that has an actual or potential interest in or impact on an
organisation’s ability to achieve its objectives.
o Financial public: Banks, Stockholders etc.
o Government public: On issues like product safety truth in advertising.
o Citizen action public: environment group. Ex the human right groups,
labour right, consumer organisation. Sometimes force you to change your
product or put a ban on your product.
o Internal public:-workers, manager, board of directors, when employees
feel good about the company.
Macro environment:-
This comprises of the target societal forces that affects the micro environment:
Demographic environment:
Explanations:
Main characteristics
• Wealthy
• More educated and brand conscious
• Mobile.
Main characteristics
• Savvy shoppers : very intelligent shoppers
• Under financial pressure
• People were value conscious. They were looking for value for money
• They were looking for social products like environment friendly products
• Looking for better quality of life
• Job satisfaction
• No personal sacrifices: e.g. people no more save or cut their expenses to buy some
future products like home or do savings for their children’s.
Main characteristics
• All time big spenders: more exp on toys , clothes, furniture
• Sony designing electronic products for kids,
• Banks offering investment and banking services for Kids.
Economic environment:
• Change in income: Factors that affect consumer buying power and spending
patters
o Dual careers couples
o DINK: double income but no kids.
o They are more careful spenders
o Engel’s Law: As income rises : % spending on food utilities decline, %
spending on housing, clothing remains constant, % spending on savings and
health care initially rises and then decline, % spending on entertainment and
insurance rises.
Natural environment:
• Natural recourses that are needed as input by marketer or that are affected by
marketing activities.
• Reasons for marketers to remain aware of natural environment
Technological environment:
Forces that create new technologies, creating new product and market opportunities
• Effects of technology.
o Antibiotics
o Organ transplants
o Notebook computers
o Internet : helping people to transact and do business any where.
o Nuclear missiles
o Chemical weapons.
Political environments:
Laws, government agencies and pressure groups that influence and limit various
organisation and individuals in a society.
Increased emphasis on
• Ethnic
• Socially responsible actions.
Cultural Environment:
Institution and other forces that affect society’s basic values, perception, preferences and
behaviors.
• Indian believe in
o Working
o Getting married
o Giving charity
o Being honest: these core beliefs are passed on to the next generation and are
reinforced by schools, businesses, government etc.
B. Shifts in secondary cultural values
a. Impact of popluar music group, movies on
i. Young generation
ii. Clothing
iii. Sexual norms etc.
C. People’s view of themselves
a. Some people seek
i. Personal pleasures
ii. Wanting fum
iii. Change and escape
iv. Others seek self realization through religion, recreation etc
v. Finally, people buy products and services those match their needs.
D. People’s view of others:
a. Internet access has forced people to look for social support leading to
i. Joining health clubs
ii. Family vacations etc,
E. People’s view of organisation
a. Organisation are finding newer ways to win customer and employee
confidence
i. Linking themselves to social causes.
ii. Using PR to build more positives images
iii. Companies adopting villages to spread literacy
iv. Providing mobile hospitals to remote places.
Industrial products:
9th Lecture
July 24th 2006
Product Product
Branding Packaging Labeling
Attribute support
services
Product attributes:-
• Product Quality: The ability of a product to perform its function, its durability,
precision, case of operation and repair and other valued attributes.
o Dimensions of product quality:
o Quality level: between two different brands of same product also differs.
Here the quality means – performance quality – the ability of a product to
perform its function. Ex rolls Royce is expected to perform better than
Chevrolet – smoother ride better handling lasts longer.
o Quality consistency: Here the quality means – conformance quality –
freedom from defect and consistency in delivering a targeted level of
performance. Ex in this sense Chevrolet and rolls Royce can have similar
quality consistency.
• Product features: - there are used as competitive tools for creating product
differentiation.
• Product Design and Style:- Design can enhance operational efficiency style
doesnot enhances / impacts operational efficiency. Ex Black & Decker in
cordless electric iron. Since it enhances its operational efficiency. Style
impacts just the appearance of the product sensational style can grab attention
but need no aid better performance.
Branding:
Brand name selection:- Desirable qualities for a brand name
• Should suggest something about product benefits and qualities.
• Easy to pronounce
• Recognise
• Remember
• Distinctive
• Easily translatable in various language (i.e in terms of capability to be written
in local language)
• Capable of registration and legal protection.
• Multi brand:
o New brand name introduced in same category.
o Flanker brand or fighter brand serpeate brands for separate countries to
suit cultures or languages. Ex HLL facing competition from GHADI
o Seiko uses different brand names for High priced watches (Seiko lasale)
and lower priced (Pulsar) to protect flanks of its mainstream Seiko.
o One major drawback : each brand may have small market share none may
be profitable.
• New Brand: New brand name in new product categories
o Mulsustita uses different brand names, technics Panasonic, national and
quasar. Sometimes new brand name brings power when old one’s power
starts waning.
What are different forms of branding strategies that a company can acquire to gain Scn.
Product Category
Existing New
Existing Line extension Brand extension
New Multi brands New brands
Brand
name
Manufacturer’s
Line Extension
Selection Brand
Brand Extension
Selection Pvt Brand
Multi Brand
Protection Licensing
New Brand
Co-Branding
Packaging
The activity of designing and producing the container or wrapper for a product is called
packaging. Packing includes
• Primary Packing: Tube holding toothpaste
• Secondary Packing: Throw away box holding the tube.
• Shipping Packaging: Used for storage, identification and shipping.
Market Growth:
• Market Growth
o What will be the market size in the future and not just the current market
growth? For ex if the telephone industry if, would have just seem the
current market growth then today we wouldn’t have reached today.
o If all else remains the same – growth means more sales and profit even
without increasing the market share
o Conversely, growth situation can involve substantial risks because of
importance of correctly assessing growth contexts.
o Successful companies would remain successful if and only if have
potential growth.
o Growth today has no meaning tomorrow. For example Maruti. Earlier had
mind blowing growth rate and market growth. If they wouldn’t have
projected the future market then they would have been wiped off by the
current market competition. Don’t just take into consideration your growth
• Market Growth
o Forecasting growth
Demographic data:
Sales of related equipment: you need to know each and every
factors and information about your products and your produce. For
example if you are into Textiles, then you don’t just need to focus
on the ways to increase its sales. You do need to focus on the
quantum of textile imports and exports. In India we see that the
Arvind Mills failed to do so. They didn’t see that the Levis and
other brands were entering into India and were being heavily
imported. Thus today the arvind mills has to face undue
competition with levis. Same is the case with the Titan and HMT.
o Detecting maturity and Decline stage:
Price pressure caused by overcapacity and lack of product
differentiation.
Buyers sophistication and knowledge
Substitute products or technologies : for example the sintex the
manufacturer of plastic tanks. People earlier just used to sell iron
tanks and tanks made of cement. But just as the sintex came out
with plastic tanks it captured the market hugely.
Saturation
No growth sources
Customer disinterest: this was found in the case of colgate. People
didn’t even think of changing its toothpaste. They were least
important on thinking on it. But when close up and other brand
came out with new USP like gel toothpaste and other related
matters, the colgate suffered a stiff competition. They weren’t
prepared for it.
COST STRUCTURE
• In the metal business, transportation cost are very high
• A competitor can locate plants near customer to enjoy significant cost
advantages.
Distribution Systems
1. Competitive Risk:
a. No. of competitors may be greater than the market can support
b. A competitor may enter with superior product or low cost advantage
2. Market changes:
a. Key success factors (KSF) might change and the organization may be
unable to adapt. For example consider the bread industry. Manythings go
into the bread. Consider a situation where the company is able to find self
rising flour. This would eradicate the yeast component and this would hit
the Yeast market badly. For the bread manufacturer the “self rising Flour”
would become a key success factors. Here the Key success factor would
be anything like better service, or manufacturing ingredients for its other
production activity.
b. Technology might change: For example the Mobile has given a bad hit to
Pager. And the broadband internet has affected the landline internet
connections. These would be example for the technology change.
c. Market growth might fail to meet expectations: for example the SIFY the
internet café’s got bad hit in Pune after the broadband became more
popular and the presence of WI-FI in the market.
d. Price instability may result due to over capacity. Example if new model of
laptop has been launched with better technology, then the shopkeeper may
have to sell the older models at a discount.
3. Firm limitations:
a. Resource might be inadequate to maintain a high growth rate.
b. Adequate distribution may not be available.
CUSTOMER ANALYSIS
• Customer Segmentation:
o Who are the biggest customers?
o The most profitable?
o Who are the most potential customers among the whole crowd?
o Can we segment the customers according to
Needs, characteristics or buying behavior
Customer Segmentation
• How could market be segment based on different business strategies:-
• Benefits sought: dessert eaters – calorie conscious
• Usage level – concert – season tickets, occasional, non users.
• Application – nylon – can be used for ropes, hosiery, tires, fishing.
• Organization type: Pc needs of restaurants, manufacturing, firms, banks.
• Geographic location
• Customer loyalty: those loyal to Heinz ketchup versus price buyers
• User types: soft drink by households versus hotels who buy in bulk.
• Price sensitive: Maruti buyer versus Mercedes Benz buyer
Customer Motivation:
• What element of the product / services does customer value most?
• What are the customers objectives
• What are they really buying
• How do segments differ in their motivation priorities
• What changes are occurring in customer motivation? In customer priorities?
Customer’s Unmet Needs:
• Why some customers remain dissatisfied? Why are some them switching
brands or suppliers?
• What are the severity and incidence of consumer problem?
• What are unmet needs that customers can identify? Are there some of which
consumers are unaware?
• Do these unmet needs represent leverage points for competitors?
Loyalty Matrix: Priorities
Switchers Fence sitters Loyal
Customer Medium High Highest
Priority Priority Priority
Non customer Low to medium High Low
priority Priority Priority
Customer Motivations:
1. New shoppers: Needs
a. A simple interface
b. Lot of hand holding and reassurance
2. Reluctant shoppers: Needs
a. Information
b. Reassurance
c. Access to live customer support
3. Frugal Shoppers: Need to be convinced.
a. They need to be convinced that the Price is Good
b. And do convince them that they don’t need to search for the same further.
4. Strategic shoppers: Need access to
a. Opinion leaders/experts: The sellers give endorsement by some experts
like colgate endorses by the doctors.
b. Choices
5. Enthusiastic shoppers: They need
a. Community as a tool to share their experience.
b. Lots of information from the experts
c. Superior customer service.
d.
August 9, 2006
Few Quotes:
• Induce your competitors NOT to invest in those product market and services
where you expect to invest the most …… that is the fundamental rule of
strategy - by, Bruce Henderson, Founder of BCG.
• There is nothing more exhilarating than to be at without result – Winston
Churchill.
• The best way to learn a sport is to watch and imitate a champion – Jean-
Claude Killy. He is a Skier.
Competitor Analysis
Exit barriers
Cost structure Organization culture
Understanding Competitors
1. Size, Growth, and Profitability:-
a. Source – Published turnover figure
b. A non profitable company can not have access to capital-externally or
internally
2. Image and Positioning strategy:
a. Useful to understand competitors profile in terms of their positioning
strategy.
b. What are the association – they use? For example – what heart attack
prevention the “Aspirin” can do or like what saffola has done with Heart
protection as their association.
3. Current and Past strategies of competitors
a. Examine their past failures in strategies. Same is not likely to be tried
again. If they have failed in certain region, they wont try to enter into that
region again.
b. What is their strategy dependence on Product Line breadth, product
quality, service distribution, service, distribution, or brand identification
c. Incase of a low cost strategy – is it based on economies of scale,
manufacturing facilities or access to raw material.
4. Competitor organization and culture:
a. Are managers drawn from marketing, manufacturing or engineering? Few
companies practices to change their managers in their departments so that
they have overall knowledge and the firm is no just driven by one
perspective say like if the manager is from finance stream then the
decision would be more related to finance.
b. Are the largely from another industry or company?
c. A tightly controlled organization would be less aggressive in using
marketing oriented strategies and vice versa for flat organization which
can be more innovative and marketing oriented.
5. Cost Structures:
a. Direct labour cost: in some companies they never keep labours on rolls.
This make them so flexible that they can remove employees if they don’t
need. They pay them so high that they come back to company as and when
the companies require them. This makes the organization to remove labour
is they are not required.
b. Relative cost of raw material and purchase components
c. Investing in inventories and plant and machinery
d. Sales level
e. Number of plants and locations
6. Exit barriers:
a. Specialized assets – plant, equipment etc
b. Fixed cost: labour agreements, maintain parts for existing equipment
c. Relationship to other business – firm’s image shared facilities, distribution
channels or sales force.
d. Government and social barriers: long terms government incentives linked
to a time period of existence / public service obligation
e. Managerial pride or emotional attachment to a business or employees –
affecting economic decisions. This causes inflexibility in an organization.
7. Assessing strengths and weakness of competitors: Checklist of strength and
weakness
a. Innovation:
i. Technical, product or service superiority
ii. New product capability
iii. R&D
iv. Technologies
v. Patents: in certain businesses its essential to acquire patents. For
instance in pharmaceutical companies its essential to acquire
patents or else the competitor would produce the same product and
thus all your R&D would go in vain.
b. Manufacturing
i. Cost structure
ii. Flexible production operation
iii. Equipment
iv. Access to raw material
v. Vertical integration: when you become supplier to your own
customer
vi. Workforce attitude and motivation
vii. Capacity
SCA
Basis of competition
* Assets and competencies