UNIT – 2

MARKETING STATERGY

INTRODUCTION:
Marketing strategy is a long-term, forward-looking approach to planning with the
fundamental goal achieving a sustainable competitive advantage.
Strategic planning involves an analysis of the company's strategic initial situation prior to
the formulation, evaluation and selection of market-oriented competitive position that contributes
to the company's goals and marketing objectives.
What is a 'Marketing Strategy?'
The marketing strategy of a company contains the company’s value proposition, key
marketing messages, information on the target customer and other high-level elements.
The marketing strategy informs the marketing plan, which is a document that lays out the
types and timing of marketing activities. A company‘s marketing strategy should have a longer
lifespan than any individual marketing plan as the strategy is where the value proposition and the
key elements of a company‘s brand reside.
Definitions of marketing strategy:
According to Philip Kotler & Kevin Keller "The marketing strategy lays out target
markets and the value proposition that will be offered based on an analysis of the best market
opportunities."
Marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable competitive
advantage. A marketing strategy should be centered on the key concept that customer satisfaction
is the main goal.

Nature of Strategic Management:

 Strategic Management is an on-going process of analysis, planning and action.

 It attempts to keep an organization aligned with its environment while capitalizing on
organizational strengths and environmental opportunities and minimizing or avoiding
organizational weaknesses and external threats.
  Strategic management is also a future-oriented provocative management system.
 Managers who use strategic management skills are seeking a competitive advantage for
their organizations and long-term organizational effectiveness.
 Strategy is a process, a continuous process which can be summed up into these three
statements:
 Where do we wish to go? (In terms of growth, profitability, status. The mission and
vision of an organization is to be developed and its value system is to be framed.)
 Where we are? (It assesses the current situation of the company. It analyses SWOT inside
the company.)
 How do we reach there? (Resources reqd in terms of manpower, money, infrastructure,
etc. /policies /procedures)

Strategic Marketing Decision Process:

Step 1: Reaffirm the firm‘s intended general direction [company mission, objectives, goal]
Step 2: Determine broad areas of environment opportunity [Market characteristics, political,
legal, economic, & technological, cultural & social]
Step 3: Narrow down alternative to those compatible with the company‘s strength. [management
& finance, marketing, R&D]
Step 4: Segment markets into groups having similar needs. [market & strategy, market
satisfaction vs cost, measurability]
Step 5: Assess Segment opportunities against competitor positions then select target. [Market
segment opportunities, competitor strength analysis, target selection]
Step 6: Determine Marketing strategy. [Market entry, expansion, development, retrenchment ]
Step 7: Develop, implement and control company‘s marketing actions [organise, plan, budget &
control marketing actions.

MARKETING STRATERGY FORMULATION PROCESS:

Marketing strategy formulation is the process of defining an organization's marketing
goals and objectives. This allows formulators to create a guide. They examine the market and in
doing so, use that information to determine what marketing approaches will be best at reaching
clients and enticing them to seek out the business' services.
CONCEPT OF MARKETING STRATEGY FORMULATION PROCESS:
Marketing strategy formulation is the process of defining an organization's marketing
goals and objectives. ... They examine the market and in doing so, use that information to
determine what marketing approaches will be best at reaching clients and enticing them to seek
out the business' services.
As a general rule, a good first step in a marketing strategy formulation is determining
what you want to accomplish in terms of marketing. It could be as simple as letting potential
customers know what you sell, and how your product can benefit them.
The next step is to examine internal and external trends. These could include spreading
the word about a next-generation version of one of your products (internal), and how it improves
upon other products in the industry (external). After that, assign a value to the strategy's
outcome. This can be a dollar value, such as how much revenue you expect your marketing
strategy to generate over a specified period of time.
 Or it could be an opportunity value, such as getting face-to-face meetings with a certain
number of potential clients. Once the targets are set, marketers assign certain tasks to each
department to identify the role each will play in reaching the strategy's goals.
The idea is to get a firm idea of where your business is now and where it will be after the
strategy is implemented. Finally, take all the information you gathered throughout the process
and choose which strategy best fits your goals and needs.
Online Marketing:
There are dozens of marketing strategies to choose from. However, these can be split into
two basic categories. The first is online marketing. For example, your business might choose to
place video or text advertisements online with the help of search engines like Google, a process
known as "search marketing".
Another type of online marketing strategy is social media marketing, which uses tools
like Face book or Twitter to gain exposure. A third example of online marketing is through the
use of mobile devices, specifically smart phones containing the iPhone or Android system.
Companies place banners or small ads in games or websites frequented by mobile users.
Offline Marketing:
The second major category, offline marketing, involves any marketing that does not take
place on the Internet. There are many options in this area. A common one is buying ad space in
newspapers, trade journals or on television. Another common one is setting up booths at trade
shows.
Word of mouth, or "referral marketing," is also effective, although you have less control
over it. With referral marketing, companies rely on good services and products to motivate
customers to recommend your business to their friends, family members and colleagues. In some
cases, businesses resort use telemarketing to spread the word.
In telemarketing, sales people place calls to either random or targeted numbers, informing
recipients of deals or services.
STEPS IN STRATEGY FORMULATION PROCESS:
Though these steps do not follow a rigid chronological order, however they are very
rational and can be easily followed in this order.
1. Setting Organizations’ objectives:
The key component of any strategy statement is to set the long-term objectives of the
organization. It is known that strategy is generally a medium for realization of organizational
objectives.
Objectives stress the state of being there whereas Strategy stresses upon the process of
reaching there. Strategy includes both the fixation of objectives as well the medium to be used to
realize those objectives. Thus, strategy is a wider term which believes in the manner of
deployment of resources so as to achieve the objectives.
While fixing the organizational objectives, it is essential that the factors which influence
the selection of objectives must be analyzed before the selection of objectives. Once the
objectives and the factors influencing strategic decisions have been determined, it is easy to take
strategic decisions.
2. Evaluating the Organizational Environment:
The next step is to evaluate the general economic and industrial environment in which the
organization operates. This includes a review of the organizations competitive position. It is
essential to conduct a qualitative and quantitative review of an organizations existing product
line.
The purpose of such a review is to make sure that the factors important for competitive
success in the market can be discovered so that the management can identify their own strengths
and weaknesses as well as their competitors‘ strengths and weaknesses.
After identifying its strengths and weaknesses, an organization must keep a track of
competitors‘ moves and actions so as to discover probable opportunities of threats to its market
or supply sources.
3. Setting Quantitative Targets:
In this step, an organization must practically fix the quantitative target values for some of
the organizational objectives. The idea behind this is to compare with long term customers, so as
to evaluate the contribution that might be made by various product zones or operating
departments.
4. Aiming in context with the divisional plans:
 In this step, the contributions made by each department or division or product category
within the organization is identified and accordingly strategic planning is done for each sub-unit.
This requires a careful analysis of macroeconomic trends.
5. Performance Analysis:
Performance analysis includes discovering and analyzing the gap between the planned or
desired performance. A critical evaluation of the organizations past performance, present
condition and the desired future conditions must be done by the organization. This critical
evaluation identifies the degree of gap that persists between the actual reality and the long-term
aspirations of the organization. An attempt is made by the organization to estimate its probable
future condition if the current trends persist.
6. Choice of Strategy:
This is the ultimate step in Strategy Formulation. The best course of action is actually
chosen after considering organizational goals, organizational strengths, potential and limitations
as well as the external opportunities.

MARKETING STRATEGY PLANNING

Marketing strategy is a set of principles used by a firm to achieve its objectives.
Successful marketing thus requires capabilities such as understanding, creating, delivering,
capturing, and sustaining customer value. Only a select group of companies have historically
stood out as master marketers (see Table 2.1). These companies focus on the customer and are
organized to respond effectively to changing customer needs. They all have well-staffed
marketing departments, and their other departments accept that the customer is king.
To ensure they select and execute the right activities, marketers must give priority to
strategic planning in three key areas:
 Managing a company‘s businesses as an investment portfolio
 Assessing each business‘s strength by considering the market‘s growth rate and the
company‘s position and fit in that market and establishing a strategy.
 The company must develop a game plan for achieving each business‘s long-run
objectives.
Most large companies consist of four organizational levels: (1) corporate, (2) division, (3)
business unit, and (4) product.
 Corporate headquarters is responsible for designing a corporate strategic plan to guide the
whole enterprise; it makes decisions on the amount of resources to allocate to each division, as
well as on which businesses to start or eliminate.
Each division establishes a plan covering the allocation of funds to each business unit within
the division. Each business unit develops a strategic plan to carry that business unit into a
profitable future. Finally, each product level (product line, brand) develops a marketing plan for
achieving its objectives.
The marketing plan is the central instrument for directing and coordinating the marketing
effort. It operates at two levels: strategic and tactical. The strategic marketing plan lays out the
target markets and the firm‘s value proposition, based on an analysis of the best market
opportunities.
The tactical marketing plan specifies the marketing tactics, including product features,
promotion, merchandising, pricing, sales channels, and service. The complete planning,
implementation,and control cycle of strategic planning is shown in Figure 2.1. Next, we consider
planning at each of these four levels of the organization.
Corporate and Division Strategic Planning:
Some corporations give their business units freedom to set their own sales and profit
goals and strategies. Others set goals for their business units but let them develop their own
strategies. Still others set the goals and participate in developing individual business unit
strategies.
All corporate headquarters undertake four planning activities:
1. Defining the corporate mission
2. Establishing strategic business units
3. Assigning resources to each strategic business unit
4. Assessing growth opportunities

Defining the Corporate Mission:

Organizations develop mission statements to share with managers, employees, and (in
many cases) customers. A clear, thoughtful mission statement provides a shared sense of
purpose, direction, and opportunity. Mission statements are at their best when they reflect a
vision, an almost ―impossible dream‖ that provides direction for the next 10 to 20 years.
Good mission statements have five major characteristics:
 They focus on a limited number of goals.
 They stress the company‘s major policies and values
 They define the major competitive spheres within which the company will operate
 They take a long-term view.
  They are as short, memorable, and meaningful as possible.
Establishing Strategic Business Units:
Strategic business unit develops a strategic plan to carry that business unit into a

profitable future.

Assessing Growth Opportunities:

Assessing growth opportunities includes planning new businesses, downsizing, and
terminating older businesses. If there is a gap between future desired sales and projected sales,
corporate management will need to develop or acquire new businesses to fill it.

KEY DRIVERS OF MARKETING STRATEGIES:

 Competitor
 Brand competitor
 Product competitor
 Generic competitor
 Total budget competitor
 Economic growth and stability
 Political trends (eg: tobacco)
  Technological achievement
 Social culture trends
 Legal & regulatory issues
 Building creditability
 Developing awareness
 Maintaining focus

FORMULATON OF STRATEGY / OTHER KEY DRIVERS OF MARKETING

STRATEGIES:
 STP (Segmentation , Targeting , Positioning )
 Segmenting the market
 Selecting target market
 Positioning
 Marketing Mix

STP (SEGMENTATION, TARGETING, POSITIONING)

SEGMENTATION:
Market segmentation it is the process of dividing the total heterogeneous market into a
small group of customers who share similar set of needs and wants and hence represent a
homogeneous group.
According to Philip kotler ―Market segmentation is subdividing of a market into distinct
and increasing homogenous subgroups of customers, where any group can conceivably selected
as a target market to be met with a distinct marketing mix‖

Basis of Marketing Segmentation:

It is impossible for a marketer to develop marketing plans for every consumer. Hence,
marketers aim at identifying broad classes of customers who have similar needs and wants and
will react similarly towards a distinct marketing mix or marketing strategy.

Market segmentation involves dividing the markets into small groups of customers that
have common demands and who behave similarly to a particular marketing action. The different
basis for segmentation a market as follows:

a) Geographic segmentation:

Geographic segmentation divides the market into geographical units such as nations,
states, regions, counties, cities, or neighborhoods.
 The company can operate in one or a few areas, or it can operate in all but pay attention
to local variations. In that way it can tailor marketing programs to the needs and wants of local
customer groups in trading areas, neighborhoods, even individual stores. In a growing trend
called grassroots marketing, such activities concentrate on getting as close and personally
relevant to individual customers as possible.

 Religion – North, South, East, West

 Climate – Hot, Cold
 Market Density – Less populated, Highly populated
 Market size – small, medium, large

b) Demographic segmentation:

In demographic segmentation, we divide the market on variables such as age, family size,
family life cycle, gender, income, occupation, education, religion, race, generation, nationality,
and social class.
One reason demographic variables are so popular with marketers is that they‘re often
associated with consumer needs and wants. Another is that they‘re easy to measure. Even when
we describe the target market in non-demographic terms (say, by personality type), we may need
the link back to demographic characteristics in order to estimate the size of the market and the
media we should use to reach it efficiently.

 Age and life cycle stage – children , teenager, adult, old

 Gender – Male, Female
 Income
 Occupation
 Marital status
 Social class
 Family class
 Educational level
 Religion
c) Phycho-graphic segmentation:
Psychographics is the science of using psychology and demographics to better understand
consumers. In psychographic segmentation, buyers are divided into different groups on the basis
of psychological/personality traits, lifestyle, or values. People within the same demographic
group can exhibit very different psychographic profiles. One of the most popular commercially
available classification systems based on psychographic measurements is Strategic Business
Insight‘s (SBI) VALS™ framework.

 Lifestyle
 Personality
 Values
 Beliefs

d) Behavioural Segmentation:
In behavioural segmentation, marketers divide buyers into groups on the basis of their
knowledge of, attitude toward, use of, or response to a product.

 Occasion – Regular, Special

 Benefits - Quality, Service, Speciality. Economy
 User status – Potential user, 1st time user, regular user, non-user
 Quantity consumed
 Loyalty status
  Attitude

Criteria for effective marketing segmentation:

 It must be measurable – Selected segment must be measurable and identifiable.
 It must be sustainable - Selected segment must be large enough to bring profits.
 It must be accessible – It refers to the degree to which a proposed segment can be
effectively reached and served
 It must be differentiable – Each market segment must be different from others in terms
of needs and wants.
 It must be homogeneous within – Within the market segment all customers should have
similar needs.

TARGETING:
Once the firm has identified its market-segment opportunities, it must decide how many
and which ones to target. Marketers are increasingly combining several variables in an effort to
identify smaller, better-defined target groups.
Essentially, your targeting strategy involves evaluating each segment‘s attractiveness
and, from there, choosing which segment to enter. And a brand‘s choice tends to be based on
which segment they think will bring the company the most value. Establishing your potential
customer base and choosing how broadly or narrowly you wish to market to these prospective
consumers is key to your brand‘s success and longevity.
1) Undifferentiated Marketing:

Often referred to as mass marketing, the undifferentiated strategy basically ignores the
differences between market segments and treats the entire market as one, single target.
Fundamentally, there is no targeting at all. Everyone is a potential customer. Let‘s imagine the
entire market as one big cake. The undifferentiated market targeting strategy doesn‘t take a
single slice or a half or even three-quarters of the treat. It takes the whole thing.

The point of mass marketing is to reach as many people as possible, in the hope that they
get on board with your brand. One advantage of this approach is that it‘s cost-effective. It‘s
cheaper for brands to manufacture goods and produce content that is targeted to, well, everyone.
It all makes sense, hopefully, but everything is clearer with an example. So here we go...

Mass marketing usually occurs when a brand has a product or service that has a high
market appeal. This is most common when it comes to things that people will always need or
want. Like toothpaste, toilet roll, washing up liquid, furniture, and so on.

2) Differentiated Marketing:

Differentiated market targeting offers us a little more depth and clarity. It‘s otherwise
known as ‗segmented‘ marketing and entails isolating a number of (generally two or more)
primary target segments that have the most potential value for the company. Once a brand has
defined those few targets, the plan is then to develop separate marketing strategies for each.

This type of market targeting is one of the most common. It makes sense for brands to
identify several market segments and then design separate, concentrated strategies for each. In
this way, companies don‘t just constantly churn out products that are all the same, with no
uniqueness, in the hope that consumers will just eat up whatever is offered to them. Segmented
market targeting understands that consumers fit into different groups that require, and respond
well to, personalisation.
3) Concentrated Marketing:

First of all, what it is? Concentrated marketing is often called ‗niche marketing‘. If we‘re
keeping with the cake metaphor, concentrated marketing doesn‘t take the whole cake, half or
even quarter-slices. It takes just one, small, exact slice which has some kind of specific, desired
attribute on top. Like a piece of chocolate or a nut.

Essentially, niche marketing puts all of its focus on one, or a few, narrow, specific
consumer groups. Brands channel all of their marketing efforts towards their uniquely defined
segment of the population, with the aim of owning this particular segment over their competitors.
This way, the brand aims to reach its growth potential and create thriving brand loyalty and long-
lasting relationships with its ideal consumer group.

4) Micromarketing:

Micromarketing goes just that one step further than concentrated marketing. In fact,
micromarketing targets a specific group (localised micro segments), or individual, within a niche
market. This strategy is highly targeted as all marketing efforts are focused on the distinct
characteristics of these small groups or individuals.

A great example of a brand that successfully uses micromarketing is Groupon. Groupon

is a digital marketplace where users are able to access coupons online for, well, almost anything.
From holidays and retail products to sports massages and date nights. Groupon allows users to
get location-based deals from almost any digital device. It was launched in 2008 and since then,
Groupon has grown to be the most popular website for discounts and promotions in the United
States. Yes, the global e-commerce marketplace is a pro when it comes to targeting users
incredibly specifically.

Market positioning:

Market positioning refers to the ability to influence consumer perception regarding a

brand or product relative to competitors. The objective of market positioning is to establish the
image or identify of a brand or product, so that consumer perceive it in a certain way.
For example:

 A handbag maker may position itself as a luxury status symbol

 A TV maker may position its TV as the most innovative and cutting-edge
 A fast- food restaurant chain may position itself as the provider of cheap meals

Types of positioning strategies:

There are several types of positioning strategies. A few examples are positioning by:

 Product attributes and benefits: Associating your brand/product with certain

characteristics or with certain beneficial value.
 Product price: Associating your brand/products with competitive pricing.
 Product quality: Associating your brand/product with high quality.
 Product use and application: Associating your brans/product with a specific use.
 Competitors: Making consumers think that your brand/product is better than that of your
competitors.

A perceptual map in market positioning:

A perceptual map is used to show consumer perception of certain brands. The map allows
you to identify how competitors are positioned relative to you and to identify opportunities in the
marketplace.

An example of consumer perception of price and quality of brands in the automobile industry are
mapped below:
How to create an effective market positioning strategy?
Create a positioning statement that will serve to identify your business and how you want
the brand to be perceived by consumers.
For example, the positioning statement of Volvo: ―For upscale American families, Volvo
is the family automobile that offers maximum safety.‖

1) Determine company uniqueness by comparing to competitors:

Compare and contrast differences between your company and competitors to identify
opportunities. Focus on your strength and how they can exploit these opportunities.
2) Identify current market position:
Identify your existing market positioning and how the new positioning will be beneficial
in setting you apart from competitors.
3) Competitor positioning analysis:
Identify the condition of the marketplace and the amount of influence each competitor
can have on each other.
4) Develop a positioning strategy:
Through the preceding steps, you should achieve an understanding of what your company
is, how your company is different from competitors, the condition of the marketplace,
opportunities in the marketplace, and how your company can position itself.

MARKETING MIX:
The marketing mix is the set of controllable, tactical marketing tools that a company
uses to produce a desired response from its target market. It consists of everything that a
company can do to influence demand for its product. It is also a tool to help marketing planning
and execution.
The four Ps of marketing: product, price, place and promotion

The marketing mix can be divided into four groups of variables commonly known as the four Ps:
Product – The goods and/or services offered by a company to its customers. It refers to the item
actually being sold. The product must deliver a minimum level of performance: otherwise even
the best work on the other element of the marketing mix won‘t do any good.
Price - The amount of money paid by customers to purchase the product. It refers to the value
that is put for a product. It depends on costs of production, segment targeted, ability of the
market to pay, supply – demand and a host of other direct and indirect factors. There can be
several types of pricing strategies each tied in with an overall business plan. Pricing can also be
used a demarcation to differentiate and enhance the image of product.
Place (Distribution) - The activities that make the product available to consumers. It refers to
the point of sale. In every industry, catching the eye of the consumer and making it easy for her
to buy it is the main aim of a good distribution or place strategy. Retailers pay a premium for
right location. In fact, the mantra of a successful retail business is “location, location, location”
Promotion - The activities that communicate the product‘s features and benefits and persuade
customers to purchase the product. It refers to all the activities undertaken to make the product or
services known to the user and trade. This can include advertising, word of mouth, press reports,
incentives, commissions and award to the trade. It can also include consumer schemes, direct
marketing, contests and prizes.
Marketing tools:
Each of the four Ps has its own tools to contribute to the marketing mix:
 Product: variety, quality, design, features, brand name, packaging, services
  Price: list price, discounts, allowance, payment period, credit terms
 Place: channels, coverage, assortments, locations, inventory, transportation, logistics
 Promotion: advertising, personal selling, sales promotion, public relations
Marketing strategy:
An effective marketing strategy combines the 4 Ps of the marketing mix. It is designed to
meet the company‘s marketing objectives by providing its customers with value. The 4 Ps of the
marketing mix are related, and combine to establish the product‘s position within its target
markets.
Weaknesses of the marketing mix
The four Ps of the marketing mix have a number of weaknesses in that they omit or
underemphasize some important marketing activities. For example, services are not explicitly
mentioned, although they can be categorized as products (that is, service products). As well,
other important marketing activities (such as packaging) are not specifically addressed but are
placed within one of the four P groups.
Another key problem is that the four Ps focus on the seller‘s view of the market. The buyer‘s
view should be marketing‘s main concern.
The four Ps as the four Cs
The four Ps of the marketing mix can be reinterpreted as the four Cs. They put the customer‘s
interests (the buyer) ahead of the marketer‘s interests (the seller).

The 4Cs marketing model was developed by Robert F. Lauterborn in 1990. It is a modification of
the 4Ps model.
Consumer Wants and Needs (For product) – A company should only sell a product that
addresses consumer demand. So, marketers and business researchers should carefully study the
consumer wants and needs.
Cost (For price) – According to Lauterborn, price is not the only cost incurred when purchasing
a product. Cost of conscience or opportunity cost is also part of the cost of product ownership.
Convenience (For place) – The product should be readily available to the consumers. Marketers
should strategically place the products in several visible distribution points.
Communication (For promotion) – According to Lauterborn, ―promotion‖ is manipulative
while communication is ―cooperative‖. Marketers should aim to create an open dialogue with
potential clients based on their needs and wants.

CLASSIFICATION OF MARKETING STRATEGIES:

a) Market leader Strategies:
The leader firm might become weaker or old-fashioned against new entrants as well as
existing rival firms. The leader firm can use one or a combination of three strategies:
i) Expand the total market strategy: The market-leader firms can gain the maximum when the
total market expands. The focus of expanding the total market depends on where the product is
in the maturity stage.

ii) Defending market share strategy: When the leader firm tries to expand the total market size,
it must also continuously defend its current business against enemy attacks. For Example: Bajaj
Auto should constantly maintain its guard against LML Scooters. In this Strategy, the leader firm
must keep its costs down, and its prices must be consistent with the value that customers see in
the product. There are six ways that a market leader might use to protect its market position.

(a) Position defence: This Strategy involves pouring maximum firm‘s resources into its
current successful brands. To overcome a position defence an attacker therefore, typically adopts
an indirect approach rather than the head-on attack that the defender expects.

(b) Flanking defence: This strategy both guards the market positions of leading brands
and develops some flank market niches to serve as a defensive corner either to protect a weak
front or to establish an invasion base for counterattack, if necessary.
 (c) Pre-emptive defence: This defence strategy involves the launching of an offence
against an enemy before it starts an offence. For ex: TITAN launched more brands and sub-
brands called Insignia Collection.
(d) Counter-offensive defence: This a strategy of identifying a weakness in an attacker
and aggressively going after that market niche so as to cause the competitor to pull back its
efforts to defend its own territory. When a leader is attacked, he may base his counter-attack in
the attacker‘s territory. The attacker has to deploy resources to this territory for defence.

(e) Mobile defence: This strategy involves the leader‘s broadening and expanding its
territories into new market areas by diversifying. The leader takes innovation into new market
areas by diversifying .The leader takes innovation works in both these directions. E.g.: A five-
star hotel can become foreign exchange dealer. Diversification into related areas is used in
mobile defence.

(f) Contraction defence: This strategy involves retrenching into areas of strength and is
often used in later stages of a product life cycle or when the firm has been under considerable
attack .For ex: HUL decided to concentrate on its core business areas, i.e. soaps and detergents
and etc.
iii) Expanding the market share strategy: Market leaders can improve their profitability
through increasing their market shares. Market leaders are successful at expanding their market
shares like, HUL, Procter and Gamble, McDonald‘s and titan.
In Conclusion, market leaders who stay on top have learned the art of expanding the total
market, defending their current territory, and increasing their market share and profitability.
Competing with highly aggressive market leaders presents a formidable challenge to all
newcomers.

b) Market Challenger Strategies:

Those firms which occupy second or third places in the market can be called as Runner
up or Market Challenger. The market challengers‘ strategic objective is to gain market share and
to become the leader eventually
How?
• By attacking the market leader
• By attacking other firms of the same size

• By attacking smaller firms

Types of Attack Strategies:
 Frontal attack
 Flank attack
 Encirclement attack
 Bypass attack
 Guerrilla attack

i) Frontal Attack: This strategy is used when the challenger masses its competitive forces right
up against those of the opponent by attacking its competitor‘s strengths rather than its
weaknesses. For this to succeed, the challenger needs a strength advantage over its opponent. An
attack is called a frontal attack when the opponent‘s strength is challenged head on.
ii) Flank Attack: This strategy is used when the challenger sets its sights on its target‘s weakest
points. Attacking a weak position in the opponent‘s force is flank attack.
iii) Encirclement Attack: It is used only by well-financed firms. In this attack both strong areas
and weak areas attacked simultaneously.
iv) Guerilla Attack: Guerilla attacks consist of making small, intermittent attacks on different
marketing territories of the opposing firm.
v) Bypass Attack: In a bypass attack to gain market share, a firm identifies segments not served
by the existing firms and makes efforts to gain market share.

c) Market-Followers strategy:
Market follower is the one who follows a leader or a challenger… the strategies are:
e.g. Product innovation—Sony , Product-imitation--Panasonic
i) Following Closely - Follower appears to be challenger in many respects, but doesn‘t muster
too great an effort so as to block direct conflict.
ii) Following at a distance - Follower parallels the leader‘s general price levels, product
innovations and distribution at a distance without thread to challenger.
iii) Following selectively - Follower follows the leader quite closely in some ways, goes its own
way in other instances, and sometimes chooses not to participate at all.
d) Nichers Strategy:
A market niche strategy coincides with a concentrated marketing strategy. Firm realizes
that it lacks the resources to compete directly with bigger firms in the industry and Seeks to
identify a particular niche or segment of the market upon which it can concentrate all its
energies. The key to success in developing such a strategy is to define a viable market segment
and then develop an offering which is perceived as differentiated from the competition by the
users comprising the segments thereby by conferring a temporary monopoly upon the supplier.
e.g. Logitech , Babool
The nicher can play a role of specialist in the following ways:
Channel specialist - large size distribution network

Service specialist - one or more services not available from other companies

Product feature specialist- certain type of product or product features

Product line specialist - only one product

Geographic specialist - certain locality, region or area

Specific Customer specialist - one or few major customers

Customer size specialist - (Small or medium or large-size)

e) Rivalry Strategies:

i) Cost leadership Strategy:

A cost leadership strategy aims to exploit scale of production, well defined scope and
other economies (e.g. a good purchasing approach), producing highly standardized products,
using high technology
ii) Differentiating Strategy:
It is the process of distinguishing a product or offering from others, to make it more
attractive to a particular target market. This involves differentiating it from competitors' products
as well as a firm's own product offerings. (Design, Brand image, Technology, Service, Dealer
Network, etc)
iii) Product Flanking Strategy:
Introduction of various combination of products at different prices to cover the
maximum market segments
iv) Confrontation Strategy:
A combination of Market-challenger Strategies (Frontal attack, Flank attack,
encirclement attack and guerilla attack)
v) Defensive Strategy:
Adopted by companies which are strong and not by the leader… attacking a perceived
weakness in the leader‘s strategy
vi) Offensive Strategy:
Strategy for market leader and attacking the competitors by introducing new products,
services
vii) De-marketing Strategy:
Withdrawing a product which is enjoying good demand and satisfies the demand by some
other products, which it likes to popularise
viii) Remarketing Strategy:
A product with declining demand is brought back to life and remarketed.

f) Growth Strategies:
a) For Existing Markets:
i) Market penetration:
Aims at increasing sales of existing products in the current market. It is achieved
by increasing the level of marketing efforts or lowering the prices. Status quo strategy
ii) Product Development:
 Development of new products for the existing markets
 Meeting changing needs and wants
 Match new competitive advantage
 Get the advantage of new technology
 Fulfill the requirements of new market segments
 iii) Vertical integration:
Vertically integrated companies in a supply chain are united through a common
owner. Usually each member of the supply chain produces a different product or (market-
specific) service, and the products combine to satisfy a common need. It is contrasted
with horizontal integration.
a) Backward Integration
b) Forward Integration

b) For New Markets:

i) Market development:
An effort to bring current products to new markets (existing markets stagnant, market
shares already high/ competitors are very powerful)

ii) Market Expansion: Moving into a new geographic market area.

iii) Diversification:
It seeks to increase profitability through greater sales volume obtained from new
products and new markets.
a) Concentric diversification: The technology would be the same but the marketing
effort would need to change.
b) Horizontal diversification: The company adds new products or services that are
often technologically or commercially unrelated to current products but that may appeal to
current customers.
c) Conglomerate diversification (or lateral diversification): The conglomerate
diversification has very little relationship with the firm's current business
g) Consolidation Strategies:
i) Retrenchment:
Retrenchment is a pullback or a withdrawal from offering some current products or
serving some markets. It seeks to reduce the size or diversity of an organization's operations.
ii) Pruning:
Reducing the number of products offered in a market (too small or too costly to
continue).
iii) Divestment:
Plan whereby a product line (or a product division of a business) is liquidated or sold so
as to limit either real or anticipated losses and to redirect the resources behind that product line.
h) Functional Strategies:
i) Product Strategies:
Specifying the exact product or service to be offered.
‗Marketing is not about providing products or services it is essentially about providing
changing benefits to the changing needs and demands of the customer‖ ‘ - product width, product
design, features….
ii) Branding Strategies:
The process by which a marketer tries to build long-term relationship with the customers
 Brand Image or brand Building
 Brand equity

iii) Brand Image:

A brand is the identity of a specific product, service, or business . A brand can take many
forms, including a name, sign, symbol, color combination or slogan.
iv) Distribution Strategies:
 Selecting the method for distributing the product or service.
 selection of one or more channels extent or intensity of distribution
v) Media Strategies - Media to be used
vi) Sales promotion Strategies:
Sales promotions are short-term incentive to encourage the purchase or sale of a product
or service.
vii) Price Strategy - Establishing a price for the product or service

INDUSTRIAL MARKETING / BUSINESS-TO-BUSINESS (B2B) MARKETING:

Industrial marketing:

Industrial marketing consists of all activities involves in the marketing products to the
organization that use product in the production of industrial goods eg: leather - shoes, bags etc.
 Industrial marketing, also known as business-to-business (B2B) marketing, is a branch of
communications and sales that specializes in providing goods and services to other businesses,
rather than to individual customers
Because industrial marketing often involves large orders and long-term relationships
between the producer and client, the process from first pitch to close of sale is often more
complex than the process between a business and a private customer.
Characteristics of industrial marketing:
 Geographic market concentration
 Sizes and number of buyers
 Buyer-seller relationships
 Evaluating international business markets
 Professional purchasing methods based on information and rationality
 Focus is on price and cost-saving

CONSUMER BUYING PROCESS IN INDUSTRIAL MARKET:

1) Recognition of a Problem:
The purchasing/buying process begins when someone in the company recognises a
problem or need that can be met by acquiring goods or services.

The common events that lead to this phase could be:

 The company decides to develop a new product and needs new equipment and materials
to produce this product.
  It decides to diversify or expand and hence requires a multitude of new suppliers.
 Purchasing Manager assesses an opportunity to obtain lower prices or better quality.
 A machine breaks down and requires replacement or new parts.
 Purchased materials turn out to be unsatisfactory and the company searches for another
supplier.
 Early emolument in the new task/problem recognition phase offers the marketer an
advantage over competitive suppliers.

2) Description of the need:

This phase involves determination of the characteristics and quantity of the needed item.
The general characteristics could be reliability, durability, price etc. and the marketer along with
the purchasing manager, engineers and users can describe the needs.

3) Product Specification:
Obtaining the input from the second phase, the buying organisation has to develop the
technical specifications of the needed items. In this phase, the product is broken down into items.
The items in turn are sorted into standard ones and new ones which need to be designed.

The specifications for both are listed. As a marketer, he must involve himself and his
technical and financial counterpart to determine the feasibility and also to elaborate the services
they can offer to develop and supply the product. Unless it is a known supplier many companies
do not encourage the supplier participation at this stage. Customer relationship plays a vital role
here.

4) Supplier Search:
This phase pertains to the search for the qualified suppliers among the potential sources.
The marketer has to ensure that he is in the list of potential suppliers. For this to happen, he has
to make periodic visits to all potential companies and create awareness. Brochures have to be
circulated and advertisements placed in specific media like trade journals. This phase only
involves making a list of qualified suppliers.
5) Proposal Solicitation:
The lists of qualified suppliers are now further shortened based on some critical factors.
For example, if the buyer is not willing to try any new firm which has not been in the market for
more than three years, it can delist those suppliers. Then the purchasing departments ask for
proposals to be sent by each supplier.

After evaluations, based on the specified criteria, some firms are asked to come over for
formal presentations. The proposal must include product specification, price, delivery period,
payment terms, taxes of experts and duties applicable, transportation cost, cost of transit
insurance and any other relevant cost or free service provided. For purchase of routine products
or services, phases 4 and 5 may occur simultaneously as the buyer may contact the qualified
suppliers to get the latest information on prices and delivery periods.

For technically complex products and services, a lot of time is spent in analysing
proposals in terms of comparison on products services, deliveries and the landed cost.

6) Supplier Selection:
Each of the supplier‘s presentations are rated according to certain evaluation models. The
buying organisation may also attempt to negotiate with its preferred suppliers for better prices
and terms before making a final decision.

7) Order Routine Specification:

After the suppliers have been selected, the buyer negotiates the final order, listing the
technical specifications, the quantity needed, the expected time of delivery, return policies,
warranties etc. In case of maintenance, repair and operating items, buyers are increasingly
moving towards blanket contracts rather than periodic purchase orders.

Blanket contracting leads to more single sources buying and ordering of more items from
that single source. This system brings the supplier in closer with the buyer and makes it difficult
for out-suppliers to break in unless the buyer becomes dissatisfied with the in-suppliers‘ prices,
quality or service.
Strategies for Industrial Market
• Company Position.
• Market Follower Strategy.
• Industrial Product Life cycle.
Industrial marketing is an intricate process that occurs at many stages. It can involve a
wide variety of marketing strategies, such as:
 Informational websites with language directed at other businesses
 Personalized presentations to the management staff of potential clients
 Product samples to demonstrate confidence in the quality of the product
 Online videos displaying products and sales staff

1. Brand Positioning:
 State in a sentence or two who exactly you help and what
 List the most important core benefits you deliver to that buyer and company.
 List the types of problems those companies commonly experience that lead them to you.
 Explain what makes your company different and unique.
 Prompt an action to be taken – like a free consultation.

2. Website Infrastructure:
 Built on a flexible content management system like WordPress that enables growth and
expansion as your business does the same.
 Mobile-friendly so visitors can effectively consume your website content on desktop
computers, iPads, iPhones, Androids and all the other devices they might be using.
 Search engine-optimized so the right buyers can find you in the first place.
 Written specifically to inform and fill the needs of each core buyer persona.
 Designed with intended paths for each of those ideal buyers to land on your site and
move toward a form submission.
 Equipped with a robust Learning Center that‘s filled with helpful, educational content
for each of your buyer personas.
 Written to appeal to each persona at all stages of their buying process (whether they‘re
researching, evaluating or ready to buy).
  Connected directly to a CRM (customer relationship management) and / or marketing
automation software platform so your Sales and Marketing teams can easily collect lead
intelligence and quickly take action as business opportunities are generated.
3. Website Traffic Strategy:
 Attended trade shows.
 Sent direct mail to targeted lists.
 Ran print ads in industry trade journals.
 Paid for banner ads on hand-picked websites.
 Ran a Google AdWords pay-per-click campaign.
 Blasted out email newsletters.
 Cold called, knocked on doors and cold called some more.

4. Lead Generation Strategy:

A majority of our industrial sector clients do not sell widgets. Their websites are not e-
commerce stores. In fact, their websites will never sell a thing. However, their websites do own
the responsibility of generating tangible leads through form submissions.
For their businesses and yours, all the website traffic in the world will never carry a
tangible value unless you can effectively convert those visitors into real, live business
opportunities.
Because industrial products and services often come in the form of highly technical,
customized and complex solutions for unique customer applications, buying decisions for those
customers rarely happen in the snap of a finger.

5. Sales Enablement Strategy:

 Sales calls Inbound Lead.
 Inbound Lead sees an unknown phone number and ignores the call.
 Sales leaves a voicemail outlining the company‘s value proposition and requesting a
meeting.
 Inbound Lead isn‘t ready for a meeting and therefore doesn‘t return the call.
 Salesman concludes that Inbound Lead is not interested and moves on.
6. Lead Nurturing Strategy:
 Continue helping and teaching the warm and cool (but potentially qualified) contacts who
have moved off your sales team‘s short-term radar.
 Continue establishing thought leadership for your business, and building trust bit by bit.
 Keep your business top of mind so these contacts think of you first when the time finally
comes to make a buying decision.

7. ROI Reporting Process:

In its simplest form, a manufacturer‘s Marketing team exists to generate qualified sales
opportunities and its Sales team exists to close those opportunities as customers. Together, the
joint goal of these two teams is to drive sustainable business growth for the company.
 The individual articles and blog posts you‘ve published on your website.
 The content you‘ve continuously pitched for guest authorship in industry trade journals.
 The hours you‘ve spent optimizing individual pages on your site to grow the visitor-to-
lead conversion rate from 1% to 2% to 3%.
 Your sales team‘s pursuit of inbound leads through marketing automation.

Marketing Mix for Industrial Product:

• Product - Introducing New & advanced product
• Price
- Customer demand
-Competitors
-Return on investment
-Trade discount
-Quantity discount
-Cash discount
-Geographical pricing

• Place
-Industrial distributor
-Manufacturer
 -Sales agent
-Manufacturer sales branches

Analysis Of Industrial Marketing: A market analysis studies the attractiveness and the
dynamics of a special market within a special industry.
Elements of market analysis:-

tructure

CONSUMER MARKETING:-
Consumer markets refers to the markets where people purchase products for consumption
and are not meant for further sale.

A consumer market is the very system that allows us to purchase products, goods, and
services. These items can be used for personal use or shared with others. The more people who
go out and actively purchase products, the more active the consumer market.
In a consumer market, marketing provides a critical role in educating people on what
buying options are available. Because consumers are empowered and can make their own
purchasing decisions, they also have more choices to make.
As a result, it becomes more vital that companies educate potential customers about their
products and encourage them to buy their products. This encourages a more diverse and vibrant
free market system that provides the opportunity for more variety and options.
Definition of consumer market
Consumer marketing is defined as creating and selling products, goods and services to
individual buyers, as opposed to trying to appeal to businesses.
Products in consumer market are further categorized into:

1. Fast Moving Consumer Goods (Abbreviated as FMCG):

Fast moving consumer goods are items that are sold quickly to the end-users generally at
nominal costs. Example - Aerated drinks, grocery items and so on.
2. Consumer Durables:
Goods that a consumer uses for a considerable amount of time rather than consuming in
one use are categorized under Consumer Durables.
Consumer Durables are further categorized into - White Goods and Brown Goods
i. White Goods - (Refrigerators, Microwaves, air conditioners and so on (Majorly
all household appliances)
ii. Brown Goods - (Television, CD Players, Radio, Game Consoles (Majorly used
for entertainment and fun)
3. Soft Goods:
Soft goods are products which have a shorter lifecycle and their value decreases after
every use. Eg shirts, clothes, shoes.

Characteristics of consumer goods:

• Large number of consumer
• Production in high volume
• High competitors
• Substitutes are highly available
• adopt mass method for promotion (t.v, radio)
• Distribution of channel is high
• Trends varies from time to time
• Packing play important role

ANALYSIS OF CONSUMER MARKET:

Market analysis: A market analysis studies the attractiveness and the dynamics of a special
market within a special industry.
SERVICES MARKETING
Service marketing is marketing based on relationship and value. It may be used to market
a service or a product. With the increasing prominence of services in the global economy, service
marketing has become a subject that needs to be studied separately.
Marketing services is different from marketing goods because of the unique
characteristics of services namely, intangibility, heterogeneity, perishability and inseparability.
In most countries, services add more economic value than agriculture, raw materials and manu-
facturing combined. In developed economies, employment is dominated by service jobs and
most new job growth comes from services.
Jobs range from high-paid professionals and technicians to minimum-wage positions.
Service organizations can be of any size from huge global corporations to local small businesses.
Most activities by the government agencies and non-profit organizations involves services.
The American Marketing Association, defines services as activities, benefits, or
satisfactions that are offered for sale or provided with sale of goods to the customer, that is, pre-
sale and after-sales services. Berry states, ‗while a product is an object, devise or physical thing,
a service is a deed, performance, or an effort‘.

Characteristics of Services:
The American Marketing Association defines services as - ―Activities, benefits and satisfactions
which are offered for sale or are provided in connection with the sale of goods.‖
The defining characteristics of a service are:
a) Intangibility:
Services are intangible and do not have a physical existence. Hence services cannot be
touched, held, tasted or smelt. This is most defining feature of a service and that which primarily
differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a
service as they need to attach tangible attributes to an otherwise intangible offering.
b) Heterogeneity/Variability:
Given the very nature of services, each service offering is unique and cannot be exactly
repeated even by the same service provider. While products can be mass produced and be
homogenous the same is not true of services. eg: All burgers of a particular flavor at McDonalds
are almost identical. However, the same is not true of the service rendered by the same counter
staff consecutively to two customers.
c) Perishability:
Services cannot be stored, saved, returned or resold once they have been used. Once
rendered to a customer the service is completely consumed and cannot be delivered to another
customer. eg: A customer dissatisfied with the services of a barber cannot return the service of
the haircut that was rendered to him. At the most he may decide not to visit that particular barber
in the future.
D) Inseparability/Simultaneity of production and consumption:
This refers to the fact that services are generated and consumed within the same time
frame. Eg: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a
takeaway burger which the customer may consume even after a few hours of purchase.
Moreover, it is very difficult to separate a service from the service provider. Eg: the barber is
necessarily a part of the service of a haircut that he is delivering to his customer.
Types of Services:
1. Core Services: A service that is the primary purpose of the transaction. Eg: a haircut or the
services of lawyer or teacher.
2. Supplementary Services: Services that are rendered as a corollary to the sale of a tangible
product. Eg: Home delivery options offered by restaurants above a minimum bill value.
Problems in Marketing Services:
 A service cannot be demonstrated.
 Sale, production and consumption of services takes place simultaneously.
  A service cannot be stored. It cannot be produced in anticipation of demand.
 Services cannot be protected through patents.
 Services cannot be separated from the service provider.
 Services are not standardized and are inconsistent.
 Service providers appointing franchisees may face problems of quality of services.
Classification of services:
• Tangible service ex Haircut; health care; restaurants;
• Intangible service ex: get it yellow page education
• Continuous service - banking, education
• Discrete relationship- Theatre seat, traveling on ticket
• Customer comes to service-theatre;
• Services go to customer- mail delivery postal
• Equipment based service - ATM; lift
• Human based service - watchman
• High contact service ex: education hospitals;
• low contact service ex dry cleaning telecommunication, broadcasting)
• public service ( services directed at the public)transport, T.V and radio broad cast
• Individual service (service directed at the individuals) beauty care, restaurants etc
MARKETING MIX OF SERVICES:

The service marketing mix is also known as an extended marketing mix and is an integral
part of a service blueprint design. The service marketing mix consists of 7 P‘s as compared to the
4 P‘s of a product marketing mix. Simply said, the service marketing mix assumes the service as
a product itself. However it adds 3 more P‘s which are required for optimum service delivery.

The product marketing mix consists of the 4 P‘s which

are Product, Pricing, Promotions and Placement. These are discussed in my article on product
marketing mix – the 4 P‘s.

The extended service marketing mix places 3 further P‘s which include People, Process
and Physical evidence. All of these factors are necessary for optimum service delivery. Let us
discuss the same in further detail.
1) Product:

The product in service marketing mix is intangible in nature. Like physical products such
as a soap or a detergent, service products cannot be measured. Tourism industry or the education
industry can be an excellent example. At the same time service products
are heterogenous, perishable and cannot be owned.

The service product thus has to be designed with care. Generally service blue printing is
done to define the service product. For example – a restaurant blue print will be prepared before
establishing a restaurant business. This service blue print defines exactly how the product (in this
case the restaurant) is going to be.

2) Place

Place in case of services determine where is the service product going to be located. The
best place to open up a petrol pump is on the highway or in the city. A place where there is
minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be
better placed in a business hub with a lot of companies nearby rather than being placed in a town
or rural area. Read more about the role of business locations or Place element.

3) Promotion

Promotions have become a critical factor in the service marketing mix. Services are easy
to be duplicated and hence it is generally the brand which sets a service apart from its
counterpart. You will find a lot of banks and telecom companies promoting themselves
rigorously.
Why is that? It is because competition in this service sector is generally high and promotions is
necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest
by advertising or promotions.

4) Pricing

Pricing in case of services is rather more difficult than in case of products. If you were a
restaurant owner, you can price people only for the food you are serving. But then who will pay
for the nice ambiance you have built up for your customers? Who will pay for the band you have
for music?

Thus these elements have to be taken into consideration while costing. Generally
service pricing involves taking into consideration labor, material cost and overhead costs. By
adding a profit mark up you get your final service pricing. You can also read about pricing
strategies.

Here on we start towards the extended service marketing mix.

5) People

People is one of the elements of service marketing mix. People define a service. If you
have an IT company, your software engineers define you. If you have a restaurant, your chef and
service staff defines you. If you are into banking, employees in your branch and their behaviour
towards customers will define you. In case of service marketing, people can make or break an
organization.

Thus many companies nowadays are involved into specially getting their staff trained in
interpersonal skills and customer service with a focus towards customer satisfaction. In fact
many companies have to undergo accreditation to show that their staff is better than the rest.
Definitely a USP in case of services.
6) Process

Service process is the way in which a service is delivered to the end customer. Lets take
the example of two very good companies – Mcdonalds and Fedex. Both the companies thrive on
their quick service and the reason they can do that is their confidence on their processes.

On top of it, the demand of these services is such that they have to deliver optimally
without a loss in quality. Thus the process of a service company in delivering its product is of
utmost importance. It is also a critical component in the service blueprint, wherein before
establishing the service, the company defines exactly what should be the process of the service
product reaching the end customer.

7) Physical Evidence

The last element in the service marketing mix is a very important element. As said
before, services are intangible in nature. However, to create a better customer
experience tangible elements are also delivered with the service. Take an example of a restaurant
which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice
music along with good seating arrangement and this also serves good food. Which one will you
prefer? The one with the nice ambience. That‘s physical evidence.

Several times, physical evidence is used as a differentiator in service marketing. Imagine

a private hospital and a government hospital. A private hospital will have plush offices and well
dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a
differentiator.
COMPETITOR ANALYSIS:

A competitive analysis is the analysis of your competitors and how your business
compares. Competitor analysis in marketing and strategic management is an assessment of the
strengths and weaknesses of current and potential competitors.
This analysis provides both an offensive and defensive strategic context to identify
opportunities and threats. Profiling combines all of the relevant sources of competitor analysis
into one framework in the support of efficient and effective strategy formulation,
implementation, monitoring and adjustment.
Competitor analysis is an essential component of corporate strategy. It is argued that most
firms do not conduct this type of analysis systematically enough[. Instead, many enterprises
operate on what is called "informal impressions, conjectures, and intuition gained through the
tidbits of information about competitors every manager continually receives."
As a result, traditional environmental scanning places many firms at risk of dangerous
competitive blind spots due to a lack of robust competitor analysis One common and useful
technique is constructing a competitor array.
The steps include:
 Define the industry – scope and nature of the industry.
 Determine who the competitors are.
 Determine who the customers are and what benefits they expect.
 Determine the key strengths – for example price, service, convenience, inventory, etc.
 Rank the key success factors by giving each one a weighting – The sum of all the
weightings must add up to one.
 Rate each competitor on each of the key success factors.
 Multiply each cell in the matrix by the factor weighting.
Types of Competitors:
The types of competitors evaluated include:
Direct – Businesses that sell the same types of goods and services you do, to the same market.
Such as gift shops, convenience stores, or florists, for example.
Indirect – Businesses that sell substitute products or services, or items that can be used in place
of yours. If you own a bakery, an indirect competitor might be a restaurant. If you run a
scrapbook supply store, an indirect competitor could be a craft store.

Potential new entrants – Although you can‘t predict the future, any news you‘ve picked up
about new businesses entering your market should be taken into account as you analyze your
current and future competition.
Competitor profiling:
The strategic rationale of competitor profiling is simple. Superior knowledge of rivals
offers a legitimate source of competitive advantage. The raw material of competitive advantage
consists of offering superior customer value in the firm‘s chosen market. The definitive
characteristic of customer value is the adjective, superior. Customer value is defined relative to
rival offerings making competitor knowledge an intrinsic component of corporate strategy.
Profiling facilitates this strategic objective in three important ways.
First, profiling can reveal strategic weaknesses in rivals that the firm may exploit.
Second, the proactive stance of competitor profiling will allow the firm to anticipate the strategic
response of their rivals to the firm‘s planned strategies, the strategies of other competing firms,
and changes in the environment.
Third, this proactive knowledge will give the firms strategic agility. Offensive strategy
can be implemented more quickly in order to exploit opportunities and capitalize on strengths.
Similarly, defensive strategy can be employed more deftly in order to counter the threat of rival
firms from exploiting the firm‘s own weaknesses.
Firms practicing systematic and advanced competitor profiling may have a significant
advantage. A comprehensive profiling capability is a core competence required for successful
competition.
A common technique is to create detailed profiles on each of the major competitors.[9]
These profiles give an in-depth description of the competitor's background, finances, products,
markets, facilities, personnel, and strategies. This involves:
Background:
 location of offices, plants, and online presences
 history – key personalities, dates, events, and trends
 ownership, corporate governance, and organizational structure
Financials:
 P-E ratios, dividend policy, and profitability
 various financial ratios, liquidity, and cash flow
 profit growth profile; method of growth (organic or acquisitive)
Products:
 products offered, depth and breadth of product line, and product portfolio balance
 new products developed, new product success rate, and R&D strengths
 brands, strength of brand portfolio, brand loyalty and brand awareness
 patents and licenses
 quality control conformance
 reverse engineering or deformulation
Marketing:
 segments served, market shares, customer base, growth rate, and customer loyalty
 promotional mix, promotional budgets, advertising themes, ad agency used, sales force
success rate, online promotional strategy
 distribution channels used (direct & indirect), exclusivity agreements, alliances, and
geographical coverage
 pricing, discounts, and allowances
Facilities:
 plant capacity, capacity utilization rate, age of plant, plant efficiency, capital investment
 location, shipping logistics, and product mix by plant
Personnel:
 number of employees, key employees, and skill sets
 strength of management, and management style
 compensation, benefits, and employee morale & retention rates
Corporate and marketing strategies:
 objectives, mission statement, growth plans, acquisitions, and divestitures
 marketing strategies.
New competitor:
In addition to analysing current competitors, it is necessary to estimate future competitive
threats[.
The most common sources of new competitors are:
 Companies competing in a related product/market
 Companies using related technologies
 Companies already targeting the target prime market segment but with unrelated
products
 Companies from other geographical areas and with similar products
 New start-up companies organized by former employees and/or managers of existing
companies
The entrance of new competitors is likely when:

 There are high profit margins in the industry

 There is unmet demand (insufficient supply) in the industry
 There are no major barriers to entry
 There is future growth potential
 Competitive rivalry is not intense
 Gaining a competitive advantage over existing firms is feasible
 Dissatisfaction with the existing suppliers

Analysis of consumer and industrial markets:

Industrial Marketing and Consumer Marketing are often assumed to be the same but both
vary in many aspects. Industrial Marketing is more related to B2B marketing where customers
are mainly manufacturers , and Consumer Marketing deals with B2C marketing where customer
is the end user who is the ultimate consumer of goods and services.
Let us define these marketing approaches to understand them better:
Industrial Marketing:
A marketing channel that specializes in selling goods and services to other business
organizations. Marketing for B2B customers involves large orders and long-term relationships
between organizations. It mostly involves purchase and sale of materials for the
manufacturing/production of goods and services.
Example
Manufacturers.

Consumer Marketing:
A marketing channel that specializes in selling goods and services to individual buyers.
Marketing for end customers involves customizing the marketing campaigns and communication
channels to reach the target audience. Marketing strategies are more focused on personalizing the
experience of the user with the product or service offered.
Example

Industrial Marketing and Consumer Marketing bundle together under the marketing
umbrella, and yet are different in many ways. Let us discuss some of the differences and
common factors between the two, to understand them better.

Common Factors in Industrial Marketing and Consumer Marketing

Industrial and Consumer Marketing are quite similar when you address the fundamental
principles of marketing. Both categories follow the principles of the marketing mix and the and
objectives of marketing. They share a common patch in following ways:-
 Match the product or service with the needs of the target market.
 Understand the market and decide on position and pricing, of the product or service to
align with the market needs.
 Create effective communication means to demonstrate the value of the product in the
target market.
 Design an end-to-end marketing process to cater to the requirements and develop a long-
term relationship with the costumer.
Industrial and Consumer Buyers:
The buying process is segmented into 5 stages:
 -purchase activities.

Consumer Buyers
The buying behavior, when concentrated on buying goods and services for household and
personal consumption is consumer buying. Here the buying is one at a time. The products are
eatable products, day-to-day use products. Product buying takes place in the following stages
1. Recognition of need
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase behavior
Industrial Buyers
Here the buying is always in bulk and is based on group decision and influence. Raw
materials purchased for further production are the products for industrial buying. Product buying
takes place in following stages.
1. Problem recognition
2. General need description
3. Product specification
4. Supplier search
5. Proposal solicitation
6. Supplier selection
7. Order routine specification
8. Performance review