Purchase Intentions - Market Shares = Sales Lost to Competitors.

To decide on a price, you should consider – The margin of the

distributors, The discounts made by some channels, Consumers’
expectations, Competitive prices, Etc.
ADVERTISING - To build brand awareness, to make consumers
familiar with product characteristics and price, to develop demand
for the whole market, To influence the decision of distributors to
carry or not your products, To create a barrier to entry for your
competitors.

R&D IS REQUIRED IN SEVERAL CASES: To develop and launch a brand in a new market (e.g.: Nutrite), To
develop and launch a brand in a new segment (e.g.: High earners), To develop and launch a brand in a segment
where you are not yet present, To modify a brand if its characteristics do not match consumers’ expectations,
To reduce the manufacturing unit cost of an existing product.
HOW TO INTERFACE WITH R&D – `
STEP 1 - HOW TO TRANSLATE CONSUMER NEEDS INTO PHYSICAL CHARACTERISTICS?
OPTION 1 – COPY THE LEADER, OPTION 2 – INTERPOLATE (Semantic Scale Diagram)
STEP 2 - HOW TO DECIDE ON THE DESIRED BASE COST?
Option 1 – Choose a Base Cost that Is in line with the base cost of comparable competitive products. Unit
Margin = Retail Price – Distribution Margin – Base Cost.
Option 2 – Ask R&D to “Develop this project at the lowest possible base cost”.
STEP 3 - DETERMINE HOW MUCH BUDGET IS NEEDED TO DEVELOP THE PROJECT
Option 1 – Run an online query. Option 2 – Run a Feasibility Study.
LIKE – TARGET SEGMENT: LOW IINCOME. LIKE was ranked #4 in the segment LOW INCOME in terms
of unit shares. 4,261 units sold in Period 10. Contribution after marketing of LIKE was average. LIKE
was not well perceived by Low Income along the product dimensions of the Brand Maps and
Perceptual Maps. Physical characteristics fit pretty well in low-income expectation. Amongst the
offerings targeted at low income LIKE had the highest awareness level.

LITE – TARGET SEGMENT: SINGLES. LITE was ranked #6 in the segment SINGLES in terms of unit
shares. In Period 9, LITE was sold at breakeven. In Period 10, LITE was sold at breakeven, thus leaving
no inventory behind. Contribution after marketing of LITE was average. LITE is well perceived by
Singles along the product dimensions of the Brand Maps and Perceptual Maps.

LUCK – TARGET SEGMENT: Elderly. LUCK was in TOP 3 in Nutrites market. 4,261 units sold in Period
10. Contribution after marketing of LUCK was average. LUCK meets the expectations of Elderly along
the product dimensions of the Brand Maps and Perceptual Maps.
LUSHLY – TARGET SEGMENT: Health Conscious. LUSHLY was in TOP 5 in Nutrites market. LUSHLY had
highest awareness level in the Heath Conscious segment. LUSHLY meets the expectations of Health
Conscious along the product dimensions of the Brand Maps and Perceptual Maps. Physical attributes
were well perceived by Health-Conscious segment.

PRICING STRATEGY – Demand across segments. Unit margin. Pricing of competitors. Needs and the
perception of the target segment.

FINANCIAL STRATEGY – Maintaining tight management of cash. Control over every expense to
optimize return. Allocated the full budget provided in every round or period. Increase in revenue
after facing huge losses in period 8. Increased in SPI. Increase in total market share.

LONG TERM STRATEGY – LUSHLY - SECOND HIGHEST MARKET SHARE IN HEALTH CONSCIOUS, THIRD
HIGHEST MARFKET SHARE IN FAMILIES. LUCK - THIRD HIGHEST MARKET SHARE IN ELDERLY
SEGMENT. LIKE - FOURTH HIGHEST MARKET SHARE IN LOW INCOME SEGMENT, SECOND HIGHEST
MARKET SHARE IN LOW INCOME IN ROUND 10. LITE - FIFTH HIGHEST MARKET SHARE IN SINGLES
SEGEMNT

SUCCESS – TEAM L was ranked #2 in market share in the Low-Income segment. Team L was market
leader in Nutrites market in period 9 in the health-Conscious segment. Launched LUCK in Period 8 to
target Elderly segment, formed a huge part of revenue from Firm L. Stagnant growth in Share Price
Index after facing huge loss in Period 3.
FAILURE – LIME was targeted at HIGH EARNERS segment. But it was not contributing to the revenue
as per our expectations. So, we decided not to invest more in brand LIME. None of the brands could
tap into the consumer segment of medium income and affluent families. Initially could not launch
proper R&D projects which further led to increase in time for tapping the desired market segment.
LEARNING – How to operate and manage 5 brands on a low budget. We did not keep a check on our
costs; costs were growing more rapidly than the revenues. Initially, we focused on one brand at a
time, hence Ignoring reinforcement of other brands. We should have positioned our brand properly,
targeting the right segment. It was necessary to analyse previous reports before making any
decision. Team effort was required to give more insights and ideas. Another key learning is that of
the marketing trends of Mark Strat change just like in the real world, even the consumer preferences
too. Lowering the price may not increase the sales. One needs to properly position the brand by
targeting market segments to generate sales effectively.
 CLASS PPTS

Strategic Planning is the management process of developing and maintaining a viable fit between
the organization's objectives, capabilities and resources, and its changing market opportunities.
The aim of strategic planning is to shape and reshape the company’s businesses and products so
that they combine to produce satisfactory profit & growth.

Marketing Strategy is a management process that enables an organization to understand its

environment and its resources & capabilities to achieve organizational objectives to meet the
needs of its customers better than its competitors.

Company Orientation

Organizational Capabilities – Marketing Capabilities •Financial Capabilities • Operations

Capabilities • Human Resources Capabilities • Physical Resources Capabilities • Top Management
Capabilities • R & D Capabilities

Hierarchy of Strategic Planning – Corporate Strategic Planning (Company level) • Business

Strategic Planning (Business Unit level) • Functional Strategic Planning (Functional level) •
Regional Strategic Planning (Market level 1) • ZonalStrategic Planning (Market level 2) • City/Town
Strategic Planning (Market level 3)

Corporate Strategic Planning There are four distinct stages: Defining the corporate mission •
Identifying the company’s Strategic Business Units (SBUs) •Analysing and evaluating the current
portfolio of businesses • Identifying business growth area.

Strategic Directions – Vision: Where the organization want to go? • Mission: Why the organization
exists? • Values: Whatthe organization believes in and how it behaves? • Strategy: What the
competitive “Game Plan” be?
Corporate Mission – Company develops mission statements in order to share them with their –
Managers – employees –channel partners – and business partners. The mission statement should
focus on distinctive values – so that it acts as guidelines when confronted with tough value trade-
offs. – A good test of understanding of mission statement is to askmanagers: “What business
would you say no to?”

1. Define the competitive domain • Industry Scope • Market Segment Scope • Vertical
Scope •Geographical Scope • Technology Scope
2. Motivate employees 3. Express the mission to those outside the organization. 4. Stress
majorpolicies of the company.

Strategic Business Unit Identification – • Within an Industry, companies tend to operate

several businesses. (E.g., Reliance Communications, HUL) • Business should be identified as
Customer-satisfying process and not goods-producing process. – (e.g. Indian Railways
defined its business not as a transportation business but as a Rail Carriers; Bollywood
defined as a movies making business and not entertainment business and thus were not
ready for competition from TV, Internet & other media) • Definition of business can be
Market-based or Product based, provided – It can operate as an independent unit from rest
of the company – Has its own strategic planning & business team – Has its own competitors
– Profit Centre (E.g. Mobile Voice, Internet/ Broadband, DTH)
Business Unit Strategic Planning
(1) Business Mission: Each SBU within a company needs to define its own mission within the
broadercorporate mission. This should cover: • Target Customer Group & needs • Industry Scope
Technology Scope • Vertical Scope • Geographical Scope
(2) SWOT analysis: Internal factors analysis (Strengths & Weaknesses) External factors
analysis(Opportunities & Threats)
(3) Or, TOWS Analysis, (4) Strategy Formulation

Marketing Management Process – Market Opportunity Analysis - Market Research, Segmentation,

Target Market Selection, SegmentProfile - Designing Marketing Strategies (Differentiation &
Positioning) - Marketing Programs (4Ps)Marketing Implementation - Marketing Measurements &
control.
Four Stages of Marketing Strategy – Where are we now? (Strategic Analysis) • What do we want to
be? (Strategic Direction & Formulation) • How will we get there? (Strategic Choice) • How can we get
there? (Strategyimplementation, Measurements & Control).

Market & Environment Analysis (Market Opportunity Analysis) –

Business Environment : External Environment – Macro-Environment – Micro-Environment • Internal
Environment
Internal Environment Important internal factors are –
1)Value System - The value system of founders and those at the helm of affairs has important
bearing on the choice of business, the mission and objectives of the organization, business policies
and practices.
2)Mission and Objectives - The business domain of the company , priorities , direction of
development, business philosophy, business policy etc. are guided by the mission and objectives of
the company
3)Management Structure and Nature - The organizational structure, the composition of the Board of
Directors, extent of professionalization of management etc. are important factors influencing
business decisions.
4)Internal Power Relationship - Factors like the amount of support the top management enjoys from
lower levels and workers, share holders and Board of Directors have important influence on the
decisions and their implementation. The relationship between the members of Board of Directors is
also a critical factor.
5)Human Resources - The characteristics of the human resources like skill, quality, morale,
commitment, attitudes etc. could contribute to the strength and weakness of the organization. The
involvement, initiative etc. of the people at different levels may vary from organization to
organization.
6)Company Image and Brand Equity - The image of the company matters while raising finance,
forming joint ventures or other alliances, soliciting market intermediaries, entering purchase or sale
contracts , launching new products etc.

External Environment - Two Types –

a) Micro Environment Consists of actors in the company’s immediate environment, that affects the
performance of the company. Also known as task environment and operating environment • Include
1. The suppliers 2. Marketing intermediaries 3. Competitors 4. Customers 5. Publics • More
intimately linked with the company. The micro forces need not necessarily affect all the firms in a
particular industry in the same way.
b)Macro Environment Consists of larger societal forces that affect all the actors in company’s micro
environment. PESTLE in book.
Michael Porter’s Five Forces Model.

5Cs Analysis - • Customers • Competitors • Company • Collaborators • Climate (Context)

External Factors – • Macro Variables – Demographic – Economic – Political – Legal/Regulatory –

Social/Cultural • Micro Variables – Customer needs & preferences/ trends – Competitors –
Distribution channels – Suppliers.
Internal Factors – • Marketing strengths – Company well-known – Strong Market share – Product
Quality – Service Quality – Distribution network – Low cost of distribution – Low cost of
manufacturing – Low raw material cost – Sales Force • Financial strengths – Low cost of capital –
High profitability – Financial stability – High Investment funds • Manufacturing strengths – Modern
machinery – Economies of scale – Plant Capacity – Technical & Manufacturing skills • Organisational
strengths – Dedicated work force – Organisational culture – Capable Managers – Leadership team –
Speed of response – Flexibility & adaptability.

Competitive Advantage Framework – • Environmental Factors – Rate of Technological Changes,

Intensity of Competition • Organisational Factors – Size, Structure, Manufacturing Capability,
Organisational Processes, Financial Resources • Market Factors – Customer Service, Product Quality,
Brand Equity • Managerial Factors – Leadership style, Leaders, Communication, etc. • Strategic
Factors – Long-term objectives, Strategic time horizon, Product-market strategy.

Research Types – • Exploratory Research • Conclusive Research – Descriptive Research –

Experimental Research.
Research Methods – • Qualitative Methods (Questionnaire Survey – Open ended questions, Focus
Group, Depth Interview, Online/ Offline Communities, Case Studies, Observational study,
Ethnography, Delphi’s method) • Quantitative Methods (Census, Questionnaire Survey – Closed
ended questions, Experimentations control groups, Test Marketing)
Relationship Marketing – Every customer is different, and marketer have every right to treat them
differently as per their value to them.
Invest – Increase market share sacrificing short term profits • Hold – Maintain Current market Share •
Harvest – Increase short term Profits • Divest – Reduce investments/ costs to increase short term profits
or liquidate.
SBU Position –
• Stars – Invest/Hold
• Question Marks – Invest/ Harvest/Divest
• Cash Cows – Harvest/ Hold
• Dogs – Divest/Harvest
Growth Strategy • Intensive Growth (Ansoff’s Matrix) – Market Penetration – Product Development –
Market Development • Diversification Growth – Concentric Diversification – Horizontal diversification –
Conglomerate Diversification • Integrative Growth – Forward Integration – Backward Integration –
Horizontal Integration

Potential Benefits Of CRM • Customer Acquisition ( Through Referrals) • Customer retention • Share of
customer wallet • Cross-selling • Up-selling • Continuity • A contact point • Personalization • Better
Deals
The essence of CRM – 1. Customers have many points of contact with an organization 2. Some customers
are more profitable than others • The “80/20” rule • For most firms, 80 percent of profit comes from 20
percent of customers. 3. Retaining customers is far most cost effective than recruiting new ones (5 to 6
times) 4. Use of Technology as enabler 5. The overall goal of CRM is effectively managing differentiated
relationships with all customers and communicating with them on an individual basis.
Potential Costs Of CRM • IT infrastructure • Process change

CRM Definition – is a business strategy with outcomes –that optimise profitability, revenue and customer
satisfaction –by organizing around customer segments, –fostering customer-satisfying behaviors and –
implementing customer-centric processes.”•“is a marketing strategy –used to learn more about
customers' needs and behaviors –in order to develop stronger relationships with them.
Advantages of CRM Organizations • Service provided in a better way, and a quicker way • Sales force
automated • Integrated customer information • Certain processes eliminated • Operation cost cut, and
time efficient • Brand names more quickly established • A central database so that everyone in your
company can keep track of customer contacts • Lets you set up rules for distributing and managing work
throughout your company.
Disadvantages of CRM Organizations – Organizational wise change of priority to customers. Significant
investment of time and money. Threatens management’s control/ power struggle. Heightens people’s
resistance to change. Inappropriate integration leads to disaster.
Customer Relationship Life Cycle Phases – Attention (Maximum Reach), Acquisition (Customer Value ),
Retention (Customer Satisfaction) & Winback, Extension (Enhancement), Saturation (Engagement),
Separation & Winback.

Five Phases of Relationship Marketing • Reaching for Potential Relationships – Identification of potential
customers through customer profiling and customer mapping • Acquiring New Relationships – You
acquire new customers by promoting your company’s product and service leadership. • Retaining
Customer Relationships – Retention focuses on service adaptability – delivering not what the market
wants but what customers want • Enhancing Existing Relationships – You enhance the relationship by
encouraging excellence in cross selling and up-selling, thereby deepening and broadening the
relationship. • Bonding in Relationships – You develop bonding in the relationship through Rewards,
Status enhancement by developing Loyalty Programs, other engagements.

Relationship Life Cycle • In the exploration phase it is important to explore consumer wishes and
expectations and to communicate the possibilities and the way of operating of the organisation. Both
parties should explore where and how they are attracted to each other. • In the growth phase the
relationship enters a critical phase. Especially by delivering service (and exceeding expectations) a
company can overcome this moment. But also with communication and cross selling efforts a company
can improve the chances to continue the relationship. • In the maturity phase it is the challenge to keep
the relationship alive. It should not become a routine. • In the decline phase a distinction should be made
between customers that one can and wants to retain and the others. Customers that are worth the effort
to be retained have to be identified. You want to learn their reasons why they might consider stopping
the relationship, so you can do something to avoid it.

Cross-selling & Up-Selling • Customer buys more than one of the same product during a contact (two life
insurance policies) • Customer buys two or more different products during a contact (home contents and
liability insurance policies) • Customer buys a second or third product at a later time.
Customer Lifetime Value (CLV) – •Customer Lifetime • Acquisition Cost • Customer Servicing Cost •
Profits Over Lifetime Period • Repeat Purchase • Break-Even Point & Payback Period • NPV • ROI%.
Strategic Implications of CLV – Firing Customers, Rewarding Customers, Identifying Cross Selling
Opportunities.