MARKETING MIX STRATEGY

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MARKETING MIX STRATEGY
Promotion Mix
Sales Promotion
Offer Mix
Advertising
Products Services Prices
Company
Channels
Customers
Sales force
Public relations
Direct mail and telemarketing
2
The Strategic Planning Implementation, and
Control Process
There are three types of companies those who
make things happen those who watch things
happen those who wonder what happened. An
onymous
Planning Implementing Controlling
Corporate planning Organizing
Measuring results Business planning
Implementing Diagnosing results Product
planning Taking corrective
action
3
MISSION STATEMENT

Corporate
Corporate
Strategic portfolio
Corporate mission
business unit evaluation
new-business
identification and strategy
plan
The corporate Strategic planning
Process
The Companys mission is shaped by five
elements. 1. History 2. Current preferences 3.
Enviornmental factors 4. Organizations
resources 5. Distinctive competences. The
mission statement should define the competitive
domain in which the corporation will operate.
The domain can be spelled out by statements on
scope 1. Industry Scope 2. Market segment
scope 3. Vertical scope 4. Geographical scope
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A Small Lighting Companys curent Definition of
Its Business Domain
Customer Needs
Air conditioning Ventilating
Heating Lighting
Customer Groups
Television studios homes
Factories
Offices
Candles Light bulb
Fluorescent
Alternative Technologies
5
CORPORATE NEW-BUSINESS PLAN
Sales

Desired sales Strategic planning gap Projected
sales
Diversification growth integrative
growth Intensive growth
Time (years)
0 5
10
Major Classes of Growth Opportunities ------------
--------------------------------------------------
--------------------------------------------------
-------- Intensive Integrative Diversificatio
n Growth Growth Growth ----------------------
--------------------------------------------------
------------------------------------------------
Market Penetration
Backward integration Concentric
diversification Market development Forward
integration Horizontal diversificaiton
Product development Horizontal integration
Conglomerate diversification
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Three Intensive Growth Strategies
New Products
Current Products
1. Market Penetration Strategy
3. Product development Strategy
Current Markets
New Markets
2. Market development strategy
(Diversification strategy)
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KEY TERMINOLOGY TO AVOID TERMINATION

• Vision A vividly descriptive image of what a
  company wants to be or wants to be known for.
• Mission A statement of intent of what a
  company wants to create, and through which lines
  of business.
• Purpose An articulation of the functions that
  a company intends to fulfil through its
  businesses.
• Value The set of cherished notions and beliefs
  that guides every move that a company makes.
• Goal The business targets that a companys
  vision, mission, and purpose are translated into
• Strategy The methods that a company employs to
  achieve the goal that its vision provides.

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AN A-Z OF CORPORATE VISION STATEMENTS

• AMTREX, Arvind Nair To be one of the top
  three tropical air-conditioner manufacturers in
  the world in five years.
• ANDERSEN CONSULTING, Sid KhannaTo help our
  clients change to be more successful.
• B.K.MODI GROUP, B.K.ModiTo develop,
  manufacture, market, and service a range of
  products and services, through group companies,
  to help our customers enhance quality and become
  more productive.
• CADBURY, J.M.Robertson Cadbury India will
  continue to maintain its leadership position in
  the confectionery market as well as achieving a
  national presence in the food drinks sector.
• CEAT, H.V.Goenka We will attain undisputed
  leadership in our core sectors with global
  leadership in at least one business. our market
  capitalisation shall be among the top three
  industrial group in India.

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AN A-Z OF CORPORATE VISION STATEMENTS

• HDFC, Deepak s.Parekh Develop close
  relationships with individual householdsmaintain
  position as the premier housing finance
  institution in the country transform ideas into
  viable and creative solutions.
• McKINSEY CO.,Anupam Puri To help leading
  corporations and governments be more successful.
• MOTOROLA, A.Sharma To serve an increasingly
  mobile workforce and society with the broadcast
  line of platforms and products, based on its two
  core competencies radio communications and
  semiconductors.
• NTPC, Rajinder Singh To make available reliable
  and quality power in increasingly large
  quantities
• TISCO, J.J.Irani To strengthen Indias
  industrial base through the effective utilisation
  of men and materials. The means envisaged to
  achieve this are high technology and
  productivity, consistent with modern management
  practices

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ARE GOALS AND OBJECTIVES TWO SIDES OF THE SAME
COIN ?

• OBJECTIVES SHOULD BE BROAD AND TIMELESS
  STATEMENTS. THEY MAY BE STATED IN QUANTITATIVE
  OR QUALITATIVE TERMS.
• GOALS ARE SPECIFIC, TIME BASED POINTS OF
  MEASUREMENT THAT THE ORGANISATION INTENDS TO MEET
  IN THE PURSUIT OF ITS BROAD OBJECTIVES.
  
  - KING AND CLELAND
• ONGC OBJECTIVES
• CONTINUE AND EXPAND EXPLORATION EFFORTS TO
  CONVERT IN THE FASTEST TIME POSSIBLE THE
  COUNTRYS PROGNOSTICATED HYDRO-CARBON RESOURCES
  TO ESTABLISHED RESERVES.
• GOAL COULD BE 10 INCREASE IN MARKET SHARE IN
  NEXT SIX MONTHS.

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TYPES OF GOALS AND OBJECTIVES

• OBJECTIVES
• MARKETING
• INNOVATION
• HUMAN ORGANISATION
• FINANCIAL RESOURCES
• PHYSICAL RESOURCES
• PRODUCTIVITY
• SOCIAL RESPONSIBILITY
• PROFIT REQUIREMENTS
• PETER DRUCKER

• GOALS
• OFFICIAL-ANNUAL REPORTS, MOA, ETC. PR VALUE
  ASSOCIATION.
• OPERATIVE -WHAT THE ORGANISATION IS REALLY
  ATTEMPTING TO DO.
• OPERATIONAL -_TO INFLUENCE THE BEHAVIOUR OF THE
  STAFF AND MEASURE THEIR PERFORMANCE.

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SO WHERE FROM THE WORD POLICY CAME AND WHAT DOES
IT MEAN ?

• PYRAMID OF BUSINESS POLICIES
• MAJOR -LINES OF BUSINESS
• SECONDARY - MAJOR CUSTOMERS, PRODUCTS.
• FUNCTIONAL-MKTG, PRODUCTION RD ETC.
• PROCEDURES AND STANDARD OPERATING PLANS -ORDER
  HANDLING, SERVICING COMPLAINTS ETC.
• RULES -DELIVERY OF PAYCHECKS, USE OF COMPANY
  CARS, SMOKING ETC. -STEINER G.A

• POLICY IT IS A GUIDE TO ACTION.
• STANDING PLAN WHICH IS USED TO GUIDE
  SPECIFICATIONS.
• GUIDES TO ACTION OR CHANNELS TO THINKING.
• A POLICY IS A DEFINITION OF COMMON PURPOSES FOR
  ORGN COMPONENTS OF THE CO. AS A WHOLE IN MATTERS
  WHERE, IN THE INTEREST OF ACHIEVING BOTH
  COMPONENT AND OVERALL CO OBJECTIVES, IT IS
  DESIRABLE THAT THOSE RESPONSIBLE FOR
  IMPLEMENTATION EXERCISE DISCRETION AND GOOD
  JUDGMENT IN APPRAISING AND DECIDING AMONG
  ALTERNATE COURSE OF ACTION. GE USA

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OH GOD ! THEN WHATS THIS STRATEGY ALL ABOUT IS ?

• REFERS TO A BLUEPRINT OF THE ORGANISATIONAL
  GAMEPLAN INDICATING HOW THE ORGN WILL ACHIEVE ITS
  OBJECTIVES AND MISSIONS.
• GROWTH
• DEPENDENCY REDUCTION
• VERTICAL INTEGRATION
• GENERIC MERGERS AND ACQUISITION/JV
• TURNAROUND
• BUSINESS UNIT AND CORPORATE

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GENERIC COMPETITIVE STRATEGIES

• STRATEGIC TARGET/ STRATEGIC
  ADVANTAGE
• UNIQUENESS PERCEIVED LOW COST POSITION
• BY THE CUSTOMER
• OVERALL
• INDUSTRYWIDE
  DIFFERENTIATION COST LEADERSHIP
• PARTICULAR FOCUS
• SEGMENT ONLY

OVERALL COST
DIFFERENTIATION
LEADERSHIP
RANBAXY
RELIANCE/BAL
F O C U S
SUNDARAM FASTENERS/ ARVIND MILLS
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RANBAXY
RANBAXY

• COMPETING ON DIFF.

BAJAJ AUTO

• SEEK DIFF. IN DELIVERY NOT PROD..

RELIANCE IND.

• COMPETING ON COST
• COMMIT ALL
• YOUR ACTS
• TO CONTROL
• COST THUS
• MAKING THE
• PRODUCT
• AFFORDABLE

• USE RD TO BUILD
• UNIQUE UNMATCHED
• SKILLS

THINK

• COMPETING ON SCALE

GLOBAL

• USE VERTICAL
• INTEGRATION TO
• CONTROL THE MKT.

ACT
GLOBAL

• ATTAIN GLOBAL SCALES
• IN EVERY PROD.LINE

SUNDARAM FASTENERS
ARVIND MILLS
FOCUS

• COMPETING ON FOCUS (QUALITY)
• FOCUS ON ONLY ONE SEGMENT OF CUST.
• USE DEMANDING CUSTOMERS TO RAISE
• QUALITY LEVELS
• BUILD UNIQUE SKILLS THAT ARE
• EXPENSIVE TO DUPLICATE

• ONE PROD.

• DIVERSIFY IN
• MANY MARKETS

• QUALITY IS FREE--SUMMARY

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COMPONENTS OF A COMPETITORS ANALYSIS
WHAT DRIVES WHAT THE COMPETITOR THE
COMPETITOR IS DOING AND CAN DO
FUTURE GOALS
CURRENT STRATEGY
AT ALL LEVELS OF MANAGEMENT AND IN
MULTIPLE DIMENSIONS
HOW THE BUSINESS IS CURRENTLY COMPETING
COMPETITORS RESPONSE PROFILE

• IS THE COMPETITOR SATISFIED WITH ITS CURRENT
  POSITION?

• WHAT LIKELY SHIFTS OR STRATEGIES THE COMPETITOR
  WILL MAKE.?
• WHERE IS THE COMPETITOR VULNERABLE.?
• WHAT WILL PROVOKE THE GREATEST AND MOST EFFECTIVE
• RETALIATION BY THE COMPETITOR?

CAPABILITIES
ASSUMPTIONS
HELD ABOUT ITSELF AND THE INDUSTRY
BOTH STRENGTHS AND WEAKNESSES
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FUNCTIONS OF A COMPETITORS INTELLIGENCE SYSTEM
COLLECTING FIELD DATA
COLLECTING PUBLISHED DATA
COMPILING THE DATA
CATALOGING THE DATA
DIGESTIVE ANALYSIS
COMMUNICATION TO STRATEGIST
COMPETITOR ANALYSIS FOR STRATEGY FORMULATION
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M A R K E T S I G N
A L S

• PRIOR ANNOUNCEMENTS OF MOVES
• ANNONCEMENTS OF RESULTS OR ACTIONS AFTER THE FACT
• PUBLIC DISCUSSIONS OF THE INDUSTRY BY THE
  COMPETITOR
• DIVERGENCE FROM THE PAST GOALS
• DIVERGENCE FROM THE INDUSTRY PRECEDENT
• THE CROSS PARRY
• THE FIGHTING BRAND
• PRIVATE ANTITRUST SUITS

• THE KEY QUESTION ??????
• CAN ATTENTION TO MARKET SIGNALS
• BE A DISTRACTION?

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US BREWING INDUSTRY STRUCTURAL ANALYSIS
POTENTIAL ENTRANTS



INDUSTRY COMPETITORS RIVALRY
SUPPLIERS BARG. POWER
BUYERS BARG. POWER
SUBSTITUTES
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Relative Market Share(Cash Generation)
Star
?
Question Mark
Large Negative Cash Flow
Modest or - Cash Flow
High
Growth (Cash use)
Otimum Cash Flow
10
Dog
Cash Cow
Modest or - Cash Flow
Large Positive Cash Flow
Low
1.0
Low
High
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Relative Market Share(Cash Generation)

• Cash Cows Business with high relative share in
  low-
• growth markets will produce healthy cash flow,
  which can be
• used to fund other, developing businesses.
• Dogs Businesses with low relative share in
  low-growth
• markets will often be modest cash users. They
  will be cash traps
• because of their weak competitive position.
• Stars Businesses with high relative share in
  high-growth markets usually will require larege
  amounts of cash to sustain growth but have a
  strong market position that will yield high
  reported profits. They may be nearly in cash
  balance.

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RELATIVE MARKET SHARE(Cash Generation)

• Question Marks Businesses with low relative
  share in rapidly growing markets require large
  cash inflows to finance growth and are weak cash
  generators because or their competitive position.
• LIMITATIONS
• The market has been defined properly to account
  for important shared experience and other
  intedependencies with other markets. This is
  often a subtle problem requiring a great deal of
  analysis.
• The structure of the industry and within the
  industry are such that relative market share is a
  good proxy for competitive position and relative
  costs. This is often not true.
• Market growth is a good proxy for required cash
  investment. Yet profit (and cash flow) depend on
  a lot of other things.

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COMPANY POSITION/INDUSTRY ATTRACTIVENESS SCREEN
Criteria

• Size
• Market Growth Pricing
• Market Diversity
• Competitive Structure
• Industry Profitibility
• Technical Role
• Social
• Environment
• Legal
• Human

Criteria
Industry Attractiveness

• Size
• Growth
• Share
• Position
• Profitability
• Margins
• Technological
• Position
• Strength/
• Weakness
• Image
• Pollution
• People

High
Low
Medium
High
Medium
Business Unit Position
Low
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Market Attractiveness -- Competitive Position
Portfolio Classification and Strategies
PROTECT POSITION INVEST TO BUILD
BUILD SELECTIVELY

• specialize around
• limited strengths
• seeks ways to overcome
• weaknesses
• withdraw if indications
• of sustainable growth are
• lacking

• challenge for leadership
• build selectively on
• strengths
• reinforce vulnerable
• areas

• invest to grow at
• maximum digestible rate
• concentrate effort on
• maintaining strength

HIGH MEDIUM LOW
BUILD SELECTIVELY SELECTIVEITY/MANAGE LIMITED
EXPANSION
FOR EARNINGS OR
HARVEST

• invest heavily in most
• attractive segments
• build up ability to counter
• competition
• emphasize profitability
• by raising productivity

• protect existing program
• concentrate investments in
• segments where profitbility is
• good and risk is relatively low

• look for ways to expand
• without high risk otherwise
• ,minimize investment and
• rationalize operations

PROTECT REFOCUS MANAGE FOR EARNING
DIVEST

• protect position in most
• profitable segments
• upgrade product line
• minimize investment

• manage for current earnings
• concentrate on attractive
• segments
• defend strengths

• sell at time that will
• maximize cash value
• cut fixed costs and avoid
• investment meanshile

STRONG MEDIUM
WEAK
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FORCES DRIVING INDUSTRY COMPETITION

• POTENTIAL
  ENTRANTS
• INDUSTRY
• SUPPLIERS COMPETITORS
  BUYERS BARGAIN.
  RIVALRY BARGAIN.
  
• POWER POWER
• 
  SUBSTITUTES

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STRUCTURAL ANALYSIS AND COMPETITIVE STRATEGY

• ESSENCE OF COMPETITIVE STRATEGY IS RELATING A
  COMPANY TO ITS ENVIRONMENT
• INDUSTRY STRUCTURE DETERMINES LEVEL OF
  COMPETITION AND HENCE INDUSTRY PROFITABILITY
• UNDERSTANDING THE STRUCTURE IS CRITICAL IN
  FORMULATING STRATEGY
• POSITIONING THE FIRM TO COMPETE
• INFLUENCING THE BALANCE OF FORCES THROUGH
  STRATEGIC MOVES
• EXPLOITING CHANGE

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THREAT TO ENTRYBARRIERS TO ENTRY

• THERE ARE SEVEN MAJOR SOURCES OF BARRIERS OF
  ENTRY
• ECONOMIES OF SCALE
• PRODUCT DIFFERENTIATION
• CAPITAL REQUIREMENTS
• SWITCHING COSTS
• ACCESS TO DISTRIBUTION CHANNELS
• COST DISADVANTAGE INDEPENDENT OF SCALE
• GOVERNMENT POLICY

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INTENSITY OF RIVALRY AMONG EXISTING COMPETITORS

• NUMEROUS OR EQUALLY BALANCED COMPETITORS
• SLOW INDUSTRY GROWTH
• HIGH FIXED OR STORAGE COSTS
• LACK OF DIFFERENTIATION OR SWITCHING COSTS
• CAPACITY AUGMENTED IN LARGE INCREMENTS
• DIVERSE COMPETITORS
• HIGH STRATEGIC STAKES
• HIGH EXIT BARRIERS

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BARGAINING POWER OF SUPPLIERS

• IT IS DOMINATED BY A FEW COMPANIES AND IS MORE
  CONCENTRATED THAN THE INDUSTRY IT SELLS TO.
• IT IS NOT OBLIGED TO CONTEND WITH OTHER
  SUBSTITUTE PRODUCTS FOR SALE TO THE INDUSTRY.
• THE INDUSTRY IS NOT AN IMPORTANT CUSTOMER OF THE
  SUPPLIER GROUP.
• THE SUPPLIERS PRODUCT IS AN IMPORTANT INPUT TO
  THE BUYERS BUSINESS.
• THE SUPPLIER GROUPS PRODUCTS ARE DIFFERENTIATED
  OR IT HAS BUILT UP SWITHING COSTS.
• THE SUPPLIER GROUP POSES A CREDIBLE THREAT OF
  FORWARD INTEGRATION.

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BARGAINING POWER OF BUYERS

• IT IS CONCENTRATED OR PURCHASES LARGE VOLUMES
  RELATIVE TO SELLER SALES
• THE PRODUCTS IT PURCHASES FROM THE INDUSTRY
  REPRESENT A SIGNIFICANT FRACTION OF THE BUYERS
  COSTS OR PURCHASES.
• THE PRODUCTS IT PURCHASES FROM THE INDUSTRY ARE
  STANDARD OR UNDIFFERENTIATED.
• IT FACES FEW SWITCHING COSTS.
• IT EARNS LOW PROFITS.
• BUYERS POSE A CREDIBLE THREAT OF BACKWARD
  INTEGRATION
• THE INDUSTRYS PRODUCT IS UNIMPORTANT TO THE
  QUALITY OF THE BUYERS PRODUCTS OR SERVICES.
• THE BUYER HAS FULL INFORMATION.

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BARRIERS AND PROFITABILITYENTRY BARRIERS //
EXIT BARRIERS
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PRESSURE FROM SUBSTITUTE PRODUCTS

• SUBSTITUTE PRODUCTS THAT DESERVE THE MOST
• ATTENTION ARE THOSE THAT
• ARE SUBJECT TO TRENDS IMPROVING THEIR
  PRICE-PERFORMANCE TRADEOFF WITH THE INDUSTRYS
  PRODUCT,
• OR
• ARE PRODUCED BY INDUSTRIES EARNING HIGH PROFITS.
  

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BACK TO BASICS
By Thomas J.Peters

Robert H.Waterman, Jr.

• Managing Ambiguity and paradox
• A Bias for Action
• Close to the Customer
• Autonomy and Entrepreneurship
• Productivity Through People
• Hands-On, Value-Driven
• Stick to the Knitting
• Simple Form, Lean Staff

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Improving ROI the easier way
Now, ROI (or RONA, OR ROCE, and so forth) has two
components a numerator - - net income -- and
a denominator -- investment, net assets, or
capital employed. ( In a service industry, a
more appropriate denominator may be head-count.)
Managers throughout our not-so-hypothetical firm
also know that raising net income is likely to
be a harder slog than cutting assets and
head-count. To grow the numerator, top
management must have a point of view about where
the new opportunities lie, must be able to
anticipate changing customer needs, must have
invested preemptively in building new
competencies, and so on. So under intense
pressure for a quick ROI improvement, executives
reach for the lever that will bring the quickest,
surest improvement in ROI -- the denominator. To
cut the denominator, top management doesnt need
much more than a red pencil. Thus the obsession
with denominators.
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CHANGING MISSION STATEMENTS WITH TIME
ATTs visionary mission some 80 years ago was
described by a former chairman this way
The dream of good, cheap, fast, worldwide
telephone service . is not speculation. It is
a perfectly clear statement that youre going to
do something. Faced with its recent
divestiture, ATT has since altered its mission
the company now aims to be a major factor in
the worldwide movement and management of
information. Most observers would probably
agree that this mission statement does not have
the clarity and potential for excitement that
the earlier one possessed.