Technopreneurship

Ms. Mashal Tariq

 Competitive Strategy
• A strategy is a plan or road map of the actions that a firm or organization
will take to achieve its mission and goals.
• Four common ways in which a firm will distinguish itself from its
competitors are niche, cost, differentiation, and combined differentiation
and cost, as summarized in Table 4.6.
Niche strategy
• The niche strategy is directed toward one or two smaller segments of a
larger market. This niche can be geographic or a product or price segment.
• Niche ventures often require less capital and achieve financial success
rather quickly.
• Niche businesses typically are started in one market segment and based on
a focused core competency and good customer and supplier relationships.
Low-Cost strategy
• The low-cost strategy is based on unique competencies that enable the
efficient management of processes.
Basis differentiation strategy
• The goal of a differentiation strategy is to create a unique product based on
a firm’s unique competencies.
Combined differentiation–low
• Many firms can achieve a combined differentiation–low-cost strategy that
blends the best of low cost and differentiation.
 Alliances

• Business is a complex mix of both competition

and cooperation – sometimes called
“coopetition.”
• A new venture possesses valuable novelty and
innovation that will attract the attention of
suppliers, customers, competitors, and
complementors, acting as a value network, as
shown in Figure 4.7.
 Market Structures
• It is most realistic to look in the context of
a contestable market.  Where costs of entry and
exit for the competition are nil, this would be a
perfectly contestable market.  
• An interesting aspect of the theory of contestable
markets is that the threat of competition in itself
is as powerful as actual competition.
• Market barriers are also an indicator of market
power, of competitivity, stability and profitability. 
 Market barrier and competition
Low Entry Barrier & High Higher Competition  =>   Monopolistic competition tending
Exit Barrier  => towards perfect competition

High Entry Barrier & Low Lower Competition   =>   Oligopoly

Exit Barrier  =>

Low Entry Barrier & Low Exit Highest Competition =>  Perfect competition
Barrier   =>

High Entry Barrier & High Lowest Competition  =>  Monopoly

Exit Barrier =>
 Product life-cycle
Barriers to Entry & the Product Life Cycle
• The product life cycle is an important concept
in marketing.
• It describes the stages a product goes through
from when it was first thought of until it finally
is removed from the market.
• Not all products reach this final stage. Some
continue to grow and others rise and fall.
• What are the main stages of the product life cycle?
• The main stages of the product life cycle are:
1. Research & development - researching and developing
a product before it is made available for sale in the
market
2. Introduction – launching the product into the market
3. Growth – when sales are increasing at their fastest rate
4. Maturity – sales are near their highest, but the rate of
growth is slowing down, e.g. new competitors in
market or saturation
5. Decline – final stage of the cycle, when sales begin to
fall
During this time Barriers to Entry can be used to
either : 
1. Lengthen the lead time that an incumbent
has to innovative therefore retaining
competitive advantage through increased
efficiency or market share
2. Deter new market entrants
Extending the Product Life Cycle
• For successful products, a business will want to do all it can to
extend the growth and maturity phases of the life cycle, and to
delay the decline phase.
• Examples of extension strategies are:
• Advertising – try to gain a new audience or remind the current
audience
• Price reduction – more attractive to customers
• Adding value – add new features to the current product, e.g.
improving the specifications on a smartphone
• Explore new markets – selling the product into new geographical
areas or creating a version targeted at different segments
• New packaging – brightening up old packaging or subtle changes
Product life-cycle
 Identifying Market
Segments and Selecting
Target Markets
 Target Marketing
• Target marketing requires marketers to take
three major steps:
– Market segmentation: Identifying and profiling distinct
groups of buyers who differ in their needs and
preferences.
– Market targeting: Selecting one or more market
segments to enter.
– Market positioning: Establishing and communicating
the key distinctive benefit(s) of the company’s market
offering to each target.
 Using Market Segmentation
• Mass marketing is losing popularity
• Micromarketing can be undertaken at four levels:
– Segment marketing- consists of consumers who share
similar Key Benefits:- set of needs and wants
– Niche marketing- defined customer group seeking a
distinctive mix Companies in niche of benefits marketing
– Local marketing- Serving to tailored needs and wants of
local customer groups( trading areas, neighbourhood,
individual stores, etc.)
– Individual marketing- Companies allow individuals to
customise their products
 Preference Segments
• Homogeneous preferences exist when
consumers want the same things
• Diffused preferences exist when consumers
want very different things
• Clustered preferences reveal natural
segments from groups with shared
preferences
 Segmenting Consumer Markets
• Nation or country
• Bases
State for
or region
• Segmentation
City or metro size
• Density
• Geographic
• Climate
• Demographic
• Psychographic
• Behavioral
 Segmenting Consumer Markets

• Age, race, gender

Bases for • Income, education
Segmentation • Family size
• Family life cycle
• Geographic
• Occupation
• Demographic
• Religion, nationality
• Psychographic • Generation
• Behavioral • Social class
 Segmenting Consumer Markets

Bases for • Lifestyle

Segmentation – Activities
– Interests
• Geographic – Opinions
• Demographic • Personality
• Psychographic
• Core values
• Behavioral
 Segmenting Consumer Markets

Bases for • Occasions

Segmentation • Benefits
• User status
• Geographic
• Demographic • Usage rate
• Psychographic • Loyalty status
• Behavioral • Buyer-readiness
• Attitude
 Segmenting Consumer Markets
• Multi-attribute segmentation via geoclustering
combines multiple variables to identify
smaller, better-defined target groups
– PRIZM Geoclustering system uses demographic,
geographic, lifestyle, and behavioral
characteristics
 Market Targeting Strategies

• Evaluating and selecting market segments

requires assessing the segment’s overall
attractiveness in light of company’s
objectives and resources.
• Five patterns of target market selection can
then be considered.
 Market Targeting Strategies

Patterns of Target Market Selection

• Single-segment • Product
concentration specialization
• Selective • Market
specialization specialization
Full market coverage
Patterns of Target Market Selection
 Figure 8.4 Patterns of
Target Market Selection
 Figure 8.4 Patterns of
Target Market Selection
 Market Positioning
• Market positioning refers to the process of
establishing the image or identity of a brand
or product so that consumers perceive it in a
certain way.
• For example:
• A handbag maker may position itself as a
luxury status symbol
• A fast-food restaurant chain may position itself
as the provider of cheap meals
 Types
1. Functional Positioning: 
This is used when the brand or products provide solutions to problems and provide
benefits to customers. Functional positioning focuses on the function, benefit or utility that
it gives to the customer.

2. Symbolic Positioning: 
This is useful for creating a brand image which helps create brand equity, a sense of social
belongingness and ego-identification. Symbolic positioning is when a customer has an
affection, social connection, ego identification etc with the product.

3. Experiential Positioning: 
This creates sensory and cognitive simulation in the minds of the customer. Experiential
positioning is one of the basis of the experiences which a customer can relate to.
Companies use a positioning process, which is step-wise method to place the product or
service in the right way in the consumer's mind. If a company decides to change the way
people perceive a brand, then they revamp the logo, slogan etc of that brand. This process
is known as repositioning of the brand, which helps create a different image of the brand.
 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/product with competitive
pricing
• Product quality: Associating your brand/product with high quality
• Product use and application: Associating your brand/product with
a specific use
• Competitors: Making consumers think that your brand/product is
better than your competitors
 Examples of Positioning

• Positioning examples of products can be understood on the basis of

various parameters, characteristics and features of products &
services. Some key examples of positioning are:
• 1. Aspirational positioning: Nike (Just Do It).
• 2. Emotional positioning: Coca Cola (Open Happiness).
• 3. Price-Based Positioning: Rolls Royce (Trusted to Deliver
Excellence).
• 4. Problem Solution Positioning: Head & Shoulders shampoo
(Dandruff free hair).
• 5. Benefits positioning: Colgate (Prevents cavity and fresh breath).
• Hence, this concludes the definition of Positioning along with its
overview.
• In positioning the product is differentiated based on 2
things to achieve competitive advantage: -
• Points of Parity (POPs): The positioning is done on the
basis of mostly similar elements compared to a
competitor.
• Points of Difference (PODs): In this case, there is a clear
difference in the product offerings vis-à-vis the competitor.

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 consumers 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. Competition Identification: The first step in the positioning process is
understanding the competition and its products. For creating a unique positioning, it is
critical to understand the competition prevalent in the market in that particular
sector. Perceptual mapping or brand mapping is often used for competitor positioning
process.
2. Product Characteristics Identification: The second step in the positioning process is
to evaluate all the qualitative characteristics, traits and uses of a product or service.
The various characteristics of a product can be in terms of its usage, sturdiness,
benefit, problem-solving, emotional connect etc.
 
3. Analyzing Customers: The third step in the positioning process is to understand the needs,
psychology, personality etc of the customer. Unless a company understands a customer, it not
create a proper positioning statement. Customer surveys, feedback forms etc can help
understand the customer better.

4. Comparative Qualitative Analysis: The fourth step in the positioning process is to compare &
analyses the data of competitors, qualitative customer inputs, external factors etc. On
comparison, the gaps in the market can be understood.

5. Identify Unique Positioning: The fifth step in the positioning process is to identify a unique
problem area or a gap which the product or service is fulfilling. This enables a company to have
a strong and unique positioning vis-à-vis its competition.

6. Execute Marketing Plan: The sixth step in the positioning process is to create a strong
marketing plan which would help in communicating the value proposition offered by the brand.

7. Measure & Evaluate: The last step in the positioning process is to measure, evaluate and
constantly monitor the performance of the positioning of the brand in the mind of the
customer. This is very important as a customer perception might completely differ from the
message which the company is trying to portray. Sometimes, to rebrand or innovate or
improve, companies do a repositioning of its products and services.
 Marketing Mix
• The marketing mix refers to the set of actions,
or tactics, that a company uses to promote its
brand or product in the market. 
 Pricing strategy
 
Pricing strategy is an activity or a process which any small businesses do to set the prices for
their products or services. There are many things to be considered while setting up the
prices and these are as follows;
 
• Input or raw cost of the product
• Variable cost
• Production & distribution cost
• Trade margin
• Segment account
• Customer’s capability to pay
• Market prices of the same process
• Competitor’s prices
• Why Pricing Strategy is Important
 
Setting up the right pricing strategy is very important and useful for various reasons, and
those reasons may from business to business and company to company. For instance,
• If the price of your product is too high, then people won’t be able
to buy your product. Which means lower sales, low sale means
less profit and your business won’t be able to cover up basic
expenses.
• If you set the low price of your product or service to compete in
the market and get maximum market share; perhaps you’ll
maximize sales and achieve maximum market share in doing so.
But you’re sacrificing your profit which covers up all of your fixed
and variable costs and expenses, at the end your company would
end up crippling down to its feet.
• Therefore, setting up the right competitive price for your product
or service at the right time is very important; which the customers
would be able to pay and your company would end up making a
profit and cover up all the relevant costs. Win, win situation for
everyone.
The basic price strategies are:
 
a) Cost Based Pricing- this suggests to consider the costs and profits
objectives of the business.
 
Calculate the cost to make/buy the product.
Calculate the related cost of doing business
Add the profit margin to come to the price call the MarkUp
 
b) Demand Based Pricing- assumes that the demand is inelastic and requires
the willingness of the customer to pay for the product and price is set
accordingly
 
c) Competition Based Pricing- price is dependent on the price of the
competitors.
 
 Pricing Policy

 
The pricing policy is important as it standardizes the pricing
decisions of products in the future. There are 2 kinds of pricing
policies:
 
a) Flexible Price Policy- this kind of policy takes the market
conditions, demand and prices of competitors into account.
 
b) One Price Policy- the price is not based on the knowledge or
bargaining skills rather same for all.
 
 Pricing Methods
 
Pricing methods are the methods that firms use to
calculate the price of their products.
Pricing is one of the toughest challenges encountered
by the firms as the prices should not only be relevant as
per the current market scenario, but should also meet
the expenses of the firm and help it gain profit.
It must also take into account competitor’s pricing.
Hence, it is important to choose the right pricing
method.
The various pricing methods are as follows :
 
a. Cost plus pricing – After calculating the total production costs, a target
profit margin is levied on it.
 
Eg – If the production cost of a pen is Rs 100 and the target profit margin is
10%, then the price of pen would be 100 + 10% of 100 = Rs 110
 
b. Targeted return – Total investments are determined and a target rate of
return is applied to it to attain the desired return on investment.
 
Eg – If the investments in the production of a cup are Rs100 and the target
rate of return is 5%, then the price of the cup will be 100 + 5% of 100 =
Rs105
 
 c. Value pricing – The price is calculated based on the value being
provided to the customers.
 
Eg – If a personal coaching for 10 days in a particular subject is equivalent
to attending a coaching class consisting of 20 students for 20 days, then the
person would be willing to even pay the fee that he pays for the coaching
classes for his personal tuitions (assuming that the coaching class charges
higher fee than the personal coaching).
 
d. Psychology pricing – Pricing is based on the psychological impact that
the price would produce on the customers.
 
Eg – These days we see a lot of products are priced at a rupee less than
some round figure (say Rs 199 instead of Rs 200). This is so because the
customers respond positively to such prices.
 Brand Equity
• Brand equity is the perceived worthiness of
the brand in the mind of the customer and
may be portrayed as the sum of four
dimensions
 Customer Relationship Management
• (CRM) is a set of conversations with the
customer
• These conversations consist of (1) economic
exchanges, (2) the product offering that is the
subject of the exchange, (3) the space in which
the exchange takes place, and (4) the context of
the exchange
• A necessary step to a CRM system is the
construction of a customer database.
• CRM is best operated when the customer and
the CRM employee are fully engaged in con
• versation.