Benison Cu, CPM

Professor, Marketing Management Department

De la Salle University
 Current Marketing
Developments
People are more different
Kids do 5.7 things than compared to 1.7
things by adults (and less for men)
Traditional marketing approaches are
under fire
In the US, 54% of consumers have banned
telemarketing
In the Philippines, there is a shift from
traditional advertising to below-the-line and
non-traditional marketing
 Current Marketing
Developments
Purchase decisions are made in an
instant
An average time for a consumer to make a
decision on a brand is at 2.6 seconds
Markets are much more competitive
than ever before
Intensity of competition has tripled in the
last ten years
 Current Marketing
Developments
Products are quickly imitated and
outdated
Lifecycle has been shorter over the same
period of time compared to previous year
by 70%
75% still trust personal
recommendation when deciding to buy
With the value of marketing
60% of brand investment impacts the
future, and not this year
 Current Marketing Developments
Businesses are still incredibly short term
Investors are looking at a maximum of 4
years ROI
Marketing talents are essential to business
leadership
Focusing Marketing Strategy with Segmentation, Targeting and
Positioning
Finding the Relevant Segmenting
Dimensions
A Best Practice Approach for
Segmenting Product-Markets
Marketing Strategy Planning, Competitors, Company, and
External Market Environment
Simplified Buyer Behavior Model
 Competitive Stance
Market Leader
A firm that dominates a market
Market Challenger
Runner-up companies that aggressively attack
competitors to get more market shares
Market Follower
Seeks stable market shares and profits by
following competitors product offers, prices,
and marketing programs
 Competitive Stance
Market Nicher
Smaller firms in the market or even large
firms that lack established position uses this
strategy
Specializes in serving market niches that
competitors overlook or ignore
 Competitive Stance
They avoid direct confrontation with the
majors by specializing along market,
customers, products, or marketing-mix lines
Through smart niching, low-share firms in an
industry can be profitable as their large
competitors
Cash Flows across Businesses in the BCG Portfolio Model

Question
Stars
Marks
Growth rate (cash use)

High

Cash
Flows

Low Cash cows Dogs

High Low
Relative market share
Desired direction of business development
Product Life Cycle Key Issues
 Why is Niching profitable?
The company ends up knowing the target
market so well that it meets its need
better than other firm
The company can charge higher because
of the added value
Nichers try to find one or more market
niches that are safe and profitable
 Why is Niching profitable?
An ideal market is one that is big enough
to be profitable and has a growth potential
Niche markets are of little interest to big
competitors
Companies should build skills and
customer goodwill to defend itself from
major threats as the niche grows big and
becomes attractive to competitors
 Key Idea to Nichemanship
Specialization!
Different types of specialization
Customer size Nicher
Geographic Nicher
Quality-price Nicher
Service Nicher
Many companies practice multiple niches
Always watch competitors closely
Find a competitive marketing strategy that
positions it effectively
 Application of strategy
Heavy advertising directed at target
segment
Selective media vehicles directed to the
market
Use extensive sales force efforts focused
on potential customers in target segment
Use incentives to encourage new product
sales to target accounts
 Application of strategy
Advertising and sales appeals stress
generic benefits of new product type
Extensive introductory sales promotion to
create trial usage, but must be focused on
target segment
Additional product development limited to
improvements or modifications to increase
appeal to target segment
 Application of strategy
Give free trial of product
Provide liberal return policies
Use penetration pricing technique
Can use market skimming, but must
provide an lower end version
Extend credit terms
Provide trade promotion for better push
strategy
At the end of the Day . . .
 The Search for Synergy:
A Top Management Perspective

What do we want?

What do our employees,

intermediaries, and What do our
other partners want? customers want?

What can we do?

Guidelines for Market-Driven Strategic Management

1. Create Customer focus 9. Measure and manage

throughout the business. customer expectations.
2. Listen to the customer. 10. Build customer relationships
3. Define and nurture your and loyalty.
distinctive competence. 11. Define the business as a
4. Define marketing as market service business.
intelligence. 12. Commit to continuous
5. Target customers precisely. improvement and innovation.
6. Manage for profitability, not 13. Manage culture along with
sales volume. strategy and structure.
7. Make customer value the 14. Grow with partners and
guiding star alliances.
8. Let the customer define quality 15. Destroy marketing
bureaucracy.

Source: Frederick E. Webster, Jr., Executing the New Marketing Concept, Marketing
Management 3, no. 1 (1994), p. 10.
 Bibliography
Boyd, Harper, Jr. et al. Marketing
Management. McGraw Hill, 2008
Harris, Elaine. Customer Service. Prentice
Hall, 1996
Holt, Charles. Market, Games, & Strategic
Behavior. Pearson, 2007
Keller, Kevin. Strategic Brand
Management. Pearson, 2008
 Bibliography
Kotler, Philip. Marketing Management.
Pearson, 2008
Perreault, William, Jr. et al. Basic
Marketing. McGraw Hill, 2008
Walker, Orville, Jr. et al. Marketing
Strategy. Irwin, 1996
Zeithaml, Valerie, et al. Service Marketing.
McGraw Hill, 2006
 Thank you
and have a nice day
Benison Cu, CPM
Professor, Marketing Management
Department
De la Salle University
Consultant, Association of Training
Institutions for Foreign Trade in Asia
and the Pacific (ATIFTAP)