MARKETING

CASEBOOK

Marketing Casebook IIM, Ahmedabad | 1

INSTRUCTIONS TO USE THE FRAMEWORKS

The first step in attempting to solve a problem in the interview is to

understand the problem being asked without any ambiguities. With this in
mind, it is highly recommended that you clarify the objective with the
interviewer. Once you are absolutely certain of the task at hand, you may
proceed to analyse the problem. To aid you in the analysis of the situation and
to ensure that you do not miss any relevant angle of the problem, we
recommend that you use the “THOUGHT FRAMEWORKS” that have been
provided in this document. The first step in using these frameworks is to
identify the class the problem given to you belongs to i.e. Is it a new product
launch problem or a sales increase problem etc. Once you identify the
framework that needs to be applied, use the framework to structure your
thoughts and think of all the facets of the problem. The next step is to come up
with answers to the various questions that you would have raised by using the
relevant thought framework. To present your answers to the interviewer in a
manner that shows off your marketing aptitude, identify and use the
“PRESENTATION FRAMEWORK” that will help you articulate your solution in
the best possible manner.

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 THOUGHT FRAMEWORKS
1) NEW PRODUCT ENTRY
 Think About the Product
Specialty, IP Rights, Substitutes, Competitor Products, Adv and Disadvantages, Fit
with Company
 Think About Market Strategy
Affect on existing line, Cannibalization, possibility to replace existing product,
Customer base expansion and source of profit, competitor response, Entry
Barriers, Competitor Analysis
 Whom to sell to?
Who? Where? How to reach? Retention Strategies and Value Proposition
 Financing
Debt, Equity, best allocation of fund

Note:
A company can either introduce a product in a market where it has no presence or
can extend product line in its current market. Launching a product in a market with
no presence pose not only operational challenges but viability of product’s success
in the market also needs to be explored. Extending the product line in current
market may require looking into cannibalization while doing a feasibility check of
product in the market and how the current value chain can be leveraged in making
the product available to its customers

2) SALES GROWTH STRATEGY

 Gather Context
Increasing sales does not necessarily mean increase profits
Growth relative to industry
Market Share by value and volume
Customer inputs on their wants
Price benchmarking with competition
Actions of competitors in Product development and marketing

 Strategies to Increase Sales

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3) PRICING A PRODUCT
 Investigate the Product
Point in PLC, R&D Expenses, Competitor Products, Market Size, Product Value Prop
 Pricing strategy
Cost-based pricing (Price = Cost +Margin) or Price based costing, Customer
Willingness-to-pay, customer acquisition expenses,
 Analysing Supply and Demand Considerations
How is the supply and demand expected to be? Effect of price on market
equilibrium, Price of substitutes and complements
 Competition Analysis
How does our product compare versus competition, who are the competitors,
competitors cost structures, competitors prices,

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 FRAMEWORK FOR NEW PRODUCT ENTRY

Reference: IIMA, Consult Book (3rd edition)

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 FRAMEWORK FOR SALES GROWTH
Reference: IIMA, Consult Book (3rd edition)
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 FRAMEWORK FOR PRICING A PRODUCT

Reference: IIMA, Consult Book (3rd edition)

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EXAMPLE 1: NEW PRODUCT ENTRY
Anti-Smoking Pills

Problem statement
Our company wants to introduce anti-smoking pills which are similar to patches
and lozenges that curb the urge to smoke. The product is nicotine free and is
proved to be much more effective (almost three times) as compared to the
available options in the lab results. Please help us with a strategy to introduce
these pills in the market

Preliminary Line of thought

1) How is the product different from the current products?
2) What can be the potential target segments? How big can be the market for
the product?
3) Which countries would you like to target for such a product?
4) Are there any marketing or distribution challenges?
5) What features will be highlighted to the relevant target group?
6) What can be the price at which the product is introduced?

Analysis

STP followed by Marketing Mix is used* to describe the strategy for new
product (anti-smoking pills) entry in the market

STP ANALYSIS

Segmentation Targetting Positioning

• Demographic (age, • Urban • Premium

income) Professionals positioning due to
• Geographic • High income higher efficiency
(location) segment that value
• Behavioural benefits more
(benefits sought)

*Some of the other thought frameworks discussed above can also be used

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 MARKETING MIX

•Unlike the patches and lozenges, pills are completely nicotine free which makes it
different from competition
PRODUCT •Quality of the product is higher which is also proved by the lab test results

• Available at usual drug stores and given only when prescription is available
• Also directly available at some of the hospitals and medical institutions
PLACE

• Since, the efficiency is more and we intend for premium positioning; value based pricing
approach to be taken
• Willingness of the customer will help in determining the price. Can be priced atleast
PRICE three times higher than the available options

•Direct sales agents and medical representatives will target the doctors and chemists
•Training of the sales agents is required to target doctors as the drug is a prescription
drug
PROMOTION • Communications can be also done through the healthcare applications

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EXAMPLE 2: PRICING
Hair-raising

Problem statement
Ranbaxy has come up with a new cure for baldness. It is a pill that can re-grow
your hair to the thickness of when you were 15 year old within 3 months. The drug
called IPP2 has to be taken every day for it to work. How would you price it?

Preliminary Line of thought

1) What is the objective of the company?
2) How are the industry profits and margins?
3) How big is the market? What will be our target segments
4) Will it be covered under health insurance?
5) How will you use the positioning of the product for pricing?

Analysis
Porter’s five forces used to analyse the industry followed by pricing strategy

PORTER’S FIVE FORCES

 Threat of new entrants - (Low pressure)
o Huge R&D costs are involved in coming up with such a drug
o We can assume that the product primarily targets people above
the age of 40. Even in this group, there is a small percentage of
people who would be willing to take medicine for hair regrowth.
Hence, incentive for new firms to enter is little
o Therefore, unless the formula becomes known to everyone,
chances of new entry are quite less
 Buyer power – (Medium pressure)
o We sell our products through distributors -> chemist -> consumer
o The buyer does not have enough power to dictate terms. Yet
there will be a cap to what they are willing to pay
 Threat of Substitution – (Low pressure)
o Substitutes could be oils, ayurvedic and homeopathic medicines
o They are not as popular – therefore should not be a big problem
 Supplier power (Low pressure)
o Assuming that there is no unique/rare ingredient in this drug,
procurement should not be a problem.
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 o As a large customer, Ranbaxy would have a huge bargaining
power in any deal.
 Competitive rivalry (High pressure)
o As of today, there are other drugs for baldness, but none are as
effective. Therefore currently, there are no close substitutes.
o But our big competitors like Sun Pharma, Dr. Reddy’s etc. do have
the resources to get something similar done. So, there is a risk of
competitor’s starting something similar in the future.
Taking all of this into consideration, we see that right now, we are reasonably
strong in the market. It will be sometime before competitors take out any
competing products. And substitutes appeal to only a small proportion of the
audience. We need not worry about new entries. Suppliers cannot cause much
trouble. But there will be cap to the markup we can charge.

PRICING
For pricing we can use either Cost Plus pricing, Value Based pricing or
Competitive pricing

1. Competitive pricing is not possible here because we don’t have similar

products in the market.
2. Cost plus could be one way to go.
o R&D are sunk costs
o We should look at the cost of producing each unit
3. We also need to combine this with Value based because we need to look at
the cap. For this, we will have to do some market analysis. We will look at
what segments we are targeting and then conduct a survey to understand
how much they would pay for this product.
o Let’s begin by looking at our target audience
- The product has some side effects which make it less appealing to
women. Accordingly, we make a rough estimate of what % of women
will be interested
- For men, we divide the group age-wise to figure out percentages
o Then we create survey forms and conduct the survey

Finally, we can combine these results with the results from our cost plus
pricing to figure out our price.
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EXAMPLE 3: SALES GROWTH
Starbucks

Problem statement
Wall Street wants Starbucks sales to grow annually by 30% for the next 5 year. The
“Street” has been Starbucks to open more coffee shops but coffee retailer feels
that it has exhausted all areas where it could grow. What should Startbucks do?
Identify the relevant “THOUGHT FRAMEWORK”

In this case, the relevant Thought Framework is clearly Increasing Sales

Preliminary Line of thought

1) Which geographic markets are to be focussed on?
2) What was last year’s growth rate at the company level and at the store
level?
3) What is the industry growth rate and what is the current Market Share?
4) What are the sales at the product level and respective product sales
growth rates?
5) What are the challenges in distribution?
6) What are the prices of product and substitutes?
7) What do the customers want?

Analysis

Possible Solutions or methods to increase Sales

Identify and Use a PRESENTATION FRAMEWORK

SOSTAC (r) is a marketing model developed by PR Smith

It is an acronym for Smith's six fundamental facets of marketing:

 Situation – where are we now?
 Objectives – where do we want to be?
 Strategy – how do we get there?
 Tactics – how exactly do we get there?
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  Action – what is our plan?
 Control – did we get there?

SOSTAC (r) contains a general marketing strategy which can be applied in

various commercial situations.
It is an extension of the SWOT analysis, which helps businesses get ready for
marketing campaigns; the main difference is that SOSTAC focuses more on the
implementation stages of the process and on marketing communications.

Marketing experts have adapted SOSTAC to a number of specific situations

 Direct marketing
 Electronic marketing

Example: The steps in the process have also been adapted to the development
of internet security systems and company business plans.

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 GD CASES EXAMPLES

Following are the GD topics in the form of a case. Use relevant frameworks
discussed above as well as refer the appendix to solve the cases.

 ABC Capital has the two investment options. Details are provided below.
Pick one.
1. XYZ Jeans is manufacturer of custom denim pants. It has recently
developed a proprietary technique for taking measurements of the
customers quickly. These measurements are stored in their database
and used for any repeat orders. This disruptive innovation allows the
customers to acquire customized jeans with exact fit.
With the help of effective supply chain management, XYZ has a lead time
of 10 days. The average industry lead time is 6 weeks.
XYZ is charging 30% more for this service than its competitors.
Within 3 years, XYZ is expected to capture 20% of the 200 million $
market for denim pants given that the current technology in the market
prevails.
Investment required to achieve these goals is 10 million $.

2. EFG Co. is in the aviation business and manufactures twin engine planes.
They have patented a fuel injection system which promises greater
efficiency in fuel usage. This system is expected to be commercially
available in 5 years. The market for the system can vary between 200 to
300 units. Unit price is 15 million $.
Production cost for 300 units is 100 million $. As aviation is a regulated
industry, prior to the delivery, Government testing is done to ensure
compliance with the rules prevalent at that time.

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 Mihir works for a firm manufacturing electronics in the sales division. A
part of his job includes looking for potential distributors to sell the
company products in various geographical areas. On a trip to Dubai, he
met Ahmed, an employee of a well-known local distributor. He informed
Mihir that this distributor was looking for a large order of electronics. This
opportunity was huge for Mihir’s firm and would fetch him a large bonus
for bringing it in. However, Ahmed asked for an expensive watch as a ‘gift’
in return for this favour. Mihir decided to consult his boss Nikhil and get
back to Ahmed.
On returning to India, when Mihir brought out the topic, Nikhil was furious,
‘Our company policy strictly prohibits any kind of bribery. Please refuse the
offer!’ But Mihir could not stop thinking about the prestigious offer. He
approached his friend and colleague Abhinav, who said, ‘Just buy a watch
and give it to Ahmed. You will gain a huge contract. The bonus itself will be
five times the value of the watch. You can tell Nikhil that you got the
contract without any bribery’. Thus, Mihir visited the watch shop and was
asking around for prices. At the same time, Priya, Nikhil’s assistant
happened to be in the store. She immediately called Nikhil and narrated
the incident. Nikhil decided to fire Mihir as soon as he arrived in the office
next day.
After browsing for watches, Mihir went to the bank to borrow the money
required to buy one. Mr. Mehta, an old friend of Mihir’s father, was the
bank manager. On hearing his story, Mr. Mehta agreed to sanction him a
loan. Happily, Mihir reached office the next day. Nikhil fired him on the
spot without listening to a word he said.

Rank the characters mentioned in the case on the basis of their morality or
ethics in the context of the case.

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 APPENDIX

MARKETING MODELS THAT CAN BE USED TO CRACK SOME PARTS OF THE

FRAMEWORK

1) PORTER’S 5 FORCES
In general, competition has been looked at too narrowly by managers. There is
a broad set of competitors that need to be looked at, which are described in
“Five Competitive Forces that Shape Strategy” by Michael Porter.
The intensity of Porter’s five competitive forces: threat of entrants, bargaining
power of buyers, bargaining power of suppliers, threat of substitution and
rivalry among existing competitors determine the long-run profitability of the
industry. Each of these forces can differently affect the profitability in different
industries. For instance, the power of buyers can be higher in one industry
than another. There are different factors that affect each of these forces. For
example, low level of switching costs increases the bargaining power of buyers
and suppliers vis-à-vis incumbents, high capital requirements restrict the
entries barriers, etc.Business managers can use this model to better
understand the market context

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2) PUSH STRATEGY

The term ‘push strategy’ describes the work a manufacturer of a product

needs to perform to get the product to the customer. This may involve setting
up distribution channels and persuading middlemen and retailers to stock your
product. The push technique can work particularly well for lower value items
such as fast moving consumer goods (FMCGs), when customers are standing at
the shelf ready to drop an item into their baskets and are ready to make their
decision on the spot. This term now broadly encompasses most direct
promotional techniques such as encouraging retailers to stock your product,
designing point of sale materials or even selling face to face. New businesses
often adopt a push strategy for their products in order to generate exposure
and a retail channel. Once your brand has been established, this can be
integrated with a pull strategy.

Examples of push tactics

 Trade show promotions to encourage retailer demand

 Direct selling to customers in showrooms or face to face
 Negotiation with retailers to stock your product
 Efficient supply chain allowing retailers an efficient supply
 Packaging design to encourage purchase
 Point of sale displays

3) PULL STRATEGY

Pull strategy’ refers to the customer actively seeking out your product and
retailers placing orders for stock due to direct consumer demand. A pull
strategy requires a highly visible brand which can be developed through mass
media advertising or similar tactics. If customers want a product, the retailers
will stock it – supply and demand in its purest form, and this is the basis of a
pull strategy. Create the demand, and the supply channels will almost look
after themselves.
Examples of pull tactics
 Advertising and mass media promotion
 Word of mouth referrals
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  Customer relationship management
 Sales promotions and discounts

4) PRICE QUALITY MATRIX MODEL

Designed by Philip Kotler, the Price Quality Matrix centers on the cross-section
between the two metrics that lend the model its name. By determining the
position of your products or services relative to the competition, retailers are
able to use the price and quality of each item to identify where they stand in
the market.

How can I apply this Pricing model?

When developing new products think of the price strategy before the
product is completed. Ask yourself, what are you trying to achieve? The cost-
plus pricing model has long gone as we expect goods and services to be
appropriately priced. One marquee hire company I worked with offered high
quality service and a very low price which was a superb-value strategy. It didn’t
work. Research showed that potential customers were suspicious and didn’t
place orders with them as they thought the product quality was low because
the price was low. They raised their prices adopting a high value strategy and
increased sales by 40%. When they introduce a new product, such as fans and
heaters, these follow the same premium pricing strategy. Be realistic and
research perceptions. ' If it sounds too good to be true then it usually is'. It's
essential to fit our price to the product's perceived quality.
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In recent years, product pricing has become a bigger issue than ever before,
thanks to the dynamic created by increased automation and the expansion of
online retailers. However, by developing a better understanding of the
connection between price and quality as described by Kotler’s model, you can
use the psychological aspects of product pricing to create a trust with
customers that will ultimately reap long-term rewards. Simply asking yourself
where each of your product offerings fits within the above categories can
shape a clearer vision of where you fit within the marketplace and the
possibilities for growth that lie ahead of you.

DRIP Marketing

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5) DIFFUSION OF INNOVATION

This model helps a business to understand how a buyer adopts and engages
with new products or technologies over time. Companies will use it when
launching a new product or service, adapting it or introducing an existing
product into a new market.

It shows how the product can be adopted by five different

categories/customer types and how to engage as a business with these types
of people:

How to use the Diffusion of Innovation- If you are launching a new tech
product, such as software, you can use this model which will help with
identifying the marketing materials needed for each group.

Examples of how it can be applied to digital marketing strategies- This is an

example based on launching new software to the different groups.

 Innovator: Show the software on key software sites such as Techcrunch,

or Mashable. Providing marketing material on the website, with relevant
information and lead to potential sales with downloads.
 Early Adopter: Create guides and add to the major software sites,
providing marketing material such as case studies, Guides and FAQs.

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  Early Majority: Blogger outreach with guest blog posts and provide links
to social media pages, key facts and figures, and 'how to' YouTube
videos.
 Late Majority: Encourage reviews, comparisons and share press
commentary on your website. Provide a press section and social proof
with information and links to reviews, testimonials, third party review
sites etc
 Laggards: It's probably not worth trying to appeal to this group

6) SEGMENTATION TARGETING POSITIONING

The STP model is useful when creating marketing communications plans since
it helps marketers to prioritise propositions and then develop and deliver
personalised and relevant messages to engage with different audiences.

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 7) SWOT ANALYSIS

The acronym SWOT stands for Strengths, Weaknesses, Opportunities and

Threats:

 Strengths are capabilities that enable your company to perform well

and must be leveraged.
 Weaknesses are characteristics that prevent your company from
performing well and must be addressed.
 Opportunities are trends, forces, events and ideas that your
company can capitalize on to succeed.
 Threats are possible events or forces beyond your control that your
company must either plan for or decide how to deal with.

strengths weaknesses

 End-user sales control and direction.  Customer lists not tested.

 Right products, quality and reliability.
 Product performance vs competitors.
 Better product life and durability.
 Spare manufacturing capacity.
 Some staff have experience of end-user
 Have customer lists.
 Direct delivery capability.
 Product innovations ongoing.
 Can serve from existing sites.
 Products have required accreditations.
 Processes and IT should cope.
 Management is committed and confident.
 Some gaps in range for certain sectors.
 We would be a small player.
 No direct marketing experience.
 We cannot supply end-users abroad.
 Need more sales people.
 Limited budget.
 No pilot or trial done yet.
 Don't have a detailed plan yet.
 Delivery-staff need training.
 Customer service staff need training.
 Processes and systems, etc
 Management cover insufficient.

opportunities threats

 Could develop new products.  Legislation could impact.

 Local competitors have poor products.
 Profit margins will be good.
 End-users respond to new ideas.
 Could extend to overseas.
 New specialist applications.
 Can surprise competitors.
 Support core business economies.
 Could seek better supplier deals.
 Environmental effects favour larger competitors.
 Existing core business distribution risk.
 Market demand very seasonal.
 Retention of key staff critical.
 Could distract from core business.
 Possible negative publicity.
 Vulnerable to reactive attack by major competitors.

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Example: Imaginary situation, the scenario is based on a business-to-business
manufacturing company, who historically rely on distributors to take their
products to the end user market. The opportunity, and therefore the subject
for the SWOT analysis, is for the manufacturer to create a new company of
its own to distribute its products direct to certain end-user sectors, which are
not being covered or developed by its normal distributors.

8) PRODUCT LIFECYCLE MODEL

The Product Life Cycle (PLC) describes the stages of a product from launch to
being discontinued.

 Introduction Introducing a new product where it's unknown and products

are small. The price is often higher as distribution is limited, and promotion
is personalised.

 Growth Here, the product is being bought and with volume, the price
declines. Distribution increases and promotion focuses on product benefits

 Maturity Here, the product competes with alternatives and pricing drops.
Distribution becomes intense (it’s available everywhere) and promotion
focuses on the differences to competitors’ products.

 Decline The product is reaching the end of its life and faces fewer
competitors. The price may rise and distribution has become selective as
some distributors have dropped the product. Promotion aims to remind
customers of its existence.

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9) 7 P’S MARKETING MIX

The marketing mix is about putting the right product or a combination thereof
in the place, at the right time, and at the right price. The difficult part is doing
this well, as you need to know every aspect of your business plan. The
following graphic shows the key elements of the 7Ps marketing mix.

7Ps are an extension of the 4Ps (Product, Promotion, Price, and Place) which
were designed at a time where businesses sold products, rather than services
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and the role of customer service in helping brand development wasn't so well
known. 4P’s referred to. The 7Ps helps companies to review and define key
issues that affect the marketing of its products and services and is often now
referred to as the 7Ps framework for the digital marketing mix.

Companies can use the 7Ps model to set objectives, conduct a SWOT analysis
and undertake competitive analysis. It's a practical framework to evaluate an
existing business and work through appropriate approaches whilst evaluating
the mix element as shown below (taking the example of Hubspot) and ask
yourself the following questions:

 Products/Services: Integrated toolset for SEO, blogging, social media,

website, email and lead intelligence tools. Q: How can you develop
your products or services?
 Prices/Fees: Subscription-based monthly, Software-As-Service model
based on number of contacts in database and number of users of the
service. Q: How can we change our pricing model?
 Place/Access: Online! Network of Partners, Country User Groups. Q:
What new distribution options are there for customers to experience
our product, e.g. online, in-store, mobile etc.
 Promotion: Directors speak at events, webinars, useful guides that
are amplified by SEO and effective with SEO. PPC Social media
advertising, e.g. LinkedIn. Q: How can we add to or substitute the
combination within paid, owned and earned media channels?
 Physical Evidence: Consistent branding across communications. Q:
How we reassure our customers, e.g. impressive buildings, well-
trained staff, great website?
 People: Investment in online services.Q: More sales staff are now
involved in conversion. Q: Who are our people and are there skills
gaps?
 Partners: Hubspot looks to form partnerships with major media
companies such as Facebook and Google plus local partners including
Smart Insights who it is collaborating with on research in Europe. Q:
Are we seeking new partners and managing existing partners well?

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10) AIDA MODEL

The AIDA Model identifies cognitive stages an individual goes through during
the buying process for a product or service. It's a purchasing funnel where
buyers go to and fro at each stage, to support them in making the final
purchase. It helps companies plan how and when to communicate during each
of the stages as consumers will be using different platforms, engaging at
different touchpoints and requiring different information throughout the
stages from various sources.

Let us understand the stages and the questions we should ask ourselves by
seeing how an award-winning hairdressing company, Francesco Group(FG)
used the model to launch their new salon.

 Awareness: creating brand awareness or affiliation with your product or

service.

 Q: How do we make buyers aware of our products or services? What is

our outreach strategy? What is our brand awareness campaign? Which tools
or platforms do we use? What should the messages be?

FG: Ran a PR campaign four months prior to launch, promoting award,

stylists, qualifications etc. and was reinforced through a DM campaign to
targeted customer groups.

 Interest: generating interest in the benefits of your product or service, and

sufficient interest to encourage the buyer to start to research further.

Q: How will we gain their interest? What is our content strategy? Social
proof available to back up our reputation? How do we make this
information available and where ? ie. on website, via videos, customer
ratings,

FG: Executed a direct mail campaign to offer a free consultation or hair cut
and finish. They used research to support that this would work, as females
are loyal if the offer is compelling.

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 Desire: for your product or service through an 'emotional connection',
showing your brand personality. Move the consumer from 'liking' it to
'wanting it'.

Q: What makes our product or service desirable? How do we interact

personally to make an emotional connection? Online chat? Immediate
response to Twitter feed? Share tips and advice?

FG: Close to the opening of the new salon, they ran exclusive local launch
events which was advertised through local press and social media. This
created a local buzz for 'people wanting an invite' and excited to see the
new salon.

 Action: CTA - Move the buyer to interacting with your company and taking
the next step ie. downloading a brochure, making the phone call, joining
your newsletter, or engaging in live chat etc.

Q: What are the call to actions and where do we place them? Is it easy for
consumers to connect and where would they expect to find it? Think about
which marketing channel/platform you are using and how to engage ie.
across emails, website, landing pages, inbound phone calls etc.

FG: Clear CTAS were positioned on the Facebook site (call to reserve), the
website (call to book) and local advertising (call in to receive discount or the
offer.

Note: An additional "R"(Retention) is sometimes added by some Marketers to

show the importance of ongoing relationship building to give the AIDAR model

11) ANSOFF MATRIX

The Ansoff Matrix is a strategic planning tool that provides a framework to

help executives, senior managers, and marketers devise strategies for future
growth. It is used to evaluate opportunities to increase sales through showing
alternative combinations for new markets (i.e. customer segments and
geographical locations) against products and services offering four strategies
as shown. Let’s look at Coca Cola’s example to understand this.

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 Market
Penetration: (EXISTING
Market, EXISTING Product)

Increase market share

within existing industries,
either by selling more
product to established
customers or by finding
new customers within
these markets. Coca-Cola
has been able to utilise
market penetration on an
annual basis by creating an
association between Coca-
Cola and Christmas, such as through the infamous Coca-Cola Christmas
advert, which has helped boost sales during the festive period.

Product Development: (EXISTING Market, NEW Product)

Developing new products for existing markets by thinking about how new
products can meet customer needs more closely and outperform competitors.
For instance, the launch of Cherry Coke in 1985 – Coca-Cola’s first extension
beyond its original recipe – and a strategy prompted by small-scale
competitors who had identified a profitable opportunity to add cherry-
flavoured syrup to Coca-Cola and resell it.

Market Development: (NEW Market, EXISTING Product)

Finding a new group of buyers for an existing product. The launch of Coke Zero
in 2005 was a classic example of this – its concept being identical to Diet Coke.
Whilst more females drink Diet Coke every day than any other soft drink
brand, it came to light that young men shied away from it due to its
consequential perception of being a woman’s drink. With its shiny black can
and polar opposite advertising campaigns, Coke Zero has successfully
generated a more ‘masculine’ appeal.

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Diversification: (NEW Market, NEW Product)
Related Diversification: Production of a new category of goods that
complements the existing portfolio, in order to penetrate a new but related
market. In 2007, Coca-Cola spent $4.1 billion to acquire Glaceau, including its
health drink brand Vitaminwater. With a year-on-year decline in sales of
carbonated soft drinks like Coca-Cola, the brand anticipates the drinks market
may be heading less-sugary future – so has jumped on board the growing
health drink sector.
Unrelated Diversification: Entry into a new industry that lacks important
similarities with the company’s existing markets. Coca-Cola offers official
merchandise from pens and glasses to fridges, therefore exploiting its strong
brand advocacy through this strategy.

12) BCG MATRIX

The Boston Consulting group’s product portfolio matrix (also known as

growth/share matrix) is designed to help with long-term strategic planning, to
help a business consider growth opportunities by reviewing its portfolio of
products to decide where to invest, to discontinue or develop products.
The Matrix is divided into 4 quadrants derived on market growth and relative
market share, as shown in the diagram below. Let’s look at the example of
Marks and Spencer :
Dogs: These are products
with low growth or market
share. The usual marketing
advice is to remove any
dogs from your product
portfolio as they are a
drain on resources.
(However, some can
generate ongoing revenue
with little cost.)
M&S: Autograph range. A
premium priced range of
men’s and women’s

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 clothing, with low market share and low growth. Although placed in the dog
category, the premium pricing means that it makes a financial contribution
to the company.
Question marks or Problem Child: Products in high growth markets with low
market share. It’s not known if they will become a star or drop into the dog
quadrant. These products often require significant investment to push them
into the star quadrant. The challenge is that a lot of investment may be
required to get a return.
M&S: Food. For years M&S refused to consider food and today has over 400
Simply Food stores across the UK. Whilst not a major supermarket, M&S
Simply Food has a following which demonstrates high growth and low market
share.
Stars: Products in high growth markets with high market share. Can be the
market leader though require ongoing investment to sustain. They generate
more ROI than other product categories.
M&S: Lingerie. M&S was known as the place for ladies underwear at a time
when choice was limited. In a multi-channel environment, M&S lingerie is still
the UK’s market leader with high growth and high market share.
Cash cows: Products in low growth markets with high market share. ‘Milk
these products as much as possible without killing the cow! Often mature, well
established products.
M&S: Classic range. Low growth and high market share, the M&S Classic range
has strong supporters.

13) RACE PLANNING

The RACE mnemonic summarises the key online marketing activities that need
to be managed as part of digital marketing

RACE covers the full customer lifecycle or marketing funnel from:

(Plan) > Reach > Act > Convert > Engage

1. REACH Reach involves building awareness of a brand, its products and

services on other websites and in offline media in order to build traffic by

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driving visits to different web presences like your main site, microsites or social
media pages.

2 ACT Act is short for Interact. It's about persuading site visitors or prospects
take the next step, the next Action on their journey when they initially reach
your site or social network presence

3. CONVERT. This is conversion to sale. It involves getting your audience to

take that vital next step which turns them into paying customers whether the
payment is taken through online Ecommerce transactions, or offline channels.

4. ENGAGE. This is long-term engagement that is, developing a long-term

relationship with first-time buyers to build customer loyalty as repeat
purchases using communications on your site, social presence, email and
direct interactions to boost customer lifetime value.

Example: Hospitality Marketing can use RACE Framework

14) SOSTAC ®

SOSTAC (r) is a marketing model developed by PR Smith. It is an acronym for

Smith's six fundamental facets of marketing:

o Situation – where are we now?

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 o Objectives – where do we want to be?

o Strategy – how do we get there?

o Tactics – how exactly do we get there?

o Action – what is our plan?

o Control – did we get there?

SOSTAC (r) contains a general marketing strategy which can be applied in

various commercial situations. It is an extension of the SWOT analysis, which
helps businesses get ready for marketing campaigns; the main difference is
that SOSTAC focuses more on the implementation stages of the process and on
marketing communications.Marketing experts have adapted SOSTAC to a
number of specific situations
o direct marketing
o electronic marketing.
Example: The steps in the process have also been adapted to the development
of internet security systems and company business plans.

15) MCKINSEY 7S MODEL

The McKinsey 7S model is a useful framework for reviewing an organisation’s

marketing capabilities from different viewpoints. It covers the key organisation
capabilities needed to implement strategy successfully, whether you're
reviewing a business, marketing or digital strategy. Let us look at it by
considering some of the issues related to introducing digital technology into an
organisation.

Hard Factors

 Strategy: The definition of key approaches for an organisation to achieve its

goals. Our example: The contribution of digital business in influencing and
supporting organisations’ strategy. The key issues are: Gaining appropriate
budgets and demonstrating, delivering value and ROI from budgets; Annual
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 planning approach; Techniques for using digital business to impact
organization strategy; Techniques for aligning digital business strategy with
organisational and marketing strategy.
 Structure: The organisation of resources within a company into different
business groups and teams. Our example: The modification of organisational
structure to support digital business. The key issues are: Integration of digital
marketing or e-commerce teams with other management, marketing
(corporate communications, brand marketing, direct marketing) and IT staff;
Use of cross-functional teams and steering groups; Insourcing vs
outsourcing.
 Systems: Business processes and the technical platforms used to support
operations. Our example: The development of specific processes, procedures
or information systems to support digital business. The key issues are:
Campaign planning approach-integration; Managing or sharing customer
information; Managing customer experience, service and content quality;
Unified reporting of digital marketing effectiveness; In-house vs external
best-of-breed vs external integrated technology solutions.

Soft Factors

 Style: The culture of the organisation in terms of leadership and interactions

between staff and other stakeholders. Our example: Includes both the way
in which key managers behave in achieving the organisation’s goals and the
cultural style of the organisation as a whole. The key issues are: Defining a
long-term vision for transformation; Relates to role of the digital marketing
or e-commerce teams in influencing strategy – is it dynamic and influential
or a service which is conservative and looking for a voice?
 Staff: The type of employees, remuneration packages and how they are
attracted and retained.
Our example: The breakdown of staff in terms of their background, age and
sex and characteristics such as IT vs marketing, use of contractors/
consultants. The key issues are: Insourcing vs outsourcing; Achieving senior
management buy-in/involvement with digital marketing; Staff recruitment
and retention, and virtual working; Staff development and training.

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 Skills: Capabilities to complete different activities. Our example: Distinctive
capabilities of key staff, but can be interpreted as specific skill-sets of team
members. The key issues are: staff skills in specific areas such as supplier
selection, project management, content management and specific e-
marketing media channels.
 Shared Values: Summarised in a vision and or mission, this is how the
organisation defines its raison d'etre. Our example: The guiding concepts of
the digital business or e-commerce organization which are also part of
shared values and culture. The key issues are: improving the perception of
the importance and effectiveness of digital business amongst senior
managers and staff it works with (marketing generalists and IT).

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