MARKETING STRATEGIES BA4207 MBA ANNA UNIVERSITY

"Marketing Strategy is a long term plan for achieving a company’s goals by understanding the needs of customers and creating a distinct and sustainable competitive advantage.”
Goals indicate what a business unit wants to achieve, strategy is a game plan for getting there.

1. UNIT 2 MARKETING STRATEGY Rhema Joy Sharath

2. MARKETING STRATEGY 2 “Marketing Strategy is a long term plan for achieving a company’s goals by understanding the needs of customers and creating a distinct and sustainable competitive advantage.” Goals indicate what a business unit wants to achieve, strategy is a game plan for getting there.

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4. ELEMENTS OF MARKETING STRATEGY 4

5. MARKETING STRATEGY FORMULATIONS 5

6. KEY DRIVERS OF MARKETING STRATEGIES 6

7. Essentials of Marketing Strategy 7 Consistent Workable Suitable Non-risky Resource based Time Horizon

8. ANSOFF MATRIX 8 The company first considers whether it could gain more market share with its current products in their current markets, using a market-penetration strategy. Next it considers whether it can find or develop new markets for its current products, in a market-development strategy. Then it considers whether it can develop new products of potential interest to its current markets with a product-development strategy. Later the firm will also review opportunities to develop new products for new markets in a diversification strategy.

9. ANSOFF MATRIX 9

10. MARKET LEADER STRATEGIES Expand the total market strategy 10 Defending market share strategy Expanding the market share strategy

11. EXPAND THE TOTAL MARKET STRATEGY 11 The market-leader firms can gain the maximum when the total market expands. The focus of expanding the total market depends on where the product is in the maturity stage.

12. DEFENDING MARKET SHARE STRATEGY 12

13. DEFENDING MARKET SHARE STRATEGY 13

14. EXPANDING THE MARKET SHARE STRATEGY: 14 Market leaders can improve their profitability through increasing their market shares. Market leaders are successful at expanding their market shares through Heavy advertisements Improved distribution New products Mergers, takeovers, alliance etc.

15. 15 Frontal Attack Flank attack Encirclement attack MARKET CHALLENGER STRATEGIES (offensive) Bypass attack Guerrilla attack

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17. MARKET-FOLLOWERS STRATEGIES Following Closely (Counterfeiter) Follower appears to be challenger in many respects, but doesn’t muster too great an effort so as to block direct conflict. 17 Following at a distance (Cloner) Follower parallels the leader’s general price levels, product innovations and distribution at a distance without thread to challenger. Following selectively (Imitator) Follower follows the leader quite closely in some ways, goes its own way in other instances, and sometimes chooses not to participate at all. Adapter Follower takes the leader’s products and adapts and improves them

18. Goal is to be a large fish in a small pond rather than the other way around Smaller firms can avoid larger firms by targeting smaller markets or niches that are of little or no interest to the larger firms Intimately know their customers and better meet their needs Channel specialist - large size distribution network Service specialist - one or more services not available from other companies Product feature specialist- certain type of product or product features Product line specialist - only one product Geographic specialist - certain locality, region or area Specific Customer specialist - one or few major customers Customer size specialist - (Small or medium or large-size) NICHERS STRATEGY

19. Rivalry Strategies Cost leadership Strategy Differentiating Strategy Product Flanking Strategy Confrontation Strategy Defensive Strategy Offensive Strategy De-marketing Strategy Remarketing Strategy Growth Strategies For Existing Markets : Market penetration, Product Development Vertical integration (backward and forward) Horizontal Integration (acquisition, merger) For New Markets : Market development, Market Expansion, Diversification (concentric, horizontal, conglomerate) 19 Consolidation Strategies Retrenchment (reduce size) Pruning (reduce variety) Divestment (redirect) Liquidation (closure) OTHER STRATEGIES

20. Product Strategies Branding Strategies Brand Image Distribution Strategies Media Strategies Sales promotion Strategies Price Strategy FUNCTIONAL STRATEGIES

21. COMPETITOR ANALYSIS 21 Utilizing that information to forecast the behaviour of competitors. COMPETITOR ANALYSIS is a process of evaluating the strengths and weaknesses of present and potential customers. Attaining information regarding the main competitors

22. FORMS OF COMPETITION IMMEDIATE OR DIRECT COMPETITION 22 RELATED OR INDIRECT COMPETITION UNRELATED OR BUDGETED COMPETITION

23. COMPETITOR ANALYSIS FRAMEWORK 23

24. PORTER’S FIVE FORCE MODEL FOR COMPETITIVE ANALYSIS 24

25. STEPS IN COMPETITOR ANALYSIS 25

26. BENEFITS OF COMPETITOR’S ANALYSIS 26 Identifies Competitive Information Provides Motivation Chooses Motivation Reveals hidden opportunities Strategy implementation

27. INDUSTRIAL MARKETING (B2B) 27 The marketing of products, services or solutions to firms like large organisations, government bodies and other institutions is called industrial marketing. Industrial goods are defined as “those goods which are destined to be sold primarily for use in producing other goods or rendering services as contrasted with goods destined to be sold primarily to the ultimate consumers” They could be raw materials, manufactured items, equipments , spare parts, consumable supplies, Industrial services etc.

28. TYPES OF INDUSTRIAL MARKET 28 PRODUCERS RESELLERS WHOLESELLERS RETAILERS ORGANISATIONS GOVERNMENT ORG . NON PROFIT ORG.

29. INDUSTRIAL MARKETING 29 6 7 8 9 10 Buying is a Group process (rational buying motive) Supplier’s reputation Awareness of Marketing process Leasing is possible Short distributive Channels CHARACTERISTICS 1 2 3 4 5 Derived / Inelastic Demand Price-quality-service mix Few buyers And massive buying Concentrated Geographical area Vertical or Horizontal markets

30. PARTICIPANTS IN B2B BUYING PROCESS 30

31. IMPORTANCE OF ANALYSING INDUSTRIAL MARKET 31

32. STRATEGIES FOR INDUSTRIAL MARKETING 32

33. CONSUMER MARKETING (B2C) 33 Consumer marketing targets every household and individual who acquires or purchases a particular product or service for his/her own consumption and not meant for further sale. Consumer Goods are destined for use by ultimate consumers or households and in such form that they can be used without commercial processing. They could be FMCG products, durable/non-durable goods, cosmetics, electronics, clothing, vehicle, services etc.

34. CONSUMER MARKETING 34 6 7 8 9 10 Directly sold to consumers – Transaction methods Shifts in buying powers Long chain of Distribution Less capital and window dressing Constant threat from change in fashion CHARACTERISTICS 1 2 3 4 5 Primary / elastic demand Large- Scale Production, Variety of products Widespread area and small purchases Huge number of buyers and sellers Horizontal markets

35. Importance of analysing Consumer Market 35 Performance evaluation of the product Making future predictions/decisions Product line/mix decisions New Product development (NPD)

36. STRATEGIES FOR CONSUMER MARKETING 36

37. PROMOTION STRATEGIES 37 Advertising Public Relations Events Direct marketing Internet marketing Word-of-mouth Affiliate marketing and alliances Publicity campaigns Online Advertising strategies j. Publicity campaigns

38. 38 DIFFERENCE BETWEEN INDUSTRIAL AND CONSUMER MARKET

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41. Service marketing 41 A service is an act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. It’s production may or may not be tied to a physical product. Kinds of services • Personal services (painting, domestic) • Facility services (car, theatre) • Business Services (consultancy) • Customer Services (laundries, hotels)

42. Categories of Service Mix 42

43. 43 Marketing excellence with services requires excellence in three broad areas: external, internal, and interactive marketing. External marketing describes the normal work of preparing, pricing, distributing, and promoting the service to customers. • Internal marketing describes training and motivating employees to serve customers well. The most important contribution the marketing department can make is arguably to be “exceptionally clever in getting everyone else in the organization to practice marketing.” • Interactive marketing describes the employees’ skill in serving the client. Clients judge service not only by its technical quality but also by its functional quality.

44. Nature of Services marketing 44 1 2 3 4 5 Intangible ( Providing tangibility to the intangibility ) Low price sensitivity No inventory Value creation process Customer co-production 6 7 8 9 10 Inseparability Perishable and fluctuating Demand Absence of certain marketing functions Highly Differentiated / Lack of Standardization Long term Customer Relationship

45. Providing tangibility to the intangibility 45 Visualisation Association Physical Representation Documentation Selling Services Tangibilising services through benefits Tangibilising through positioning

46. Marketing mix for services 46 • Marketing should occur at all levels • Establish direct contact with the customers • Use high-quality personnel for marketing job • Creation of loyalty • Ensure quick resolving of problems • Brand the services offered • Provision of improved services at lower cost

47. 47 7 P’s of services marketing

48. Methodology of services marketing 48 SERVQUAL: SERVQUAL stands for Service Quality, and it is a model that measures the gap between customer expectations and perceptions of service quality. It was developed by Parasuraman, Zeithaml, and Berry in 1988 , and it consists of 22 items that cover five dimensions of service quality: reliability, responsiveness, assurance, empathy, and tangibles (RATER). The model assumes that service quality is a function of the discrepancy between what customers expect and what they receive, and that higher gaps indicate lower quality. SERVQUAL can help e-commerce businesses identify the areas where they need to improve their service delivery and meet or exceed customer expectations. SQ = P − E where; SQ is service quality P is the individual's perceptions of given service delivery E is the individual's expectations of a given service delivery

49. 5 factors 49 Reliability —The ability to perform the promised service dependably and accurately. Responsiveness —Willingness to help customers and provide prompt service. Assurance —The knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy —The provision of caring, individualized attention to customers. Tangibles —The appearance of physical facilities, equipment, personnel, and communication materials.

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51. 51 THE SERVQUAL MODEL

52. 5 gaps 52 Gap between consumer expectation and management perception Gap between management perception and service-quality specification Gap between service-quality specifications and service delivery Gap between service delivery and external communications Gap between perceived service and expected service

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54. SERVPERF 54 SERVPERF stands for Service Performance, and it is a model that measures the customer perceptions of service quality. It was proposed by Cronin and Taylor in 1992 , and it is based on the same 22 items and five dimensions as SERVQUAL, but it does not consider customer expectations. The model assumes that service quality is a direct reflection of service performance, and that higher perceptions indicate higher quality. SERVPERF can help e-commerce businesses evaluate the effectiveness of their service delivery and enhance customer satisfaction.

55. Importance of Service Marketing 55 Helps building Relationships Assists in Affecting Customer’s Perception Involves Customer’s Feedbacks Helps in differentiating the service organisation Offers higher customer retention

56. Challenges in Service Marketing 56 PASSION MOMENTUM BETWEEN MARKETING AND SALES

57. 57 BASIS FOR COMPARISON PRODUCT MARKETING SERVICE MARKETING Meaning Product marketing refers to the process in which the marketing activities are aligned to promote and sell a specific product for a particular segment. Service marketing implies the marketing of economic activities, offered by the business to its clients for adequate consideration. Marketing mix 4 P's 7 P's Sells Value Relationship Who comes to whom? Products come to customers. Customers come to service. Transfer It can be owned and resold to another party. It is neither owned nor transferred to another party. Returnability Products can be returned. Services cannot be returned after they are rendered. Tangibility They are tangible, so customer can see and touch it, before coming to the buying decision. They are intangible, so it is difficult to promote services.

58. 58 Separability Product and the company producing it, are separable. Service cannot be separated from its provider. Customization Products cannot be customized as per requirements. Services vary from person to person, they can be customized. Imagery They are imagery and hence, receive quick response from customers. They are non-imagery and do not receive quick response from customers. Quality comparison Quality of a product can be easily measured. Quality of service is not measurable.