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MICROWAVE OVENS”
CHAPTER -1
INTRODUCTION
Strategy is about:
• Which markets should a business compete in and what kinds of activities are
involved in such markets? (markets; scope)
• How can the business perform better than the competition in those markets?
(Advantage)?
• What are the values and expectations of those who have power in and
around the business? (stakeholders)
Strategies exist at several levels in any organization - ranging from the overall
business (or group of businesses) through to individuals working in it.
Corporate Strategy - is concerned with the overall purpose and scope of the
business to meet stakeholder expectations. This is a crucial level since it is
heavily influenced by investors in the business and acts to guide strategic
decision-making throughout the business. Corporate strategy is often stated
explicitly in a "mission statement".
Strategy is differentiated from tactics in that tactics are micro strategies that
contribute to large goal. Opening a successful business would fall under
strategy achieving financing or an important client would be considered tactics
towards strategy.
7P’s 7C’s
Promotion Communication
Price Cost
Place Convenience
People Capable
Process Convergent
• Product
• Promotions
What promotions appeals would influence consumer to purchase & use of our
product?
• Pricing
• Place
• People
What type of people is desired by the consumer to deliver the service? Would
differentiation by people help in gaining competitive advantage?
• Process
• Physical Evidence
Tactical Programs – Marketing strategy sets the stage for specific actions that will
take place. Marketing tactics are the day-to-day actions that marketers undertake
and involve the major marketing decision areas. As would be expected, this is the
key area of the Marketing Plan since it explains exactly what will be done to reach
the organization’s objectives.
Marketing Budget – Carrying out marketing tactics almost always means that
money must be spent. The marketing budget lays out the spending requirements
needed to carry out marketing tactics. While the marketing department may request
a certain level of funding they feel is required, in the end it is upper-management
that will have final say on how much financial support will be offered.
One of the most important concepts of the marketing planning process is the
need to develop a cohesive marketing strategy that guides tactical programs for the
marketing decision areas.
These set the direction for all marketing efforts by describing, in general terms,
how marketing will achieve its objectives.
There are many different General Marketing Strategies, though most can be
viewed as falling into one of the following categories:
Market Expansion :
Grow Sales with Existing Products – With this approach the marketer seeks
to actively increase the overall sales of products the company currently
markets. This can be accomplished by: 1) getting existing customers to buy
more; 2) getting potential customers to buy (i.e., those who have yet to buy);
or 3) selling current products in new markets.
Grow Sales with New Products – With this approach the marketer seeks to
achieve objectives through the introduction of new products. This can be
• Status Quo – This strategy looks to maintain the marketer’s current position
in the market, such as maintaining the same level of market share.
• Market Exit – This strategy looks to remove the product from the
organization’s product mix. This can be accomplished by: 1) selling the
product to another organization, or 2) eliminating the product.
• These are used to achieve the General Marketing Strategies by guiding the
decisions within important marketing areas (product, pricing, distribution,
promotion, target marketing).
• Pricing Strategy – create price programs that offer lower pricing versus
competitors
• Promotion Strategy – create a plan that can quickly build awareness of the
product
For instance, to meet the Pricing Strategy that lowers cost versus competitors’
products, the marketer may employ such tactics as: quantity discounts, trade-in
allowances or sales volume incentives to distributors.
Positioning: select the marketing mix most appropriate for the target
segment(s)
Segmentation:
• Grouping consumers by some criteria, such that those within a group will
respond similarly to a marketing action and those in a different group will
respond differently.
• Sex
• Age
• race
• Income
• educational level
• marital status
• No of children
• introvert / extrovert z
• usage history
Which segment –
• Mass market,
• Multiple segments,
• Single segment
• Marketers understand they cannot do all things to all people ,all the time .
Buyers & markets are too complex & diverse for one simple marketing formula
to adequately address the needs of all.
• Target market – identifying market segment that are bite size chunks that
organization can manage
Market Segmentation:
it is too difficult to create a product that will satisfy everybody, that is why we
focus on a segment of the total market
• Market Segmentation-def
• Demographic - based upon age, gender and income level (very often used)
• Benefits - based on the different expectation that customers have about what
a product/service can do for them
eg. People who want to but “lite” food cause ti will help them lose weight.
Positioning Strategy:
• A Positioning Strategy results in the image you want to draw in the mind of
your customers, the picture you want him/her to visualize of you what you
offer, in relation to the market situation, and any competition you may
have".
• While designing your positioning strategy you will be faced with three
main options:
• Positioning your product against your competitors, " Our prices are half of
that you may find else where for similar products"
• Emphasizing a distinctive unique benefit "the only book keeping system that
instantly calculates your taxes"
• Affiliating your product with something the customer knows and values "the
same archiving system used by the library of university "
• The USP: Why you do it better than the competitors. (As you may know,
USP stands for "unique selling proposition".)
• Our product is better than the competitors in the following manner: -----------
-----
• Every marketing program should cover only one product, hence must not
reflect more than one clearly stated positioning strategy, So:
• By use or application- The users of Apple computers can design and use
graphics more easily than with Windows or UNIX. Apple positions its
computers based on how the computer will be used.
• Positioning is what the customer believes and not what the provider wants
them to believe. Positioning can change due to the counter measures taken
at the competition.
• Managing your product positioning requires that you know your customer
and that you understand your competition; generally, this is the job of market
research not just what the entrepreneur thinks is true.
• Typically there are four types of market dominance strategies that a marketer
will consider:
• There are -market leader, market challenger, market follower, and market
nicher.
• Market Leader
• Market Challenger
• Market Follower
• Market Nicher
Defense Strategy :
– Position Defense
– Mobile Defense
– Flanking Defense
– Contraction Defense
– Pre-emptive Defense
– Counter-Offensive
– Defense
• Line extensions
• Improve service
• Change distribution
• Cost reductions
How?
• Frontal attack
• Flank attack
• Encirclement attack
• Bypass attack
• Guerrilla attack
PORTER’S
FIVE FORCES MODEL
• The Porter's 5 Forces tool is a simple but powerful tool for understanding
where power lies in a business situation. This is useful, because it helps you
understand both the strength of your current competitive position, and the
strength of a position you're looking to move into.
The five forces come from Porter's famous framework and are:
• Power of Buyers
• Power of Suppliers
• Threat of substitutes
• Barriers to entry
• Competitors
• Firms are able to apply their core competence s, business model or network
to achieve a profit above the industry average. A clear example of this is the
airline industry. As an industry, profitability is low and yet individual
companies, by applying unique business models have been able to make a
return in excess of the industry average.
• Porter's five forces include three forces from 'horizontal' competition: threat
of substitute products, the threat of established rivals, and the threat of new
entrants; and two forces from 'vertical' competition: the bargaining power of
suppliers, bargaining power of customers.
• Porter makes clear that for diversified companies, the first fundamental issue
in corporate strategy is the selection of industries (lines of business) in
which the company should compete; and each line of business should
develop its own, industry-specific, five forces analysis.
• The idea is that change in your market is likely to come as the basis of one
of these five areas. For instance, buyers may distort the market by forcing
prices down, or by deciding to take build products in-house.
• In considering how these "forces" act on your markets, you get a picture of
issues such as channel conflict, threats from vertical integration, the impact
of regulatory change or the advent of new technology. You can also take a
view as to how you are or can affect the competitive situation for your own
benefit, rather than statically accepting the status quo
• How do we know SCA when we see it? What is it? When is it considered
“sustainable”?
1. Produce value
2. Be rare
• Intel
• Motorola
• Knowledge-based strategy
• Generic strategy
• Hybrid strategy
Knowledge-based Strategy
Generic Strategy
• The optimal business portfolio is one that fits perfectly to the company's
strengths and helps to exploit the most attractive industries or markets.
Portfolio Analysis
Definition
• Two most common measures used in a portfolio analysis are market growth
rate and relative market share.
It is a chart that had been created by Bruce Henderson for the Boston Consulting
Group in 1970 to help corporations with analyzing their business units or product
lines .
This helps the company allocate resources and is used as an analytical tool in
• Brand marketing,
• Product management
• Portfolio analysis
Product Hierarchy
• Need
• Product family
• Product class
• Product Line
• Product type
• Brand
• Item
• Product class—a family of products having similar function e.g. all shoes
• Product line—a group of products with closely related functions e.g. sports
shoes
• Product type—products within a line having similar form e.g. foot ball shoes
• Item (Stock Keeping Unit)—a unit item e.g. one pair of Nike football shoe
What is product?
Product-Mix Decisions
Decisions on the product mix (the number of product lines and items in each
line) that the company may offer:
• A single product
• Multiple products
• A systems of products
Product Innovation:
• A new product outside the existing range but in a similar field of technology
Promotional
Strategy
• Specific Objective:
• To stimulate demand
• To counter competitors
• To respond to news
• The strategy should be rooted in the brand's vision and driven by the
principles of differentiation and sustained consumer appeal.
• The true brand is the sum total of the perceptions of all the constituencies
which contribute to revenues and profits.
BRAND VISION
• A first step to strategic success as to where the brand can & cannot go.
• Provides a vision that forces management to articulate what they want the
brand to do for the organization over the next five years, relative to brand
value, revenue & profit contributions.
BRAND’S POSITIONING IS
• The place in the consumer’s mind that you want your brand to own –the
benefit you want them to think of when they think of your brand.
• A strong position means the brand has a unique, credible, sustainable, &
valued place in the customer’s mind.
• Good positioning gives you the direction required to focus the organization
& focused your strategic moves.
• It revolves around a benefit that helps your product or service stand apart
from the competition.
1.9PRICING STRATEGY
Pricing is one of the 4 Ps of the marketing mix. The other three aspects are
product, promotion, and place. It is also a key variable in microeconomic price
allocation theory. Price is the only revenue generating element amongst the 4ps,
the rest being cost centers.
Definitions:
• The effective price is the price the company receives after accounting for
discounts, promotions, and other incentives.
Pricing Process:
2. Analyze demand