MARKETING PLANNING &

STRATEGY

Rahul Gandhi
Congress launched him as their marketing
weapon
He has added a new constituency the
youth
Shows freshness , sincerity , positivity all
of which is a rare combination amongst
the politicians
Political scion gifted with a glorious smile

Virgin Mobile
Decided to target youngistan focused
exclusively on youth
Focus on communication where the youth
gets around not necessarily rebels
..they find a way
Introduced many first including ..get paid
to receive a call -Cut clutter
It has achieved a 92 % awareness , and
69 % consideration a year since its launch

Rakhi Sawant
From an item girl she became the biggest
start for NDTV imagine
As a brand she is brash , crude , willingly
flaunts her unsophistication
Her appeal connected with the masses

Sun Tze on Strategy

Know your enemy, know yourself,
and your victory will not be
threatened. Know the terrain,
know the weather, and your victory
will be complete.

Strategic Marketing Planning

is the managerial process of
developing and maintaining a
strategic fit between the
organization's objectives and
resources and its changing market
opportunities.
Org Objectives Strategic Fit

Resources

Changing Environment

Strategic Marketing
Marketing Strategy is a series
of integrated actions leading
to a sustainable competitive
advantage.
John Scully

Corporate Mission
Broad purposes of the organization
General criteria for assessing the longterm organizational effectiveness
Driven by heritage & environment
Mission statements are increasingly
being developed at the SBU level as well

Examples of Corporate
Mission
SINGAPORE AIRLINES is engaged in air
transportation and related businesses. It
operates world-wide as the flag carrier of
the Republic of Singapore, aiming to
provide services of the highest quality at
reasonable prices for customers and a
profit for the company

Examples of Corporate Mission

(contd)
MARRIOTTS Mission Statement:
We are committed to being the best
lodging and food service company in the
world, by treating employees in ways that
create extraordinary customer service and
shareholder value

Corporate Culture

The most abstract level of managerial

thinking
How do you define culture?
What is the significance of culture to an
organization?
How does marketing affect culture in
the organization?

Corporate Objectives & Goals

An objective is a long-range purpose
Not quantified and not limited to a time period
E.g. increasing the return on shareholders equity

A goal is a measurable objective of the

business
Attainable at some specific future date through
planned actions
E.g. 10% growth in the next two years

SMART

STRATEGIC MANAGEMENT

Insights and hard work deliver results

What types of strategies are used by organizations?
How are strategies formulated and implemented in
strategic management?

Business Strategy covers all basic goals and

objectives of the business
Capital

Investors
Relations
Financial
Plan

Project
Management

Public Offering

Strategy Plan

Business
Strategy
Plan

Financial
Controlling

Management

Salesforce

HR, Training &

Recruiting Plan

Certificate
Program

Infrastructure

FDA
Regulations

Legal
Production &
Logistics

Sales

Operations

Marketing

All stakeholders will benefit from the

business strategy approach

Business Strategy

Project Management Plan

Management
Support

Structuring business
operations

Operational
Business Plan

Communicating and
implementing
Management orders

Team
Potential Buyers
Investors

Agency 1

Marketing
Strategy Plan

Interviewing and Briefing of

Agencies
Revenue: Sales and
Distribution

Agency 2
Agency 3
Salespeople
Customers
Re-sellers

Momentum develops the Marketing Strategy and

prepares the tactics to the market
Momentum
Agency

Sales & Distribution

Target Market

Marketing
Strategy
Plan

Positioning
Communication
Branding
Objectives

Tactics

Management

Artefill Marketing Dept.

Promotion Policy

Product Mix

Pricing Policy

Market

Marketing Planning is a step-by-step process

Market Research
Bus. Review
Competition An.

Marketing Strategy Development

Target market
Definition
Positioning
Communication
Branding
Strategy
Tactics

The Role of Strategy

Corporate
Mission &
Objectives

Strategy:
Corporate
Business
Functional

Operatin
g Plans

Funnel

PURPOSE OF
STRATEGY
To set the future direction for the organisation.

To state how it is to create value to customers.

To identify what product/s and in which markets
the firm will invest its resources.
To describe how it is to perform better than
competition.

STRATEGY HELPS IN:

Defining the scope of business.
Finding Strategic Fit between organisation and
its environment.
Identifying a Sustainable Competitive Advantage
(SCA).
Guiding the allocation of resources.

HIERARCHY OF STRATEGY
CORPORATE

SBUs

FUNCTIONAL AREAS

3 LEVELS OF STRATEGY
Corporate
The overall goals of the business; often expressed in financial
terms

Competitive/Business (SBU)
How to compete in individual product-markets and support the
corporate strategy

Functional
Functional strategies for the organisations functional areas in
support of SBUs and corporate strategies

What is a Strategic
Business Unit? (SBU)
A set of products or product lines
With clear independence from other
products or product lines
for which a business or marketing strategy
should be designed

Types Of Strategies

Strategy is a comprehensive plan for achieving competitive

advantage.
Organizations use strategy at the corporate, business and functional
levels.
Growth and diversification strategies focus on expansion.
Restructuring and divestiture strategies focus on consolidation.
Global strategies focus on international business initiatives.
E-business strategies focus on using the Internet for business
transactions.

Types Of Strategies
Strategy
a comprehensive plan guiding resource allocation to
achieve long-term organization goals.

Strategic Intent
focuses organizational energies on achieving a
compelling goal.

Competitive Advantage
operating in successful ways that are difficult to
duplicate

Corporate Strategies
Corporate Strategy
Sets long-term direction for the total enterprise

Business Strategy
Identifies how a strategic business unit or division will
compete in its product or service domain

Functional Strategy
Guides activities within one specific area of
operations

Corporate Strategies

Growth And Diversification Strategies

Growth Strategy
Expansion through current operations

Concentration
Expansion within an existing business area

Diversification
Expansion occurs by entering new business areas

Vertical Integration
Expansion by acquiring existing suppliers or
distributors

Restructuring and Retrenchment

Strategies
Retrenchment
Changes operations to correct weaknesses
Liquidation
An extreme form of retrenchment wherein the business
closes and sells off its assets

Restructuring
Reduces the scale or mix of operations

Downsizing
Decreases the size of operations

Divestiture
Sells off part of the organization to focus on core
businesses

Global Strategies
Globalization Strategy
Adopts standardized products and advertising
for use worldwide

Multidomestic Strategy
Customizes advertising and products to best
fit local needs

Transnational Strategy
Seeks efficiencies of global operations with
attention to local markets

E-Business Strategies
E-Business Strategies
Focus on Using the Internet for Business
Transactions

B2B Business Strategies

use IT and Web portals to vertically link organizations
with members of their supply chains.

B2C Business Strategies

use IT and Web portals to vertically link organizations
with members of their customers.

Strategic Management
Strategy formulation begins with the organizations
mission and objectives.
SWOT analysis identifies strengths, weaknesses,
opportunities, and threats.
Porters five forces model examines industry
attractiveness.
Porters competitive strategies model examines business
or product strategies.
Portfolio planning examines strategies across multiple
businesses or products.
Strategic leadership activates organizations for strategy
implementation.

Strategic Management
Strategic management
the process of formulating and implementing
strategies.

Strategy Formulation
the process of creating strategies

Strategy Implementation
the process of putting strategies into action.

Strategic Management

Strategy Formulation
Mission Statement
The reason for the organizations existence in society

Operating Objectives
Specific results that organizations attempt to achieve

Common Operating Objectives of Organizations

Profitability
Market share
High-quality workforce
Cost efficiency
Product and service quality
Innovativeness
Social responsibility

Market-oriented:

Strategy based upon the needs & wants of the

marketplace

Establishes a
profitable market
position:

End goal of strategy to make a profit in the forprofit sector or to meet alternate metrics (NFP
sector)

Establishes a
sustainable market
position:

Marketing strategy not about one-off

transactions. Aim is to find a place in the
market

Forces that
determine industry
competition:

Complex mix of ingredients that create the

marketing whirlwind

Continuously
creating &
developing CA:

Find a spot where, if need be, the primary

challenges can be tackled

Potential sources
that exist in a
firms value chain:

What value any organisation wants to create

using its available marketing resources

STRATEGIC PLANNING MODEL

THE INTER-RELATIONSHIP BETWEEN

MARKETING AND CORPORATE
STRATEGY

INFORMS
DIRECTS
GUIDES
CONTROLS

Corporate Strategy
Specifying the
organisations mission

Allocating resources
Defining Organisational
objectives

Marketing Strategy
Identifying product market/s to
compete in
Selecting market segments to
target
Developing the marketing mix
ACHIEVES
SUPPORTS
OPERATIONALISE

OPERATIONAL vs STRATEGIC
MARKETING
Operational Marketing
Action-oriented
Existing opportunities
Non-product variables
Stable environment
Reactive behaviour
Day-to-day management
Marketing department

Strategic Marketing
Analysis-oriented
New opportunities
Product market variables
Dynamic environment
Proactive behaviour
Longer range management
Cross-functional
organisation

STRATEGIC MARKETING
MANAGEMENT PROCESS
SMM process aims to answer a complete
set of strategic questions:
Where are we now?
Where we want to go?
How might we get there?
How can we ensure arrival?

STRATEGIC MARKETING
MANAGEMENT PROCESS

STRATEGIC ANALYSIS
Strategic analysis is concerned with
understanding the strategic position of the
organisation in terms of its external
environment, internal resources &
competencies, and the expectations and
influence of stakeholders

WHERE ARE WE NOW?

Analysis of Current Situation
What are the major trends and possible changes in the
marketing environment?
Who are our competitors? How can we make
ourselves different from competition?
Who are our target customers & what are their needs?
What competitive advantages and core competences
do we have?

STRATEGIC CHOICE
Strategic choice involves understanding
the underlying bases guiding future
strategy, and generating strategic options
for evaluation and selecting from among
them
Johnson and Scholes (1999)

WHERE WE WANT TO GO?

Strategic Choice
A set of interrelated strategic decisions
about:
Strategic direction (generic strategy)
Product/s to offer
Market/s to target
Competitive stance to take
Positioning strategy

STRATEGIC IMPLEMENTATION
Strategic implementation is concerned with
the translation of strategy into organisational
action through organisational structure &
design, resource planning and the
management of strategic change
Johnson and Scholes (1999)

HOW MIGHT WE GET THERE?

Plan Marketing Activities
Design the Marketing Mix to support the chosen
strategy and achieve strategic objectives.
Decide on tactics for positioning products in the
chosen markets.
Define targets & time frame.
Identify who will be responsible for different
tactics.

HOW CAN WE ENSURE ARRIVAL?

Measure, Evaluate & Control Activities
Methods of control and evaluation.
Not only at the end of the time frame but on a
regular basis.
Ease of measurement depends on the types of
activities implemented.
Measurement reveals effectiveness of evaluation &
helps decide if contingencies must be put in action.

VALIDITY OF SMM MODEL?

Rational, formalized, systematic
Orderly thinking
Deliberate, logical response to changes in the
environment
Top down approach
Think THEN act & formulate THEN implement
Identify actions which need to be undertaken

MARKETING ENVIRONMENT

4 Main Ways of Approaching Marketing Strategy

THINKING FIRST
SEEING FIRST
DOING FIRST
SIMPLE RULES

COMPETITIVE
MARKETING
STRATEGY

ENVIRONMENTAL ANALYSIS
Environmental scanning is the process of gathering
information about the various forces in the environment.
It involves observation, perusal of secondary sources,
such as business, trade, government and general
interest publications and marketing research.
Environmental analysis is the process of assessing
and interpreting the information gathered through
market intelligence and environmental scanning.

MACRO (REMOTE)
ENVIRONMENT:
PEST MODEL
PEST:
Political Factors,
Economic Factors,
Socio-cultural Factors,
Technological Factors
A framework that assists in analyzing the
external (remote) environment and identifying
the existing opportunities & threats

STRATEGIC FIT
Strategic Fit is the effective match and
management of the environmental
opportunities and threats while taking into
account the organisation strengths and
weaknesses

STRATEGIC FIT
Drawing upon the strategic analysis undertaken previously,
strategic managers have to:

Find strategic fit between what the environment

wants and what the organisation has to offer, and
between what the organisation needs and what the
environment can provide
Identify and assess alternative ways in which their
organisation can use its specific strengths to
capitalise on opportunities and/or minimise threats,
and invest in available opportunities to overcome its
weaknesses

SWOT ANALYSIS
Integrates the internal and external environmental
analysis
Not just a list of SWOT variables!
SWOT/TOWS Matrix can be helpful
SWOT/TOWS analysis is the alternative ways in
which an organisation can use its specific strengths
to capitalise on opportunities or to minimise threats
and invest in available opportunities to overcome
its weaknesses

SWOT (TOWS) MATRIX

STRATEGY FORMULATION

SWOT
SWOT Analysis
Identifies Organizations Strengths, Weaknesses, Opportunities, and Threats

Core Competency
A special strength that gives an organization a competitive advantage

STRATEGY FORMULATION

Porters Five Forces

STRATEGY FORMULATION

Porters Five Forces

Porters Competitive Strategies
Differentiation Strategy
Offers products and services that are uniquely different from
the competition

Focused Differentiation Strategy

offers a unique product to a special market segment.

Cost Leadership Strategy

Seeks to operate at lower costs than competitors

Focused Cost Leadership Strategy

uses cost leadership and target needs of a special market.

STRATEGY FORMULATION

Porters Five Forces

COMPETITIVE ANALYSIS

STRATEGY FORMULATION

Boston Consulting Group (BCG)

BCG Matrix
Analyzes business opportunities according to growth
rate and market share

Ansoffs Product-Market Grid

Current products

Current
Mkts

Mkt penetration
strategy

New
Mkts

Mkt
development
strategy

New products
Product
development
strategy
Diversification
strategy

A way to analyze a company's competitive position in comparison

to the offerings of competitors. As with Porter's Generic Strategies,
Bowman considers competitive advantage in relation to cost
advantage or differentiation advantage. There are six core strategic
options

STRATEGIC MANAGEMENT

Strategy Implementation
Strategic Leadership
the capability to inspire people to successfully
engage in a process of continuous change,
performance enhancement, and
implementation of organizational strategies.

Marketing at the SBU Level

Strategic Marketing

Strategic Marketing requires

Detailed understanding of market needs, and

Proactive use of competitive intelligence at the
corporate as well as SBUs levels

Strategic Marketing

Focuses on what the firm do best at the SBU level

To secure and maintain a sustainable competitive
advantage

Key Elements of Marketing Strategy

Formulation
The strategic 3 Cs

Customers, Competitors & the Corporation

Environment analysis -- PEST

Strategic Marketing Decisions

Where to compete
How to compete
When to compete

A Viable Marketing
Strategy
Must have a clearly defined market
Must have a good match between
corporate strengths and market needs
Must have significant positive
differentiation in the key success
factors of the business

WHERE WE WANT TO GO?

Strategic Decisions
Strategic decisions at the corporate level
Developing/re-stating mission statement
Directional strategy
Resource allocation

Strategic decisions at the SBU level

Choosing Generic Strategy:
Cost leadership strategy, Differentiation strategy, Focus
strategy: Cost focus & Differentiation focus

Strategic decisions at the functional level

Products to offer
Market segments to target
Market position tactics

DIRECTIONAL (Grand) STRATEGIES

Growth Strategies
Concentration
Vertical Growth
Horizontal Growth

Diversification
Concentric
Conglomerate

Stability Strategies
Pause/Proceed with caution
No Change
Profit

Retrenchment strategies

Turnaround
Captive Company
Sell-Out/Divestment
Bankruptcy/Liquidation

The Competitive Environment

Kinds of Markets

Key
Concepts
in the
Competitive
Environment

Competitor Analysis

Competitive Rivals

Competitive Barriers

Information on Competitors

What is Competitive
Advantage?
Competitive advantage is a
companys ability to perform in one or
more ways that competitors cannot or
will not match.
Philip Kotler

If you dont have a competitive

advantage, dont compete.
Jack Welch,
GE

Other Characteristics of
Competitive Advantage
Substantiality
Is it substantial enough to make a difference?

Sustainability
Can it be neutralized by competitors quickly?

Ability to be leveraged into visible

business attributes that will influence
customers
(Source: Strategic Marketing Management, Aakers)

Seeking Competitive
Advantages
Positions of advantage
Superior customer value
Lower relative total cost

Performance advantages
Customer satisfaction, Loyalty, Market Share,
Profit

Sources of advantages
Superior skills & knowledge, Superior
resources, Superior business process

COMPETITIVE POSITION TACTICS

Marketing Strategy
Encirclement
Flanking Defense

Preemptive
Defense

Attacker

Defender

Frontal

Contraction
Defense

(bigger)

(smaller)
Attack
Counteroffensive

Position
Defense

Guerilla Attack
Mobile Defense
Flank Attack
Bypass

CREATIVE THINKING
6 HATS

Information
seeking ?

Emotions ,
feelings

Truth ,
reality
Critical thinking
Overview
Sequence of
thinking

Creative
thinking

Optimistic
Forward looking
futuristic

TRAFFIC LIGHTS

Stop, exit

Look around

go

Samsung
Launched 225 products in 2009 against 2000
the year before
It is closing the gap effectively with technology
breakthrough / products customized to Indian
needs
They made an exclusive 32 LED TV for Indian
customers as Indians have smaller rooms
They target to lead in product innovation space
& be relevant to consumers

Aircel
Till 2006 it was just in 2 circles with 2.2
million consumers
Positioning was on non-voice uses pay
bills/book tickets/network with friends
Monthly susbscriber additions have
doubled from 600,000 6 months ago to 1.4
million

Gajni

Before 25 December
th

First Look:
Ghajini's marketing started way back from March 20
when he came out on the premier of RACE with his new
BALD look.
It actually gave the perfect sneak peek at the two looks
of Aamir in the movie.
Notice the jacket and rolled up half sleeves?
Did anyone say Sanjay Singhania?

 And then
in November, this photo shot across leading dailies
and Aamir without even showing his face and his 8
packs instantly became the talk of the town.

 The 8 pack promotion:

October 2007 and remember SRK and the ho-hallah

around his 6 pack abs.

It was only around that time that Aamir silently started
working on his own, and just to make it better, he added
a pair and made it eight!
The fact that the man now had a 8 pack and a fantastic
body, he decided to show the world how he got it!
Up came the videos with 'Making of Aamir's 8 pack' on
all news and entertainment channels.
Videos similar to this you tube got thousands of visits!
He even went a step ahead and called a press conference
to introduce his trainer and explain his diet chart!

 Television appearances
With the TV channels filled with Ghajini promos,
Aamir went into overdrive with his interviews, which
came in by the day on every news and entertainment
channel. Not to forget the guest appearances on
reality shows, which is now a sort of a norm.

 Offline Promos at Theaters

'Theater personnels with Ghajini hair cut' act that he did on the
release on Rab neBana di Jodi.Simply Fantastic. Imagine going
to a cinema hall to watch RNBDJ and you watch all these Aamir
Khan look alikes and his life size cut outs. You almost wish that
you had come to watch Ghajini!

Co branding
Tata Sky started running Ghajini specials complete
with behind-the-scenes stories of the upcoming
film. Samsung launched special Ghajini edition mobile
phones of L700 and M200 models. These handsets have
preloaded with Ghajini ringtones, pictures and songs.
Tata Indicom started with a outbound dialer service with
Khan's pre-recorded voice.

Co branding
Van Heusen launched Ghajini's apparels in their stores
all across India and is backing it with in-store campaigns
and giant posters of Khan dressed in formal attire.
Van Heusen also organized a fashion show wherein
models along with Aamir sported the Ghajini look.Add a
little big of jig and a bit of Guzarish and he had all the TV
channels beaming again!

Viral SMS campaign

Remember the chain SMS which threatened to reveal
what could possibly be the climax of the film? For those
who were not on the mailing list, here it goes...Someone
killed Aamirs girlfriend and he lost his memory. Then he
tries to find out the killer. Suspense Aamir himself is
the killer. Now enjoy Ghajini!

I bet this one was proposed by someone at Tata

Indicom!!!

Digital Promotion

With so much happening offline, something had to be done online

to.
And Ghajini makers had that well covered.

Websites like www.rememberghajini.com, www.findghajini.com and

www.wallofsuspects.com were built to drive curiousity levels around
the movie and provide a movie like experience on the Internet.
Add to that a 3D PC game and a number of mobile games and
applications, and you have the digital space busy.
Not to forget that he has his own popular blog, which was a
constant source of dope for all those waiting for Ghajini to release.

Final Week Controversy

Just to cap it all, we had this 'Ghajini Release
Stayed' court notices which threatened to stop
the release of the immensely anticipated film a
day before 25th December. Naturally, this
became breaking news with minute to minute
tracking on the latest updates. And after much
drama, when the permission was granted, it was
like a whole nation had taken a sigh of relief and
they could all breath again!

10 month Campaign, where we saw Aamir from

8 pack fighting machine to
turning in to a barber
on the streets of Delhi, is a
real case study in motion picture marketing.

 To hear from the horse's mouth :

With Ghajini we've opened with the
highest number of screens ever. So the
marketing needed to have depth and
width, so we needed to be very aggressive
with the marketing of the film.

After 25th December:

100% opening day collections with over

1500 prints
Over 90 crore business by the end of first
Sunday
Expected 120 crore by end of first week
Best Ever Opening
Top film of 2008 already

The end result

It raked in Rs 90 crores in the ist weekend of its
release
Marketing cost was Rs 7.5 crore and the global
box office off-take Rs 260 crore
They honestly told the consumers
what to expect through a major use of IMC Aamirs
physical appearance , the haircut , the in cinema
visibility ; ushers having a similar haircut
The audience was prepared for what they were going
to see

The Marketing Concept

Customer
Customer
Satisfaction
Satisfaction

Total
Total Company
Company
Effort
Effort

The
Marketing
Concept

Profit
Profit

Utility and Marketing

From Production
Time
Time
Form
Form

Utility
Utility

Value
Value that
that comes
comes
from
from satisfying
satisfying
human
human needs
needs

Task
Task

Place
Place

Possession
Possession

From Marketing

Customer Value

Costs

Benefits

One customers views may vary from another

customers view, so firm may not be able to satisfy
everybody
Customer value concept takes the customers point
of view, but customers may not explicitly weigh
costs and benefits

The Marketing Management

Process
Whole-Company
Whole-Company
Strategic
Strategic
Management
Management
Planning
Planning
Adjust Plans
As Needed

Control
ControlMarketing
Marketing
Plan(s)
Plan(s) and
andProgram
Program

Marketing
Marketing
Planning
Planning

Implement
ImplementMarketing
Marketing
Plan(s)
Plan(s) and
andProgram
Program

The Four Ps of the Marketing Mix

Product

Place

C
Price

Promotion

Strategy Decision Areas

Product

Place

Promotion

Price

Physical Goods
Service
Features
Quality Level
Accessories
Installation
Instructions
Warranty
Product Lines
Packaging
Branding

Objectives
Channel Type
Market Exposure
Kinds of
Middleman
Kinds and
Locations of
Stores
How to Handle
Transporting
and Storing
Service Levels
Recruiting
Middlemen
Managing
Channels

Objectives
Blend
Salespeople
Kind
Number
Selection
Training
Motivation
Advertising
Targets
Kinds of Ads
Media Type
Copy Thrust
Who Prepares?
Sales Promotion
Publicity

Objectives
Flexibility
Level over PLC
Geographic
Terms
Discounts
Allowances

Marketing Strategy Planning Process

Narrowing down to focused strategy with screening criteria
Customers

Company

S.
W.
O.
T.

Segmentation
& Targeting

Product

Place

Target
Market
Differentiation
& Positioning

Competitors

External Market Environment

Price

Promo

SWOT Analysis
Strengths

Internal
Factors

Weaknesses

Opportunities

Strategy
Planning

External
Factors

Threats

STP

Segmentation

Targeting

Positioning

Perceptual Mapping

Steps in Market Segmentation,

Targeting, and Positioning
Market
Segmentation
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments

Market
Targeting
3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)

Market
Positioning
5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
positioning
concept

Basic Market-Preference
Patterns

Sweetness

(c) Clustered
preferences

Creaminess

(b) Diffused
preferences

Creaminess

Creaminess

(a) Homogeneous
preferences

Sweetness

Sweetness

Market Aggregation The

Strategy of Mass Marketing
Advantages & Disadvantages
Product Differentiation

Step 1. Market Segmentation

Levels of Market Segmentation
Mass
Mass Marketing
Marketing
Same
Same product
product to
to all
all consumers
consumers
(no
(no segmentation)
segmentation)
Segment
Segment Marketing
Marketing
Different
Different products
products to
to one
one or
or more
more segments
segments
(some
(some segmentation)
segmentation)
Niche
Niche Marketing
Marketing
Different
Different products
products to
to subgroups
subgroups within
within segments
segments
(more
(more segmentation)
segmentation)
Micromarketing
Micromarketing
Products
Products to
to suit
suit the
the tastes
tastes of
of individuals
individuals and
and locations
locations
(complete
(complete segmentation)
segmentation)
Local Marketing

Individual Marketing

Tailoring brands/ promotions

to local customer groups

Tailoring products/ programs

to individual customers

Steps in the Market

Segmentation Process
Determine Market Boundaries
Decide Which Segmentation Variables to
Use
Collect and Analyze Segmentation Data
Develop a Profile of Each Segment
Target Segments to be Served
Design a Marketing Plan

Bases for Segmenting

Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate

Demographic
Age, Gender, Family size
and Fife cycle, Race,
Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits,
Uses, or Attitudes

Step 1. Market Segmentation

Bases for Segmenting Business
Markets
Personal
Characteristics

Situational
Factors

Demographics

Bases
Bases
for
for Segmenting
Segmenting
Business
Business
Markets
Markets

Purchasing
Approaches

Operating
Characteristics

Effective Segmentation
Measurable
Measurable

Size, purchasing power,

profiles of segments can
be measured.

Substantial
Substantial

Segments must be large or

profitable enough to serve.

Accessible
Accessible

Segments can be
effectively reached and
served.

Differential
Differential

Segments must respond

differently to
different marketing mix
elements & actions.

Actionable
Actionable

Must be able to attract and

serve
the segments.

Descriptive Bases
Age

Gender
Income
Occupation
Education
Family Size or Family Life Cycle
Religion or Nationality

Geographic Bases
Region
Density
Climate
Population

Behavioral Bases
User Status & Brand Loyalty
Personality/Lifestyle
Social Class

Occasion
Readiness to Buy
Benefits Sought
Usage Rate

Step 2. Market Targeting

Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected
profitability
for various
segments.
Segment
Structural
Attractiveness
Consider effects of: Competitors, Availability of
Substitute Products and, the Power of Buyers &
Suppliers.

Company Objectives and Resources

Company skills & resources relative to the segment(s).
Look for Competitive Advantages.

Five Patterns of Target Market

Selection
Single-segment
concentration

Product
specialization

Selective
specialization

M1 M2 M3

M1 M2 M3

M1 M2 M3

P1

P1

P1

P2

P2

P2

P3

P3

P3
Market
specialization

Full market
coverage

M1 M2 M3
P = Product
M = Market

M1 M2 M3

P1

P1

P2

P2

P3

P3

Step 2. Market Targeting

Market Coverage Strategies
Company
Company
Marketing
Marketing
Mix
Mix

Market
Market

A. Undifferentiated Marketing

Company
Company
Marketing
MarketingMix
Mix11
Company
Company
Marketing
MarketingMix
Mix22
Company
Company
Marketing
MarketingMix
Mix33

Segment
Segment11
Segment
Segment22
Segment
Segment33

B. Differentiated Marketing

Company
Company
Marketing
Marketing
Mix
Mix
C. Concentrated Marketing

Segment
Segment11
Segment
Segment22
Segment
Segment33

Step 2. Market Targeting

Choosing a Market-Coverage
Strategy
Company
Resources

Product
Variability
Products Life-Cycle
Stage
Market
Variability
Competitors
Marketing Strategies

Positioning is the act of

designing the
companys offering and
image to occupy a
distinctive place in the
the target markets
mind. P 298

The BCG Competitive

Advantage Matrix

Size of the
Advantage

Number of Approaches
to Achieve Advantage
Few

Many

Large

Volume

Specialized

Small

Stalemated

Fragmented

Product Differentiation

Form

Features

Performance

Durability

Reliability

Repairability

Quality

Style

Conformance
Quality

Design

Services Differentiation

Delivery
Delivery

Installation
Installation

Customer
Customer
Consulting
Consulting

Customer Maintenance
Maintenance
Customer
Training
Repair
Training
&&Repair

Miscellaneous
Services

Ordering
Ordering
Ease
Ease

Differentiation
Personnel
Channel

Image Differentiation

Media

Atmosphere
Symbols

Events

Important
Important
Profitable
Profitable

Distinctive
Distinctive

Differences Worth
Establishing
Affordable
Affordable

Superior
Superior
Preemptive
Preemptive

Perceptual Map
Live shows
Easy to reach
Good food
Fantasy
Exercise
Fun rides
Disneyland

Knotts
Berry
Farm

-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2

-0.2

Magic
Mountain

1.0

Little waiting

0.8

Educational,
animals
Marineland
0.4
of the
Japanese
Pacific
0.2
Deer Park
0.6

0.2

0.4

0.6 0.8 1.0 1.2 1.4 1.6

-0.4
-0.6
-0.8

Busch
Gardens
Economical

Lion
Country
Safari

Positioning Strategies
Product Attributes

Benefits, Problem Solutions & Basic Needs

Price & Quality
Specific Use
Against Other Products
Product User
Against a Competitor

Push-Pull Strategies
Producers Promotion Blend

Wholesaler
Promotion
Push

Promotion to
Channel Members

Wholesaler
Promotion
Push

Retailer
Promotion
Push

Business
Customer
Pull

Final
Consumer
Pull

Promotion to
Final Customers

Promotion to
Business Customers

Personal Selling, Sales Promotion, Advertising, Publicity

A Model of Buyer Behavior

Marketing Mixes

All Other Stimuli

Psychological
Variables

Social
Influence

Purchase
Situation

Motivation
Perception
Learning
Attitude
Personality/Lifestyle

Family
Social Class
Reference Groups
Culture

Purchase Reason
Time
Surroundings

Person
Making
Decision

Problem-Solving Process

5-5

Person Does or Does Not Purchase (Response)

The PSSP Hierarchy of Needs

Personal
Needs

Social Needs

Safety Needs

Physiological Needs
5-6

The Consumer Problem Solving Process

Marketing mixes

Psychological
Variables
Person making
decision

All other stimuli

Social Influences

Purchase
Situation

Need-want Awareness
Routinized Response
Information Search

Set Criteria

Feedback of
information
as attitudes

Decide on Solution

Postpone
Decision
5-13

Purchase Product
Postpurchase
Evaluation

Levels of Problem Solving

High involvement
Infrequently purchased
Expensive
High risk
Much information desired

Low involvement
Frequently purchased
Inexpensive
Little risk
Little information needed

Routinized
Response
Behavior

Limited
Problem
Solving

Low Involvement

Extensive
Problem
Solving

High Involvement

Involvement Continuum

Brand identity

Brand
equity

Brand
relationship
spectrum

Unique characteristics of services

Key Factors That Influence Price Setting

Pricing
objectives
Price of other
products in the line
Demand

Cost

Price flexibility

Price
settin
g

Competition
Markup chain
in channels
17-

Discounts and
allowances

Legal
environment
Geographic
pricing terms

Strategic Pricing Options

Reverse
Cost-Plus
Variations
in Value
Price
Sensitivity

POS

Successful
Pricing

Customer
Costs

Competitor
Reaction

Emotion
Individual?
Bundled?

Pricing Objectives
Profit
Oriented

Pricing
Objectives

Sales
Oriented

Status Quo
Oriented

Target
Return
Maximize
Profits
Dollar or Unit
Sales Growth
Growth in
Market Share
Meeting
Competition
Nonprice
Competition

Strategy Planning for Price

Target
Market

Product

Place

Promotion

Price
Pricing
objectives

Price
flexibility

Price levels
over product
life cycle

Discounts and
allowances
to whom and
when

Geographic
term
who pays
transportation
and how

Distribution Options*

Direct
Internet
Telephone
Mail
Catalogue
Own channel

Salesforce
Own
Another firms
Contract

Intermediary
Franchise
Wholesaler
Agent/Merchant
Distributor
Partner

*More limited for services

The Transporting Function

Rail

Truck

Modes
of
Transportation

Air
Pipeline
Water

Types of Retailers

Conventional
offerings

Singleand
limitedline
stores

Expanded
assortment
and service

Specialty shops and

department stores

Expanded
assortment
and/or reduced
margins/service

Supermarkets, discount
houses, mass-merchandisers,
supercenters

Added
convenience
higher margins
less assortment

Telephone/mail order,
vending machines,
door-to-door, convenience
stores, electronic shopping

Expanded
assortment
reduced margins
more information

Internet

Types of Wholesalers
Does wholesaler own
the products?
Yes (merchant wholesaler)

No (agent middleman)

How many functions

does the wholesaler
provide?
Some
functions

All the functions

Service
merchant
wholesalers

Limited-function
merchant
Wholesalers

Agent middlemen

Four Examples of Basic Channels of

Distribution for Consumer Products
Manufacturer or producer
Citibank

Del
Monte

Procter &
Gamble

Wholesaler

Wholesaler

Nissan

Wholesaler
Retailer

Consumer

Retailer

Retailer

e
t
e
p
m
o
C
s
r
e
l
i
a
t
e
R
w
o
H
1)
1) Identifying
Identifying aaTarget
TargetMarket
Market
2)
2) Selecting
SelectingaaProduct
Product Strategy
Strategy
3)
3) Selecting
SelectingaaCustomer
Customer Service
ServiceStrategy
Strategy
4)
4) Selecting
SelectingaaPricing
Pricing Strategy
Strategy
5)
5) Choosing
Choosing aaLocation
Location
6)
6) Building
BuildingaaPromotional
Promotional Strategy
Strategy
7)
7) Creating
CreatingaaStore
StoreAtmosphere
Atmosphere

Price and Distribution Strategies

Market Leader
Distribution in place
Price main weapon
Premium price
Variety of options

Market Follower
Cloning
Set lower prices

Market Challenger
Focus on flanks
Direct or indirect attack

Market Niche
Stay with markets
Add niches
Premium price
Selective distribution

Informatio
n
Sources
Market
Research
Studies
Internal
Data
Sources
External
Data
Sources

New Information

Marketing Information Systems

Questions
and
Answers
Marketing
Models

Decisio
n
Maker

Result
s

Answers

?
Inputs
Databases

Decision
Support
System
(DSS)

Marketing
Manager
Decisions

Information
Technology
Specialists
Feedback

Outcomes

Product
Development

Overestimation of Market Size

Product Design Problems
Product Incorrectly Positioned, Priced or Advertised
Costs of Product Development
Competitive Actions

To create successful new products, the company

must:
understand its customers, markets and
competitors
develop products that deliver superior value to
customers.

PRODUCT DEVELOPMENT

New Product Development

Process

Idea Generation and Screening

Concept Development and Testing
Marketing Strategy
Business Analysis
Product Development
Test Marketing
Commercialization

Systematic Search for New Product

Ideas
Internal sources
Customers
Competitors
Distributors
Suppliers

 Process to spot good ideas and drop poor

ones
Criteria
Market Size
Product Price
Development Time & Costs
Manufacturing Costs
Rate of Return

Marketing Research Process

Early
Identification
of
Solution

Defining
the
Problem

Analyzing
the
Situation

Getting
ProblemSpecific
Data

Feedback to Previous Steps

Interpreting
Data

Solving
the
Problem

Sources of Data
Secondary
Data
Sources

Inside Company

Outside Company

All
Data
Sources
Primary
Data
Sources

Observation

Questioning

1.
1. Develop
DevelopProduct
ProductIdeas
Ideasinto
into
Alternative
Alternative
Product
ProductConcepts
Concepts

2.
2. Concept
ConceptTesting
Testing--Test
Testthe
the
Product
ProductConcepts
Conceptswith
withGroups
Groups
of
ofTarget
TargetCustomers
Customers

3.
3. Choose
Choosethe
theBest
BestOne
One

Marketing Strategy Statement Formulation

Part
Part One
One -- Overall:
Overall:

Target
Target Market
Market
Planned
Planned Product
Product Positioning
Positioning
Sales
Sales &
& Profit
Profit Goals
Goals
Market
Market Share
Share

Part
Part Two
Two -- Short-Term:
Short-Term:
Products
Products Planned
Planned Price
Price
Distribution
Distribution
Marketing
Marketing Budget
Budget

Part
Part Three
Three -- Long-Term:
Long-Term:
Sales
Sales &
& Profit
Profit Goals
Goals
Marketing Mix Strategy

Business
Business Analysis
Analysis
Review
Review of
of Product
Product Sales,
Sales, Costs,
Costs,
and
and Profits
Profits Projections
Projections to
to See
See ifif
They
They Meet
Meet Company
Company Objectives
Objectives

IfIf No,
No, Eliminate
Eliminate
Product
Product Concept
Concept
IfIf Yes,
Yes, Move
Move to
to
Product
Product Development
Development

Standard
Standard
Test
Test Market
Market
Full
Fullmarketing
marketingcampaign
campaign
in
inaasmall
smallnumber
numberof
of
representative
representativecities.
cities.

Controlled
Controlled
Test
Test Market
Market
AAfew
fewstores
storesthat
thathave
have
agreed
to
carry
new
agreed to carry new
products
productsfor
foraafee.
fee.

Simulated
Simulated
Test
Test Market
Market
Test
Testin
inaasimulated
simulated
shopping
environment
shopping environment
to
toaasample
sampleof
of
consumers.
consumers.

The Adoption Curve

Percent Adoption

Innovators
(3-5%)
90

Early
Adopters
(10-15%)

Early
Majority
(34%)

50

20

5
0

Time

Late
Majority
(34%)

Laggards/
Nonadopters
(5-16%)

The Adoption Curve

Innovators:
First to Adopt, Eager to Try
Young, Well-Educated, Mobile
Seek Info from non-salesperson Sources

Early Adopters
Opinion Leaders
Greater Contact with Salespeople
Word-of-Mouth

The Adoption Curve

Early Majority:
Avoid Risk, Try Only if Others Have Usually
are Not Opinion Leaders

Late Majority:
Cautious About New Ideas, Older and More
Set in Their Ways
More Subject to Peer Pressure

The Adoption Curve

Laggards:
Suspicious of New Ideas
Do Things the Way that They Have Always
Been Done

The Product Life Cycle

Market
Introduction

Market
Growth

Market
Maturity

Sales
Decline

Total Industry
Sales

Total Industry
Profit
Time

Defining Product
Target Market

Product

Place

Promotion

Price

Product
Idea

Brand

Package

Warranty

Physical
good/service
Features
Quality level
Accessories
Installation
Instructions
Product line

Type of Brand:
Individual or
family
Manufacturer or
dealer

Protection,
Promotion,
or both

None, full, or
limited

Strategy Planning for Advertising

Target Market

Product

Place

Promotion

Personal
Selling

Mass
Selling

Advertising

Target
audience

Kind of
advertising

Price

Sales
Promotion
Publicity

Media types

Copy thrust

Who will do
the work?

Basic Promotion Methods

Target
Market

Product

Place

Personal
Selling

Promotion

Mass
Selling

Advertising

Sales
Promotion

Publicity

Price

MARCOMS Strategic Process

AUDIT

PESTLE
PESTLE
Competitors
Competitors
SWOT
SWOT

STRATEGY

Strategic
Strategic Intent/Objectives
Intent/Objectives

Segment/Target
Segment/Target
Position
Position

Proposition
Creative
Creative Execution
Execution

Media
Media Classes
Media
Media Execution
Execution

Pre-Test
Pre-Test

OPERATIONS

Post-Test
Post-Test
Contingency
Contingency
International
International

Brand Wheel

Features
Benefits
Values
Personality

Key
Reward

Preference, but
not loyalty
Relationship &
loyalty
Core of the
claim

The Task
Isolate, in a simple statement why the
advertising will have worked:
Increase sales
Generate leads
Increase/maintain share
Stop decline
Justify price
Announce/Launch
Corporate reputation

Expand the Problem to a Higher

Level

Product Definition:

Performance Superiority:

Help brand matter to the consumer

Cultural Identification:

Solve a problem or better fulfill a desire

Emotional:

Make the central benefit salient (again?)

Make the brand part of consumers world

Paradigm Shift:

Alter the consumers definition of

category

Types of MARCOMS Objectives

Exposure message to ...
Create 40% awareness amongst...
Create attitude/opinion that...
Increase preference amongst...
Encourage trial amongst...
Re-enforce loyalty amongst..

Exposure
The desired level of frequency (OTS =
Opportunity to See) and coverage to achieve the
advertising objectives
Most agencies seek an average of 2-3 OTSs
amongst the target market in order to give
advertising a chance to work

Describe Who Were Talking To

A person, not a
target
Beyond reports - talk
to customers
Paint a personal
picture
Whats really
important to them?

Sources of a Proposition

product characteristics
user characteristics
ways of using the product
how product is made
surprising points about the product
price characteristics
image characteristics
satisfying psychological/physiological needs
product heritage
disadvantages of non-use
direct comparisons with rivals
product comparisons
newsworthiness
generic benefits

What Proposition Will Do This?

Specific core benefit brand delivers
Key emotion, reason or blend
Keep it singular

A good proposition

Gives creatives an angle or way in

Forces a strategic choice
Is single-minded not all encompassing
Is based on a truth (Rational or Emotional)
Is original, or expressed in an original way
Is liberating not limiting
Isnt an end-line

MARCOMS Overview
MEDIUM

DEFINITION

HORIZON

FORM

SCOPE

ADVERTISING

A paid for communication by an identified

sponsor with the aim of informing and
influencing one or more people.
The recording, analysis and tracking of
customers direct responses in order to
develop loyalty.
The formulation, execution and sustained
effort to establish and maintain
goodwill and mutual understanding and
reciprocal goodwill between an
organisation and its stakeholders.

Mainly long-term

TV, press, posters, radio, web,

cinema, digital, SMS.

Awareness, attitudes

Short and long-term

Mainly retention but also

acquisition

An incentive for the customer, sales force

or distributor to make an immediate
purchase.

Mainly short-term

Direct mail, DRTV & radio,

telemarketing, press, inserts,
leaflets, web, digital, SMS.
Community relations/CSR,
corporate advertising, crisis
management, events, internal
communications, investor
relations, media relations, public
affairs, lobbying, sponsorship,
web, digital.
Consumer: Coupons, contests,
trial, mail-in offers/refunds, group
promotions, self-liquidations, instore promotions, point-of-sale,
web, digital, SMS.
Trade: Dealer merchandise;
contests advertising, allowance,
trade allowance/ staff incentive,
web.

DIRECT
MARKETING
PR

SALES
PROMOTIONS

Short and long-term

Credibility, visibility and

reputation

Consumer: Trial, re-trial,

extended trial, build
database
Trade: Gain a listing,
increase distribution,
increase inventory, improve
shelving space/position

Media Scheduling
1. Reach
2. Creative Scope
3. Media History
4. Location
5. Distribution Channels
6. Budget

Budgeting
1. JUDGEMENTAL METHODS
Arbitrary
Affordable
2. OBJECTIVE and TASK
3. MEASUREMENT
ROI
Incremental
Quantitative Models
4. PERCENTAGE OF SALES
% Last Years Sales
% Anticipated Sales
Unit Sales
5. SHARE OF VOICE
Competitive Absolute
Competitive Relative

Marketing Audit
Marketing audit is a comprehensive,
systematic, independent, and periodic
examination of a companysor
business unitsmarketing environment,
objectives, strategies, and activities with
a view to determining problem areas and
opportunities and recommending a plan
of action to improve the companys
marketing performance
Philip Kotler

Characteristics of Marketing
Audit
Comprehensive
Must cover all marketing areas

Systematic
Sequential diagnostic steps

Independent
Internal & external auditors

Periodic
Performed at regular intervals

Marketing Audit Procedure

Marketing environment audit

Marketing strategy audit
Marketing organization audit
Marketing system audit
Marketing productivity audit
Marketing function audit
Marketing excellence review
Ethical and social responsibility review

Basic Steps in Control

1. Set standards of performance (these are
typically in the form of goals or
objectives)
2. Evaluate the reality of what occurs
against these steps
3. Take corrective or reinforcing action
where required

Steps in the Control Process

Possible Outcome 1:
15% market share
1. Set Standards
e.g. Marketing
Objective is to
attain 25%
market share

2. Evaluate
Standards
Against
Reality

Possible Outcome 2:
35% market share

Corrective
Action

3. Take Action

Reinforcing
Action

Nature of Control

Annual Plan control looks at the objectives set in the annual

marketing plan, evaluates these against the actual results achieved,
and takes corrective or reinforcing action when necessary
Financial or Expense control considers the financial parameters and
objectives set by a firm in its annual marketing plan, and the
corrective or reinforcing actions needed to attain these
The purpose of strategic control is to ensure that the organization is
maximizing the opportunities that exist in its business environment.
Strategic control often takes the form of a marketing audit

Marketing Strategy FormulationImplementation Grid

Figure 13.2: The Marketing Strategy
Formulation-Implementation Grid

Adequate
Trouble

Success

Strategy
Formulation
Failure
Poor
Poor

Rescue
or Ruin
Strategy
Implementation

Adequate

Barriers
The marketing strategy is implicit, not explicit, and people
cannot implement what they dont know
The marketing strategy is developed in isolation and people
cannot implement what they do not understand
Not everyone is a good strategic marketing thinker
The marketing strategy is developed by an external consultant
The marketing strategy has unanticipated consequences

(Robert, 1991)

Process Model
Figure 13.3: A Process Model of Competitive
Advantage (Day and Wensley, 1988)

Outcomes
Sources

Superior Skills

Superior
Resources

Sources

Superior Skills

Superior
Resources

Customer
satisfaction

Customer
Loyalty
Market Share

Reinvestment

ROI

Loop in the Model

Hard expressed in numbers that can easily be calculated,

compared and tracked
However they are historical a good way of tracking the past, but a
rather inadequate indication of the future
They are not good diagnostics of strategic health
By comparison measures of customer satisfaction and loyalty are
soft, and impression based but they are about the future
The astute firm will reinvest the financial outcomes of competitive
advantage in the sources of competitive advantage itself, namely
superior skills and/or superior resources
This activity closes the loop in the model, and suggests that
managing for competitive advantage is indeed a process that is
continually renewed, revived and refreshed

Customer Equity
The outcomes of ROI and Market Share are hard but
historical
The outcomes of Customer Satisfaction and Customer
Loyalty are future-oriented but soft
The ideal marketing control variable would be a single
outcome that is both hard (a number that can be
expressed financially) and future (customer) oriented
Customer Lifetime Value (CLTV), which in turn leads to
Customer Equity, is that single appropriate outcome

Customer Lifetime Value

Figure 13.4: A Simple Spreadsheet for the Calculation of CLTV

Revenue
Customers
Retention Rate
Ave Ann Sales
Total Revenue
Costs
Cost%
Total Costs
Profits
Gross Profit
Discount Rate
NPV Profit
Cum NPV Profit
CLTV

YEAR
YEAR
YEAR
YEAR
YEAR
1
2
3
4
5
1000
400
180
90
50
40.00%
45.00%
50.00%
55.00%
60.00%
150
150
150
150
150
150000
60000
27000
13500
7425
50.00%
75000

50.00%
30000

50.00%
13500

50.00%
6750

50.00%
3713

75000
30000
1.00
1.20
75000.00 25000.00
75000
100000
75.00
100.00

13500
1.44
9375.00
109375
109.38

6750
1.73
3906.25
113281
113.28

3713
2.07
1790.36
115072
115.07

Increasing CLTV
Increasing retention rate, or increasing
customer life (i.e. the number of years a
customer can remain a customer)
Increasing Sales to a Customer, either by
increasing the firms share of the
customers purchases, or by increasing
the customers referral rate
Cutting the Costs of serving a customer

Corporate Culture
The Clan culture, which emphasises
teamwork and cooperation
The Adhocracy culture, which
emphasizes entrepreneurship and
creativity
The Hierarchy culture, which emphasizes
order, regulations and rules
The Market culture, which emphasizes
competitiveness and goal achievement
(Deshpande, Farley and Webster, 1993)