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MARKETING STRATEGY-AN OVERVIEW 1 MARKETING STRATEGY AN OVERVIEW Slide 2 MARKETING STRATEGY-AN OVERVIEW 2 Central Role Of Marketing Marketing is the process through which a firm creates value for its customers. After creating the value the firm is entitled to capture a portion of it for itself through pricing. To create value on a sustained basis there has to be a marketing strategy. Slide 3 MARKETING STRATEGY-AN OVERVIEW 3 The Major Activities. Marketing strategy involves the following key activities. Selecting a target market. Positioning the product in the target consumers mind. Planning the market activities to achieve the desired positioning. Slide 4 MARKETING STRATEGY-AN OVERVIEW 4 SCHEMATIC OF MARKETING PROCESS. MARKETING ANALYSIS (THE 5CS) CUSTOMERS COMPANY COMPETITORS COLLABORTORS CONTEXT MARKET SEGMENTS TARGET MARKET SELECTION PRODUCT & SERVICE POSITIONING MARKETING MIX (THE 4 PS) PRODUCT PLACE PROMOTION CREATING VALUE CAPTURING VALUE CUSTOMER ACQUISITION CUSTOMER RETENTION PROFITS SUSTAINING VALUE PRICING Slide 5 MARKETING STRATEGY-AN OVERVIEW 5 5 Cs ANALYSIS Customer-----what needs to satisfy? Company-------what skills, competency. To meet these needs? Competition who competes to meet. These needs? Collaborates- who do we enlist to. Help? How ? what are their. Cost structures. More &. More seen as partners. Context----------- restrictions/limitations. Cultural, technological, Legal. (Pest). Slide 6 MARKETING STRATEGY-AN OVERVIEW 6 Competition. Slide 7 MARKETING STRATEGY-AN OVERVIEW 7 Customer Needs. Slide 8 MARKETING STRATEGY-AN OVERVIEW 8 Company Competencies. Slide 9 MARKETING STRATEGY-AN OVERVIEW 9 Collaborators. Slide 10 MARKETING STRATEGY-AN OVERVIEW 10 EVERYTHING BEGINS WITH THE CUSTOMER MARKETING STRATEGY BEGINS WITH THE CUSTOMER. WHICH POTENTIAL CUSTOMER SHOULD THE FIRM ATTEMPT TO COVER. SEGMENT THE MARKET THROUGH DEMOGRAPHICS, GEOGRAPHIC, PSYCHOGRAPHICS (LIFESTYLE). WITHIN SEGMENT WHICH TARGET CUSTOMER GROUP, MASS MARKET, NICHES OR ONE-ON-ONE OR USER STATUS LIGHT OR HEAVY, PERFORMANCE V/S PRICE ORIENTED OR LOYAL V/S UNSATISFIED. THE PROCESS OF SELECTING THE SEGMENT AND THE TARGET MARKET IS CRITICAL. MARKET RESEARCH USED. Slide 11 MARKETING STRATEGY-AN OVERVIEW 11 Target Markets Other Issues. Firms comparative strength and WEAKNESS VS. competition. The STRATEGY (potter model). The RESOURCES necessary. The availability of APPROPRIATE collaborators. Financial cost and returns. Gap in the market, does not mean market in the gap. The USP. An explicit statement of the positioning idea is critical. Slide 12 MARKETING STRATEGY-AN OVERVIEW 12 THE MARKETING MIX. THE ADVANTAGE OF SOLVING THE POSITIONING PROBLEM IS THAT IT ENABLES THE COMPANY TO SOLVE THE MARKETING MIX PROBLEM. THE MARKETING MIX-PRODUCT, PRICE, PLACE AND PROMOTION-IS ESSENTIALLY THE WORKING THE TACTICAL DETAILS OF THE POSITIONING STRATEGY P.KOTLER.Marketing management: analysis planning implementation and control. PRODUCT, PLACE (Channels of distribution), PROMOTION (Communication strategy) and PRICE. Slide 13 MARKETING STRATEGY-AN OVERVIEW 13 The Product. Not just the product but the total package of benefits to the customer. (The augmented product). Value can be delivered simultaneously by a number of vehicles. The physical product, the brand name, the company reputation, after sales support, financing, AVAILABILITY. Slide 14 MARKETING STRATEGY-AN OVERVIEW 14 THE PRODUCT-PRODUCT LINE PRODUCT LINE BREADTH. (different lines the company offers) PRODUCT LINE LENGTH. (how many products covering different price points.) PRODUCT LINE DEPTH. (How many types of a given product.) THESE ARE THE MAJOR PRODUCT LINE DECISIONS. IMPORTANT CONSIDERATIONS ARE: DOES THE PRODUCT SATISFY CUTOMER WANTS, IS IT PROFTABLE TO THE FIRM, DOES IT DIFFERENTIATE FROM THE COMPETITION, WILL IT COMPLIMENT OR CANNIBALIZE, IMPACT ON BRAND AND COMPANY REPUTATION. Slide 15 MARKETING STRATEGY-AN OVERVIEW 15 NEW PRODUCT DEVELOPMENT OPPORTUNITY IDENTIFICATION. DESIGN. TESTING. TEST MARKETING. PRODUCT LAUNCH/ROLLOUT. LIFE CYCLE MANAGEMENT. Slide 16 MARKETING STRATEGY-AN OVERVIEW 16 Place-distribution. A distribution channel is a set of INTERDEPENDENT organizations (networks) involved in the process of making a product or a service available for use customers. The generic tasks are product INFORMATION, PRODUCT customization, quality assurance, lot size, product ASSORTMENT LENGTH, breadth and width of product lines), AVAILABILITY, AFTER SALES service, logistics. The best approach is to develop customer-driven systems to design channel structures and management. Slide 17 MARKETING STRATEGY-AN OVERVIEW 17 Channel-major Decisions. Two major decisions are: Channel design. Involves both length and breadth. Channel management. What polices and procedures to be used to ensure the necessary functions are performed by the various parties. Slide 18 MARKETING STRATEGY-AN OVERVIEW 27 Pricing Objectives. At a minimum the price must cover the cost. Loss LEADER. DIFFICULT to raise prices later on. Skim" focus on customers with high value-first edition hard cover) and PENETRATION PRICING GENERATE lots of sales, leaves money on the table, important when customers are sensitive to PRICE, ECONOMICS of scale are available, threat of COMPETITION, PRODUCTION capacity available). Slide 28 MARKETING STRATEGY-AN OVERVIEW 28 PRICING CUSTOMIZATION. CUSTOMERS MAY PLACE DIFFERENT VALUES ON THE PRODUCT. FIRMS CAPITILISE ON THIS THROUGH CUSTOMIZED PRICING. THIS IS DONE THROUGH: PRODUCT DIFFERENTIATION BUYER BEHAVIOUR.FIRST TIME USERS OF SOFTWARE V/S UPGRADERS CHARACTERISTICS OF THE TRANSCATION. QUANTITY DISCOUNT. STICK V/S PACKETS. Slide 29 MARKETING STRATEGY-AN OVERVIEW 29 PRICE SENSITIVITY SOME INDUSTRIES ARE PRICE SENSTITIVE. A PRICING MOVE CAN SET OF A PRICE WAR. THIS IS TRUE WHEN FIRMS HAVE HIGH FIXED COST BUT LOW VARIABLE COST. LITTLE DIFFERENTIATION IN COMPETITIVE PRODECTS SO CONSUMERS BUY ON PRICE. INDUSTRY GROWTH RATE IS LOW. THERE ARE BARRIERS TO CAPACITY ADJUSTMENTS AND ECONOMICS OF SCALE ARE IMPORTANT. LEGAL LAWS PLACE RESTRICTIONS. Slide 30 MARKETING STRATEGY-AN OVERVIEW 30 In Summary. Devising an effective marketing program requires in depth analysis to support decisions on a host of interrelated issues. Above all its always changing and marketer must be constantly ALERT. IN the market place.