Chapter Five

Marketing New venture Development

5.1 Marketing Research:

• Marketing research is a Systematic Design, Collection,
Analysis, and Reporting of Data Relevant to a Specific
Marketing Situation Facing an Organization.

• Market research and marketing research are often

confused.
• 'Market' research is simply research into a specific
market. It is a very narrow concept.
 Cont…………….
• "Marketing research is the function that
links the consumer, customer, and public
to the marketer through information.
 Cont……………………….
• Marketing research assists in the overall management of the
marketing function.
 A marketing manager must:
 prioritize the more important and pressing problems,
 reach the best possible solution based on the information
available,
 implement the solution,
 modify the solution when additional information so dictates,
and
 establish policy to act as a ready-made solution for any
recurrence of the problem.
 Cont……………………..

• Marketing research often focuses on

understanding the “Customer” (purchasers,
consumers, influencers), the “Company”
(product design, promotion, pricing,
placement, service, sales), and can also be
expanded toward the environment to include
“Competitors” (and how their market offerings
interact in the market environment).
 Objectives of Marketing Research


Marketing research is used to:
a)Identify and define marketing opportunities and
problems:
b) Generate, refine and evaluate marketing actions
c) Marketing Research enables to answer such
questions as:
1) What are our weak/strong products, divisions,
attitudes etc?
 Objectives of Marketing Research

2) Are there gaps/opportunities we can

go for?
3) Are there dangers/threats we need
protection from?
4) Are we strong in the right way to
exploit the opportunity where one exists?
 Cont…………………….

d) Monitor marketing performance.

e) Improve understanding of marketing
process.
f) To anticipate or respond to customer
needs.
 THE RESEARCH PROCESS
• How is marketing research actually
conducted?
• What are the general steps in completing a
research project?
• These questions are answered in the steps of
the research process.
 Marketing Intelligence
• Marketing intelligence is everyday
information about developments in the
marketing environment that helps managers
prepare and adjust marketing plans.
• The marketing intelligence system
determines the intelligence needed, collects
it by searching the environment and delivers
it to marketing managers who need it.
 Marketing Intelligence

Sources of marketing intelligence:

• Marketing intelligence comes from many
sources. Much intelligence is from the
company's personnel - executives, engineers and
scientists, purchasing agents and the sales force.
But company people are often busy and fail to
pass on important information.
 Continued
• The company must 'sell' its people on their
importance as intelligence gatherers, train
them to spot new developments and urge them
to report intelligence hack to the company.
• The company must also persuade suppliers,
resellers and customers to pass along
important intelligence.
 Continued
• Some information on competitor’s comes from
what they say about themselves in annual
reports, speeches, press releases and
advertisements.
• The company can also learn about competitors
from what others say about them in business
publications and at trade shows.
 Continued
• The company can improve the marketing intelligence
system through:
 Train and motivate the sales force to spot and report
new developments:
 Motivate distributors, retailers, and other
intermediaries to pass along important intelligence:
 Network externally: includes purchase competitors
product, read competitors published report, attend
stockholders report, talk to employees, dealers, and
collect competitors ads,
 Continued

 Setup customer advisory panel:

 Take advantage of government data sources:
 Purchase information from outside suppliers:
 Use online customer feedback system to
collect competitive intelligence:
 5.3 competitive analysis

• To prepare an effective marketing strategy, a

company must consider its:
 competitor
 actual and potential customers.
 continuously analyze its competitors and
 develop competitive marketing strategies that
effectively position it against competitors and
give it the strongest possible competitive
advantage.
 Continued

• Competitor analysis first involves:

 identifying the company's main competitors,

 Then gathers information on competitors' objectives,

strategies, strengths and weaknesses, and reaction patterns.

 Select competitors to attack or avoid. Company marketing

managers should be able to obtain full and reliable

information about any competitor affecting their decisions.

 5.4 Marketing strategies

• Competitive marketing strategy makes the most sense

depends on the company's industry position and its
objectives, opportunities and resources.
• The company's competitive marketing strategy depends on
whether it is a market;
 Leader,
 Challenger,
 Follower or
 Nicher.
 Continued
• A market leader faces three challenges:
 expanding the total market,
 protecting market share and
 expanding market share.
The market leader wants to find ways to
expand the total market because it will benefit
most from any increased sales.
 Continued
• The most sophisticated leaders cover themselves
by doing everything right, leaving no openings for
competitive attack. Leaders can also try to increase
their market shares. This makes sense if
profitability increases at higher market-share
levels.
• A market challenger is a firm that aggressively
tries to expand its market share by attacking the
leader, other runner-up firms or smaller firms in
the industry.
 Continued
• A market follower is a runner-up firm that
chooses not to rock the boat, usually out of
fear that it stands to lose more than it might
gain. Some followers enjoy a higher rate of
return than the leaders in their industry.
 Continued
• A market nicher is a smaller firm that serves
some part of the market that is not likely to
attract the larger firms. Market nichers often
become specialists in some end use, vertical
level, customer size, specific customer,
geographic area, etc,
 Continued
FRONTAL ATTACK
• In a full frontal attack, the challenger matches
the competitor's product, advertising, price and
distribution efforts. It attacks the competitor's
strengths rather than its weaknesses. The
outcome depends on who has the greater
strength and endurance.
 Continued
FLANKING ATTACK
• Rather than attacking head on, the challenger can
launch a flanking attack. The competitor often
concentrates its resources to protect its strongest
positions, but it usually has some weaker flanks. By
attacking these weak spot, the challenger can
concentrate its strength against the competitor's
weakness. Flank attacks make good sense when the
company has fewer resources than the competitor.
 Continued
ENCIRCLEMENT ATTACK
• An encirclement attack involves attacking
from all directions. The encirclement strategy
makes sense when the challenger has superior
resources and believes that it can break the
competitor's hold on the market quickly.
 Continued
BYPASS ATTACK
• A bypass attack is an indirect strategy. The
bypass can involve:
 diversifying into unrelated products,
 moving into new geographic markets or
 leapfrogging into new technologies to replace
existing products.
 Continued
Market-Follower Strategies
• Not all runner-up companies will challenge the
market leader. The effort to draw away the
leader's customers is never taken lightly by the
leader. If the challenger's finally, the adapter
builds on the leader's products and marketing
programs, often improving them. The adapter
may choose to sell to different markets to avoid
direct confrontation with the leader.
 Continued
Market-Nicher Strategies
• Almost every industry includes firms that
specialize in serving market niches. Instead of
pursuing the whole market or even large
segments of the market, these firms target
segments within segments or niches. This is
particularly true of smaller firms because of
their limited resources. Smaller divisions of
larger firms also pursue niching strategies.
 Continued
5.5 International marketing
• International marketing is the multinational process of
planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services
to create exchanges that satisfy individual and
organizational objectives. Only the word multinational has
been added. That word implies that marketing activities
are undertaken in several countries and that such activities
should somehow be coordinated across nation.