Download - Marketing Strategies

ACHIEVING HEALTHCARE’S TRUE RETURN

Marketing Warfare Strategies

Suresh Kochattil


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.

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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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The use of marketing warfare strategies

• Strategy 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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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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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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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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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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Learning from history• Strategy 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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Effective Strategy“An 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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Aggressive and Passive

• By 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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Dolphin Strategy• This 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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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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Synergy and Competition

Today 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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Strategy and Tactics

Weapons 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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Offensive marketing warfare strategies

• Frontal Attack

• Envelopment Strategy

• Leapfrog Strategy

• Flanking Attack

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Offensive marketing warfare strategies

• Offensive 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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Fundamental Principles• Assess 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.

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Frontal Attack• This 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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Frontal attacks are rare• In 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.

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Frontal attacks are possible

The 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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Envelopment Strategy

Envelopment 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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Similar 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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The 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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Leapfrog Strategy• Leapfrog strategy involves bypassing the enemy’s forces

altogether. • In the business arena, this involves either developing

new technologies, or creating new business models. • This is a revolutionary strategy that re-writes the rules of

the game. • The introduction of compact disc technology bypassed

the established magnetic tape based defenders. The attackers won the war without a single costly battle.

• This strategy is very effective when it can be realized.

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Flanking Attack

• This strategy is designed to pressure the flank of the enemy line so the flank turns inward.

• You make gains while the enemy line is in chaos. In doing so, you avoid a head-on confrontation with the main force.

• Flanking marketing warfare strategies are a type of marketing warfare strategy designed to minimize confrontational losses.

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Fundamental Principles

The fundamental principles involved are:•Avoid areas of likely confrontation. A flanking move always occurs in an uncontested area.•Make your move quickly and stealthfully. The element of surprise is worth more than a thousand tanks.•Make moves that the target will not find threatening enough to respond decisively to.

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Flanking - Offensive Attack

This is designed to pressure the flank of the enemy line, make gains in the resultant chaos and avoid a head-on confrontation.The disadvantage with an offensive flanking attack is that it can draw resources away from your center defense, making you vulnerable to a head-on attack. In business terms, a flanking attack involves competing in a market segment that the target does not consider mission critical.

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Flanking - Offensive AttackThe target competitor will not be as concerned about your activities if they occur in market niches that it considers peripheral. It usually involves subtle advertising campaigns and other discrete promotional measures, like personal selling and public relations. It often entails customizing a product for that particular niche. Rather than finding uncontested market niches, the attacker could also look for uncontested geographical areas.

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When does it workThe strategy is suitable when:•the market is segmented•there are some segments that are not well served by the existing competitors•the target competitor has relatively strong resources and is well able to withstand a head-on attack•the attacker has moderately strong resources, enough to successfully defend several niches

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Offense or DefenseCompanies typically use many strategies concurrently, some defensive, some offensive, and always some deterrents. •Offensive strategies were more important that defensive one. Market gains are made only by offensive strategies.•Defensive strategies were used when needed, but an offensive strategy was requisite. Defensive strategies could at best keep you from falling too far behind.

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Learnings from NapoleonTo understand how business strategists used military strategies, we can look at the innovations of Napoleon and apply them to business situations. All four provide lessons for business strategistsNapoleon made four key innovations. 1)increase his army’s marching rate2)organize the army into self contained units 3)live off the country4)attack the opponent’s lines of supply.

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Increase the speed• By increasing the speed that the army marched and

fought, they created a military advantage. They could implement their tactics faster than the enemy.

• Hitler used the same strategy with his Blitzkrieg. The enemy was overrun before they were able to organize a viable resistance.

• But once these innovations were used, other armies made adjustments and the nature of warfare changed.

• All armies had to increase their pace of operations to be effective.

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Increase the speed• Businesses, like armies must operate at a faster pace

than their competitors in order to have a competitive advantage.

• They must develop and introduce products faster, implement strategies faster, and respond to environmental factors faster.

• They must be proactive.

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The Cohort OrganisationNapoleon returned to the cohort organization of the Greek phalanx. •These were self contained fighting units of citizens that knew each other in daily life, and had a wide variety of skills and various skill levels. •Under the Roman Empire the phalanx was replaced by specialized legions containing 100 fighters (centurion). •Each legion had a specialized skill (such as the archer legions)

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Functional Specialisation• For more than 100 years, businesses organized by

functional specialization, just like the Roman legions did.• Accountants populated the finance department and

technicians populated the operations department. But as the speed of business increases we need a more flexible system.

• Today, we use cross functional teams (like the Greek phalanx) that have enough breadth of knowledge to see the big picture, are objective enough to get accurate and unbiased perceptions of environmental factors, and are flexible enough to act quickly.

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Living off the countryNapoleon’s armies lived off the country instead of bringing supplies with them. •This allowed them to march faster. •The disadvantage is that stealing from the local population created resentment. •But this was a longer term problem. It could be dealt with when the time came.•The short term advantage outweighed the long term disadvantage.

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Supply chain managementIn business we no longer stock inventory based on an Economic order quantity (EOQ) model. We use a Just In Time model and this reduces costs considerably. However it makes us vulnerable to our supply channel partners. Just as Napoleon had to manage the local people that supplied him his provisions, businesses today have found supply chain management to be a critically important part of doing business.

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Attack supply linesStriking at the opponents lines of supply is known as a flanking strategy. It is effective because it eliminates the need to fight the enemy head-on. An attack on a poorly defended supply line can render the whole enemy army unable to fight. In business today we attempt to do this with exclusivity agreements with suppliers (if you sell Pepsi, you can’t sell Coke). If Pepsi has an exclusivity agreement with Pizza Hut, Coke will effectively be eliminated from that part of the market.

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Defensive marketing warfare strategies

• Position Defense

• Mobile Defense

• Flank Position

• Counter Defense

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Defensive marketing warfare strategies

• In marketing and strategic management, marketing warfare strategies are a type of marketing strategy that uses military metaphor to craft a businesses strategy.

• Defensive marketing warfare strategies are a type of marketing warfare strategy designed to protect a company's market share, profitability, product positioning, or mind share.

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Fundamental PrinciplesThere are five fundamental principles involved:•Always counter an attack with equal or greater force.•Defend every important market.•Be forever vigilant in scanning for potential attackers. Assess the strength of the competitor. Consider the amount of support that the attacker might muster from allies.•The best defense is to attack yourself. Attack your weak spots and rebuild yourself anew.•Defensive strategies should be the exclusive domain of the market leader.

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Position Defense• This involves the defense of a fortified position. • This tends to be a weak defense because you become a

“sitting duck”. • It can lead to a siege situation in which time is on the side of

the attacker, that is, as time goes by the defender gets weaker, while the attacker gets stronger.

• In a business context, this involves setting up fortifications such as barriers to market entry around a product, brand, product line, market, or market segment

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Position Defense

• This could include increasing brand equity, customer satisfaction, customer loyalty, or repeat purchase rate.

• It could also include exclusive distribution contracts, patent protection, market monopoly, or government protected monopoly status.

• It is best used in homogeneous markets where the defender has dominant market position and potential attackers have very limited resources.

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Mobile Defense• This involves constantly shifting resources and developing new

strategies and tactics. • A mobile defense is intended to create a moving target that is

hard to successfully attack, while simultaneously, equipping the defender with a flexible response mechanism should an attack occur.

• In business this would entail introducing new products, introducing replacement products, modifying existing products, changing market segments, changing target markets, repositioning products, or changing promotional focus.

• This defense requires a very flexible organization with strong marketing, entrepreneurial, product development, and marketing research skills.

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Flank Position

Flank position - This involves the re-deployment of your resources to deter a flanking attack. You protect against potential loss of market share in a segment, by strengthening your competitive position in this segment with new products and other tactics.

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Defensive Flanking• This involves the re-deployment of your resources to

deter a flanking attack. • You strengthen your flank if you think it is vulnerable. • The disadvantage of this defense is that it can distract

you from your primary objective and siphon resources away from where they are needed most.

• In business terms, this involves the introduction of new products, product lines, or brands, the defensive re-positioning of existing products, or additional promotional activity in a market niche.

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Defensive Flanking• This involves the re-deployment of your resources to

deter a flanking attack. • You strengthen your flank if you think it is vulnerable. • The disadvantage of this defense is that it can distract

you from your primary objective and siphon resources away from where they are needed most.

• In business terms, this involves the introduction of new products, product lines, or brands, the defensive re-positioning of existing products, or additional promotional activity in a market niche.

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Defensive Flanking• It requires market segmentation and/or product

differentiation. You protect against potential loss of market share in a segment by strengthening your competitive position there.

• Defensive marketing warfare strategies - are used to defend competitive advantages; lessen risk of being attacked, decrease effects of attacks, strengthen position

• Flanking marketing warfare strategies - Operate in areas of little importance to the competitor.

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Counter Offensive

This involves countering an attack with an offense of your own. If you are attacked, retaliate with an attack on the aggressor’s weakest point.

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Flotilla Marketing

This involves protecting the mother brand with a number of brands surrounding it.

A competitor has to deal with the outer brands before they can take a shot at the mother brand.

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The Colgate flotilla strategy


Flotilla Marketing

This involves protecting the mother brand with a number of brands surrounding it.

A competitor has to deal with the outer brands before they can take a shot at the mother brand.

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Guerrilla MarketingThe concept of guerrilla marketing was invented as an unconventional system of promotions that relies on time, energy and imagination rather than a big marketing budget.

Typically, guerrilla marketing campaigns are unexpected and unconventional; potentially interactive.

Consumers are targeted in unexpected places.

The objective of guerrilla marketing is to create a unique, engaging and thought-provoking concept to generate buzz, and consequently turn viral.

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Guerrilla MarketingThe term was coined and defined by Jay Conrad Levinson in his book Guerrilla Marketing and has since entered the popular vocabulary and marketing textbooks.

Guerrilla marketing involves unusual approaches such as intercept encounters in public places, street giveaways of products, PR stunts, any unconventional marketing intended to get maximum results from minimal resources.

More innovative approaches to Guerrilla marketing now utilize cutting edge mobile digital technologies to really engage the consumer and create a memorable brand experience.

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Guerrilla MarketingLevinson identifies the following principles as the foundation of guerrilla marketing:

•Guerrilla Marketing is specifically geared for the small business and entrepreneur.

•It should be based on human psychology rather than experience, judgment, and guesswork.

•Instead of money, the primary investments of marketing should be time, energy, and imagination.

•The primary statistic to measure your business is the amount of profits, not sales.

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Guerrilla Marketing• The marketer should also concentrate on how many

new relationships are made each month.

• Create a standard of excellence with an acute focus instead of trying to diversify by offering too many diverse products and services.

• Instead of concentrating on getting new customers, aim for more referrals, more transactions with existing customers, and larger transactions.

• Forget about the competition and concentrate more on cooperating with other businesses.

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Guerrilla Marketing

• Guerrilla Marketers should use a combination of marketing methods for a campaign.

• Use current technology as a tool to build your business.

• Messages are aimed at individuals or small groups, the smaller the better.

• Focuses on gaining the consent of the individual to send them more information rather than trying to make the sale.

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Associated Marketing TrendsThe term Guerrilla Marketing is now often used more loosely as a descriptor for non-traditional media, such as:

•Reverse Graffiti — clean pavement adverts

•Viral marketing — through social networks

•Presence marketing — marketing for being there

•Grassroots marketing — tapping into the collective efforts of brand enthusiasts

•Wild Posting Campaigns

•Alternative marketing

•Buzz marketing — word of mouth marketing59


Associated Marketing Trends• Undercover marketing — subtle product placement

• Astroturfing — releasing company news to imitate grassroots popularity

• Experiential marketing — interaction with product

• Tissue-pack marketing — hand-to-hand marketing

• Wait marketing — when and where consumers are waiting (such as medical offices and gas pumps) and receptive to communications

• Guerrilla marketing was initially used by SMEs but it is now increasingly adopted by large businesses.

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Ambush MarketingAmbush marketing refers to an effort by an unauthorised entity to attempt to benefit from an event at the expense of another company's association with the event. In the context of the cricket, it would amount to linking a promotional campaign with the event without paying the fee. In such a case an `ambush' ensures that the main sponsors exclusive association with the event gets diluted, and the sponsor is unable to get the return he expected from the investment made in the event.

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“I want you to remember that no bastard ever won a war by dying for his country, he won it by making the other poor dumb bastard die for his country.”

George C Scott, the greatest military strategist of all time

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Suresh Kochattil

[email protected]

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