Strategic Marketing Principles

Sample Missions
TCS Mission

To help customers achieve their business objectives by providing Innovative, best-in-class consulting, IT solutions and services. Make it a joy for all Stakeholders to work with us.
HDFC Bank Mission

To be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance.

Marketing Strategy Drivers

PESTL
Political Stability Stable governments lead to rapid growth in Business Economy Closed versus open Economy Social Structure Variety or Homogeneity of society Technology Available Advanced technology leads to better products

Legal Framework Can act as support or hindrance Competition Good for customers, not so good for business

Marketing Strategy Drivers

Strategic Window Derek F. Abell (1978) introduced the concept of Strategic Window
A Strategic Window is a period of time during which the strategy will work. It is the relatively short time interval during which the fit between the factors critical for success and competencies of the organization are in optimal state. Any change in the Marketing Environmental factor/s can cause opening or closing of Strategic Window.

Formulation of Marketing Strategy

Genesis
Projected or Expected state of Business

Current state of Business

Formulation of Marketing Strategy

Genesis
Step 1: Detailed analysis of elements and operating conditions of business

Step 2: Identification of Strategic Window Step 3: Checking its alignment with Mission Step 4: Strategic Planning to exploit the Strategic Window
Step 5: Implementation Step 6: Continuous looking out for Strategic Window or work towards creation of one.

Various Marketing Strategies BCG Matrix

Differentiation Tools Boston Consulting Group (BCG) Matrix Product Portfolio Method
Cash Cows

High Market Share Low Business Growth Low Investment Requirement High Returns

Every companys Dream Financial Foundation of Co.

Various Marketing Strategies

Differentiation Tools Boston Consulting Group (BCG) Matrix Continued.
Dogs

Low Market Share Low Business Growth Very High Investment Requirement Very low Returns Every companys Nightmare Financial Drain for Co.

Various Marketing Strategies

Differentiation Tools Boston Consulting Group (BCG) Matrix Continued.
Question Marks

Low Market Share High Business Growth High Investment Requirement Can turn to a Star or a Dog

Companys new products Risk Investment for Co.

Various Marketing Strategies

Differentiation Tools Boston Consulting Group (BCG) Matrix Continued.
Stars

High Market Share High Business Growth High Investment Requirement Can turn to a Cash Cow

Companys growing products Low Risk Investment for Co.

Various Marketing Strategies

Product Strategies 2. Ansoffs Matrix By Igor Ansoff of Harvard College, 1957
Current Products New Products 3. Product Development Strategy

Current Markets
New Markets

1. Market Penetration Strategy

2. Market Development Strategy

4. Diversification Strategy

Various Marketing Strategies

Strategies based on Market Share Market Leader Has a larger market share and is successful. His strategies create proven track record for academics and followers to study and follow. e.g. Colgate toothpaste Challenger The one who innovates a strategy which challenges the established leaders existence. e.g. Close-up toothpaste Follower The one who is satisfied in his own niche and doesnt take out of Way risk to become challenger. e.g. Vicco Vajradanti

Various Marketing Strategies

Porters Generic Product Strategies 1. Overall Cost Leadership Achieve lowest cost of production and distribution to kill competition by offering products at lowest price e.g. Wal-Mart

2. Differentiation By achieving superiority in an important customer benefit area valued by masses e.g. Sony audio systems

3. Focus By focusing on only one of the business segments e.g. Bisleri 60% Market share in packaged drinking water and 100% Growth in 2007

Various Marketing Strategies

Alliance Strategies McDonalds Coca-Cola (Product Alliance) Pizza Hut Pepsi (Product Alliance)
A Hotel Rent-a-Car company (Service Alliance) Hotels Corporate Houses (Service Alliance) Small Banks ICICI Bank draft drawing arrangements (Service Alliance) Credit Cards Discounts on products and services (Pricing Alliance) Organization Ad agency (Promotion Alliance)

Various Marketing Strategies

McKinsey 7-S Framework for Marketing Success
Strategy Structure of Organization
Skills Shared Values Structure

Strategy

System Automation

Style Way of functioning Staff Effective staff which can cope up with growth
Skills Required to perform

Staff

System

Style

Shared values leading to mission

Various Marketing Strategies

Strategies based on Innovation
Pioneer The one who is first in the business. Apple i-pod

Close Followers The ones who launch their brand in the market very soon after the pioneer.

Late Follower The one who enters the market with a product which is long existing in the market, usually at a cheaper price.

Concept, Nature, and Scope of Retailing

What is Retailing? Retailing includes all the activities in selling goods directly to the final consumer for personal (non-business) use. Kotler

Manufacturer Retailer Consumer Manufacturer Wholesaler Retailer Consumer Manufacturer Wholesaler Jobber Retailer Consumer Manufacturer Distributor Wholesaler Jobber Retailer Consumer Manufacturer Branch Distributor Wholesaler Jobber Retailer Consumer

Session 3 Learning Objective

Concept, Nature, and Scope of Retailing

Concept, Nature, and Scope of Retailing

What is Retailing? Retailing includes all the activities in selling goods directly to the final consumer for personal (non-business) use. Kotler

Manufacturer Retailer Consumer Manufacturer Wholesaler Retailer Consumer Manufacturer Wholesaler Jobber Retailer Consumer Manufacturer Distributor Wholesaler Jobber Retailer Consumer Manufacturer Branch Distributor Wholesaler Jobber Retailer Consumer

Significance of Retailing from Economy Point of View

Accounts for 15-20% work force Second largest employment in India after agriculture About 6 million Retail outlets of which 1.8 m in urban India About 20% of urban outlets are into Services Retailing Almost 70% are food or general stores category

Significance of Retailing For manufacturer & Consumer

Direct contact with the customer

Bargaining power of Retailer due to huge selling capacity (For e.g. Vijay Sales, Big Bazaar, Wal-Mart)
Point of revenue for manufacturer For consumer its a combination of Services & Product Marketing

Functions of Retailer At a Glance

Provide Goods & Services

Understand Customers Needs

Breaking bulk into Saleable lots

Functions of Retailer Entertain & Provide Service to Customers Gather Mktg Info Hold Inventory

Functions of Retailer

Understand Customers Needs

Interaction with end user First point to register grievance / complaints Suggestions are received Other demographic info can be collected by observation

Functions of Retailer
Providing goods & Services
Assortment of products Multiple brands under one roof

Large quantities are bought for effective rates and then it is broken into small quantities for customer convenience

Functions of Retailer
Entertain and Provide Services

Provide credit facilities / Hire-purchase arrangements Free home delivery and installation After sales service Helping customer to make decision Product display for effecting sale

Functions of Retailer

Holding Inventory
On behalf of Manufacturer / Supplier

Act as a component of Marketing Information System for supplier

Challenges of Retailing

Emergence of India & China as new markets

The well-informed consumer

Technology enabled functioning those who have it and those who dont
Emergence of E-retailing

Retail Customer Profile in India Urban Population in India 28% = 31 Crores = Total Population of USA 40% Indian households earn Rs. 80,000 + per annum Urbanization is rapidly growing UN estimate 90% Population of underdeveloped nations will be urbanized by 2025

Retail Customer Profile in India

Continued..

Mumbai is more populated than NY, LA, Shanghai, Paris, Moscow, London, Bangkok, Chicago and Hong Kong (Not Collectively) Working women class is increasing Nuclear Family

Trends in Retailing, Globally

Scattered profitable segments all over the world Commoditization - where one offering is nearly indistinguishable from another
Retailing in Exclusive segment / focused retailing The fight to come to India or go to China Rise of non-store retailers competing with store retailing

Trends in Retailing in India

Grocery Beginning of Retailing [Hypercity, Big Bazaar]

Medicines Yet to come to India

Electronics [Vijay Sales, Hypercity] Furniture [The Living Room, Hypercity] Apparel [Shoppers Stop, Lifestyle]

Trends in Retailing, Globally

Continued..

Challenge of differentiation in experience

Retailers becoming powerhouses of Marketing and exploit the manufacturers

Trends in Retailing in India

Grocery Beginning of Retailing [Hypercity, Big Bazaar]

Medicines Yet to come to India

Electronics [Vijay Sales, Hypercity] Furniture [The Living Room, Hypercity] Apparel [Shoppers Stop, Lifestyle]

Trends in Retailing in India

Continued..

Small store formats for quick buying [termed as Precision Shopping] Entertaining the customer International Retailing So far only about 30 out of 250 US retailers have international presence

Trends in Retailing in India

Some unsung giant retailers

Canteen Stores Department 3,500 Canteen Stores operated via 34 depots catering to 40 Lac households of in service and retired army, air force and navy personnel
Khadi & Village Industries 7,050 outlets all over India Raymonds was one of the pioneering Indian Retailers

Factors behind success of Retail in India

Good economic growth rate (8+%) Increasing Urbanization Increasing Consumerism (e.g. Shopping Therapy) Increased Brand consciousness Software and BPO Boom Increased Credit facilities