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MARKETING STRATEGYMARKETING STRATEGY IS THE SOLUTION TO PROVIDE SUPERIOR CUSTOMER VALUE TO THE TARGET MARKET

STRATEGY FORMULATIONSTARTING POINT-----MARKET ANALYSIS

CONSUMER COMPANY COMPETITION CONDITION

MARKET SEGMENTATION-THE 2ND STEPTHE THREE MAJOR SEGMENTS COULD BE 1. 2. 3. 4. THE GEOGRAPHIC SEGMENT THE DEMOGRAPHIC SEGMENT THE PSYCHOGRAPHIC SEGMENT BEHAVIORAL SEGMENT

Cont..MARKET ANALYSIS COMPETITION: -Michael Porters Five Forces Analysis -Value Chain Analysis -SWOT Analysis

Michael Porters Five Forces Model

THREAT OF NEW ENTRANT DEPENDS UPON: -economies of scale -Capital /investment requirement -Customer switching costs -Access to distribution channel -Access to technology -Brand loyalty -Degree of retaliation from existing players -Government policies

THREAT OF SUBSTITUTES DEPENDS UPON: -quality of the substitute -Buyers willingness to substitute -Relative price and performance of substitutes -Switching costs to substitutes

BARGAINING POWERS OF SUPPLIERS DEPENDS UPON: -concentration of suppliers Vs the buyers -branding of the supplier -suppliers threat to integrate forward -quality n service -switching cost of the suppliers

BARGAINING POWER OF BUYERS DEPENDS UPON: -concentration of buyers VS the suppliers -products represents a significant amount of buyers costs or purchases -differentiated/undifferentiated product -switching costs to the buyers -buyers threat of backward integration -information update of the buyers

INTENSITY OF RIVALRY DEPENDS UPON: -structure of competition;numerous competitors vs clear cut market leader -degree of product differentiation -structure of industry costs;high fixed costs leading to price cutting -exit barriers; high leads to intense rivalry

VALUE CHAIN MICHAEL PORTERIDENTIFIES 9 WAYS TO CREATE MORE CUSTOMER VALUES THROUGH PRIMARY AND SECONDARY ACTIVITIES PRIMARY ACTIVITIES: 1. INBOUND LOGISTICS 2. OPERATIONS 3. OUTBOUND LOGISTICS 4. MARKETING AND SALES 5. SERVICE

Cont.SECONDARY ACTIVITIES: 6.FIRM INFRASTRUCTURE 7.HUMAN RESOURCE MANAGEMENT 8.TECHNOLOGICAL DEVELOPMENT 9.PROCUREMENT

Framework for competitor analysisFuture goals current strategy

competitors response profile

Assumptions

capabilities

FUTURE GOALS: Business Unit Goals -financial goals -values and beliefs -organisational structure -control and incentive system

Parent Company -current sales of the parent company -overall goals -strategic relevance of the business unit to the parent company -diversification plans PORTFOLIO ANALYSIS -BCG -GE

ASSUMPTIONS Competitors assumptions about itself Competitors assumptions about the industry CURRENT STRATEGY-competitors key operating policies in each functional area of the business

CAPABILITIES -assessment of competitors strengths and weakness in varied areas -core capabilities of the competitors in each of the functional areas -Ability to grow -quick response capability -Staying power

COMPETITORS RESPONSE PROFILE -is the competitor satisfied with its current position? -what likely moves or strategy shifts will the competitor make? -where is the competitor vulnerable? -what will provoke the greatest and most effective retaliation by the competitor?

CONDITIONMACRO ENVIRONMENT DEMOGRAPHIC ENVIRONMENT SOCIO-CULTURAL ENVIRONMENT ECONOMIC ENVIRONMENT POLITICAL ENVIRONMENT NATURAL ENVIRONMENT TECHNOLOGICAL ENVIRONMENT LEGAL ENVIRONMENT

COMPANYInternal Appraisal -BCG -GE McKinsey -SWOT Strategies in terms of 4 Ps: -Product -Price -Place -Promotion

PRODUCTAN OFFERING THAT SATISFIES THE NEEDS OF THE CUSTOMER

Major tasks in Product ManagementI. MANAGING THE PLC :-STAGES:INTRODUCTION GROWTH MATURITY DECLINE

NEW PRODUCT DECISIONSSIGNIFICANCE OF NEW PRODUCT: MEETING CHANGES IN CONSUMER DEMAND MAKING NEW PROFITS COMBATING ENVIRONMENTAL THREATS NEW PRODUCTS CAN BE: NEW ARISING OUT OF TECHNOLOGICAL INNOVATION NEW DUE TO MARKET-ORIENTED MODIFICATIONS

STAGES IN NEW PRODUCT DEVELOPMENT IDEA GENERATION IDEA SCREENING CONCEPT TESTING MARKETING STRATEGY BUSINESS/MARKET ANALYSIS PRODUCT DEVELOPMENT MARKET TESTING COMMERCIALISATION

STRATEGIES AT VARIOUS STAGESINTRODUCTION:-strategies to be aimed at Attracting customers by raising awareness of, and interest in the product through advertising, public relations and publicity efforts that stress key product features and benefits. Inducing customers to try and buy the product through the use of various sales tools and pricing activities. Strengthening and expanding channel and supply chain relationships to gain sufficient product distribution to make the accessible to target market.

Setting pricing objectives that will balance the firms need to recoup the investment with the competitive realities of the marketplace GROWTH strategies to be aimed at Improving product quality,adding new product features and style Entering new market segments Increasing distribution coverage Shift from product awareness advertising to product preference advertising

Finding an ideal balance between price and demand as the price elasticity becomes more important as product moves towards the maturity stage MATURITY strategies to be aimed at Generating cash flow Holding market share Stealing market share Increasing share of customers

DECLINE options available are Postpone the decline Accept its decline

II. APPRAISAL OF THE PRODUCT LINE ALTERING THE LENGTH OF THE LINE THROUGH: STRETCHING THE LINE -UP or DOWN LINE FILLING LINE PRUNNING

III. MANAGING BRAND EQUITY BRAND EQUITY- TOTAL WEIGHTAGE THE CUSTOMER GIVES TO THE BRAND BRAND = BASIC PRODUCT+NAME+LOGO+MARKETING STRATEGY STAGES OF BRANDING: 1.BRAND AWARENESS 2.BRAND ACCEPTANCE 3.BRAND PRIORITY 4.BRAND LOYALTY

NAMING THE BRAND INDIVIDUAL BRAND NAMES ex: Breeze, Camay FAMILY/UMBRELLA BRAND ex: Lakme, Ponds COMPANY NAME AS BRAND NAME ex: Godrej, Tata , BPL MIDDLEMENS/STORE BRAND/PRIVATE LABEL ex: Shoppers Stop, Pantaloons

NEED FOR BRANDING MARKET IDENTITY LEGAL PROTECTION CUSTOMER LOYALTY PROFIT MARGINS SEGMENTATION BARGAINING CAPACITY CORPORATE IMAGE

PRICINGMONETARY VALUE IN RETURN OF PRODUCT/SERVICE OCCASIONS OF PRICING:1. SETTING A PRICE OF A NEW PRODUCT 2. INTRODUCTION OF EXISTING PRODUCT IN A NEW MARKET 3. RESETTING /ADJUSTING THE CURRENT PRICE

THE PROCESS.. SELECTING THE PRICING OBJECTIVES DETERMINING THE DEMAND ESTIMATING COST ANALYSING COMPETITORS COSTS,PRICES AND OFFERS SELECT A PRICING METHOD SELECTING THE FINAL PRICE

SELECTING THE PRICING OBJECTIVESTHE COMPANY FIRST DECIDES WHERE IT WANTS TO POSITION ITS MARKET OFFERING. THE CLEARER A FIRMS OBJECTIVES, THE EASIER IT IS TO SET PRICE. Survival. Maximum current profit. Maximum market share. Maximum market skimming. Product-quality leadership

Demand estimationFactors contributing to Price sensitivity: Unique Value effect Substitute Awareness effect Difficult Comparison effect Total expenditure effect End-Benefit effect Shared Cost effect Sunk Investment Effect Price Quality effect Inventory effect

Measuring demand curves: -controlled experimentation -Direct probing -Statistical analysis of past data Demand is likely to be less elastic under the following conditions: There are few or no substitutes or competitors. Buyers do not readily notice a higher price. Buyers are slow to change their buying habits. Buyers think the higher prices are justified.

Costs set the floor to the price. Competitors prices and the price of substitutes provide an orienting point. Customers assessment of unique features establish the price ceiling. There are five price-setting methods: Markup pricing. Target-return pricing. Perceived-value pricing. Value pricing. Going-rate pricing.

Other price adaptationsa) Price discrimination customer segment pricing Trade discrimination Location pricing Time pricing b) Discounts Cash discount Quantity discount Trade discount Seasonal discount

c) Promotional pricingLoss Leader pricing Special event pricing Longer payment terms Low interest financing Warranties and service contracts

d) Product mix pricingProduct line pricing Captive product pricing Two part pricing Product bundling pricing

DISTRIBUTION NETWORK Know what work marketing channels perform Know how channels should be designed Know what decisions companies face in managing their channels Know how companies should integrate channels and manage channel conflict

NEED FOR A DISTRIBUTION SYSTEMGENERAL DISCREPANCY EXISTING : SPATIAL DISCREPANCY TEMPORAL DISCREPANCY NEED TO BREAK THE BULK NEED TO PROVIDE ASSORTMENT INFORMATION GAP

ENTITIES1)PHYSICAL DISTRIBUTION 2) MARKETING CHANNELS

PHYSICAL DISTRIBUTION1.TRANSPORTATION -MODE:air,rail,road,water,pipeline -ROUTING -COST

.cont.2. WAREHOUSING a. Critical storage points nos. Location

b. Inventory control-costs ordering carrying stockout

MARKETING CHANNELSMOST PRODUCERS DO NOT SELL THEIR GOODS DIRECTLY TO THE FINAL USERS; BETWEEN THEM STANDS A SET OF INTERMEDIARIES PERFORMING A VARIETY OF FUNCTIONS These intermediaries constitute a marketing channel

SET OF INDEPENDENT ORGANISATIONS INVOLVED IN THE PROCESS OF MAKING A PRODUCT OR SERVICE AVAILABLE FOR USE/CONSUMPTION.

INTERMEDIARIES:TYPES OF MARKETING INTERMEDIARIES CFAs Distributor/wholesaler Retailer exclusive:owned or franchise shop in shop commission agents

FUNCTIONSa)Information-Potential & current customers -Competitors -Forces in the mktg. environment b)Promotion c)Negotiation d)Risk taking(financial,credit terms,storage,pilferage) e)Transactional efficiency financing to the manufacturer service provider presale post sale

LEVELS OF CHANNEL ZERO LEVEL manufactureconsumer eg: EU