Amity Business School

Marketing Strategies
Module IV: Understanding Marketing Strategy Dynamics and its Impact
MBA
Sem 4
Dr. Sunetra Saha
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Topics
• Market Entry Strategy – National and International,
First Mover / Late Mover Advantage
• Diffusion and implication for Marketing Strategy,
Analysing Marketing Strategy and Firm Value
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Generic Strategies
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New Generic Strategies

• Product Leadership
• Customer Intimacy
• Operational Excellence
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Market Entry Strategy

• A market entry strategy is the method in which an
organization enters a new market.
• Points to consider:
Type of industry
Agility of the products
Culture of the new market
Costs associated with entering a new market
Local and international laws of importation and exportation
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Factors in market entry decisions

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Strategies for Market Entry

• Exporting
• Licensing
• Franchising
• Partnering
• Joint ventures
• Turnkey projects
• Greenfield investments
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Raymond Miles' strategy categories

• Prospectors: proactively seek to locate and exploit new market
opportunities
• Analyzers: are very innovative in their product-market choices;
tend to follow prospectors into new markets; often introduce
new or improved product designs
• Defenders: are relatively cautious in their initiatives; seek to
seal off a portion of the market which they can defend against
competitive incursions; often market highest quality offerings
and position as a quality leader
• Reactors: tend to vacillate in their responses to environmental
changes and are generally the least profitable organisations
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Marketing warfare strategies

Competitor-centered strategies drawn from analogies
with the field of military science. The typology of
marketing warfare strategies is useful for predicting and
understanding competitor responses.
In the 1980s, Kotler and Singh developed a typology of
marketing warfare strategies
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 Amity Business School

Strategy for market leaders

• Expand the total market
– Finding new users
– Creating new users
– Encouraging more users
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Strategy for market leaders

• Protect the current market share
 Position defence
 Flanking defence
 Pre-emptive defence
 Counter-offensive defence
 Mobile defence
 Contraction defence
• Expand the market share
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Market Challenger Strategies

• Frontal attack: where an aggressor goes head to head for the same
market segments on an offer by offer, price by price basis; normally used
by a market challenger against a more dominant player
• Flanking attack: attacking an organisation on its weakest front; used by
market challengers
• Bypass attack: bypassing the market leader by attacking smaller, more
vulnerable target organisations in order to broaden the aggressor's
resource base
• Encirclement attack: attacking a dominant player on all fronts
• Guerilla warfare: sporadic, unexpected attacks using both conventional
and unconventional means to attack a rival; normally practiced by smaller
players against the market leader
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 Amity Business School

First Mover Advantage

The first-mover advantage refers to an advantage gained by a company that
first introduces a product or service to the market. The first-mover
advantage enables a company to establish strong brand recognition and
product/service loyalty before other entrants to the market.
 attain exclusive company-product association.
 find success through the effects of networking
 rise in consumption as demand grows.
 determine economies of scale
 lock the consumers up into the market,
 create an exclusive customer base before additional competition enters.
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Late Mover Advantage

 ability to perfect the product before putting it on the market.
 use demographic surveys to help them know how to tailor their product to
their audience, which can maximize sale of the product.
 use its knowledge of the product to reduce production cost, making it
more cost effective for the consumer.
 market and develop the product to appeal to a wider array of consumers
than that for which the original product was designed.
 capitalize on companies who took the initial risk of implementing the first
mover theory.
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Diffusion and implication for Marketing

Strategy
• The market diffusion process is strongly linked to the
adoption process, which describes the way in which an
individual customer learns about an innovation. During
the market diffusion process, the marketer must
recognize that people differ greatly in their readiness to
adopt new products.
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The process by which

the acceptance of an
innovation is spread by
Diffusion
communication to
Process
members of social
system over a period of
time.
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The stages through

which an individual
consumer passes in
Adoption arriving at a decision to
Process try (or not to try), to
continue using (or
discontinue using) a new
product.
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Elements of the Diffusion Process

• The Innovation
• The Channels of Communication
• The Social System
• Time
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Defining Innovations

• Firm-oriented definitions
• Product-oriented definitions
• Market-oriented definitions
• Consumer-oriented definitions
Product-Oriented Amity Business School

Definitions
Continuous
Innovation

Dynamically
Continuous
Innovation

Discontinuous
Innovation
 Telephone Innovations
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Discontinuous Dynamically Continuous Continuous

Innovations Innovations Innovations
Telephone answering machines Hold button
Call forwarding Line-in-use indicator
Call waiting Redial button
Telephone Caller ID Auto dialing feature
Banking by telephone Touch-tone service
Call-prompting systems 800 Numbers
900 Numbers

Ability to send/receive email Switch from analog to

Incorporate PDA functions digital
Cell Phone Calendar/Phonebook Include camera
Voice-activated dialing Ringer styles
Play games
Fax modem Plain paper fax
Mobile fax machines Speed dial buttons
Fax Machine Home office systems Delayed send
(combined fax, copier, Copy function
computer printer) Paper cutter
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Product Characteristics That

Influence Diffusion
• Relative Advantage
• Compatibility
• Complexity
• Trialability
• Observability
 Characteristics That Amity Business School

Influence Diffusion
CHARACTERISTICS EXAMPLES

Air travel over train travel, cordless

Relative
phones over corded telephones
Advantage

Gillette MACH3 over disposable

Compatibility razors, digital telephone answering
machines over machines using tape

Electric shavers, instant puddings

Complexity
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continued
CHARACTERISTICS EXAMPLES

Trial size jars and bottles of new

Trialability products, free trials of software,
free samples, cents-off coupons

Clothing, such as a new Tommy

Hilfiger jacket, a car, wristwatches,
Observability
eyeglasses
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 Amity Business School

Time and Diffusion

• Purchase Time
• Adopter Categories
• Rate of Adoption
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A sequence of
categories that
describes how early (or
Adopter
late) a consumer
Categories
adopts a new product
in relation to other
adopters.
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Adopter Categories

Early Laggards
Adopters
13.5% Early Late 16%
Majority Majority
Innovators 34%
34%
2.5%

Percentage of Adopters by Category Sequence

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Innovators: Description

• 2.5% of population
• Venturesome
• Very eager to try new ideas
• Acceptable if risk is daring
• More cosmopolite social relationships
• Communicates with other innovators
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Early Adopters: Description

• 13.5% of population
• Respected
• More integrated into the local social system
• The persons to check with before adopting a
new idea
• Category contains greatest number of
opinion leaders
• Are role models
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Early Majority: Description

• 34% of population
• Deliberate
• Adopt new ideas just prior to the average
time
• Seldom hold leadership positions
• Deliberate for some time before adopting
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Late Majority: Description

• 34% of population
• Skeptical
• Adopt new ideas just after the average
time
• Adopting may be both an economic
necessity and a reaction to peer pressures
• Innovations approached cautiously
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Laggards: Description

• 16% of population
• Traditional
• The last people to adopt an innovation
• Most “localite” in outlook
• Oriented to the past
• Suspicious of the new
 Stages in Adoption Amity Business School
Process
WHAT HAPPENS
NAME OF EXAMPLE
DURING THIS STAGE
STAGE
Consumer is first Janet sees an ad for a new MP3 player in
Awareness exposed to the product the magazine she is reading.
innovation.
Consumer is interested in Janet reads about the MP3 player on the
the product and searches manufacturer’s Web site and then goes to
Interest
for additional an electronics store near her apartment and
information. has a salesperson show her a unit.
Consumer decides After talking to a knowledgeable friend,
whether or not to believe Janet decides that this MP3 player will
that this product or allow her to easily download the MP3 files
Evaluation
service will satisfy the that she has on her computer. She also
need--a kind of “mental feels that the unit’s size is small enough to
trial.” easily fit into her beltpack.
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Stages in Adoption Process

WHAT HAPPENS
NAME OF DURING THIS STAGE EXAMPLE
STAGE
Consumer uses the Since an MP3 player cannot be “tried” like
product on a limited a small tube of toothpaste, Janet buys the
Trial basis MP3 player online from Amazon.com,
which offers a 30-day full refund policy.

If trial is favorable, Janet finds that the MP3 player is easy to

consumer decides to use use and that the sound quality is excellent.
the product on a full, She keeps the MP3 player.
Adoption rather than a limited
(Rejection) basis--if unfavorable, the
consumer decides to
reject it.
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An Enhanced Adoption Process Model

Discontinuation or
Rejection
Rejection

Evaluation

Pre-existing Adoption
problem or Awareness Interest Evaluation Trial or
Need Rejection

Adoption or Rejection
Postadoption or
Postpurchase
Evaluation
Discontinuation
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Issues in Profiling
Consumer Innovators
• Defining the Consumer Innovator
• Interest in the Product Category
• The Innovator Is an Opinion Leader
• Personality Traits
• Media Habits
• Social Characteristics
• Demographic Characteristics
• Are There Generalized Consumer Innovators?
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Analysing Marketing Strategy and Firm Value

• https://www.ukessays.com/essays/marketing/impact-of-
firm-strategy-on-the-marketing-plan-essay.php
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