Marketing strategy

Marketing
Strategy

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Contents:
Section 1 : Market Scope Strategy
Section 2 : Market Entry Strategy
Section 3 : Product Strategy
Section 4 : Promotion Strategy
Section 5 : Distribution Strategy
Section 6 : Pricing Strategy

Market Scope
Strategy
1. Single Market Strategy
2. Multi Market Strategy
3. Total Market Strategy


1. Single Market Strategy
• Concentration of efforts in a single
segment.
• Requirements: (a) Serve the market
wholeheartedly despite initial difficulties
(b) Avoid competition with established
firms.


2. Multi Market Strategy

• Serving several distinct markets.
• Requirements: (a) Careful selection of
segments to serve (b) Avoid
confrontation with companies serving
entire market.


3. Total Market Strategy
• Serving the entire spectrum of the market by selling
differentiated products to different segments in the
market.
• Requirements: (a) Employ different combinations of
price, product, promotion, and distribution strategies
in different segments (b) Top management
commitment to embrace entire market (c) Strong
financial position.


Market Entry
Strategy
1. First In Strategy
2. Early Entry Strategy
3. Laggard Entry Strategy


1. First In Strategy
• Entering the market before all others.
• Requirements: (a) Willingness and ability to
take risks (b) Technological competence (c)
Strive to stay ahead (d) Heavy promotion (e)
Create primary demand (f) Carefully evaluate
strengths.


2. Early Entry Strategy
• Entering the market in quick succession after
the leader.
• Requirements: (a) Superior marketing
strategy (b) Ample resources (c) Strong
commitment to challenge market leader.


3. Laggard Entry Strategy
• Entering the market toward tail end of growth phase
or during maturity phase. Two modes of entry are
feasible: (a) Imitator - Entering market with me-too
product (b) Initiator - Entering market with
unconventional marketing strategies.
• Requirements: Imitator - (a) Market research ability
(b) Production capability. Initiator - (a) Market
research ability, (b) Ability to generate creative
marketing strategies.


Product
Strategy
1. Product Positioning Strategy
2. Product Repositioning Strategy
3. Product Scope Strategy
4. Product Design Strategy
5. New Product Strategy


• Placing a brand in that part of the market where it
will have a favorable reception compared with
competing brands.
• Requirements: (a) Successful management of a
single brand requires positioning the brand in the
market so that it can stand competition from the
toughest rival and maintaining its unique position by
creating the aura of a distinctive product.

• (b) Successful management of multiple brands
requires careful positioning in the market so that
multiple brands do not compete with nor
cannibalize each other.


• Reviewing the current
2. Product
positioning of the product and
Repositioning its marketing mix and seeking
Strategy a new position for it that
seems more appropriate.


• Requirements: (a) If this strategy
2. Product is directed toward existing
Repositioning customers, repositioning is
customers
Strategy sought through promotion of
more varied uses of the product


• (b) If the business unit wants to
2. Product reach new users, this strategy
users
Repositioning requires that the product be
Strategy presented with a different twist
to the people who have not been
favorably inclined toward it.
• In doing so, care should be
taken to see that, in the process
of enticing new customers,
current ones are not alienated

• (c) If this strategy aims at
2. Product
presenting new uses of the
Repositioning product, it requires searching
product
Strategy for latent uses of the product, if
any.
• Although all products may not
have latent uses, there are
products that may be used for
purposes not originally intended.


3. Product
Scope
Strategy
• The product-scope strategy deals
with the perspectives of the product
mix of a company.
• The company may adopt a single-
product strategy, a multiple-
product strategy, or a system-of-
products strategy.


3. Product
Scope
Strategy
• Requirements: (a) Single product:
product
company must stay up-to-date on
the product and even become the
technology leader to avoid
obsolescence (b) Multiple
products: products must
products
complement one another in a
portfolio of products

3. Product
Scope
Strategy
• (c) System of products: company
products
must have a close understanding of
customer needs and uses of the
products.


4. Product • The product-design strategy deals
with the degree of standardization
Design of a product.
Strategy • The company has a choice among
the following strategic options:
standard product, customized
product, and standard product
with modifications.


4. Product • Objectives: (a) Standard product :
to increase economies of scale of
Design
the company (b) Customized
Strategy product : to compete against mass
producers of standardized products
through product-design flexibility
(c) Standard product with
modifications : to combine the
benefits of the two previous
strategies.

• A set of operations that
5. New
introduces (a) within the
business, a product new to its
business
Product
previous line of products (b) on Strategy
the market, a product that
market
provides a new type of
satisfaction.
• Three alternatives emerge from
the above: product
improvement/modification,
improvement/modification
product imitation, and product
imitation
innovation.

• Requirements: A new-product
5. New
strategy is difficult to implement
if a new product development Product
system does not exist within a Strategy
company.


• Five components of this
5. New
system should be assessed:
• corporate aspirations toward
Product
new products Strategy
• organizational openness to
creativity
• environmental favor toward
creativity
• screening method for new
ideas, and
• evaluation process.


Promotion
Strategy
1. Promotion Mix Strategy
2. Media Selection Strategy
3. Advertising Copy Strategy


1. Promotion
Mix Strategy
• Determination of a judicious mix of
different types of promotion.
• Requirements :
• (a) Product factors: (i) nature of
factors
product (ii) durable versus
nondurable (iii) perceived risk (iv)
typical purchase amount


1. Promotion
Mix Strategy
• (b) Market factors: (i) position in the
life cycle, (ii); market share, (iii)
industry concentra-tion, (iv) intensity
of competition, and (v) demand
perspectives
• (c) Customers factors: (i)
household versus business
customers, (ii) number of customers,
and (iii) concentration of customers

1. Promotion
Mix Strategy
• (d) Budget factors: (i) financial
resources of the organization and (ii)
traditional promotional perspectives
• (e) Marketing mix factors: (i)
relative price/relative quality, (ii)
distribution strategy, (iii) brand life
cycle, and (iv) geographic scope of
the market


2. Media Selection
Strategy
• Choosing the channels
(newspapers, magazines, television,
radio, outdoor advertising, transit
advertising, and direct mail) through
which messages concerning a
product/service are transmitted to
the targets.


2. Media Selection
Strategy
• Requirements: (a) Relate media-
selection objectives to product/market
objectives (b) Media chosen should
have a unique way of promoting the
business (c) Media should be measure-
minded not only in frequency, in timing,
and in reaching the target audience but
also in evaluating the quality of the
audience

2. Media Selection
Strategy
• (d) Base media selection on factual
not artificial grounds, (e) Media plan
should be optimistic in that it takes
advantage of the lessons learned
from experience (f) Seek
information on customer profiles and
audience characteristics.


• Designing the content of
an advertisement.
• Objective: To transmit a
particular product/service
message to a particular
target.

3. Advertising
Copy Strategy

Requirements:
(a) Eliminate "noise" for a clear
transmission of message
(b) Consider importance of :
• source credibility
• balance of argument
• message repetition
• rational versus emotional
appeals
• humor appeals

3. Advertising • presentation of model's eyes
in pictorial ads
Copy Strategy • comparison advertising.

Distribution
Strategy
1. Distribution Scope Strategy
2. Multiple Channel Strategy


• Establishing the scope of
1. Distribution distribution, that is, the target
Scope customers.

Strategy • Choices are exclusive
distribution (one retailer is
granted sole rights in serving
a given area), intensive
distribution (a product is
made available at all possible
retail outlets), and selective
distribution (many but not all
retail outlets in a given area
distribute a product).

• Requirements: Assessment
1. Distribution of :
Scope • customer buying habits
• gross margin/ turnover
Strategy
rate
• capability of dealer to
provide service
• capability of dealer to
carry full product line
• product styling


2. Multiple Channel
Strategy
• Employing two or more different channels
for distribution of goods and services.
• Multiple-channel distribution is of two
basic types: complementary (each
channel handles a different non-
competing product or market segment)
and competitive (two different and
competing channels sell the same
product).


2. Multiple Channel
Strategy
• Requirements: (a) Market segmentation,
(b) Cost/benefit analysis.
• Use of complementary channels prompted
by (i) geographic considerations, (ii)
volume of business, (iii) need to distribute
non-competing items, and (iv) saturation
of traditional distribution channels.
• Use of competitive channels can be a
response to environmental changes.


Pricing Strategy
1. Pricing Strategies for New Products
2. Pricing Strategies for Established Products
3. Price Flexibility Strategy
4. Price Leadership Strategy


1. Pricing for
New Products
• Skimming Pricing Strategy
• Penetration Pricing Strategy


Skimming Pricing
Strategy
• Setting a relatively high price during
the initial stage of a product's life.
• Objectives: (a) To serve customers
who are not price conscious while
the market is at the upper end of the
demand curve and competition has
not yet entered the market


Skimming Pricing
Strategy
• (b) To recover a significant portion of
promotional and research and
development costs through a high
margin.


Skimming Pricing
Strategy
• Requirements: (a) Heavy
promotional expenditure to introduce
product, educate consumers, and
induce early buying (b) Relatively
inelastic demand at the upper end of
the demand curve (c) Lack of direct
competition and substitutes.


Penetration Pricing
Strategy
• Setting a relatively low price during
the initial stages of a product's life.
• Objective: To discourage
competition from entering the market
by quickly taking a large market
share and by gaining a cost
advantage through realizing
economies of scale.


Penetration Pricing
Strategy
• Requirements: (a) Product must
appeal to a market large enough to
support the cost advantage (b)
Demand must be highly elastic in
order for the firm to guard its cost
advantage.


2. Pricing for
Established Products
• Maintaining the Price
• Reducing the Price
• Increasing the Price


Maintaining the Price

• Objectives: (a) To maintain position
in the marketplace (i.e., market
share, profitability, etc.) (b) To
enhance public image.


Maintaining the Price

• Requirements: (a) Firm's served
market is not significantly affected by
changes in the environment (b)
Uncertainty exists concerning the
need for or result of a price change
(c) Firm's public image could be
enhanced by responding to
government requests or public
opinion to maintain price.

• Objectives: (a) To act defensively
and cut price to meet the
competition (b) To act offensively
and attempt to beat the competition
(c) To respond to a customer need
created by a change in the
environment.

Reducing the Price

• Requirements: (a) Firm must be
financially and competitively strong
to fight in a price war if that becomes
necessary (b) Must have a good
understanding of the demand
function of its product.

Reducing the Price

Increasing the Price

• Objectives: (a) To maintain
profitability during an inflationary
period (b) To take advantage of
product differences, real or
perceived (c) To segment the
current served market.


Increasing the Price

• Requirements: (a) Relatively low
price elasticity but relatively high
elasticity with respect to some other
factor such as quality or distribution,
(b) Reinforcement from other
ingredients of the marketing mix


• One Price Strategy
3. Pricing • Flexible Pricing Strategy
Flexibility
Strategy


• Charging the same price to all
customers under similar conditions
and for the same quantities.
• Objectives: (a) To simplify pricing
One Price
decisions (b) To maintain goodwill
Strategy among customers.


• Requirements:
• Detailed analysis of the firm's
position and cost structure as
compared with the rest of the
industry
• Information concerning the cost
One Price variability of offering the same
Strategy price to everyone


• Knowledge of the economies of
scale available to the firm
• Information on competitive
One Price prices; information on the price
that customers are ready to
Strategy pay.


Flexible Pricing Strategy
• Charging different prices to different
customers for the same product and
quantity.
• Objective: To maximize short-term profits
and build traffic by allowing upward and
downward adjustments in price depending
on competitive conditions and how much the
customer is willing to pay for the product.

• Requirements: Have the information needed
to implement the strategy.
• Usually this strategy is implemented in one
of four ways: (a) by market (b) by product (c)
by timing (d) by technology.


• Other requirements include :
• a customer-value analysis of the product,
• an emphasis on profit margin rather than
just volume, and
• a record of competitive reactions to price
moves in the past.


4. Price Leadership
Strategy
• This strategy is used by the leading
firm in an industry in making major
pricing moves, which are followed by
other firms in the industry.


4. Price Leadership
Strategy
• Objective: To gain control of pricing
decisions within an industry in order
to support the leading firm's own
marketing strategy (i.e., create
barriers to entry, increase profit
margin, etc.).


4. Price Leadership
Strategy
• Requirements:
• An oligopolistic situation
• An industry in which all firms are
affected by the same price
variables (i.e., cost, competition,
demand),
• An industry in which all firms
have common pricing objectives

Source of Reference:
Subhas Jain, Marketing Planning and Strategy, Prentice
Strategy
Hall International.


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