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8/7/2019 Marketig PPTs full

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BrandA name becomes a brand when consumers associate it with a set of tangible and

intangible benefits that they obtain from the product or serviceIt is the sellers promise to deliver the same bundle of benefits/services consistently

to buyersCommodity

A commodity is some good for which there is demand, but which is suppliedwithout qualitative differentiation across a market

Brand EquityWhen a commodity becomes a brand, it is said to have equity.The premium a brand can command in the marketThe difference between the perceived value and the intrinsic value

Brand PowerCustomer will change brands for price reasonsCustomer is satisfied. No reason to change.Customer is satisfied and would take pains to get the brandCustomer values the brand and sees it as a friendCustomer is devoted to the brand

Brand Equity Competitive AdvantagesReduced marketing costsTrade leverageCan charge a higher priceCan easily launch brand extensionsCan take some price competition

Managing Brand EquityBrand Equity needs to be nourished and replenished. We must not flog the brand for

equity to be diluted or dissipatedStore brands

Advantages of brandingEasy for the seller to track down problems and process ordersProvide legal protection of unique product featuresBranding gives an opportunity to attract loyal and profitable set of customersIt helps to give a product category at different segments, having separate bundle of

benefitsIt helps build corporate imageIt minimises harm to company reputation if the brand fails

Brand parityConsumers buy from a set of acceptable/ preferred brands

Umbrella BrandProducts from different categories under one brandDangerous to the brand if the principal brand failsSometimes the company name is prefixed to the brand. In such cases the company

name gives it legitimacy. The product name individualises it.Naming the Brand

Product benefitsProduct qualitiesEasy to pronounceShould be distinctive


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Should not have poor meanings in other languages and countriesBrand strategy

Line extension existing brand name extended to new sizes in the existing productcategory

Brand extension brand name extended to new product categoriesMultibrands new brands in the same product category

New brands new product in a different product categoryCobrands brands bearing two or more well known brand names

Brand RepositioningThis may be required after a few years to face new competition and changing

customer preferences


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Dealing with Competition & Competitive strategiesKnowledge is a source of advantage

Customer Knowledge

Competitor KnowledgeBoth are critical for better strategies

Competitive Strategies based on Levels of KnowledgePorters 5 force Model for competition

Strategies to deal with competitionMarket Leader StrategyMarket Challenger StrategyMarket Follower StrategyMarket-Nicher Strategy

Competitive AdvantageHaving a competitive advantage is necessary for a firm to compete in the market

But what is more important is whether the competitive advantage is sustainableA firm must identify its position relative to the competition in the marketBy knowing if it is a leader, challenger, follower or nicher, it can adopt appropriate

strategies to compete

Sustainable Competitive AdvantageA good strategist seeks not only to win the hill, but hold on to it.

Subash JainSustaining competitive advantage requires erecting barriers against the competitionAakers suggested looking at the following:

How you compete

Basis of competitionWhere you competeWhom you are competing against

Examples of SCAFor many years, Singapore Airlines were riding on its SCA of having the best in-flight

serviceAs more airlines improved their service and narrowed the gap, SIA sought other

competitive advantages among which areThe most modern fleetOutstanding Service on the GroundA super entertainment system in its cabins

Comfort in its First Class cabins at an unparallel levelAre the later initiatives sustainable?

Sun Tzes defensive strategyDo not assume the enemy will not comebut be prepared for his comingDo not presume he will not attack,but instead make your own position unassailable.

Strategies for Market Leaders


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Market Leaders objectives:Expand the total market by

Finding new usersCreating new uses, andEncouraging more usage

Protect its current market share by

Adopting defense strategies (see following slides)Increase its market share

Note the relationship between market share and profitabilityWhich strategy to use?

Depends on your answer to the following:Is it worth fighting?Are you strong enough to fight?How strong is your defense?Do you have any choice but to fight?

Defense StrategyA market leader should generally adopt a defense strategy

Six commonly used defense strategiesPosition DefenseMobile DefenseFlanking DefenseContraction DefensePre-emptive DefenseCounter-Offensive Defense

Defense Strategy (contd)Position DefenseLeast successful of the defense strategiesA company attempting a fortress defense will find itself retreating from line after

line of fortification into shrinking product markets. Saunders (1987)e.g. Mercedes was using a position defense strategy until Toyota launched a frontal

attack with its Lexus.Defense Strategy (contd)

Mobile DefenseBy market broadening and diversificationFor marketing broadening, there is a need to

Redefine the business (principle of objective), andFocus efforts on the competition (the principle of mass)

e.g. Legend Holdings, the top China PC maker Legend has announced a jointventure with AOL to broaden its business to provide Internet services in themainland

Defense Strategy (contd)Flanking Defense:Secondary markets (flanks) are the weaker areas and prone to being attackedPay attention to the flankse.g. Jet Airways introduced a low cost product by acquiring Sahara Airlines

Defense Strategy (contd)Contraction DefenseWithdraw from the most vulnerable segments and redirect resources to those that


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are more defendableBy planned contraction or strategic withdrawale.g. Indias TATA Group sold its soaps and detergents business units to Unilever in

1993

Defense Strategy (contd)

Pre-emptive DefenseDetect potential attacks and attack the enemies firstLet it be known how it will retaliateProduct or brand proliferation is a form of pre-emptive defense e.g. Maruti Suzuki

Defense Strategy (contd)Counter-Offensive DefenseResponding to competitors head-on attack by identifying the attackers weakness

and then launch a counter attacke.g. Toyota launched the Lexus to respond to Mercedes attack

Market Challenger StrategiesThe market challengers strategic objective is to gain market share and to become

the leader eventually

How?By attacking the market leaderBy attacking other firms of the same sizeBy attacking smaller firms

Market Challenger Strategies (contd)Types of Attack StrategiesFrontal attackFlank attackEncirclement attackBypass attackGuerrilla attack

Frontal AttackSeldom work unless

The challenger has sufficient fire-power (a 3:1 advantage) and staying power,and

The challenger has clear distinctive advantage(s)e.g. Japanese and Korean firms launched frontal attacks in various ASPAC countries

through quality, price and low costFlank attack

Attack the enemy at its weak points or blind spots i.e. its flanksIdeal for challenger who does not have sufficient resourcese.g. In the 1990s, Yaohan attacked Mitsukoshi and Seibus flanks by opening

numerous stores in overseas marketsEncirclement attack

Attack the enemy at many fronts at the same timeIdeal for challenger having superior resourcese.g. Seiko attacked on fashion, features, user preferences and anything that might

interest the consumerBypass attack

By diversifying into unrelated products or markets neglected by the leaderCould overtake the leader by using new technologies


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e.g. Pepsi use a bypass attack strategy against Coke in China by locating its bottlingplants in the interior provinces

Guerrilla attackBy launching small, intermittent hit-and-run attacks to harass and destabilize the

leaderUsually use to precede a stronger attack

e.g. airlines use short promotions to attack the national carriers especially whenpassenger loads in certain routes are low

Which Attack Strategy should a Challenger Choose?Use a combination of several strategies to improve market share over time

Market-Follower StrategiesTheodore Levitt in his article, Innovative Imitationargued that a product imitation

strategy might be just as profitable as a product innovation strategye.g. Product innovation--Sony

Product-imitation--PanasonicMarket-Follower Strategies (contd)

Each follower tries to bring distinctive advantages to its target market--location,services, financing

Four broad follower strategies:Counterfeiter (which is illegal)Cloner e.g. the IBM PC clonesImitator e.g. car manufacturers imitate the style of one anotherAdapter e.g. many Japanese firms are excellent adapters initially before

developing into challengers and eventually leaders

Market-Nicher StrategiesSmaller firms can avoid larger firms by targeting smaller markets or niches that are

of little or no interest to the larger firmse.g. Logitech--mice

Microbrewers--special beersMarket-Nicher Strategies (contd)

Nichers must create niches, expand the niches and protect theme.g. Nike constantly created new niches--cycling, walking, hiking,

cheerleading, etcWhat is the major risk faced by nichers?

Market niche may be attacked by larger firms once they notice the niches aresuccessful

Multiple Niching[A] firm should `stick to its niching but not necessarily to its niche. That is why

multiple niching is preferable to single niching. By developing strength in twoor more niches the company increases its chances for survival.

Philip Kotler


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Market SegmentationSegmentation

Market Segment is a specific group of customers with similar needs, purchasingbehavior & identifying characteristics

The segments should be measurable in terms of size & purchasing power,should beaccessible & should be substantial in size

Key steps in Segmentation ProcessNeeds-Based segmentationSegment IdentificationSegement attractivenessSegment profitabilitySegment positioningSegment Acid testMarketing Mix strategy for the segment

Segmentation StrategiesMass Market approach (Coca-cola,Ford)

Large Market Strategy(Hero Honda)Adjacent Market Strategy (Toyota)Multi-Segment strategy (Maruti)Small Segment strategyNiche Segment Strategy(Revolution,espn,Himalaya)Sub-segment strategy(Car,SUVs)

Bases For Segmentation for consumer marketsGeographic Region, City, Rural etcDemographic Age, Family size, Gender, Income, Occupation, EductnPsychographic Socioeconomic, Lifestyle, PersonalityBehavioral Occasions, Benefits, User Status, Usage Rate, Loyalty Status,

Readiness stage etcConsumer Market Forces

Bases for segmentation of Business MarketsDemographicOperating Variables Technology,CapabilitiesPurchasing approaches Power structure,Relationship,Policies,CriteriaSituational Factors Urgency, Specific Application,Size or orderPersonal charaxcteristics

Business Market Forces


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Marketing CommunicationThe role of Marketing CommunicationThey are means by which firms attempt to inform, persuade & remind directly or

indirectly about the product and brand they sell

Marketing Communication MixAdvertisingSales PromotionEvents & ExperiencesPublic Relations & PublicityDirect MarketingInteractive marketingWord-of mouth marketingPersonal Selling

PurposeConsumer ResponseAwareness

KnowledgeLikingPreferenceConvictionPurchase

Steps in Developing Effective Comm ModelIdentify Target MarketDetermine the objectivesDesign Communication ( Message strategy & Creative strategy)Select Channel (Personal & Non-personal)Establish Budget

Decide on Media MixMeasure resultsManaget Integrated marketing communication5 Ms of AdvertisingMission What are the objectives?Money How much can we spend?Message What message?Media What media shoud be used?Measurement - How to evaluate results

Mission?Informative advertising

Persuasive AdvertisingRiminder AdvertisingReinforcement AdviertisingMoneyAd spend depends on the stage in PLCMarket Share and customer baseCompetition & ClutterAdvertising frequency


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Product substitutability ( Beer, Softdrinks,Banks,Airlines)MessageMessage Generation & EvaluationCreative Development & Execution

- Television Ads- Print Ads

- Radio Ads- Film Ads

Legal IssuesMediaReach frequency and impactMedia Types (Newspaper,TV,Magazines,Yellow pages,Internet etc)Alternative Advertising options ( Billboards)Media Timings and Allocation

MeasurementCommunication effect ResearchSales effect research


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PricingPrice is only the tip of the Iceberg

Steps in setting a PriceSelecting Pricing Objective Survival,Maximum current profit,Maximum Market

Share,Product qlty leadership etcDetermining Demand Price sensitivityEstimating CostsAnalysing Competitors Costs,Prices

Pricing OrientationSelecting Pricing Method

Mark Up PricingTarget Return PricingPerceived Value PricingValue Pricing (Rengineering the prices)Going Rate Pricing ( Based on competitors pricing)

Adapting the priceGeographical PricingPrice discounts and allowancesPromotional pricingDifferentiated pricing

Price ChangesInitiating Price Cuts

Initiating Price increases


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Product Management Over the Product Life CycleWhat is the Product Life Cycle?

Describes the stages a product goes through in the marketplace including

introduction, growth, maturity, and decline.PLC can apply to:

Product category (watches)Product form (digital)Product brand (Timex)

I. Introductory StageA. Characteristics

Low sales volumeHigh costsNo or little direct competitionBasic product configuration

B. StrategiesDevelop primary demand by building awareness and educating consumersStimulate opinion leaders to buy the productBuild channels of distribution (selective in the beginning)Two pricing strategies:

price skimming introduce at high priceprice penetration introduce at low price

II. Growth Stage

A. CharacteristicsSales volume increases significantly

Costs per unit decreaseCompetition increasesMore product variation

StrategiesEngage in product modificationBuild selective demand; stress differentiationMove toward intensive distributionPractice more aggressive pricing

III. Maturity StageA. Characteristics

Sales growth slows then levels offProfits decline for the industryMarginal competitors leave marketplace

B. StrategiesRejuvenate product change packaging, new


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models, line extensionsStimulate usage rateMaintain brand loyalty through reminder promotionsContinue aggressive pricingContinue intensive distribution

IV. Decline Stage

A. CharacteristicsStrong downward shift in salesProfits stay low and continue to declineOnly a few strong competitors remainBack to basic product configurations

B. StrategiesDistribution reduced to fewer outlets

Promotional support reducedPrices lowered

Use harvesting strategy

Product life cycles vary in lengthProduct life cycles are getting shorter

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