Competitive Marketing Strategy

Introduction
What is the Marketing Concept
Marketing Concept is about satisfying consumer needs and wants simultaneously
Meeting organizational objectives

There are five types of needs:

stated needs: the customer wants an inexpensive car

unstated needs: customer expects good service from a dealer
real needs : customer wants a low operating cost car, not just a low price
secret needs: customer wants to be known as a savvy consumer
delight needs: customer wants a navigation system to be installed
 Marketing Concept is about customer satisfaction

Customer Satisfaction

Hyundai Launches ‘Hyundai Sonata’

In the untapped Rs.10-20 lakh Volvo, Sweden has been very successful in
Segment - acquisition Customer retention, with a repeat purchase
Rate of up to 80% over last 40 years.

Customer Acquisition Customer Retention

Good customer satisfaction is obtained by focusing on both the customer

acquisition and customer retention processes.
 Marketing Concept is about customer satisfaction

Customer is also satisfied when they obtain the following

a. VALUE

b. SERVICE

c. QUALITY – Performance, Conformance

d. CHOICE
Marketing concept is that of exchanges.

A transaction is a measured exchange.

Contract formalizes a transaction either for the present or for future and
Legalizes it if necessary and also provides a recourse in case of a market failure

There are five conditions of exchange

3. There are at least two parties

4. Each party has something that might be of value to the other party
5. Each party is capable of communication and delivery
6. Each party is free to accept or reject the exchange offer
7. Each party believes it is appropriate or desirable to deal with other party
A transaction is distinguished from a transfer. A gives X to B but does not
receive anything tangible in return. E.g. gifts, subsidies, charitable contributions.
Persons making such transfers are possibly expecting gratitude or changed
behavior in the person who accepts the transfer.
Marketing Management is Demand Management.

Demand represents:

- desire and willingness to buy

- ability to buy
Marketing Management is Demand Management. Eight demand
States are possible

 Negative demand – ex-convicts and alcoholics in factories for employment

 No Demand – Indian College students in semi-urban areas have no demand for

foreign language courses

 Latent Demand – Strong latent demand for harmless cigarettes or fuel efficient cars

 Declining Demand – for Yamaha in Pianos in 1980s

 Irregular Demand - Metro rail demand through the day, seasonality

 Full Demand – Organizations sell to maximum capacity

 Overfull Demand – Waiting list on Honda Scooters at the dealership

 Unwholesome Demand – Hard Drugs

Marketing Concept has evolved over six stages

-Production concept: It holds that consumers will prefer products that

are widely available and inexpensive

-product concept: Consumers will favor those products that offer the most
quality, performance or innovating features

-selling concept: Consumers do not buy enough, so firms must put in extra
efforts to sell products.

-marketing concept: sense the market and respond with offerings – consists of
both reactive and proactive market orientation. Reactive means
understanding and meeting customer’s expressed needs. Focusing
on customer’s latent needs leads to proactive orientation.

-holistic marketing concept: Includes dimensions of internal marketing,

development of integrated marketing programs that
cover the 4Ps, relationship marketing that covers
customers, channel and partners and socially
responsible marketing that covers ethics,
environment, legal and community issues.
Market Places

Market Spaces

Meta Markets
cluster of complementary products and services that
are closely related in consumer minds but are spread \
across a diverse set of industries. Automobile
metamarket consists of auto manufacturers, dealers,
service shops, auto magazines, auto sites on Internet.
• AMA definition :
 Marketing is an organizational function and a set of
processes for creating, communicating and delivering
value to customers and for managing customer
relationships in ways that benefit the organization and
its stakeholders.

• Kotler definition :
 Human activity directed at satisfying needs and wants
through exchange processes
Marketing Management is the art and science of choosing target markets
and getting, keeping and growing customers through creating, delivering
And communicating superior customer value.
Marketing people are in involved in marketing ten types of entities

 Goods
 Services
 Experiences
 Events
 Persons
 Places
 Properties
 Organizations
 Information
 Ideas
Important Schools of Thought in Mktg

- Functional School

- Managerial School

- Buyer Behavior School

- Organizational dynamics school

Functional School: Marketing is organized along functions – product
management, sales, advertising, market research

Managerial School: The marketing that is taught comprising of PLC,

marketing mix, market segmentation and positioning.
Pioneered by Joel Dean, John Howard, Neil Borden
William Lazer, Theodore Levitt, Philip Kotler

Buyer Behavioral School: Unwise to target an “Eonomic Man”. Consumer

behavior study will lend more depth. Pioneers include
Ernest Dichter, John Howard, George Katona,
James Engel

Organizational Dynamics School: Interorganizational behavior is the key focal

point for understanding marketing process.
Trends in Marketing
1. Mass customization: This addresses heterogeneity in markets.
e.g. Jenson and Nicholson in paints
Mercedes Benz – choice of design of cars at factory
on order using flexible manufacturing, JIT production
JIT distribution, computer information systems

7. Provision of supervalue / ecstasy

Airline frequent flyers tied to hotel rentals/ auto rentals

10. Wants become needs

Today’s power steering option- want is tomorrow’s need

13. Increasing Brand Proliferation – concept of power brands

15. Trend towards relationship marketing. CRM. Customer building takes

precedence over classical marketing

6. Rise of Competition e.g. HLL Pepsodent-Colgate; Computer Industry Rivalry

1. The importance of branding and other intangible assets such as corporate
reputation, intellectual capital.

4. Requirement of both reactive and proactive market response mechanisms.

6. Firms should make deliberate attempts to step out of short termism and
look at long term

9. Societal Marketing more widely practiced.

11. How to convert niche products to larger markets e.g. mobile phones,
home computers etc.

12. Globalization
 Marketing

Conceptualization

Design
Marketing Identify and satisfy customer needs and wants
of to Through exchange processes simultaneously
Build Up Programs
Fulfilling organizational objectives
Execution

Monitor
Strategy
Long term implications

Huge Investments

Contingency Build Up
 Market Structure based on Consumption and Ownership Pattern

Very Rich, those who buy the most expensive consumer pdts

Consuming class – those that buy bulk of consumer goods

Marketed in the country.

Indian Market Climbers who own or purchase slightly more expensive consumer
Goods like B/W TV, sewing m/s, mixers.

Aspirants – those who purchase a few inexpensive consumer

Goods like cycle, radio/transistor

Destitutes - Consume very little of m/f goods

 Market Structure based on SEC Classification

Education – Illiterate, School upto 4th, Literate but no formal

Schooling, School 5th – 9th, SSC/HSC, Some College but not
A graduate, Graduate/Post Graduate – General, Graduate /
Post Graduate- Professional

SEC Urban

Occupation – Unskilled Workers, Skilled Workers, Petty traders,

Shop Owners, Businessmen / Industrial with no of employees (a) 1-9
(b) 10+, Self Employed Professional, Clerical / Salesman,
Supervisory Level, Officers / Executive Junior, Officers /
Executives – Middle/Senior

The eight socio-economic classes in the urban area – A1, A2, B1, B2, C, D, E1, E2
 Market Structure based on SEC Classification

Education – Illiterate, School upto 4th, Literate but no formal

Schooling, School 5th – 9th, SSC/HSC, Some College but not
A graduate, Graduate/Post Graduate – General, Graduate /
Post Graduate- Professional

SEC Rural

Type of House – Pucca, Semi Pucca, Kuchha

The four socio-economic classes in the rural area are R1, R2, R3, R4
 MARKETING STRATEGY FORMAT

Marketing Objective

Strategic Mkt Analysis Internal Analysis

Analysis of past performance

and present strategy

Developing Marketing strategies

Analytical inputs to developing Implementation & control

marketing strategy

Competition
 Objective:
Maximize Profit, share ,sales.
TRANSACTION FACILATATORS Minimize Uncertainty Risk
• INFORMATION
• Marketing Objectives:
SERVICING
 Enhance brand image, Improve Customer Satisfaction, provide customer
• FINANCING value , maintain price stability
Functionality Domain Restraint

Resource allocation in marketing Market selection Organizational opportunity

Strategic decision making Positioning/differentiation Contingency

build –in
Dynamic adjustments to competition & market Market entry/exit /timing Coherent with vision

Action setting 4P’s

Relationship with key publics functionality

COMPETITIVE FOCUS : CUSTOMER ORIENTATION

FRAMEWORK FOR MARKETING STRATEGY

 Intensive Growth Opportunities

Growth Opportunities Integrative Growth Opportunities

Diversification Growth Opportunities

 Intensive Growth Strategies – Ansoff’s Product-Market Expansion Grid

Current Products New Products

Current Market Product Development Strategy

Markets Penetration Strategy

New
Markets Market Development Strategy (Diversification Strategy)
Identification of Growth Opportunities … cont

Integrative growth opportunities

backward (acquiring suppliers) , forward (acquiring
channel members) and horizontal integration (acquiring
competitors)

Diversification growth opportunities

concentric – technological or marketing synergies to a new
group of consumers e.g. audio cassettes from
a firm making computer tape
Conglomerate – new opportunities which have no relation
to current technologies, products or markets
Reliance into Telecom
Horizontal diversification – Appeal to current customers
with new technologies e.g. Music company
produces CD / Cassette racks
Product Portfolio Analysis
Objectives of Product Portfolio Analysis

3) Resource allocation among products and markets

4) portfolio analysis of competitors leads to a refined
understanding of competitive strategy by action –
reaction steps
7) Assess the marketing effort for each product to direct it
in the product portfolio from one place to another
 Boston Consulting Group- Growth share matrix.

M
A High STARS PROBLEM
R
K CHILD
E
T

G CASH COW DOG

R
O Low
W
T
H High Low
RELATIVE MARKET SHARE
 Shell International directional policy matrix
Prospects for sectors profitability

Unattractive Average Attractive

Company’s Weak Disinvest Phased Double or

Competitive withdrawal
Capabilities
quit
Company’s Average Phased Custodial Try harder
Competitive withdrawal Growth
Capabilities
Company’s Strong Cash generation Custodial leader
Competitive growth
Capabilities

Competitive capabilities- Market position

- Production Capability
- Product R &D
 Mc Kinsey/GE Business Array
Industry attractiveness – Size, Market Growth, Pricing, Mkt. Diversity
Competitive Structure, Industry Profitability
High Medium Low
Business
strength High Investment Investment Selectivity/
- Size and growth and growth Earnings
- Growth (G) (G)
- Share
- Position
- Profitability Medium Investment Selectivity/ Harvest
and growth Earnings
- Margins
(G)
- Tech.
Position
- Image
- People Low Selectivity/ Harvest Harvest
Earnings
 Product performance matrix
Company sales Decline Stable Growth
Profitability Below Target Above Below Target Above Below Target Above
target Target target target target target

Industry sales

MKT share

Growth Dominant
average
Marginal

Stable Dominant
average
marginal
Decline Dominant

average

Marginal
 Getting Back to Basics of
Customer Needs and Wants
Understand Ground Realities of the Market

Understand Perceived Realities of the

Organization

Manage the interaction of the Ground

Realities and the Perceived Realities