Developing Marketing

Strategies and Plans

Three V’s Approach to
Marketing
Define
Define the
the value
value segment
segment

Define
Define the
the value
value proposition
proposition

Define
Define the
the value
value network
network
 Porter’s Value Chain
Tool for identifying ways to create
more customer value
Porter’s Generic
Strategies
Overall Cost Leadership

Differentiation

Focus
 Benchmarks

Organizational Competitor
costs costs
and and
performance performance
measures measures
Core Business Processes
• Market-sensing process
• New-offering realization process
• Customer acquisition process
• Customer relationship
management process
• Fulfillment management process
 Characteristics of Core
Competencies

• A source of competitive
advantage

• Applications in a wide variety of

markets

• Difficult to imitate
The Strategic Planning
Gap
Ansoff’s Product-Market
Expansion Grid
 Video
• Ansoff’s matrix
 Diversification
• Concentric Diversification
New Products( Synergy with old) …New Customers

• Horizontal Diversification
New Products…..Current Customers

• Conglomerate Diversification
SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats
 SWOT Analysis
Strengths (Internal) – The internal competencies
of the company. What do we do well. Think not
in terms of products, but more of methods. For
example, Wal-mart has great inventory
operations that leads to the ability to charge
lower prices. HUL has Mega Brands

Weaknesses (Internal) – What does our

company not do well. Is there high employee
turnover? Are we lacking in product design?
Poor signal strength of Idea mobiles
 SWOT Analysis
Opportunities (External) – What opportunities
exist in the market that our company can take
advantage of. 3G spectrum, Biotechnology

Threats (External) – What events and trends in

the market may threaten the way we do business.
This can include the emergence of competitors,
demographic changes and economic forces. Ban on
Plastic Bags in Delhi
 Five Forces Analysis
The Five Forces Analysis allows the manager to
discover opportunities and threats within the
market.

• Rivalry – How strong is the competition? Is it

monopolistic or are there many competitors?
E.g. Pepsi-Coke

• Power of Suppliers – How much influence do

the suppliers have over business operations?
Are there multiple suppliers? E.g. Intel
 Five Forces Analysis
• Power of Buyers – How much influence do the buyers
have over the business operations? How dependant are
they on your product?

• Threat of New Entrants – How easy is it for potential

competitors to enter this industry? Entry of Royal Cola,
Icelings in the market

• Threat of Substitutes – Are there other products that can

substitute for your product? Ex: Airplane travel
replacing trains.
 BCG MATRIX

• It is a portfolio planning model which is based

on the observation that a company’s business units
can be classified in to four categories:
 Stars
 Question marks
 Cash cows
 Dogs

• It is based on the combination of market

growth and market share
 Market Share
• Market share is the percentage of the total
market that is being serviced by your company,
measured either in revenue terms or unit volume
terms.

• Relative Market Share

• RMS = Business unit sales this year

Leading rival sales this year

• The higher your market share, the higher

proportion of the market you control.
 Market Growth Rate
• Market growth is used as a measure of a
market’s attractiveness.

• MGR = Individual sales - individual sales

this year last year
Individual sales last year

• Markets experiencing high growth are ones

where the total market share available is
expanding, and there’s plenty of opportunity
for everyone to make money.
 STARS
High growth, High market
share
• Stars are leaders in business.
• They also require heavy investment, to
maintain its large market share.
• It leads to large amount of cash
consumption and cash generation.
• Attempts should be made to hold the
market share otherwise the star will
become a CASH COW.
 CASH COWS
Low growth , High market share

• They are foundation of the company and often

the stars of yesterday.
• They generate more cash than required.
• They extract the profits by investing as little cash
as possible
• They are located in an industry that is mature,
not growing or declining.
 DOGS
Low growth, Low market
share
• Dogs are the cash traps.
• Dogs do not have potential to bring
in much cash.
• Number of dogs in the company
should be minimized.
• Business is situated at a declining
stage.
 QUESTION MARKS
High growth , Low market
share
• Most businesses start of as Question marks.
• They will absorb great amounts of cash if the
market share remains unchanged, (low).
• Why question marks?
• Question marks have potential to become star
and eventually cash cow but can also become a
dog.
• Investments should be high for question marks.
 Video
• BCG Matrix
 Exercise
• Company : FIFA
Product Market Market Growth
Share
Kaka 54% 10%
Messi 40% 25%
Villa 15% 30%
Dunga 10% 5%

• Draw its BCG Matrix

 GE Matrix

 Developed by McKinsey & Company in

1970’s.
 GE is a model to perform business
portfolio analysis.
 GE is rated in terms of ‘Market
Attractiveness & Business Strength’
 Enlarged & Sophisticated version of
BCG.
 Classification
Business Strength
Strong Medium Weak
5.00
High
Market Attractiveness

3.67
Medium

2.33
Low

5.00 3.67 2.33 1.00

 Market Attractiveness
 Annual market growth rate
 Overall market size
 Historical profit margin
 Current size of market
 Market structure
 Market rivalry
 Demand variability
 Global opportunities
 Business Strength

 Current market share

 Brand image
 Brand equity
 Production capacity
 Corporate image
 Profit margins relative to competitors
 R & D performance
 Managerial personal
 Promotional effectiveness
 Video
• The Five Competitive Forces That Shape
 PESTEL Analysis
• A systematic way of looking at the external
factors which potentially impact the
organization

– Political
– Economic
– Socio-Cultural
– Technology
– Environmental
– Legal
 PESTEL
• Political : Global , Regional, National

– Tax Politics
– Labor Market Politics
– Development in trade and industry
– Agricultural Politics
– Public Interference
– Trade Political Conditions
– Foreign Trade Regulations
– Social Welfare Policies
 PESTEL
Economic :

Business cycles
Interest rates
Money supply
Inflation rates
Unemployment
Disposable income
Private consumption and available income
Other costs
Development of the rate of exchange
 PESTEL
Socio-Cultural

– Demographic conditions
– Change in values / attitudes
– Change in lifestyle
– Attitudes toward work / spare time
– Education conditions
– Work environment conditions
– Health conditions
– Change in income distribution
– Social mobility
– Consumerism
 Population and
Demographics
• Population • Educational
growth groups
• Population age • Household
mix patterns
• Ethnic markets • Geographical
shifts
Needs and Trends

Fad

Trend

Megatrend
 PESTEL
• Technological

– Development in R&D
– New patents and products
– Knowledge tool and technique used to transform input
(Raw Material, Information) into output (Product and
Service)
– Speed of technology transfer
– Government spending on research
– Rates of obsolescence
 PESTEL
• Environmental

– Ecology
– Pollution conditions
– “Green Energy”
– Energy conservation
– Waste handling
– Environmental protection laws
 PESTEL
• Legal

– Labor market legislation

– Product safety and approvals
– Competition laws
– Employment laws
– Product safety
 Video
• Kotler on Marketing during Economic
Uncertainty
 Projects
• Groups to submit their titles/product
details by this Friday

• Go for some new businesses/

products

• Explore your creativity

 Example
Maha-Bali

Current Scenario - Carrier

Complexities
Types of Bikes with respect to carriers
• Bikes with no carriers
• Bikes with carriers – an unfavorable product
Bike with no carriers
 Bike with no carriers
• There has to be a pillion rider to
carry the luggage.
• If hanging on handle, bike becomes
unstable.
• A lot of difficulties for rider during the
entire trip.
Bike with carriers
 Bike with carriers
• Cost of accessory.
• Comfort problem of the pillion rider.
• Problems in traffic.
• Problems in balancing (even when
not carrying any luggage).
• Unnecessary increase in weight.
• Unnecessary waste of space
MahaBali – Our Product
Different Views of our
Product
Features Of Our Products
• Foldable shelves.
• Three sides and a base for carrying purpose.
• Can carry 5-7 kg in each side (Overall 20 –
30).
• Acts as a cushion in the absence of luggage.
• Comfortable for the pillion rider in the absence
of luggage.
• Cost effective.
 Benefits Of Our Products
• Foldable
• Flexible
• Inexpensive
• Space effective
• Volume efficient
• Less weight
• pillion rider friendly
• Washable
• Easy to manufacture
 Target Customers

• Rural Markets (U.P.)

• Small Town
• Lower middle class
Inventory requirements and
Production Costs for single
unit
• Cloth – 1.5metres – Rs 25
• Velcro – 2metres – Rs 12
• Tailoring – Rs 55
• Total cost – Rs 92
 Marketing Plan
A marketing plan is the central
instrument for directing and
coordinating the marketing effort.

It operates at a strategic and

tactical level.
 Levels of a Marketing
Plan
• Strategic • Tactical

– Target marketing – Product features

decisions – Promotion
– Value proposition – Merchandising
– Analysis of – Pricing
marketing – Sales channels
opportunities
– Service
Strategic Planning,
Implementation,
and Control Processes
 Planning
• Corporate Planning
Ranbaxy plan for 25% growth in its revenue in 2010
• Division Planning
Pharma division plan to have a growth of 30%
Generics division plan to grow by 40%
• Business Planning
Mature product business plan to grow by 15%
New product business plan to grow by 30%
• Product Planning
Growth for Volini gel is projected at 20%
 Marketing Information
System
A marketing information system consists
of people, equipment, and procedures to :

•Gather
•Sort
•Analyze
•Evaluate, and distribute

needed, timely, and accurate information to

marketing decision makers.
Internal Records and
Marketing Intelligence

Sales
Order-to-Payment
Information
Cycle
System

Databases, Marketing
Warehousing, Intelligence
Data Mining System
Steps to Improve Marketing
Intelligence
Train
Train sales
sales force
force to
to scan
scan for
for new
new developments
developments

Motivate
Motivate channel
channel members
members to
to share
share intelligence
intelligence
Network
Network externally
externally
Utilize
Utilize aa customer
customer advisory
advisory panel
panel
Utilize
Utilize government
government data
data resources
resources
Purchase
Purchase information
information
Collect
Collect customer
customer feedback
feedback online
online
 Sources of Competitive
Information
• Independent customer goods and
service review forums
• Distributor or sales agent feedback
sites
• Combination sites offering customer
reviews and expert opinions
• Customer complaint sites
• Public blogs