Competitive Marketing Strategy

Introduction
What is the Marketing Concept
Marketing Concept is about satisfying consumer needs and wants simultaneously
Meeting organizational objectives

There are five types of needs:

stated needs: the customer wants an inexpensive car

unstated needs: customer expects good service from a dealer
real needs : customer wants a low operating cost car, not just a low price
secret needs: customer wants to be known as a savvy consumer
delight needs: customer wants a navigation system to be installed
 Marketing Concept is about customer satisfaction

Customer Satisfaction

Hyundai Launches Hyundai Sonata

In the untapped Rs.10-20 lakh Volvo, Sweden has been very successful in
Segment - acquisition Customer retention, with a repeat purchase
Rate of up to 80% over last 40 years.

Customer Acquisition Customer Retention

Good customer satisfaction is obtained by focusing on both the customer

acquisition and customer retention processes.
 Marketing Concept is about customer satisfaction

Customer is also satisfied when they obtain the following

a. VALUE

b. SERVICE

c. QUALITY Performance, Conformance

d. CHOICE
Marketing concept is that of exchanges.

A transaction is a measured exchange.

Contract formalizes a transaction either for the present or for future and
Legalizes it if necessary and also provides a recourse in case of a market failure

There are five conditions of exchange

1. There are at least two parties

2. Each party has something that might be of value to the other party
3. Each party is capable of communication and delivery
4. Each party is free to accept or reject the exchange offer
5. Each party believes it is appropriate or desirable to deal with other party
A transaction is distinguished from a transfer. A gives X to B but does not
receive anything tangible in return. E.g. gifts, subsidies, charitable contributions.
Persons making such transfers are possibly expecting gratitude or changed
behavior in the person who accepts the transfer.
Marketing Management is Demand Management.

Demand represents:

- desire and willingness to buy

- ability to buy
Marketing Management is Demand Management. Eight demand
States are possible

Negative demand ex-convicts and alcoholics in factories for employment

No Demand Indian College students in semi-urban areas have no demand for

foreign language courses

Latent Demand Strong latent demand for harmless cigarettes or fuel efficient cars

Declining Demand for Yamaha in Pianos in 1980s

Irregular Demand - Metro rail demand through the day, seasonality

Full Demand Organizations sell to maximum capacity

Overfull Demand Waiting list on Honda Scooters at the dealership

Unwholesome Demand Hard Drugs

Marketing Concept has evolved over six stages

-Production concept: It holds that consumers will prefer products that

are widely available and inexpensive

-product concept: Consumers will favor those products that offer the most
quality, performance or innovating features

-selling concept: Consumers do not buy enough, so firms must put in extra
efforts to sell products.

-marketing concept: sense the market and respond with offerings consists of
both reactive and proactive market orientation. Reactive means
understanding and meeting customers expressed needs. Focusing
on customers latent needs leads to proactive orientation.

-holistic marketing concept: Includes dimensions of internal marketing,

development of integrated marketing programs that
cover the 4Ps, relationship marketing that covers
customers, channel and partners and socially
responsible marketing that covers ethics,
environment, legal and community issues.
Market Places

Market Spaces

Meta Markets
cluster of complementary products and services that
are closely related in consumer minds but are spread \
across a diverse set of industries. Automobile
metamarket consists of auto manufacturers, dealers,
service shops, auto magazines, auto sites on Internet.
 AMA definition :
Marketing is an organizational function and a set of
processes for creating, communicating and delivering
value to customers and for managing customer
relationships in ways that benefit the organization and
its stakeholders.

Kotler definition :
Human activity directed at satisfying needs and wants
through exchange processes
Marketing Management is the art and science of choosing target markets
and getting, keeping and growing customers through creating, delivering
And communicating superior customer value.
Marketing people are in involved in marketing ten types of entities

Goods
Services
Experiences
Events
Persons
Places
Properties
Organizations
Information
Ideas
Important Schools of Thought in Mktg

- Functional School

- Managerial School

- Buyer Behavior School

- Organizational dynamics school

Functional School: Marketing is organized along functions product
management, sales, advertising, market research

Managerial School: The marketing that is taught comprising of PLC,

marketing mix, market segmentation and positioning.
Pioneered by Joel Dean, John Howard, Neil Borden
William Lazer, Theodore Levitt, Philip Kotler

Buyer Behavioral School: Unwise to target an Eonomic Man. Consumer

behavior study will lend more depth. Pioneers include
Ernest Dichter, John Howard, George Katona,
James Engel

Organizational Dynamics School: Interorganizational behavior is the key focal

point for understanding marketing process.
 Marketing

Conceptualization

Design
Marketing Identify and satisfy customer needs and wants
of to Through exchange processes simultaneously
Build Up Programs
Fulfilling organizational objectives
Execution

Monitor
Strategy
Long term implications

Huge Investments

Contingency Build Up
 Market Structure based on SEC Classification (Old)

Education Illiterate, School upto 4th, Literate but no formal

Schooling, School 5th 9th, SSC/HSC, Some College but not
A graduate, Graduate/Post Graduate General, Graduate /
Post Graduate- Professional

SEC Urban

Occupation Unskilled Workers, Skilled Workers, Petty traders,

Shop Owners, Businessmen / Industrial with no of employees (a) 1-9
(b) 10+, Self Employed Professional, Clerical / Salesman,
Supervisory Level, Officers / Executive Junior, Officers /
Executives Middle/Senior

The eight socio-economic classes in the urban area A1, A2, B1, B2, C, D, E1, E2
 Market Structure based on SEC Classification (Old)

Education Illiterate, School upto 4th, Literate but no formal

Schooling, School 5th 9th, SSC/HSC, Some College but not
A graduate, Graduate/Post Graduate General, Graduate /
Post Graduate- Professional

SEC Rural

Type of House Pucca, Semi Pucca, Kuchha

The five socio-economic classes in the rural area are R1, R2, R3, R4, R5
THE NEW SEC SYSTEM
THE NEW SEC SYSTEM
The new SEC system is used to classify households in India.
Its based on two variables:
Education of chief earner
Number of consumer durables ( from a predefined list)-owned by the family.
The list has 11 items, ranging from electricity connection and agricultural land
-to cars and air conditioners

We have 12 grades in the new SEC system, ranging from A1 to E3

(A1, A2, A3, B1, B2, C1, C2, D1, D2, E1, E2, E3)
THE NEW SEC SYSTEM
10Items owned / have access at home
1a Electricity Connection 01
Ceiling Fan 02
LPG Stove 03
Two Wheeler 04
ColourTV 05
Refrigerator 06
Washing Machine 07
PersonalComputer/ Laptop 08
Car/Jeep/Van 09
AirConditioner 10
1b Agricultural Land 11
 Marketing Objectives

Strategic Market Analysis Internal Analysis

Changing Customer Needs Past Performance / Current

Strategy

Development of Marketing Strategies

Analytical Inputs/
Competition Analysis

Execution/ Implementation of Marketing Strategy

Change / Power / Competitive Interaction / Tech Choice / Culture / Corp. Strategy

& Structure

Feedback / Control

Business Marketing Structure

Transaction Facilitators
Information
Servicing
Financing
Logistics

Processes Domain Restraint or Prerequisite

Resource allocation in marketing Market selection Organizational opportunity

Strategic decision making Positioning/differentiation Contingency

build in
Dynamic adjustments to competition & market Market entry/exit /timing Coherent with vision

Action setting Stance on Competitive

advantage
Relationship with key publics 4Ps / value management /
functionality

Become Customer Centric

Develop Market Orientation
Build Competitive Edge
Accommodates a convergence of the business purpose of value creation
with the business purposes of firm orientation and competitive orientation.

FRAMEWORK FOR COMPETITIVE MARKETING STRATEGY

 Intensive Growth Opportunities

Growth Opportunities Integrative Growth Opportunities

Diversification Growth Opportunities

 Intensive Growth Strategies Ansoffs Product-Market Expansion Grid

Current Products New Products

Current Market Product Development Strategy

Markets Penetration Strategy

New
Markets Market Development Strategy (Diversification Strategy)
Identification of Growth Opportunities cont

Integrative growth opportunities

backward (acquiring suppliers) , forward (acquiring
channel members) and horizontal integration (acquirin
competitors)

Diversification growth opportunities

concentric technological or marketing synergies to a new
group of consumers e.g. audio cassettes from
a firm making computer tape
Conglomerate new opportunities which have no relation
to current technologies, products or markets
Reliance into Telecom
Horizontal diversification Appeal to current customers
with new technologies e.g. Music company
produces CD / Cassette racks
 Getting Back to Basics of
Customer Needs and Wants
Assess and understand the Ground Realities of the market, the environment and the
organization a Ford dealer is losing out to on car sales to competing dealers who have
recently entered the same territory

Assess and understand the Perceptions in the market, the environment and the organization
the prices of the Ford dealer are high and the dealer is poor on service response.

Fix the Perceptual Realities of the market, the environment and the organization given an
understanding of the ground realities and the perceptions ; i.e assess and understand those
realities for which Perception is Reality. the prices are perceived high by the consumer in
the territory as the recently entered competitor has started giving discounts on trade-ins on
the same brand thrice a year in January, May, September

It is not possible that Perception is Reality for all realities, assuming which could lead to
distortion - keep correcting those perceptions that cause distortion for which perception is
not reality. The corrections could be through direct communication and signaling.
The dealers records say that there has been service response upkeep in 99% of all
job cards in the past three years. Correct the consumers perception on service response by
leveraging on communication through advertising of the service track record.

Manage the interaction of the Ground Realities and the Perceptual Realities. Earlier trade-
ins on the same brand was offered once during the close of the year. Now strategize to offer
trade-in across brands to address the perceptual reality of high prices and beat
competition.