ADAPTING MARKETING

TO
CHANGING SCENARIO
Kotler on
Marketing
The Internet will
create new winners
and bury the
laggards.
 Chapter Objectives
 In this chapter, we will address the
following questions:
 What are the major forces driving the New
Economy?
 How are business and marketing practices
changing as a result of the New
Economy?
 How are marketers using the Internet,
customer databases, and customer
relationship marketing in the New
Economy?
 Old Economy vs. New Economy
Old Economy New Economy
Organize by product units Organize by customer segments
Focus on profitable transactions Focus on customer lifetime value
Look primarily at financial Look also at marketing
scorecard scorecard Focus on
Focus on shareholders stakeholders
Marketing does the marketing Everyone
Build brands
doesthrough
the marketing
behavior
Build brands through advertising Focus on customer retention and
Focus on customer acquisition growth
No proper customer Measure customer satisfaction and
satisfaction measurement retention rate
Overpromise, underdeliver Underpromise, overdeliver
CarPoint, leading metamediary for car buying, is a pure
click company: It exists only on the Web.
Customers can shop online at Calyx and Corolla or
ask for a catalog and shop by phone
Infogate.com “pushes” targeted content and ads to those

who are interested in a product or product category

Adapting Marketing to the New
Economy
 How Marketing Practices are Changing:
Reduce rate of customer defection?
 Increase longevity of
customer relationship?
 Enhance growth
potential
through cross-selling
and up-selling
 Make low profit customers more profitable
or terminate them
How Sales
Covid-19
has changed Promotion
the Product
marketing Distribution of
in India products
The Supplier-
Customer
Relationship:
Traditional and
New Economy
Structures
Which is more important for
developing an e-presence: the agility
of a pure click company, or the well
defined and readily identifiable
resources of a traditional
brick and mortar
company?
Procter & Gamble’s Reflect.com site allows customers
to design their own beauty products

1-18
Adapting Marketing to the New
Economy
Industry Convergence
Industry boundaries are blurring at an incredible
rate.
Pharmaceutical companies, at one time
essentially chemical companies, are now adding
biogenetic research capacities in order to
formulate new drugs, new cosmetics
(cosmoneuticals), and new foods.
Would you be willing to give up one or
more of the seven elements of an effective
web site in order to speed the
deployment of a new company e-
commerce site?
What would the expected trade-offs be
between an effective site
and an early web
presence?
Analysis of Competition
Dealing with the Competition

Poor firms ignore their competitors;

average firms copy their competitors;
winning firms lead their competitors.

Philip Kotler
Why to analyze competitors?
• Knowing the competitors is critical to effective marketing planning
• A company must constantly compare its products, prices, places and
promotion with those of its competitors
• In this way, it can identify areas of competitive advantage and disadvantage
• The company can launch more precise attacks on its competitors as well as
prepare stronger defenses against attacks
• Sometimes competitor can become a partner
BASIC QUESTIONS
• 1. Who are our competitors?
+ who are not our competitors yet but they can be? (why they are not competing now?)
• 2. What are their objectives?
• 3. What are their strategies? 4 Ps
• 4. What are their strengths and weaknesses?
Analyze competitors’ ability to:
• Conceive and design new products
• Produce the product or deliver the service
• Market their products
• Finance
• Manage
• 5. What are their reaction patterns?
Understanding the competitors

Image
Imageand
and
Positioning
Positioning Objectives
Objectivesand
and
Size,
Size,Growth
Growth Commitment
Commitment
&&Profitability
Profitability

Strengths Competitor Current

Currentand
andPast
Strengthsand
and Competitor Past
Weaknesses Strategies
Strategies
Weaknesses Actions
Actions
Exit
ExitBarriers
Barriers Organization
Organizationand
and
Culture
Culture
Cost
CostStructure
Structure

Figure 3.3
Michael Porter model of 5 competitive forces
Five Forces Determining Segment Structural Attractiveness

Threat of:
1. intense segment
rivalry
2. new entrants
3. substitute products
4. buyers’
bargaining power
5. suppliers’ bargaining

power
Identifying competitors
• Market concept of competition (WIDER VIEW)
Looking at companies that satisfy the same customer need
Gives broader set of actual and potential competitors and stimulates more
long-run strategic marketing planning
• Industry concept of competition
Looking at companies that make the „same“ product
• Industry = set of sellers and degree of differentiation
• Pure monopoly
• Oligopoly
• Pure oligopoly
• Differentiated oligopoly
• Monopolistic competition
• Pure competition
• Pure monopoly
• Only one firm offers an
undifferentiated product or service
in an area
• Unregulated
• Regulated
• Example: Most utility companies
Differentiated oligopoly
• A few firms produce partially
differentiated items
• Differentiation is by key attributes
• Premium price may be charged
• Example: Luxury autos
• Pure oligopoly
• A few firms produce essentially
identical commodities and little
differentiation exists
• Lower costs are the key to higher
profits
• Example: oil
• Monopolistic Competition
• Many firms differentiate
items in whole or part
• Appropriate market
segmentation is key to
success
• Example: beer, restaurants
Other ways of Identifying Competitors

• Supply-based approaches
• Classify competitors based on objective attributes.
• Demand-based approaches
• Classify competitors based on customer attitudes and
behaviors.
 Analyzing competitors
• Strengths and Weaknesses
• Dominant
• Strong
• Favorable
• Tenable „sustainable“
• Weak
• Nonviable

Customer’s Ratings of Competitors on Key Success Factors

Customer Product Product Technical Selling
Awareness Quality Availability Assistance Staff

Competitor A E E P P G

Competitor B G G E G E

Competitor C F P G F F

Note: E = excellent, G = good, F = fair, P = poor.

Analyzing competitors
Three ways or variables to monitor
when analyzing competitors:
• Share of market
• Share of mind
The percentage of customers who named the competitor
in responding to the statement
“Name the first company that comes to mind in this
industry”
• Share of heart
The percentage of customers who named the competitor
in responding to the statement
“Name the company from whom you would prefer to buy
the product”

http://www.youtube.com/watch?v=nUrvPMQqZZQ
KFC vs McDonalds´
Assessing Competitive Positions: Strategic Groups

• A Strategic Group consists of those rival firms with similar competitive approaches and positions in an
industry
• A Strategic Group displays different competitive positions that rival firms occupy
• Organizations in the same strategic group have one or more competitive characteristics in common
• Sell in the same price/quality range
• Cover same geographic areas
• Be vertically integrated to same degree
• Emphasize same types of distribution channels
• Offer buyers similar services
• Use identical technological approaches
Designing Competitive Strategies

MARKET LEADER MARKET CHALLENGER

• Expanding the total market
• Defending market share
• Expanding market share
• First define the strategic goals
and objectives(s)
• Choose general attack
strategy
• Choose specific attack
strategy
MARKET LEADER
NEW
USERS
NEW
USES

Expanding the total market: MORE

USAGE
• Targeting Product to New Users
• Market-penetration strategy
• New-market strategy
• Geographical-expansion strategy
• Promoting New Uses of Product
• Encouraging Greater Product Use
Defending Market Share
https://testbook.com/question-answer/the-strategies-of-flanking-defense-preemptive-def--5feb12e6409626c9cb26a7b2

https://www.youtube.com/watch?v=6Xx1ZDWrPUs

2. Flank
defense

3. Preemptive 1.
defense Position
defense 6. Contraction
Attacker defense
4. Counter-
offensive Defender
defense (Leader)

5. Mobile defense
MARKET CHALLENGER
General attack strategies:
• Frontal attacks match competition
• Flank attacks serve unmet market needs or underserved areas
• Bypassing opponent and attacking easier markets is also an option
Specific attack strategies include:
• Price-discount
• Lower-price goods
• Prestige goods
• Improved services
• Product innovation
• Distribution innovation
• Manufacturing cost reduction
Strategies for Market Challenger

https://businessjargons.com/market-challenger-strategies.html

https://www.youtube.com/watch?v=1GCr2WzqcCE

4. Bypass
2. Flank attack attack

1. Frontal 5. Guerrilla
Attacker attack attack
Defender
(Challenger)

3. Encirclement
attack
 MARKETNICHER
MARKET FOLLOWER
https://youtu.be/rzMDNnlJJx8
https://www.marketing91.com/market-follower-strategies/
https://youtu.be/_7zDU7FY3z8
•• Niche specialties:
Imitation may be more profitable than innovation
• End-user
• Four broad strategies:
• Customer-size
• Counterfeiter
• Specific customer
• Cloner
• Geographic
• Imitator
• Product/product line
• Adapter
• Product feature
• Quality-price
• Service
• Channel
Thank You