Unit 1

1. What is Marketing Strategy (MS)

• Marketing Strategy is plan to sell services or Products

• Longer profitability
• Road Map for any brand
• Where to go, whats the best route to go there.
• MS helps to deliver offerings to customers to create an meaningful impact.

So

“Marketing Strategy is defined as an organization’s strategy that combines all of its marketing
goals into one comprehensive plan”

• Indepth market research analysis

• Focus on right product mix to attain the maximum profit potential.

2. How to build marketing Strategy ?

i. Selecting the right target market

ii. Collecting the marketing mix (4 ps – Product, Price, Place and Promotion) Building Blocks

a. Product
• Products and their packaging must sustain the position of a brand
• Design and functionality need to be considered carefully and developed
to communicate product profits.

b. Price
• Organizations selling a premium product can control above average
prices
• Brands who want to be recognized as price leaders should offer lower
prices to reap a competitive edge.

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 c. Place
• The choice of distribution channel must be consistent according to the
brand’s positioning.
• This means that a high-end product must be linked with a high-end
distribution channel to strengthen product value.

d. Promotion
• Promotion strategy includes the brand’s USP into all of its messaging.
• Organization should include all of the brand’s marketing objectives and
develop particular tactics that will render against them.
• This includes recall of key communication point, brand awareness,
shifts in preference, and more.

3. Significance of Marketing Strategy

i. Helps to win over the market
ii. Create awareness
iii. Build a New customer Base Every time
iv. Plan the Marketing Budgets
v. Keep everyone on the same page

4. In short Marketing strategy is significant because:

In short, a marketing strategy is significant because:

• It offers an organization a competitive edge.

• It aids in developing products and services with best profit-making potential.
• Helps in creating an organizational plan to satisfy customer needs.
• It helps in discovering the areas affected by brand’s growth.
• It helps in fixing the right price for organization’s offerings.
• Helps you best utilize your resources to offer a sales message to the target market.
• It helps to set the advertising budget in advance.
• Helps develop a method to determine the scope of the marketing plan.

5. Factors Considered in Formulating Marketing Strategy

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6. What are Competitive Strategies ?

Competitive strategy is a long-term action plan of a company which is directed to gain

competitive advantage over its rivals after evaluating their strengths, weaknesses,
opportunities and threats in the industry and compare it with your own. (SWOT)
analysis.

Michael Porter, a professor at Harvard presented competitive strategy concept.

According to him there are four types of competitive strategies that are implemented
by businesses globally. It is necessary for businesses to understand the core principles
of this concept that will help them to make a well-informed business decisions in the
course of action.

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Four Types of Competitive Strategy

1. Cost Leadership Strategy

• Cost leadership strategy is difficult to

implement for small scale businesses

• It involves making long term

commitment for offering products and
services

• To offer at lower prices in the market.

• For this purpose firms need to

produce products at low cost
otherwise it will not make profit.

• Since the cost leadership means to

become low cost producer or
provider in the industry

• Any large-scale business which can

provide products at low cost by
attaining economies of scale.

• There are many cost leadership

factors such efficient operation,
large distribution channels,
technological advancement and
bargaining power.

Example : Walmart is a good

example.

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2. Differentiation Strategy
• Identifying attribute of a product which are unique from competitors in the
industry
• When a product is able to differentiate itself
from other similar products or services in the
market through superior brand quality and
value-added features it will be able to charge
premium prices to cover the high cost.
• There are few business examples who
successfully differentiated their brands
Eg. Apple
o Apple has been well-known for its
innovative products, including their
Macintosh line computers, the iPod, iPad,
and of course – the iPhone.
o Product Design
o Operating System
o Pricing Strategy

3. Cost Focus Strategy

• This strategy is quite a resemblance to the cost

leadership strategy

• A major difference is that the cost focus strategy

businesses target a particular segment within the
market and

• That segment is offered the lowest price of the product

or service.

• This type of strategy is very useful to satisfy your

consumer and increase brand awareness.

• For example, beverage companies manufacturing

mineral water can target market segment like Dubai,
where people need and use only mineral water for
drinking, can be sold at a lower than competitors.

Pondicherry Mineral Water

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4. Differentiation Focus Strategy

• Differentiation focus strategy targets a particular segment within the

market; however, instead of offering lower prices to consumer; firms
differentiate itself from its competitors.

• Differentiation strategy offers unique features and attributes to appeal

its target segment.

• For example, Club Mahindra Holiday Resorts (140+ in India & 33 places
in Finland, Sweden & Spain), is a company having several resorts and
caters and offer peaceful holiday spending.

o Tesla : Focuses on the high-end

electric vehicle market segment

o Lush Cosmetics : Consumers who

prefer organic, handmade, and
cruelty-free cosmetic products.

o Bang & Olufsen : Specializing in

high-end audio products.

o Rolex: Rolex has positioned itself in

the luxury watch market segment.

o Whole Foods Market : Whole Foods

focuses on health-conscious
consumers by offering organic, natu
ral, and non-GMO products

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 o Harley-Davidson : Harley-Davidson
targets motorcycle enthusiasts who
value tradition, community, and Am
erican craftsmanship

Market Leader

• A market leader usually holds the largest market share in a particular industry.
• Market leaders may also be the first to develop certain products or services.
• Apple and Amazon are examples of market leaders.

WABCO is a global leader supplying

breaking control systems and advanced
technologies. It commands an 80% market
share in medium and heavy vehicles
braking systems.

Coal India : The company makes up for almost 80% of the country’s coal production

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Market Followers
• Market Follower strategy is a strategy of imitating the products, services and strategies
from the market leader.
• The innovator or the leader bears the expense of developing the new product, bringing
in the technology, breaking entry barriers and educating the market.
• However, another firm can come along and copy or improve on the new product.
• Apple: Apple is a market follower in the consumer electronics industry. The
company has a strategy to launch products that capitalize on the success of its
competitors.

• Walmart: Walmart is a market follower in the retail industry. The company has a
strategy to stock the same products as its competitors, but at a lower price.

• Samsung: Samsung is a market follower in the smartphone industry.

Fragrances and deodorants

What are Market Nichers?

• Market Nichers are the marketeers or companies who make specific products and/or
services which made for specific demand of customers which are not met by
otherwise available products.
• Produce highly customized and specialist products/ services which serve a narrow
market range.
• In this type of market strategy, though the volume is less the profit margin is high.
• This is one of the alternate strategies to being a market leader or a market follower.
• It is generally pursued by small sized firms who do not compete with the large firms.
• Focus on a Niche market.

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Corporate strategy and its characteristics
The term strategy is associated with unified design and action for achieving major goals,
gaining command over the situation with long-range perspective and securing a critically
advantageous position. Strategies are formulated at the corporate, divisional, and functional
level. Corporate strategies are formulated by the top managers. They include the
determination of the
i. business lines,
ii. expansion and growth,
iii. vertical and horizontal integration,
iv. diversification,
v. takeovers and mergers,
vi. new investment and divestment areas,
vii. R & D projects and so on.

These corporate wide strategies need to be operationalised by

a. Divisional and
b. Functional strategies pertain to:
i. product lines,
ii. production volume,
iii. quantum ranges,
iv. prices,
v. product promotion,
vi. market penetration,
vii. purchasing sources,
viii. personnel development

Characteristics of Corporate Strategy

i. Long range in nature

ii. Action oriented
iii. Multi pronged and integrated
iv. Flexible and dynamic
v. Formulated at the top management
vi. Competitive and complex setting
vii. Goals and objectives for the enterprises

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 UNIT II
Designing Marketing Mix Strategies
Product Strategy
• A product strategy is a high-level plan describing
• what a business wants to accomplish with its product and how it plans to do so.
• The strategy should answer key questions such as who the product will serve
(personas), how it will benefit those personas, and the company’s goals for the
product throughout its life cycle.
According to Roman Pilcher suggests a strategy should have:
• Market for the product and the specific needs it will address.

• Product’s key differentiators or unique selling proposition.

• Company’s business goals for the product

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Product Strategies Examples : -

• Price driven strategy : By adopting a premium or value strategy

• Innovation strategy : In offering the best and charging for it.
• Time to market strategy : Being first to market with a better product
• Market/Customer Oriented : Customers insights and competitive position
• Platform driven strategy : Optimize flexibility, cost, and scale
• Leader/alpha strategy : Creating a product that leads the market
• Challenger/quality strategy : challenging the current market leader by
offering an improved product experience

Key Elements for Effective Product Strategy

1. Importance of Product Strategy
A. For Business Success
ii. Alignment of Stakeholders (vision & Mission)
iii. Guiding Decision Making
iv. Meeting the Market Demand
v. Competitive Advantage
B. Benefits from effective Product Strategy
i. Increase the Market Share
ii. Customer Satisfaction
iii. Increase in Revenue
iv. Brand Reputation
v. Good Adaptability to market changes.
2. Market Research Analysis
a. Conducting Market Research
b. Identify the Customer needs
c. Utilizing data and analytics for decision making
3. Defining the goals (SMART) and objectives
4. Identifying the targeted audience
5. Differentiation and competitive advantage (Unique Selling Products)
6. Execution
7. Measurement and evaluation

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Product Differentiation Strategy (Seven Types)
1. Price
2. Quality
3. Service
4. Branding
5. Functionality
6. User Type (friendly)
7. Audience

What is product life cycle marketing?

• Product life cycle marketing aligns a product’s marketing efforts (promotions and
sales) with its life cycle stages.
• As you focus on the product’s life cycle stage, you’ll be able to determine when it
needs to capture more market share, gain new markets, or reinvigorate its existing
market.

Benefits of product life cycle marketing?

There are many benefits of employing the product life cycle model in marketing. This includes:
• Providing decision-makers with better support services.
• Optimization of marketing investment to match the life cycle stage of the product.
• Offering better control over marketing results.
• Providing a better platform for long-term strategic planning.
• Enabling the elongation of a product’s life cycle.
• Preparing product managers in advance to face competition.
• Offering managers better organization and process management systems.

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Product Lifecycle Marketing

• A product’s life cycle refers to all the stages it goes through before it enters the market
and until it exits.
• There are five stages of the product life cycle: development, introduction, growth,
maturity, and decline.
Product Development: When the company finds and develops a new product idea.
During the product development the sales are zero and the
company investments costs mount.
Introductions : Is a period of slow sales growth as the product is introduced in
the market. Profits are non-existent in this stage because of the
heavy expenses of product introduction.
Growth : Is a period of rapid market acceptance and increasing profits.
Maturity : There is a slowdown in sales growth because the product has
achieved acceptance by most potential buyers. Profit level off
or decline because of increased marketing outlays to defend the
product against competition.
Decline : Is the period when sales fall off and profits drops.

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Product Life Cycle :
➢ Some Products Die quickly
➢ Whereas other stay in the mature stage for a long and long time.
➢ TABASCO sauce is over “ 130 years old and yet still able to totally whup your
butt!”
Some well managed brand live forever (75 years), such as
➢ Coco-Cola
➢ Gillette
➢ American Express
➢ Lifebuoy
➢ Lux
➢ Dalda
➢ Lipton
➢ Tabasco

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Quick Summary of Product Life Cycle Characteristics, Objectives and Strategies

Characteristics Introduction Growth Maturity Decline

Sales Low Sales Rapidly rising Sales Peak Sales Declining Sales
Costs Per Customer Higher Average Low Low
Profits Negative Rising Profits High Profits Declining Profits
Customers Innovators Early adopters Middle Majority Laggards (slow progress)
Competitors Few Growing Stable Declining Numbers

Marketing Objectives

Introduction Growth Maturity Decline

Create product Maximize profit Reduce expenditure and
Objectives awareness and Maximize Market while defending milk the brand
trial market share

Strategies
Characteristics Introduction Growth Maturity Decline
Product Offer a basic product Offer Product Diversify brand and Phase out weak
extension service, models items
warranty
Price Use Cost Plus Price to Penetrate Price to match or Cut Price
beat competitors
Distribution Build Selective Build intensive Build more Go selective: phase
distribution distribution intensive out unprofitable
distribution outlet
Advertising Build Product Build awareness Stress brand Reduce to level
awareness among and interest in the differences and needed to retain
early adopters and mass market benefits hard core loyals.
dealers
Sales Promotion Use heavy sales Reduce to Intake Increase to Reduce to minimal
promotion to entice advantage of heavy encourage brand level.
trial consumer demand switching

Prevention of Food Adulteration Act Food safety and standards Act

Drugs and Cosmetics Act Consumer Protection Act

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What is Price ?
➢ Price is the amount of money charged for a
product or service.
➢ Price is the sum of all the values that
customers give up in order to gain the
benefits.
➢ Price remain the one of the most important
element in determining the firms market
share.
➢ Price is the only element in marketing mix
that produces revenue.
➢ A small percent of increase can increase the
profit of the company.

Factors to consider the Pricing

➢ Customers perceptions of the product value set the celling for prices.
➢ If customer perceives that the price is greater than the product value, they will not
buy.
➢ Product Cost set the floor price.
➢ If Company prices the product below its cost, company profit will suffer.
➢ Number of Internal and External Factors to be considered.

❖ Cost
❖ Customer
❖ Types of products
❖ Target market
❖ Competitor
❖ Price elasticity of
demand
❖ Product life cycle

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What is Pcide Skimming
Price Skimming involves setting high prices when a product first enters the market to skim
profit from those willing to pay more before gradually lowering the price to reach the
remaining market.

Why Are Pricing Strategies Important?

Your price is too high or
Your price is too low

Steps in Pricing Strategy

Five Types of Pricing Strategies
1. Cost-Plus Pricing
• This approach involves setting a price based on the cost of production, including
materials, labor, and overhead, and then adding a markup for profit.
• Commonly used in industries where the costs of production are relatively stable and
well understood.
• But, it may overlook market demand and competitive pricing dynamics.

2. Competitive Pricing

• Competitive pricing involves setting prices based on what competitors are charging
for similar products or services
• It doesn’t take the cost of their product or consumer demand into account.
• This strategy aims to capture market share by offering comparable value at a
competitive price point and requires businesses to regularly monitor and adjust their
prices to stay competitive in the market.
Example
❖ A retail chain adjusts its prices in response to competitors’ promotions and
discounts, leveraging pricing intelligence tools to maintain price parity and retain
customers.

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3. Value-Based Pricing

• Value-based pricing focuses on pricing products according to the perceived (seeming)

value they offer to customers, rather than based on cost or competition.
• By understanding the benefits and value proposition of your offerings, you can set
prices that reflect the value they provide to customers.
• This strategy requires a deep understanding of customer needs and preferences to
justify premium pricing.
❖ Example
A luxury car manufacturer prices its vehicles based on their unique features,
craftsmanship, and brand prestige, appealing to affluent consumers willing to pay
a premium for exclusivity and superior quality.

4. Penetration Pricing

• Penetration pricing involves setting a low initial price to attract customers and gain
market share quickly.
• This strategy is particularly effective for new entrants aiming to penetrate
competitive markets or for existing businesses introducing new products.
• It offers products at a lower price point compared to competitors, the company aims
to attract price-sensitive consumers and stimulate demand.
• One important thing to have in mind using this strategy is that it may result in initial
revenue sacrifices due to the lower pricing.
• But, it can lead to rapid adoption of the product, increased brand awareness, and
customer loyalty in the long run.
• Penetration pricing can serve as a barrier to entry for potential competitors, making it
challenging for them to compete solely on price.
❖ Example
A technology oriented startup offers its software at a discounted rate during its
initial launch phase, aiming to quickly acquire a large customer base and establish
a strong market presence.

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5. Skimming Pricing
• Skimming pricing is a strategic approach where a company initially sets a high price
for its product or service before gradually reducing it over time.
• This strategy is commonly used for new or innovative products with unique
features.
• High price helps companies maximize profits from early adopters willing to pay a
premium.
• As demand slows down, the price is then lowered to attract more price-sensitive
customers.
• Skimming pricing can help companies recoup development costs quickly and
create a perception of exclusivity and premium quality.
• It carries the risk of alienating customers who find the initial price too high.
• Careful market research and understanding customer segments are essential for
successful implementation of skimming pricing.
Example
➢ A consumer electronics company releases its latest smartphone at a
premium price
➢ Targeting early adopters and enthusiasts seeking cutting-edge technology
before gradually reducing the price to attract a broader audience.

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Channel Strategy
➢ At its core, a channel strategy (or channel distribution strategy) refers to a vendor’s
plan to reach its target audience through a mix of different marketing channels,
direct and indirect channels.
➢ Historically, brands leveraged brick-and-mortar stores, direct mail, and local sales
efforts to engage customers.
➢ However, the digital age introduced a plethora of new avenues such as social
media platforms, search engine marketing, and more, resulting in the
development of multi-channel and omni-channel strategies.

Retail Channel Strategy

➢ This strategy focuses on reaching consumers directly through brick and
mortar retail stores or online retail platforms.
➢ It gives businesses more control over customer interactions, brand image, and,
most importantly, customer experience.
Example Amazon, Flipkart

Wholesale Channel Strategy

➢ Wholesale strategy emphasizes selling products in large quantities to retailers or other
businesses (business to business or B2B) rather than directly to consumers.
➢ This often involves channel members or channel partners who buy products in bulk.

Consumer Direct Channel Strategy

➢ The Consumer Direct Channel Strategy prioritizes reaching the target audience
directly, eliminating the need for intermediaries (e.g., channel partners) in either
distribution channel strategy or marketing channel strategy.

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 ➢ This typically gives brands more control over the marketing messages, customer
journey, and overall brand experience.

Franchising Channel Strategy

➢ Franchising involves allowing entrepreneurs to run independent businesses using a
larger company’s branding, products, and services.
➢ It accelerates business expansion without needing the parent company to manage
each outlet directly.

Business (B2b) Partnership Strategy

➢ This approach involves forming strategic alliances or partnerships with other
businesses to expand reach, share resources, or co-create value for mutual
benefit.
Example:
The collaboration between Spotify and Starbucks, wherein Starbucks integrates
Spotify’s music streaming into its stores and app, showcases a win-win B2B
partnership.

Network Channel Strategy

➢ Leveraging a network of interconnected businesses, individuals, or resources, this
strategy focuses on collaborative efforts to reach common business objectives, often
relying on the strength and reach of the network members.

Resell Channel Strategy

➢ The Resell Channel Strategy involves businesses buying products from manufacturers
or wholesalers and selling them to end-users or other businesses.
➢ Businesses with strong marketing and distribution capabilities often adopt this
approach but don’t produce their goods.
Example: Best Buy is a stellar example

Digital Channel Strategy

➢ This strategy emphasizes using digital channels, such as search engine marketing,
social media platforms, and email marketing, to reach potential and current
customers.
➢ It harnesses online platforms to engage, inform, and convert target audiences.
Example : Netflix to dominate the video streaming and rental space.

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