FT205C

Fundamentalsof Marketing Management

Unit 7 MarketingStrategiesforLeaders,Challengers.FollowersandNichers
DefiningMarketShare Thepercentageofthetotalsalesofagiventypeofproductorservicethatareattributabletoa givencompany. ExpandingMarketShare Thereareatleastadozencommonstrategiesandavarietyofstrategiccombinationsorspecial situationstochoosefrom. 1. ExpansionofmarketshareatPresentLocation Learntospottelltalesignsofsaturationinyourpresentfacilities.Grocerystores,forexample, keep track of abandoned carts. When a shopper fills a cart and then leaves because the checkoutlineistoolong,thegrocershouldrealizethatthereisaseriousproblem.Ifyouare experiencing bottlenecks, think about adding to your facilities. Determine how many additionalcustomersyoucouldservicebybuildinguporoutandcomparetheadditionalsales tothecostofconstructionandtemporaryinconvenience. 2. ExpandMarketSizeByRelocation If it appears unlikely that you can draw more customers to your present location (at a reasonable cost), consider moving closer to your customers. A location on Main Street, in a shoppingmalloranindustrialparkmaycostyoumoreinrent,butifyougainexposuretonew customersitmaybeasoundinvestment. 3. ExpandingYourMarketSizeByAdditionalOutlets Reaching the most customers may require opening several outlets at convenient locations throughout your market area. In addition to the added costs of real estate and multiple inventories, carefully analyze the cost and availability of labor and training, and the cost of hiring a manager for each location and installing an efficient monitoring system. Your advertisingdollarsmaybecomemoreefficientsinceyourradio,TVandnewspaperadscover yourentiremarket.Themultiplelocationswillmakeitmoreconvenientforcustomerstofind you. 4. DownwardVerticalIntegrationExpansion Ifyourprofitsdependonthepricesyoupayforrawmaterials,yourmostprofitablegrowth

FT205C/FundamentalsofMarketingManagement/Prof.ArpitLoya

FT205C

Fundamentalsof Marketing Management

strategymaybetobuyafarm,mineorprocessingplanttoproduceyourownmaterials.This strategyalsomaymakesenseifyourproductqualityisbasedonaconsistentsupplyofgoods atanacceptablequalitylevel. 5. UpwardVerticalIntegration Most small manufacturing businesses that start are forced to conform to the existing marketing channels and sell through established manufacturers' representatives, jobbers or dealerswhohaveaccesstothemarket.Asyougrow,however,itmakessensetoanalyzeyour distributionsystem toseewhenyoucanimproveyoursituationbyhiringyourownsalesteam, contractingwithdistributors,buyingatruckfleet,openingretailstoresorfactoryoutletstores or doing anything else you need to do to get closer to your market. Remember, every time someone gets between you and your customer, it either reduces your revenue or increases youroperatingcosts.Also,itimpedestheproviderconsumercommunicationthatisessential toagoodmarketingprogram. 6. ExpandingMarketSizeByExportingGoodsorServices Literally, there is a world of markets available to you if you are willing to learn how to get started. 7. Tourists'Business Whenyouarelookingtoexpandmarketshare,don'tignoretouristswhocouldbeattractedto yourarea.Workwithyourlocalconventionandvisitors'bureautodeterminetheimpactifyou cooperatewithlocaltouristattractionsorhotelsandrestaurantstogetmorepeopletovisit andspendmoneyinyourcommunity. 8. Franchises Franchising as a growth strategy offers advantages if you areshort of expansion capital, yet haveaconceptthatcanbepackagedandtaughttopeoplewhowishtoinvestinabusiness. Thelegalproblemscanseemoverwhelming,butwithagoodplanandcompetentadvice,you candevelopafranchisesystemthatcouldproveextremelyprofitable. 9. LicenseAgreements If you have a technical process or service, you may be able to find people in other markets whowouldbewillingtopayyouaroyaltyfortherightstouseyourprocess.Perhapsyoucould sellrawmaterials,secretingredients,specialtoolingorpromotionalmaterialstoyourlicense holders.

FT205C/FundamentalsofMarketingManagement/Prof.ArpitLoya

FT205C

Fundamentalsof Marketing Management

10. DirectMarketing Sellingdirectlytoyourcustomersisoneoftheoldestandmosteffectivemethodsofmarket expansion. Today, there are few doortodoor salespeople; most direct marketing is seen in partyplansellingandthroughmail,TVandmagazines.Directsellingrequiresgoodselection andtrainingtechniquesandacommissionplanplusliberalincentives. 11. Telemarketing Ifyouhaveagoodlistofprospectivecustomers,telemarketingmaybeaneffectivemethodof informing them about your business, qualifying them for sales followup or selling your product or service to them. Professional firms can be used, or you can set up your own telephoneroom.Hereagain,recruitingandtrainingarecriticalbecauseonlyafewpeoplecan dotelemarketingwell. 12. PrivateLabel One method of expanding your markets is to sell your product under the name of your distributor or retailer. However, you cannot build customer or brand loyalty because the consumerdoesnotknowyouaretheproducer.Anotherpotentialproblemisthat,shouldthe ownerofthelabelfindacheaperproducer,youmaybeoutofthebusiness. Reference 1) Bizmove.com

FT205C/FundamentalsofMarketingManagement/Prof.ArpitLoya