Topic 1: Introduction to Marketing Strategy

Marketing Strategy is the fundamental goal of increasing sales and

achieving a sustainable competitive advantage. Marketing Strategy
includes all basic, short-term, and long-term activities in the field of
marketing that deal with the analysis of the strategic initial
situation of a company and the formulation, evaluation and
selection of market-oriented strategies and therefore contributes to
the goals of the company and its marketing objectives.
The process generally begins with a scan of the business
environment, both internal and external, which includes
understanding strategic constraints. It is generally necessary to try
to grasp many aspects of the external environment, including
technological, economic, cultural, political and legal aspects.
Goals are chosen. Then, a marketing strategy or marketing plan is
an explanation of what specific actions will be taken over time to
achieve the objectives. Plans can be extended to cover many years,
with sub-plans for each year, although as the speed of change in
the merchandising environment quickens, time horizons are
becoming shorter.
Ideally, strategies are both dynamic and interactive, partially
planned and partially unplanned, to enable a firm to react to
unforeseen developments while trying to keep focused on a specific
pathway; generally, a longer time frame is preferred. There are
simulations such as customer lifetime value models which can help
marketers conduct "what-if" analyses to forecast what might happen
based on possible actions, and gauge how specific actions might
affect such variables as the revenue-per-customer and the churn
rate. Strategies often specify how to adjust the marketing mix; firms
can use tools such as Marketing Mix Modeling to help them decide
how to allocate scarce resources for different media, as well as how
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to allocate funds across a portfolio of brands. In addition, firms can

conduct analyses of performance, customer analysis, competitor
analysis, and target market analysis. A key aspect of marketing
strategy is often to keep marketing consistent with a company's
overarching mission statement.
Marketing strategy should not be confused with a marketing
objective or mission. For example, a goal may be to become the
market leader, perhaps in a specific niche; a mission may be
something along the lines of "to serve customers with honor and
dignity"; in contrast, a marketing strategy describes how a firm will
achieve the stated goal in a way which is consistent with the
mission, perhaps by detailed plans for how it might build a referral
network, for example. Strategy varies by type of market. A wellestablished firm in a mature market will likely have a different
strategy than a start-up. Plans usually involve monitoring, to assess
progress, and prepare for contingencies if problems arise.
An organization's strategy combines all of its marketing goals into
one comprehensive plan. A good marketing strategy should be
drawn from market research and focus on the right product mix in
order to achieve the maximum profit potential and sustain the
business. The marketing strategy is the foundation of a marketing
plan.

Topic 2: Strategic Importance of a Market

Two dimensions determine the strategic importance of a firm:
I. Market Potential
II. Learning Potential
I.
i.

Market Potential:
following:

Current Market Size

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Market Potential depends on the

ii.

Growth Expectations
II.
(i)

(ii)

Learning Potential: There are two drivers of learning

potential:
Driver 1: Pace at which relevant technologies are evolving
(leading
edge
customers,
innovative
competitors,
universities, local research centres, and firms in related
industries)
Driver 2: Presence of sophisticated and demanding
customers for a particular product or service

Topic 3: Ability to Exploit a Market

i.
ii.

Height of entry barriers

Intensity of competition in the market

Topic 4: Foundation of Marketing Strategy

Segmentation, Targeting and Positioning
The goal of the STP process is to guide the organization for the
development and implementation of an appropriate marketing mix.

Topic 5: Segmentation:
Basic Test of Segmentation
H Homogeneity
H Heterogeneity
M Meaningful
Criteria for Effective Segmentation
MASDA
MAPS
MASDA
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MAPS

M Measurable

M Measurable

A Accessible

A Accessible

S Sustainable
D Distinguishable

Profitable (only dis dfrnt from MASDA)

S Sustainable

A Actionable

Topic 6: Three Basic Steps to Strategy Formulation

Step 1: Segmentation Identification
Step 2: Market Selection (How its different from Segmentation
Identification). See Pg.5, this step 2 is similar to Target Market
Segment
Step 3: Positioning

Topic 7: Positioning

(Example- Dettol)

What is Positioning?
Positioning is placing a product or service in the mind of
consumer.
Positioning is not what you do to a product; positioning is what you
do to the mind of the consumer Al Ries and Jack Trout
Positioning is increasingly becoming critical to high technology
products.
Three Level Positioning Model
Level 1: Core Product, Technical Specification, Price
Level 2: Extended Product
Distribution and Sales, Service and Support System.
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Level III: Total Product, Corporate Image

Five Steps in Positioning
Documenting
Deciding
Differentiating
Designing
Delivering
Documenting
Documenting: What benefits are the most important to your current
and potential customers?
Deciding: What image do you want your current and potential
customers to have of your organization?
Differentiating: Which competitors do you want to appear different
from, and what are the factors that you will use to make your
organization different from them?
Designing: How
differences?

will

you

develop

and

communicate

these

Delivering: How will you make good on what youve promised, and
how do you make sure that you have delivered?

Topic 8: Three Step Strategy Formulation Process for

Selecting Target Markets
Step 1: Identify Market Segments
Step 2: Target Market Segments
Step 3: Position the Segment
Step 1: Identify Market Segments
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Market Segment A:

Segment Name
-------------------------

Market Segment B:

Segment Name
-------------------------

Market Segment X:

Segment Name
-------------------------

Step 2: Target Market Segmentation

(Select key segments for marketing activities)
Primary Market

Segment Name
---------------------------

Target Market Profiles and Needs

Secondary Market

Segment Name
---------------------------

Target Market Profiles and Needs

Step 3: Position the Segments
(Formulate a unique marketing strategy)
Primary Market

---------------------------Segment Name

Competitive Advantage
Positioning Strategy
Secondary Market

-------------------------Segment Name

Competitive Advantage
Positioning Strategy
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Topic 9: Strategies for finding Niches

1. Product /Service Modification
2. Customer Service Variations
3. Different Distribution Channels
4. Target Communications
5. Variable Pricing

Topic 10: Niche Strategy

What is a Market Niche?
A Market Niche is a small segment that offers incremental business
opportunity. It is a small sub segment in a market.

What is Nichemanship?
Nichemanship is the process whereby a company integrates
marketing and managerial activities to optimise its competitive
market position.
Characteristics of a Market Niche
1. The company determines those products that it can best offer
given its distinct competencies, competition and customer
needs.
2. The company designs specialised goods and services to meet
identified market demands.
3. By only focusing its energies on specific target markets, the
company is more efficient than its large counterparts in
satisfying its customer database.
4. Change is sought. Market niche companies are not looking to
be like everyone else but to seek a new and better way to
conduct business.
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5. A Management commitment to excellence in all endeavors is

the
market
niche
companys
underlying
operating
philosophy.An environment for growth is fostered.
6. These firms are trend setters/ trend spotters,
innovators, and creative marketing strategists.

Market

Assessment of a Niche Marketer

1. Do you know your firms
competitive Advantage?

strengths,

weaknesses

and

2. Do you understand your customers, inside and out?

3. Is your company dependent on one or a limited number of
customers?
4. Have you developed an ongoing customer information system?
5. How well do you know your competition? (For example, why
customers use your competitors products and how can you get
them to switch?)
6. What is your positioning strategy? Have you developed and
communicated a clear image for your product/product line?
How is your product differentiated from that of your rivals?
7. Have you created your own safe haven in the market?
8. Are your resources spread too thin? (Watch for overexpansion ,
attracting too many niches)
9. Is your marketing program synergistic? Is it consistent with
your financial, managerial, operations and R&D management?
10. Are you monitoring shifts in the markets place
and responding quickly to them?
Evaluation of A Niche
S Size
I Identifiability
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G Growth
A Accessibility
A Absence of Vulnerability
S - Size: Is the size of the niche
to serve customers

(sub segment in the market)

big enough

profitability?
I -Identifiability: Is the niche easily identifiable in the market?
G - Growth Does the niche has adequate growth potential?
A - Accessibility Is the niche accessible through different media at
low cost?
A -Absence of Vulnerability: Is the niche hospitable without any
easy attack by competitors?

Topic 11: Business Model

A successful business model results from business level strategies
that create a competitive advantage over its rivals. A profitable
business model depends on providing the customer with the most
value while keeping cost structures viable.
To develop a successful business model, strategic managers must
devise a set of strategies that determine:
How to DIFFERENTIATE their product?
How to PRICE their product?
How to SEGMENT their markets?
How WIDE A RANGE of products to develop?
The term business model has been used in a variety of contexts and
has been defined in many different ways. Business model is the
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method by which a firm builds and uses its resources to offer its
customer better value and to make money in doing so. The business
model describes the content, structure, and governance of
transactions designed so as to create value through the exploitation
of business opportunities. A business model can be defined as a
concise representation of how an interrelated set of decision
variables in the areas of venture strategy, architecture and
economics are addressed to create sustainable competitive
advantage in defined markets. A business model articulates the
logic, the data and other evidence that supports a value proposition
for the customer, and a viable structure of revenues and costs for
the enterprise delivering that value.
A business model has the following six fundamental components:
i. Value Proposition
ii. Customer
iii. Internal Processes/Competencies
iv. External Positioning
v. Economic Model
vi. Personal/Investor factors.

Topic 12: Industry Environment

Different
industry
environments
opportunities and threats.

present

different

A companys business model and strategies have to change to

meet the environment.
Companies must face the challenges of developing and maintaining
a competitive strategy in:
Fragmented Industries
Mature Industries
Embryonic Industries
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 Declining Industries
Growth Industries
A Company must decide on:
1. Customer needs WHAT is to be satisfied
2. Customer groups WHO is to be satisfied
3. Distinctive competencies HOW customers are to be satisfied
These decisions determine
strategies are formulated & implemented
model into action.

which
to put a business

Topic 13: Transition from Introduction to Maturity

A strong business model enables a smooth transition from
introduction to maturity.
An investment strategy determines the type of resources and
capital human, functional and financial that must be spent
to configure a companys value chain so that it can
successfully pursue a business model over time.
A companys investment depends on the level of competition and
source of the companys competitive advantage.
1. Competitive Advantage of companys business model
2. Stage of the industry life cycle
Managers must evaluate the potential return (on investment)
by investing in a particular business model against the cost
Two factors are crucial in choosing investment strategy
i.
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CA that can be obtained in an industry from a business model

relative to its competitors

ii.

Stage of the industrys life cycle in which the company is

competing

Topic 14: Strategies during Embryonic Stages

i.
ii.
iii.

Share Building Strategies

Development of distinctive competencies and competitive
advantage
Requires capital to develop R&D and sales/service
competencies.

Topic 15: Strategies during Growth Stages

i.

Maintain relative competitive position

ii.

Strengthen business model to prepare to survive industry

shakeout

iii.

Requires investment to keep up with rapid growth of the

market

Topic 16: Strategies during Mature/Shakeout Stage

Increase share during fierce competition
Invest in share-increasing strategies at expense of weak
competitors.
Weak companies should exit the industry during the harvest
stage.
Maturity stage hold-and-maintain to defend business model
Dominant companies want to reap the reward of prior
investments.

Topic 17: Strategies to Deter Competitors in

Maturity Stage
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1) Product Proliferation
2) Price Cutting
3) Maintaining Excess Capacity

Topic 18: Factors Affecting Growth Rate

1. Relative advantage
2. Compatibility
3. Availability of Complimentary Products
4. Complexity
5. Observability
6. Trialability

Topic 19: Decline Stage

Industry decline because of the following reasons:
1. Technological Changes
2. Social Trends
3. Changing Demographics
Examples: Rail Road, Steel, Tobacco, Lime Stone

Topic 20: Strategies during Decline Stage

1. Divesting
2. Harvesting
Divesting suits those companies
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 That spot decline before it becomes detrimental and when the

assets of the company are still valued by others
Recover most of its investment by selling early
Ex:In a move to raise money, GOI divested 10% of its stake in
EIL to raise around INR 730 crore.
Harvesting suits those companies
That foresee a steep decline and intense competition
That does not have resources to fight the competition
That intend to exit a declining industry and optimise cash flow
ExJP Cement sold off its cement plants in 6 states for an
enterprise value of Rs. 16500 crore to Ultratech Cement Ltd.

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