MARKETING MANAGEMENT 1 ASSIGNMENT 16-18

SUBMITTED BY – GROUP 7

Ashik Ahmed- 190101032

Chirag Chaudhary – 190103046

Danish Saeed – 190101039

Naincy Chittransh – 190101067

Rachit Srivastava – 190103173

Varun Sunil Kaore – 190103165

Q1) Marketers have a range of possibilities on a continuum from mass market to

customization when thinking of their target market decisions. Discuss the various options
that organizations may pursue with appropriate examples of each.

MASS MARKETING TO CUSTOMISED MARKETING STRATEGIES:

Mass marketing is a strategy which is mostly based on attracting a massive portion of the
audience. It goes for the highest number of potential customers while ignoring niche
demographic differences. The strategy focuses on a higher volume of sales at lower prices to
obtain maximum exposure to the product. Mass marketing is necessary for the products which
are considered as necessities, and it is guaranteed that people will buy the product anyway. Some
core features of mass marketing are as follows:

1. It generally focuses upon a significant portion of the audience

2. The approach here taken is to get as many people as possible to get some plausible
returns
3. Mass media is extensively used for spreading the message about the product
 4. Majority of the companies use this technique to create a brand image at first

For a mass marketing campaign to be successful, the advertisement must be focused on “set of
product needs that are common to most consumers in the target market.” The medium used for
mass marketing is Social Media, Television/Radio, Newspapers, Magazines, Email Marketing.

Example- Telecom operators make use of mass marketing campaigns because

telecommunication services are being used by a massive portion of the audience. Also, some
FMCG products like soaps and detergents use the Mass Marketing strategy. Body deodorants
and other personal hygiene products also use mass marketing effort. Coke is a product which
spans over various niches in terms of popularity, Coca Cola’s mass marketing campaign has
become rapidly successful over time.

Niche marketing, on the other hand, is a marketing strategy that focuses on a unique target
market. Instead of marketing to everyone, who could become the beneficiaries of a product or
service, this strategy focuses exclusively on one group- a niche market. The benefit of niche
marketing is that it allows brands to differentiate themselves, rather than blending with other
many brands that offer the same type of products or services, a brand can use niche marketing to
stand out, appear more valuable and reach its growth potential.

Strategies involved in niche marketing are as follows:

1. Finding the firm’s strengths and interests: The best niche marketing strategies play
into the company’s brands and perspectives.
2. Doing proper industry research: Doing a competitive analysis becomes necessary to
see if there are competitors in that space and how are they faring. Also, adequate
targeting is required, and if there is any opening in the target market or there is legitimate
demand in the vertical, that should be adequately addressed.
3. Getting to know about an ideal customer: It's essential to look closely at the target
audience and identify their needs and wants. Getting to know one firm’s perfect
customer helps them offer a better quality product, services, or message.

Example: Lefty’s- The Left Hand Store

 This company has found a widely underserved community of people- those who favor left
hand instead of their right hand. Left-handers have broadly had to adjust to using the
products suitable for right-handed people. Lefty’s saw this as an opportunity. They created a
store only for the lefty people to sell designated products.

Q2) The market leader must work hard to stay on top of its market. Describe the different
strategies that can be used be a market leader. Discuss with example.

MARKETING STRATEGIES ADOPTED BY THE MARKET LEADERS:

The market leader has the largest market share in a particular product in the market. It has a
dominant position in the industry- it leads the other players in new product development,
changes in price, distribution, and promotional activities. In India, examples of well-known
market leaders are Maruti Suzuki in 4-wheeler consumer vehicles, Hero Motocorp in 2-wheeler
consumer vehicles, Coca-Cola in soft drinks, Life Insurance Corporation of India in life
insurance.

The strategies followed by the market leaders to stay in the top position in the market are as
follows:

1. Expanding Total Market

2. Defending Current Market Share
3. Growing Market Share
 Expanding Total Market:

The total market can be developed by the following strategies:

1) Adding New Customers: Every product class has the potential to attract new customers who
are either not aware of it or are resistant to buy due to high prices offered by the company.
Several ways can be used to add new users, as follows:
a) Convincing the non-users to use the product (Market penetration strategy)
b) Adding more users in the product class (Newmarket strategy)
c) Selling products in different geographical location (Geographical-expansion strategy)
d) Winning competitors’ customers (Aggressive strategy)
 Example- Starbucks produces and sells bottled Frappuccino coffee drinks and a line of
premium ice creams, in addition to its existing product line, through its joint venture
partnerships and offers a range of innovative premium teas produced by its wholly-owned
subsidiary, Tazo Tea Company.

2) Discover new users: Another option to expand the market is to discover and promote the
new uses of the existing products. This strategy can be used for industrial as well as
consumer goods. Users can be induced to suggest the new uses of the current
product/technology. Company’s R&D wing can also be a part of discovering the new and
innovative use of the existing product. After seeing the new uses of the product, heavy
advertising and promotional expenses can be commenced.

Example- Daimler, maker of Mercedez-Benz has developed a balanced approach to cater to

the demands of both from mature markets while targeting fast-growing emerging markets
which show enormous potential.

3) More usage per occasion: The third strategy to expand the market can be to convince the
customer to use the existing product more often. It is more applicable to edible class
products. It can be extended to FMCDs as well. More usages may be in the form of quantity,
time, number, amount, intensity, etc.
Example- Hershey’s have developed smaller packaging sizes so that the sales volume
increases through more frequent usage. Monroe advertises to remind users to make sure they
do not forget to change their socks and thus increased products’ usage as well.

 Defending the current Market Share:

‘Customer-retention more profitable than new customer creation.’ At any cost, the current
market share cannot be endangered. While expanding the current market, a market leader
also must continuously defend its current market share against the rivals’ attacks. Example-
Coca-cola guards its market share against PepsiCo. Continuous innovation, better customer
service, distribution effectiveness, and cost-cutting can be useful.
1) Position Defense: The most basic strategy is to build strong protection around the market
leader’s territory to keep the opponents away. It involves continuous innovation,
diversification, price cuts, strong promotional efforts, improved distribution.
Example- Proctor & gamble owns the critical functional benefits in many product categories,
with Tide detergent for cleaning, Crest toothpaste for cavity prevention and Pamper diapers
for dryness.
2) Flank Defense: The purpose is to protect the weak flank or side of a business. Flank defense
consists of protecting weak fronts by erecting outposts so that weak fronts cannot be
vulnerable to be attacked. Quality improvement, lowering the price, the aggressive sales
force can be a sensible strategy in this regard.
Example- Proctor & Gamble brands such as Gain & Cheer laundry Detergent, and Luvs
Diapers have played their roles to support Tide and Pampers brands.
3) Preemptive Defense: The basic idea of this type of strategy is to attack before the opponent
starts attacking, to attack earlier to avoid the opponent’s attack. The leader announces that it
is considering price cut in the product, or planning to build another product or plant. Such
announcements intimidate the competitors who decide to benchmark the market leader then.
Example- Bank of America’s colossal number of ATMs and Retail Branches have provided
steep competition to the local and regional banks.
4) Counteroffensive Defense: Counteroffensive Defense indicates responding to enemy’s
attack with a counterattack. The leader cannot remain passive when competitors attacks in
terms of price attacks, product modification, or aggressive advertisements. Leader firm has to
take the attack head-on to secure the erosion of the market share.
Example- Apple has aggressively defended its brands in court previously.
5) Mobile Defense: The leader shifts its domain to other territories that can serve as the future
centers for an offense as well as the defense. It will deploy its resources in such a way that
the future evasion is avoided and perception in the minds of the competitors is created that it
is capable of defending its territories. The mobile defense can be incorporated in two ways,
namely Market Broadening and market Diversification.
Example- Pepsico has quickly switched to mineral drinking water industry(through Aqua
Fina) while competing heavily with Coca-Cola.
6) Contraction Defense: Sometimes, market leaders don’t need to defend all of its territories.
The best strategy in this situation is a planned contraction or strategic withdrawal. Planned
contraction doesn’t mean market abandonment but to leave the weaker territories and
concentrate on the stronger ones.
Example- P&G sold Pringles to Kellogg when it decided to get out of food business and
focus on core household and consumer products.

 Expanding Market Share:

Instead of increasing the total market or defending the current market, market leaders
sometimes prefer to improve the profitability by increasing the market share of an existing
product line. The extent to which a product’s market share increment results into improved
profitability depend on many factors, and it depends on the following ways:

1) Adding new product lines: To increase the market share of a product, a market leader can
add new and diversified product lines to make the product mix comprehensive and attractive.
Also, there must be enough demand for the increased product line.
2) Expanding existing product lines: It means expanding the current product lines by adding
newer models, adding new features to the product (Colors, sizes, weights, etc) and superior
qualities (durability, taste, safety, convenience, usefulness, etc). The R&D department of the
company should be active enough to implement these changes required.
3) Improving product qualities
4) Increasing promotional efforts
5) Improving the current Distribution System: market share can be expanded by increasing
the quality of the existing distribution system- both the direct and indirect and physical
distribution system must be modified so that the customers can avail the products more
efficiently. It can also bring down the selling costs.
6) Deploying aggressive salesforce
7) Applying necessary price cuts
8) Improving production efficiencies: Production efficiency can be increased to reduce the
overall costs. It will ensure selling better-quality products even at a lower price.
Example- Microsoft and Intel have had to fend off numerous lawsuits and legal challenges
around the world. Kraft split its company into two to better focus on fast-growing categories and
markets and support its solid core of heritage brands.

Q3) Elucidate the strategic choices available to a marketer of a product in decline stage,
with an example.

MARKETING STRATEGIES FOR DECLINING STAGE OF A PLC:

The first important task in hand when a product is in a Declining stage of its life cycle is to detect
it, which can be done through observation of its poor performance in the market. After
identifying the poor product, the company should brainstorm whether the product should be
dropped or not. Some companies in this matter form a special Committee called Product Review
Committee to see whether there is something to revive for the product itself. The committee
collects the data from internal and external sources to evaluate and judge according to the
situation. Based on the reports submitted by the committee, appropriate actions are taken further.

Companies may follow the following strategy for a product in its declining stage of its PLC.

1) Continue with the original products: This strategy is followed in the hope that the
competitors will leave the market eventually in due course of time. Many a time, the
company develops the product in active segments and drops from the remaining
ineffective segments.
2) Continue products with Modifications or Improvements: Qualities and features of
the product may be improved to result in better sales. Products can undergo several
enhancements and revamp so that they can be relaunched with better advertisements.
3) Eliminate weak product: Weak products consume a lot of management’s time, require a
frequent change in the price and inventory adjustments, draw advertising and sales force,
and cast a negative image of the company. So, companies decide to drop the production
of weak products to avoid these issues. Production may be dropped in 3 ways as well.
Firstly, selling the production and sales to other companies. Secondly, stopping the
production facility from diverting resources to other products and finally, dropping the
 product line immediately. Example- General Motors decided to drop Oldsmobile and
Pontiac lines.
4) Harvesting and Divesting: Harvesting means gradually decreasing the product or
business’s costs while trying to maintain sales. The first step here is to cut the R&D costs
and plant and equipment investment. The company might also reduce product quality,
sales force size, and advertising expenditures. Harvesting is a difficult-to-execute
strategy, but, it can substantially increase current cash flow.

Divesting means selling the product line to another firm. Some firms specialize in
acquiring and revitalizing Orphan or Ghost brands that the larger firms want to divest or
that have encountered bankruptcy. Example- Nuprin Pain Relievers.