Marketing Strategy

1. Company and
Marketing Strategy

2. Marketing Strategy &
Marketing Mix

3. Customer orientation
Customer commitment.
Creation of customer value.
Understanding of customer needs and objectives.
Measure customer satisfaction.
After-sales service.
Competitor orientation
Sales force shares competitors’ information among themselves.
Individual organizations respond rapidly to competitors actions.
Senior managers frequently discuss competitors’ strategies and tactics.
Keen to seize opportunities for competitive advantage.
Constant struggle to achieve market leader status.
Inter-functional coordination
Inter-functional calls on customers.
Technical, procurement, customer and market information is shared closely
among different functions/departments.
Close integration among different functions and departments in
implementation of strategy.
Functions are geared towards creation and satisfaction of individual customer
needs.
Resources are shared frequently among the various business units.

4. Strategy Success Indicators
 (a) Growth in sales revenue
 (b) Increase in market share.
 (c) Percentage increase in sales achieved through
customer retention/brand loyal customers.
 (d) Product development speed time i.e. time to develop,
manufacture and market a new product.
 (e) Number of customer complaints lodged. Percent
increase/decrease in number of customer complaints.
 (f) Number of new distributorships appointed in the
year.
 (g) Sales of new products / models lodged in the year as
a proportion of the Company’s annual turnover.

5. Market Segmentation
The market consists of many types of customers,
products, and needs. The marketer must
determine which segments offer the best
opportunities. Consumers can be grouped and
served in various ways based on geographic,
demographic, psychographic, and behavioral
factors. The process of dividing a market into
distinct groups of buyers who have different
needs, characteristics, or behaviors, and who
might require separate products or marketing
programs is called market segmentation.

6. Criteria for segmentation
 Measurability is the degree to which the size, purchasing
power, and profiles of a market segment can be
measured.
 2) Accessibility refers to the degree to which a market
segment can be reached and served.
 3) Substantiality refers to the degree to which a market
segment is sufficiently large or profitable.
 4) Differentiation refers to the degree to which a market
segment can conceptually be distinguished and has the
ability to respond differently to different marketing mix
elements and programs.
 5) Action ability is the degree to which effective
programs can be designed for attracting and serving a
given market segment.


7. Geographic Segmentation
 Geographic segmentation calls for dividing the
market into different geographical units such as
nations, regions, states, counties, cities, or
neighborhoods. A company may decide to
operate in one or a few geographical areas, or to
operate in all areas but pay attention to
geographical differences in needs and wants. It
is common to localize products, advertising,
promotions, and sales efforts to fit the needs of
geographical areas (regions, cities, and even
neighborhoods).

8. Demographic
Segmentation
 Demographic segmentation divides the market into groups based on
variables such as age, gender, family size, family life cycle, income,
occupation, education, religion, race, and nationality.

 Demographic factors are the most popular bases for
segmenting customer groups. One reason is that consumer needs,
wants, and usage rates often vary closely with demographic variables.

 Another is that demographic variables are easier to
measure than most other types of variables.

 Even when market segments are first defined using other
bases, such as benefits sought or behavior, their demographic
characteristics must be known in order to assess the size of the target
market and to reach it efficiently. Demographic variables are easier to
measure than most other types of variables.

9. Age and Life cycle
segmentation
Age and life cycle segmentation consists of
offering different products or using different
marketing approaches for different age and life-
cycle groups. Marketers must guard against
stereotypes when using this form of segmentation.
While certain age and life cycle groups do behave
similarly, age is often a poor predictor of a
person’s life cycle, health, work or family status,
needs, and buying power. Consumer needs and
wants change with age. Some companies use age
and life cycle segmentation, offering different
products or using different marketing approaches
for different age and life-cycle groups.

10. Gender Segmentation
Calls for dividing a market into different
groups based on gender. This
segmentation form has long been used for
clothing, cosmetics, toiletries, and
magazines. New opportunities in this area
are emerging such as automobiles,
deodorants, and financial services. There is
an increased emphasis on marketing and
advertising to women. Specialized Web
sites are becoming very popular with this
group.

11. Income Segmentation
It consists of dividing a market into
different income groups. Marketers for
automobiles, boats, clothing, cosmetics,
financial services, and travel have long
used this form of segmentation. Using this
form, marketers must remember that they
do not always have to target the affluent.
Other income groups are also viable and
profitable market segments.

12. Psychographic
segmentation
It calls for dividing a market into different groups
based on social class, lifestyle, or personality
characteristics. People in the same demographic
class can exhibit very different psychographics
characteristics. As previously seen in, lifestyle
also affects people’s interest in various goods, and
the goods they buy express those lifestyles. This
method of segmentation is gaining in popularity.
Personality variables can also be used to segment
markets. Marketers will give their products
personalities that correspond to consumer
personalities.

13. Behavioral segmentation
It involves dividing a market into groups
based on consumer knowledge, attitudes,
uses, or responses to a product. Many
marketers believe that behavior variables
are the best starting point for building
market segments. Occasion segmentation
consists of dividing the market into groups
according to occasions when buyers get
the idea to buy, actually make their
purchase, or use the purchased item.

14. Pricing for segments
Geographic or location segments – High prices are
charged for the same products/services in posh
locations where customers are willing to pay the
high prices and low prices are charged in relatively
less affluent areas where the consumers are not
well-off or have different types of needs, although
the cost of offering may be the same in both the
locations. A bottle of water of 0.5 liter may sell for
Rs 25 in the super market, but in a prestigious
restaurant the price charged for the same brand of
bottled water may be as high as Rs 95.

15. Demographic segments – Different prices
may be charged from different customers
for the same product/service on the basis
of differences in their age, gender or
profession. Lower entry fees may be
recovered from students and senior
citizens to encourage them to visit a
museum or an amusement park as
compared to the entry fees charged from
other visitors.

16. Time segments – The market may be segmented to
recover high prices for use of the service during
peak business hours and low prices for use of the
same service during the slack or off-peak periods.
A provider of telephone services may levy a higher
tariff structure for calls made during the business
hours and lower rates for services provided after
the normal business hours. This pricing strategy
would encourage more customers to make their
calls during the off-peak periods.

17. Usage or consumption segments – Marketers often
differentiate the market segments on the basis of customers
volume of purchases, frequency of usage or their particular
types of use and reward them with low prices as compared
to the high prices charged from those customers who make
their purchases in small quantities or usage for specific
purposes. A supermarket may offer special discounts on
certain items to those customers whose purchases are in
excess of a specified quantity to encourage bulk purchases.
Also, lower tariff structures may be charged for electricity
used for drawing water from tube wells for agricultural
purposes to reduce costs of inputs used in the production of
agricultural products and higher rates for electricity
consumed in commercial establishments.

18. Market targeting
After a company has defined its market
segments, it can enter one or many of these
segments. Market targeting involves
evaluating each market segment’s
attractiveness and selecting one or more
segments to enter. A company should
target segments in which it can profitably
generate the greatest customer value and
sustain it over time.

19. Differentiation
Actually differentiating the
market offering to create
superior customer value.

20. Positioning
Positioning is arranging for a product
to occupy a clear, distinctive, and
desirable place relative to competing
products in the minds of target
consumers. Marketers plan positions
that distinguish their products from
competing brands and give them the
greatest advantage in their target
markets.

21. Undifferentiated Marketing
Using an undifferentiated marketing (or mass-marketing)
strategy, a firm might decide to ignore market segment
differences and go to the whole market with one offer. This
mass-marketing strategy focuses on what is common in the
needs of consumers rather than on what is different. The
company designs a product and a marketing program that
will appeal to the largest number of buyers. It relies on mass
distribution and mass advertising, and it aims to give the
product a superior image in people's minds. Difficulties arise
in developing a product or brand that will satisfy all
consumers. Moreover, mass marketers often have trouble
competing with more focused firms that do a better job of
satisfying the needs of specific segments and niches.

22. Differentiated Marketing
 Using a differentiated marketing strategy, a firm
decides to target several market segments or
niches and designs separate offers for each.
General Motors tries to produce a car for every
"purse, purpose, and personality." Nike offers
athletic shoes for a dozen or more different
sports, from running, fencing, and aerobics to
bicycling and baseball. By offering product and
marketing variations, these companies hope for
higher sales and a stronger position within each
market segment.


23. Concentrated Marketing
A third market-coverage strategy, concentrated marketing, is
especially appealing when company resources are limited. Instead
of going after a small share of a large market, the firm goes after a
large share of one or a few segments or niches. Concentrated
marketing provides an excellent way for small new businesses to
get a foothold against larger, more resourceful competitors.
Through concentrated marketing, firms achieve strong market
positions in the segments or niches they serve because of their
greater knowledge of the segments' needs and the special
reputations they acquire. They also enjoy any operating economies
because of specialization in production, distribution, and
promotion. If the egment is well chosen, firms can earn a high rate
of return on their investments. At the same time, concentrated
marketing involves higher-than-normal risks. The particular market
segment can turn sour. Or larger competitors may decide to enter
the same segment.

24. Marketing Mix
 After determining its overall marketing strategy, the company is ready to
begin planning the details of the marketing mix, one of the major
concepts in modern marketing. The marketing mix is the set of tactical
marketing tools that the firm blends to produce the response it wants in
the target market. The marketing mix consists of everything the firm can
do to influence the demand for its product. The many possibilities can be
collected into four groups of variables—the four Ps (Product, Price,
Place, Promotion)
 Product means the goods-and-services combination the company offers
to the target market. (Variety, Quality, Design, Features, Brand name,
Packaging, Services)
 Price is the amount of money customers must pay to obtain the product.
(List price, Discounts, Allowances, Payment period , Credit terms)
 Place includes company activities that make the product available to
target consumers. (Channels, Coverage, Locations, Inventory,
Transportation, Logistics)
 Promotion means activities that communicate the merits of the product
and persuade target customers to buy it. (Advertising, Personal selling.
Sales promotion, Public relations)

25.  Advantages

 Television
 Offers combined effects of highly attractive sights, sound and motion to
appeal to the audience.
 Captures high attention of the audience.
 Reaches a large segment of the prospective market.
 Qualities of the product can be highlighted more effectively.

 Disadvantages/Limitations
 Entails high cost.
 Has very short exposure.
 Has minimum audience selectivity.
 Audience can move away from the TV sets during advertisement breaks.

26.  Widely circulated newspapers

 Advantages
 extensive coverage of different categories of the prospective audience.
 a large part of the audience may read the newspaper in their free time or when
required when it is more easier to respond.
 customers can refer back to the newspaper whenever there is a need for the
product.
 captures attention of the audience for a relatively longer duration.

 Disadvantages

 Newspapers have a very short life and advertisements are effective only if they are
repeated frequently.
 Quality of the advertisements are generally not ‘audience attention captivating
type’.
 Newspapers have a very restricted ‘pass-on’ or secondary audience.
 busy readers glance through the newspapers to read the headlines and ignore the
advertisements.


27.  Billboards(Hoardings)

 Advantages
 High repeated exposure to the passing traffic.
 Can be installed at most strategic locations.
 Colourful digital graphic billboards attract attention of large
audience.
 Disadvantages
 Limited audience selectivity.
 Ignored by the fast moving traffic on busy roads.
 Billboards placed too closely are eyesore for the audience and
are ignored.
 High costs are involved in the maintenance and upkeep of the
billboards.
 Audience often find the similar colours on billboard boring and

28. Marketing Analysis
 Managing the marketing function begins with a complete analysis of the company’s
situation. The marketer should conduct a SWOT analysis (pronounced “swat”
analysis), by which it evaluates the company’s overall strengths (S), weaknesses
(W), opportunities (O), and threats (T). Strengths include internal capabilities,
resources, and positive situational factors that may help the company serve its
customers and achieve its objectives. Weaknesses include internal limitations and
negative situational factors that may interfere with the company’s performance.
Opportunities are favorable factors or trends in the external environment that the
company may be able to exploit to its advantage. And threats are unfavorable
external factors or trends that may present challenges to performance.

 The company should analyze its markets and marketing environment to find
attractive opportunities and identify environmental threats. It should analyze
company strengths and weaknesses as well as current and possible marketing
actions to determine which opportunities it can best pursue. The goal is to match
the company’s strengths to attractive opportunities in the environment, while
eliminating or overcoming the weaknesses and minimizing the threats. Marketing
analysis provides inputs to each of the other marketing management functions. (for
details on SWOT Analysis, see Chapter 2)

29. Market Planning
 Market Planning
 Through strategic planning, the company decides what it wants to
do with each business unit. Marketing planning involves choosing
marketing strategies that will help the company attain its overall strategic
objectives. A detailed marketing plan is needed for each business,
product, or brand. What does a marketing plan look like?

 Sections of a Marketing Plan
 Executive Summary
 Current Market Situation
 Threats and Opportunities Analysis
 Objectives and Issues
 Marketing Strategy
 Action Programs
 Budgets
 Controls

30. Marketing Implementation
Marketing implementation is the process
that turns marketing plans into marketing
actions to accomplish strategic marketing
objectives. Whereas marketing planning
addresses the what and why of marketing
activities, implementation addresses the
who, where, when, and how.


31. Marketing Control
Marketing control refers to
measuring and evaluating the
results of marketing strategies
and plans and taking corrective
action to ensure that the
objectives are achieved.