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Transcript of Marketing Strategies

ACHIEVING HEALTHCARES TRUE RETURN

Marketing Warfare Strategies

Suresh Kochattil

ACHIEVING HEALTHCARES TRUE RETURN

Fight for Survival Marketing warfare strategies are a type of strategies used in business and marketing with a military metaphor to craft a businesses strategy. They try to draw parallels between business and warfare, and then apply the principles of military strategy to business situations. Competing firms considered as analogous to sides in a military conflict, and market share considered as analogous to the territory which is being fought over.2

ACHIEVING HEALTHCARES TRUE RETURN

Zero Sum GameIn mature, low-growth markets, and when real GDP growth is negative or low, business operates as a zero-sum game. One person s gain is possible only at another person s expense. Success depends on battling competitors for market share.

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ACHIEVING HEALTHCARES TRUE RETURN

The use of marketing warfare strategiesStrategy is the organized deployment of resources to achieve specific objectives, something that business and warfare have in common. In the 1980s business strategists realized that there was a vast knowledge base stretching back thousands of years that they had barely examined.

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ACHIEVING HEALTHCARES TRUE RETURN

Learnings from WarsThe best book on marketing was neither written by a Harvard professor nor by an alumnus of General Motors, General Electric, or even Procter & Gamble. We believe that the best book on marketing was written by a retired Prussian general, Karl Von Clausewitz, entitled On War, which outlines the strategic principles behind all successful wars. Al Ries and Jack Trout in their book Marketing Warfare.

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ACHIEVING HEALTHCARES TRUE RETURN

Learning the TacticsMilitary strategy books like The Art of War by Sun Tzu, On War by von Clausewitz, and The Little Red Book by Mao Zedong have became business classics. From Sun Tzu we have learned the tactical side of military strategy and specific tactical proscriptions.

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ACHIEVING HEALTHCARES TRUE RETURN

First-mover advantage"Generally, he who occupies the field of battle first and awaits an enemy is at ease, he who comes later to the scene and rushes into the fight is weary." Sun Tzu From Von Clausewitz we can learn the dynamic and unpredictable nature of military strategy. Clausewitz felt that in a situation of chaos and confusion, strategy should be based on flexible principles.

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ACHIEVING HEALTHCARES TRUE RETURN

First-mover advantage"Generally, he who occupies the field of battle first and awaits an enemy is at ease, he who comes later to the scene and rushes into the fight is weary." Sun Tzu From Von Clausewitz they learned the dynamic and unpredictable nature of military strategy. Clausewitz felt that in a situation of chaos and confusion, strategy should be based on flexible principles.

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ACHIEVING HEALTHCARES TRUE RETURN

Learning from historyStrategy comes not from formula or rules of engagement, but from adapting to what he called "friction" (minute by minute events). From Mao Zedong they learned the principles of guerrilla warfare. The first major proponents of marketing warfare theories was Philip Kotler and J. B. Quinn.

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ACHIEVING HEALTHCARES TRUE RETURN

Effective StrategyAn effective strategy first probes and withdraws to determine opponents' strengths, forces opponents to stretch their commitments, then concentrates resources, attacks a clear exposure, overwhelms a selected market segment, builds a bridgehead in that market, and then regroups and expands from that base to dominate a wider field. JB Quinn

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ACHIEVING HEALTHCARES TRUE RETURN

Aggressive and PassiveBy the turn of the century marketing warfare strategies had gone out of favour. It was felt that they were limiting. There were many situations in which non-confrontational approaches were more appropriate. The Strategy of the Dolphin was developed in the mid-1990s to give guidance as to when to use aggressive strategies and when to use passive strategies.

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ACHIEVING HEALTHCARES TRUE RETURN

Dolphin StrategyThis was developed by John C. Lilly's observations of dolphins. Among other admirable behaviors, Lilly was drawn to the creativity that dolphins often display when not given expected rewards in training situations. Instead of continuing to do the same tricks, they may produce innovative behaviors in the expectation of improving their chances of being rewarded.

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ACHIEVING HEALTHCARES TRUE RETURN

Dolphin StrategyThe dolphin user may employ their own unique strategies for resolving dilemmas depending on the situation. If one way is unsuccessful, dolphins respond with other possibilities. They learn from their mistakes and the mistakes of others. Dolphins see the possibility of both potential scarcity and potential abundance, through solutions that involve "breakthrough" win-win strategies that build new value.

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ACHIEVING HEALTHCARES TRUE RETURN

Synergy and CompetitionToday most business strategists stress that considerable synergies and competitive advantage can be gained from collaboration, partnering, and co-operation. They stress not how to divide up the market, but how to grow the market. Such are the vicissitudes of business theories.

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ACHIEVING HEALTHCARES TRUE RETURN

Strategy and TacticsWeapons may change, but warfare itself, is based on two immutable characteristics: strategy and tactics. The difference today is that the same strategic principles of war guide both military commanders and companies, whether they surge ahead into an invasion of the enemy in the battlefield or consumers and competition in the marketplace.

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ACHIEVING HEALTHCARES TRUE RETURN

Offensive marketing warfare strategiesFrontal Attack Envelopment Strategy Leapfrog Strategy Flanking Attack

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ACHIEVING HEALTHCARES TRUE RETURN

Offensive marketing warfare strategiesOffensive marketing warfare strategies are used to secure competitive advantages Market leaders, runner-ups or struggling competitors are usually attacked. Designed to obtain market share, key customers, high margin market segments, or high loyalty market segments from a target competitor.

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ACHIEVING HEALTHCARES TRUE RETURN

Fundamental PrinciplesAssess the strength of the target competitor. Consider the amount of support that the target might muster from allies. Choose only one target at a time. Find a weakness in the target s position. Attack at this point. Consider how long it will take for the target to realign their resources so as to reinforce this weak spot. Launch the attack on as narrow a front as possible. Whereas a defender must defend all their borders, an attacker has the advantage of being able to concentrate their forces at one place. Launch the attack quickly. The element of surprise is worth more than a thousand tanks.18

ACHIEVING HEALTHCARES TRUE RETURN

Frontal AttackThis is a direct head-on assault. It usually involves marshaling all the resources including a substantial financial commitment. All parts of the company must be geared up for the assault from marketing to production. It usually involves intensive advertising assaults and often entails developing a new product that is able to attack the target competitors line where it is strong. It often involves an attempt to liberate a sizable portion of the target s customer base.

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ACHIEVING HEALTHCARES TRUE RETURN

Frontal attacks are rareIn actuality, frontal attacks are rare. There are two reasons for this. Firstly, they are expensive. Many valuable resources will be used and lost in the assault. Secondly, frontal attacks are often unsuccessful. If defenders are able to re-deploy their resources in time, the attacker s strategic advantage is lost. You will be confronting strength rather than weakness. Also, there are many examples (in both business and warfare) of a dedicated defender being able to hold-off a larger attacker.20

ACHIEVING HEALTHCARES TRUE RETURN

Frontal attacks are possibleThe strategy is suitable when the market is relatively homogeneous brand equity is low customer loyalty is low products are poorly differentiated the target competitor has relatively limited resources the attacker has relatively strong resources

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ACHIEVING HEALTHCARES TRUE RETURN

Envelopment StrategyEnvelopment Strategy, also called encirclement strategy is a much broader but subtle offensive strategy. It involves encircling the target competitor. This can be done in two ways. You could introduce a range of products that are similar to the target product. Alternatively, the encirclement can be based on market niches rather than products.

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ACHIEVING HEALTHCARES TRUE RETURN

Envelopment StrategySimilar product strategy: Each product will liberate some market share from the target competitor s product, leaving it weakened, demoralized, and in a state of siege. If it is done stealthily, a full scale confrontation can be avoided. Market niche strategy: The attacker expands the market niches that surround and encroach on the target competitor s market. This encroachment liberates market share from the target.

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ACHIEVING HEALTHCARES TRUE RETURN

Envelopment StrategyThe envelopment strategy is suitable when: the market is loosely segmented some segments are relatively free of well endowed competitors the attacker has strong product development resources the attacker has enough resources to operate in multiple segments simultaneously the attacker has a decentralized organizational structure

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ACHIEVING HEALTHCARES TRUE