Presentation 1

MARKETIN
G
STRATEGY
Marketing Strategy 1
Definition of Strategy

It means planning business

activities with an objective of
achieving long-term goals
Strategy is different from
planning; while planning is
concerned with day-to-day
activities, strategy is
concerned with long-term
goals Marketing Strategy 2
The basic questions that a
good strategy needs to
answer are:
What needs to be achieved?
Where it needs to be
achieved?
How it needs to be achieved?
Strategy helps a business to:
Develop and sustain its
competitive advantage
Build a brand image
Enhance performance
Define market position
Create a unique selling
proposition (USP)
 Levels of Strategy
Strategy can be broadly
classified into:
Corporate level strategy
(It’s an overall objective – a game plan of
the Company)
Business level strategy
(Company’s plan of action to compete with
in its industry)
Functional level strategy
(the focus here is on the smallest unit of a
business i.e. product or market)
So, What is Marketing

Strategy
It’s the process of
discovering, expecting, and
suiting the customer needs
and at the same time
making profits.
It is to know and understand
the customer so well that
the product or service fits
This involves broader
activities ranging from:
Market research
Product development
Sales and
Customer Management

Strategic Marketing Process

The strategic marketing process

involves:
Marketing Analysis (internal)
Analysis of Marketing Situation
(external)
Formulating Marketing Strategy
Marketing Program Development
Implementation, Evaluation,
Control
and Correction
 Marketing Analysis
(Internal analysis of the organization)
Market audit
(Current market situation, Operations, Ability to
cop with the changes, Past marketing successes
and failures)
SWOT analysis
(Organization’s strengths and weaknesses)
Marketing Costs & Financial
analysis
(Identifying available resource and using them
optimally, Marketing cost analysis, Customer
profitability analysis, Financial situation analysis,
Identifying Marketing
the key financial ratios, Contribution 9
Strategy
Formulating Marketing Strategy

The insights about the internal and external

environment act as inputs for the formulation
of a marketing strategy
Segmenting markets
Targeting and Positioning strategies
(using various combination of P’s)
Generic Strategies (cost leadership strategy,
focus strategy and differentiation strategy)
Managing marketing mix

 Implementing and Managing
Marketing Strategy
Address the organizational issues
in marketing
Design an effective marketing
organization
Marketing strategy
implementation, evaluation,
control and corrective action

VIMAL TEXTILE
1.TARGET MARKET: Elite customer
2.Postioning: high fashion high tech fabric for
elite customer
3.Marketing mix
 PRODUCT: premium quality product made
from crimped yarn
 PRICE: premium price
PLACE: Chain of exclusive Vimal showrom
Promotion: high budget,agreesive promotion,
 Theme: Selling Fashion


ONLY VIMAL
STPD
Segmentation
(divide the market into distinct subunits of
customers with similar needs)
Targeting
(Identify the most profitable segments that
its products and services can cater to)
Positioning
(create and image or a specific identity for
the product or brand in the minds of
customers called positioning)
DIFFERIENTIATION : Giving someting unique &
innoviative

Strategic Marketing 15
 Why Segmentation
Facilities proper choice of market

Adapting offer to the Target

Marketing efforts more efficient & economic

Benefits to customer


Consumer markets can be
segmented based on the:
Geographic
Demographic
Psychographic and
Behavioral characteristics of
customers
Segmentation
Geographic:
1. Nation
2. State
3. Region
4. City
5. Climate
6. Density (urban/rural)
7.
8.

Demographic
1.Age/Family size/Life cycle
2.Education
3.Income
4.Religion/Race/Generation
5.Nationality/Social class
6.Gender
7.Occupation
Psychographic
1.
2.Lifestyle – culture, sports, outdoor, Page 3
etc
3.
4.Personality – introvert, extrovert,
compulsive, ambitious, authoritarian etc
Behavioral
1.Occasions – regular, special
2.Benefits
3.User status – non user, regular
4.Usage rate – light, heavy
5.Loyalty status – medium, strong
6.Readiness stage – unaware, aware
7.Attitude toward product – positive,
indifferent
 TARGETING
Targeting involves taking decisions regarding the
choice of the segments on which the limited
resources (include the marketing skills, managerial
capabilities, technological innovations, and the cost
advantages) are to be focused.
The smart choice for the company to decide how
it can deploy its resources to optimize
efficiency, sales and profitability
For example, HUL started selling shampoos
in sachets in order to tap the potential in
rural markets
Targeting
Single segment concentration – small car
only
Selective specialization – FM channel
targeting all age groups with different
programs
Product specialization – one product
selling to different segments (paint)
Market specialization – many needs of 1
group – selling only to schools
Full market coverage - Coke
Positioning

Positioning is a term introduced

by Jack Trout and Al Ries in 1969,
means creating an image in the
perception of the buyer in the
target market about the product
or service of a company with an
advantage over the competition
It is a combination of both market
and psychological positioning
 Positioning Concept
A company can position its
product based on various factors:
Positioning by attribute
Positioning by price/quality
Positioning by use or application
Positioning by with respect to a
competitor
Revamped Positioning Strategy
Assumption is that customers focus on the
basic product or service and do not give
much importance to the added features
 E.g. Air Deccan
(provides only the basic)
Break Free Positioning Strategy

According to this strategy, the product must
be positioned in such a way that it escapes
from categorization
 E.g. Dettol Soap,

Classes of Competitors
Generic competition
Form competition
Industry competition and
Brand competition
Generic competition is a
form of competition where
all the companies compete
for the same disposable
income of the customers
For example, pepsi & clinic plus
shampoo
Form Competition is the one in
which a company sees itself
competing with all the other
companies offering similar
benefits
For example, Hero Honda
competing with all other
providers of transportation, which
could be companies producing
cars, buses, autos, scooters and
so on
Industry competition is the one in
which a company competes with
the companies offering similar
products to the same consumer
segments.
Eg; Pepsi with Coke
Michael E. Porter has developed his
‘Five Forces Model’ to help
managers to analyze the business
environment. It discuss namely:
The Threat of new entrants
The Bargaining power of buyers
The Bargaining power of suppliers
The Rivalry among existing players
and
The Threat of substitute products

Five Forces Model
POTENTIAL
Bargaining Threat of new
power entrants
of Suppliers
Industry Competitors
SUPPLIERS BUYERS
Rivalry among existing firms
Threat of substitute Bargaining power

products of Buyers
SUBSTITUTES
ALL THESE PLAY A VITAL ROLE IN SHAPING THE COMPANY ’ S FUTURE

Intensity of Rivalry
among firms
When rivalry among firms
is high, it leads to price
wars, advertising battles,
launches of new products
and increased customer
services and warranties
Threat of Substitutes
Substitutes affect the level of
competition in an industry
E.g. tea, soft drinks, juices, etc. can
be a substitutes for coffee
If coffee prices are hiked, customers
have the option of switching over to
tea or soft drinks.
At the same time, the switching
costs are negligible
Bargaining Power of
Buyers
The following circumstances in
which the bargaining power of
buyers will be higher:
When there are many suppliers
and a few large buyers
When the buyers purchase in large
quantities
When a supplier is depend heavily
on a buyer for a large percentage
of its total orders
When the buyers can switch orders
between supply companies at a
low cost, thereby playing
companies off against each other
to force down prices
When it is economically feasible for
the buyers to purchase the input
from several companies at time
When buyers can use the threat of
vertical integration as a device
for forcing down prices
Bargaining Power of
Suppliers
Suppliers too exert power, when
they are only few, at the same
time there are many buyers
The suppliers can get together
and decide on the price which is
most profitable to them
Intel – Computer chips
Opec – Oil suppliers
Suppliers are powerful under the following
circumstances:
When the product they sell has few
substitutes
When no single buyer is a major customer for
the suppliers
When products are differentiated to such an
extent that they are not easily substitutable
and it is costly for a buyer to switch from one
supplier to another
To raise prices, the supplier can use the threat
of vertically integrating forward into the
industry and competing directly with the
buying company
The buying companies cannot use the threat
of vertically integrating backward and
Market Situation
Strategy –
Leaders, Challengers, Followers
and nichers
 Market Leader Strategies
A market leader has
Considerable market share
Significance presence in the industry and
Acknowledged as the leader by other firms
A market leader has to guard itself from
competition
Competitors will always try to attack the leader
at its weak spot or challenge in its strong area
Therefore they need to remain in that position
by adopting certain strategies:
Eg. Microsoft GilleteLG Hero Honda

Dealing with competition - market
leader
Expanding total market –
1.New users – market penetration, new-
market segment, geographical
expansion
2.New uses – Vaseline petroleum
3.More usage - shampoo
4.
leader
Expanding market share – Best example is
P&G, thru:
1.Customer knowledge
2.Product innovation
3.Quality
4.Line/Brand extension/Multibrand
5.Heavy advertising/sales promo
6.Aggressive sales force etc
7.
8.
leader
Defending market share –
1.Position defense – Building superior brand
power make the brand impregnable
(Nascafe)
2.Preemptive defense – Attack is best defense
SBI with more than 10k branches, has left
nothing to chance!
3.Counteroffensive defense – In case of price
cut by competitor ,Eg. HLL made a counter
attack by reducing the price for its
detergent brands Surf Excel and Surf Excel
Blue
leader
4 Flank defense – should erect outpost

 5 Mobile defense – through a) broadening

(Reliance from petrochemicals to petrol,
LPG etc) & b) diversification into unrelated
industries (ITC)
 6 Withdrawl defense – Withdrawing from
non core areas (P&G from super soker from

detergent etc.)
5.
6.
Dealing with competition – market
challenger
1.Frontal attack ;Amul
2.Flank attack ; Target enemy’s weak spot by
geographical & segmental attack eg; LG
3.Encirclement attack – grand offensive on
several fronts
4.Bypass attack – diversifying into unrelated
products/new markets/new technologies
eg; googleover yahoo
5.Guerilla warfare - Shivaji
Market follower Strategies

Market followers prefer to follow the leader

rather than attack it. Most follower firms
manufacture products leveraging on the
product innovations of the market leaders.
If the follower attacks a market leader with
the same quality offerings and at the same
price, it might have to face severe attacks
from the market leader.
So, unless the follower firm has some strong
point in its armor, it will not dare attack the
market leader
.
46
Market follower
1.Counterfeiter – Duplicate leaders market &
sell in black market eg. Pirated product
2.Cloner – emulates with slight variations eg .
LAVIS
3.Imitator – Copies Something but maintain
differentiation
4.Adapter – adapts from leader & improves
Market nicher
Before you look for a niche in the market,
make sure there is a market in the niche.
Instead of being a follower in a large
market, it is sometimes better to be a
leader in a small market
Example – Logitech has become the king of
niche markets by making every variation
of computer mouse!
BCG Matrix
GE / McKinsey Matrix
The GE/McKinsey Matrix was developed by the
management consulting firm McKinsey & Co.
as a tool to screen General Electric’s large
portfolio of strategic business units (SBUs).
The idea behind the matrix is to use multiple
factors to evaluate businesses along two
composite dimensions: industry attractiveness
and industry strength.
Conceptually, this matrix is similar to the BCG
Growth-Share Matrix
The GE/McKinsey Matrix improves
on the BCG approach in two
ways:
1.It utilizes more comprehensive axes (the BCG
matrix uses market growth rate as a proxy
for industry attractiveness and relative
market share as a proxy for the strength of
the business unit); and
2.It consists of nine-cells rather than four,
allowing for greater precision by placing a
business unit in one of the nine cells of the
matrix based on attractiveness and
business strength scores.
The various Business Strength
factors taken into consideration
are:
Market size and growth rate
Intensity of competition
Technological requirements
Capital requirements
Entry and Exit barriers
Emerging industry threats and opportunities
Historical and projected industry profitability
The various Industry Attractiveness index
consists of factors like:
Industry size and growth prospects
Relative market share
price
Profit Margin
competitiveness
product quality
Economies of scale
Degree of seasonal and cyclical fluctuations
Industry cost structure
Market knowledge
Caliber of management
sales effectiveness, and
Geographic advantages
GE / McKinsey Matrix
The Green Zone consists of
the three cells. If the SBU
falls in this zone, it’s in a
favorable position with
relatively attractive growth
opportunities.
This position indicates a
"green light" to invest and
grow this SBU.
The Yellow Zone consists of the
three diagonal cells. A position in
the yellow zone is viewed as
having medium attractiveness.
Management must therefore
exercise caution when making
additional investments in this
SBU.
The suggested strategy is to
protect or allocate resources on a
selective basis rather than
The Red Zone consists of the
three cells. A harvest strategy
should be used in the two cells
just below the three-cell
diagonal. These SBUs shouldn’t
receive substantial new
resources.
The SBUs in the lower left cell
shouldn’t receive any resources
and should probably be divested
or eliminated from a firm’s
portfolio.
Sustainable Competitive
Advantages –
Porter’s Generic Strategy
Porter’s Generic Competitive
Strategies
A firm can perform profitably, if it employs its
resources optimally even though the industry
is not lucrative
Michael Porter suggests that a firm can gain
strategic advantage and meet its target if it
adopt the following generic strategies. They
are:
Cost leadership
Differentiation and
Focus strategy
Cost Leadership Strategy

Porter suggests that a firm can gain cost

leadership in an industry when:
Its cost of production is lower than that of its
competitors
By managing its processes and resources
efficiently and effectively
Developing efficient methods of production
Curbing overhead and Administrative costs
Procuring materials at low prices and
Monitoring costs of promotion, distribution and
service
Such cost advantages will
help firm:
To offer its products and services
at lower prices
Can reap higher profits while the
competitors are bound to make
losses
Gains an edge over its
competitors
Protects itself in the event of a
price war
Cost Leadership Strategies of Nirma
 In the early 1970s, when Nirma washing powder was introduced in the low-
income market, HLL, the market leader with the Surf brand reacted in a
way typical of many multinational companies. Senior executives were
dismissive of the new product: “That is not our market,” “We need not be
concerned.” But very soon, Nirma’s success in the detergents market
convinced HLL that it really needed to take a closer look at the low-
income market.
 Starting as a one-product one-man outfit in 1969, Nirma became a Rs. 17
billion company within three decades. The company’s mission to provide
“Better Products, Better Value, Better Living”contributed a great deal to
its success. Nirma successfully countered competition from HLL and
carved a niche for itself in the lower-end of the detergent and toilet soap
market. The brand name became almost synonymous with low-priced
detergents and toilet soaps.
 By 1985, Nirma washing powder had become one of the most popular
detergent brands in many parts of the country. By 1999, Nirma was a
major consumer brand – offering a range of detergents, soaps, and
personal care products. In keeping with its philosophy of providing
quality products at the best possible prices, Nirma brought in the latest
technology for its manufacturing facilities at six places in India.
 Within a short span, Nirma had completely rewritten the rules of the game,
offering good quality products at an unbeatably low price. Nirma’s
success was attributed to its focus on cost effectiveness. The company
endeavored to keep improving quality while cutting costs. To keep
products costs at a minimum, Nirma sought captive products plants for
raw materials. This led to the backward integration program, as a part of
which two state-of-the-art plants were established at Vododara and
Bhavnagar in Gujarat, which
Marketing became operational in 2000. this resulted
Strategy 62
in a decline in raw-materials costs.
Cost Leadership Strategies of Nirma
 Some of the factors which enable Nirma to break the cost barrier
are mentioned here.
 Cost Competitiveness: In 1969, Nirma was launched at Rs.3/kg,
when the price of Surf was Rs.13 for the same quantity. Although
the manufacturing mode was primitive, it was ideally suited for a
labor-surplus market. In the 1970’s with a workforce of 10,000
and 200 managers, Nirma managed to keep its wage bill at a fifth
of HLL’s.
 Backward Integration:But as the business environment changed,
the manufacturer’s strategy evolved as well. Even as the excise
concessions were withdrawn in 1982, Nirma had to contend with
a whole host of new competitors. To survive, the company had to
adopt backward integration and manufacture Alpha Olephin
Sulphonates (AOS), Linear Alkyl Benzene (LAB) and soda ash, and
consolidate its capacities. This upstream strategy was the
strength of Nirma all along.
 Supply Chain Management: Initially, Nirma sourced packages
from 10 vendors but incurred high costs and the delivery was not
always on time. By centralizing packaging, Nirma was able to cut
its inventory costs by over 40%. Further, costs savings had come
from a flat distribution system. Nirma was directly connected to
the distributor; there were not carrying and forwarding, or
warehousing agents in between.
Differentiation Strategy

It is basically the skill and ability to differentiate

the product from that of the competitors by
providing some attributes
How does firm adopt this strategy
By advanced scientific research
Using highly skilled labor force
Effective customer communication strategies
By Product design
By Brand image
By product features
By product benefits
E.g.
Coca-Cola – brand image
Cadillac – features
Intel microprocessors – technology
Hilton hotels – customer service
Sony – quality
HLL- used Soya in its Modern
brand biscuits
By using the
differentiation strategy, a
firm is able to influence
the perception of
customers that the
product or the service is
unique, rather than
having to reduce its costs
to attract customers.
Baskin-Robbins’ Product Differentiation Strategies
 Baskin-Robbins was set up in 1945 in the US by Irv Robbins (Robbins)

Burt Baskin (Baskin), who were brothers-in-law. They hit upon the
unique idea of offering 31 flavors of ice cream – one for each day of
the month – to allow customer more variety and, by 1953, the big
’31’ sign began to be displayed prominently in all the stores, soon
becoming a national trademark.
 Baskin-Robbins was well known for being an innovator in the ice cream
industry. It was also the pioneer in ice cream marketing. In the
1990s, the chain introduced some of its most popular products;
Cappuccino Blast (cappuccino served with ice cream) and BR
Smoothie (blended yogurt with fruit and ice), which became a regular
part of the menu in later years. By the end of 2002, Baskin-Robbins
had 2500 outlets in the US and 2100 stores in over 50 countries
around the world. The chain also had a portfolio of over 1000 flavors
developed over the years, along with other novelties and frozen
desserts.
 Innovative Flavoring:Since its inception, BR had followed the
practice of introducing flavors to commemorate important current
events. This was the company’s way of acknowledging the
importance of these events. It was also an effective marketing tools
as it generated interest in people, who bought the new flavors out of
a sense of curiosity. The flavors also provided an interesting history
of world events. In the 1960s, it saluted the popularity of the Beatles
with Beatle Nut. 0031 Secret Bonded Flavor acknowledged the spate
of James Bond movies, and Lunar Cheesecake commemorated man’s
landing on the moon. Such flavors ensured that the company tapped
Baskin-Robbins’ Product Differentiation Strategies
‘What’s Your Flavor?’ – 31 to Choose From

 The punch line of Baskin-Robbins, ‘`What’s your flavor?’,

emphasized the wide range flavors offered by the company.
This relived monotony has helped infuse novelty into the
stores. Besides this, the company had some regular flavors,
like Jamoca, Jamoca Almond fudge, Mint Chocolate Chip,
Pralines ‘n Cream, Chocolate Chip and Vanilla, which were all-
time best sellers and were always available in the stores.
 Basking Robbins thrived on creating unique flavors of ice cream
with fanciful names. The catch names usually contributed to
making the flavors popular. BR had a full-fledged R&D wing
which worked round the year to develop new flavors. It was
able to position the company on a unique stage by focusing on
the concept of 31 flavors, emphasizing that the stores always
carried at least 31 flavors so that customers could try a
different one each day of the month. The 31 concept was a
very effective marketing tools as it differentiated the company
from its competitors and provided instant recall value for the
brand.
 Wide variety and uniqueness were the USP of Baskin-Robbins.
The company was set up with the objective of providing
variety and uniqueness and it managed to do this over the
years. BR lived up to its motto “Where Wonders Never Cease.”
 Marketing Strategy 68
Focus Strategy

Pursue or serve a specific segment instead of

catering the entire market. It may be:
A special group of customers
A specific geographic area
A particular product or service line
The advantage being
Niche market
Loyal set of customers
Entry of competitors become difficult
Higher pricing possible
Generic Strategy Mix

Porter suggests that, to be successful over

the long-term, a firm must select only one
of these three generic strategies
Otherwise, with more than one single
generic strategy the firm will be left
nowhere and will not achieve a
competitive advantage.
However, those firms that are able to
succeed at multiple strategies often do so
by creating separate business units for
each strategy.
By separating the strategies into different
units having different policies and even
Communication Strategy
(managing communication mix for
products, brands)
 Types of Communication
Channels
Communication channels are
classified into:
Personal channels
Non-personal channels.

 Personal Channels
This include:
Face-to-face interactions
Telephone conversations
Mailers, e-mails etc
Here the message can be
personalized to the
audience’s tastes and
preferences
Promotional Tools

The promotional tools that are widely used by

organization for their marketing activities are:
Advertising
Sales promotion
Publicity
Public relations
Personal selling and
Direct marketing
All these tools communicates the intended
message at different levels and through
different formats
 Developing Communication
Strategy
Decide and select the best and
cost effective promotional tool
that can reach to the desired
target i.e.
The right audience
At the right time
At the right place
A promotional tool should help
maximize its sales
 Objectives of the
Communication Strategy
The marketers must know exactly
in what stage the consumers is
in order to decide what type of
communication to be used at
what stage.
The message should create
awareness, enhance image,
increase knowledge, linking,
preference, conviction and
stimulate demand, finally end-up
The factors influence the
design of the communication
message are:
Message content (the appeal)
Message structure (attractiveness)
Message format (alignment and
placement of message / pictures etc.)
Message source (who is endorsing it)
ADVERTISEMENT
Promotion is an important component of the
marketing mix. The key components of
promotion include:
Personal selling
Direct marketing
Advertising
Sales promotion and
Public relations
Advertising is a persuasive communication, to
its target audience
Advertising Strategy
Advertising strategy is defined
as “a statement setting forth
the competitive frame, target
market, and message
argument to be used in an
advertising campaign for a
specific product or service.”
An advertising campaign
can have different
objectives and they are:
Inform
Persuade
Remind
Developing an Advertising
Strategy
1.An advertising strategy is developed in light
of its advertising objectives
2.Advertising objectives depend on the
marketing objectives
3.Which in turn depend on the overall
organizational objectives
4.Once the advertising objectives have been set,
the advertising budgets are finalized
5.The next step involves finalizing the
creative strategy and media strategy
6.Finally, evaluating the effectiveness of the
advertising strategy
Advertising Budget

Advertising budget is the amount of

money allocated by a firm for its
advertising campaigns for a
specific period of time
It means the specific amount spent
on:
Media costs
Creative costs
Production costs
The most common methods used for setting
advertisement budgets include the:
1. Objective and task method
2. Percentage of sales method
3. Affordability method and
4. Competitive parity method
Spending a lot on advertising does not
automatically guarantee success.
What is important here is the creativity.
Creative Strategy

Advertising creativity is the skill to create

new, distinctive, and suitable ideas that can
be used as solutions to communications
problems.
The level of creativity in an advertisement
consists of:
Logo trademark or firm’s name
Headlines/ Headings
Body text, Punch line, Baseline
Color, Graphics, Image and emotion
Quality of sound and visuals
Jingles etc.
Media Strategy
 (the vehicle of
communication)
Media strategy is a plan of action by an
advertiser for bringing advertising messages to
the attention of the consumers through the use
of appropriate media.
Different types of media are used like:
Television
News paper
Radio
Internet and Mobile phones
The firm need to find answers to the following
important question before selecting a vehicle
for advertising
Who are the target audience
Where are they located
What is the message that has to be delivered
When do we run the advertising campaign
The media cost
The right medium
The time schedule
Number of insertions etc
Frequency
Sales Promotion

Sales promotion is defined as the

media and non-media marketing
pressure applied for a
predetermined, limited period of
time at the level of consumer,
retailer, or wholesaler in order to
stimulate trial, increase
consumer demand and boost the
sales of a product.
A sales promotion aimed at
consumer is termed as ‘pull
strategy’ and it encourages
customers to purchase more.
A sales promotion aimed at
distribution channels is known
as ‘push strategy’ and it
encourages channels to stock
more products.
 Purpose of Sales Promotion
Sales promotion also helps in
achieving the following purposes:
Encourage the customer trials
Attract new customers
Make the customer brand loyal
Encourage channel’s support for the product
Counter a competitors’ promotional activities
Sales promotion can be in
the form of either
Consumer Sales Promotion
or
Trade Sales Promotion
Dealer
Distributor
Stockist
Wholesaler
Retailer
Consumer Sales Promotion

Sales promotions offered to

consumers take the form of
offering:
Discounts
Coupons
Door-to-door selling
Telemarketing etc
Trade Sales Promotion

Trade sales promotions involve

activities aimed at channel
members to encourage and
support for the product or
service in the form of:
Displays
Shows
Demonstrations
Distribution of samples
Offering free gifts etc
Distribution Strategy
Designing of channel systems,
Managing Distribution channels
Distribution Channel

The focus now is on channel performance to
enhance and deliver better value addition to the
final customer in terms of:
Price
Quality
Innovation and
Customer service
To achieve this, an efficient distribution strategy
is absolutely necessary.
Strategic Issues in
Distribution
The strategic importance of a
distribution management
mainly encompasses three
issues:
Analyzing the present
distribution system
Deciding on the distribution
system that is futuristic
Devising strategies for the new
The distribution strategy of an
organization is influenced by
the decisions taken in other
areas of marketing like:
Product
(the nature of product)
Price
(number of intermediaries affects the final
selling price)
Promotion
(channel as a promotional partner)
Channels
The key constituents of a
marketing channel are:
Manufacturers
Intermediaries
End Users

 Channels of Distribution
(e.g. Eureka Forbes and Amway)
Zero-level channel
recudorP ro rerutcafunaM
(MUL, BPCL, HP)
Retailer
One-level
channel
(FMCG – HUL, Dabur, Godrej)
Wholesaler Retailer
remusnoC
Two-level channel
(Pharma Companies)
Agent Wholesaler Retailer

Three-level channel
Designing Distribution Channels
In designing a distribution
channel for an organization,
there are mainly three steps:
1.Identifying the functions to be
performed by the channel
2.Designing the channel structure
3.Putting the structure into
operation
Designing Distribution Channels
In designing a distribution channel
for an organization, there are
mainly three steps:
1.Identifying the functions to be
performed by the channel
2.Designing the channel structure
3.Putting the structure into operation

In deciding on the kind of
distribution strategy to be used,
there are various considerations
to be kept in mind:
Middlemen Considerations
(ability and capacity)
Customer Considerations
(convenient and easy availability of
products)
Product Considerations
(nature of products, after sales services
etc.)
Price Considerations
(the final selling price)
Distribution Intensity
Distribution intensity can be
referred to as the number of
retail stores carrying a product
in a geographical location
(i.e. the maximum number of
outlets through which products
are distributed)

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MARKETIN

It means planning business

The strategic marketing process

The insights about the internal and external

Positioning is a term introduced

Break Free Positioning Strategy

Rivalry among existing firms

Threat of substitute Bargaining power

ALL THESE PLAY A VITAL ROLE IN SHAPING THE COMPANY ’ S FUTURE

 5 Mobile defense – through a) broadening

non core areas (P&G from super soker from

Market followers prefer to follow the leader

Porter suggests that a firm can gain cost

It is basically the skill and ability to differentiate

 Baskin-Robbins was set up in 1945 in the US by Irv Robbins (Robbins)

 The punch line of Baskin-Robbins, ‘`What’s your flavor?’,

Pursue or serve a specific segment instead of

Porter suggests that, to be successful over

The promotional tools that are widely used by

Advertising budget is the amount of

Advertising creativity is the skill to create

Sales promotion is defined as the

Sales promotions offered to

Trade sales promotions involve

(MUL, BPCL, HP)

Agent Wholesaler Retailer

Marketing Strategy 100

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