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1visit: www.studyMarketing.org
Marketing Strategy
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You can download this presentation at:
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Contents:Contents:
Section 1 : Market Scope Strategy
Section 2 : Market Entry Strategy
Section 3 : Product Strategy
Section 4 : Promotion Strategy
Section 5 : Distribution Strategy
Section 6 : Pricing Strategy
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Market Scope Market Scope StrategyStrategy
1. Single Market Strategy
2. Multi Market Strategy
3. Total Market Strategy
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1. Single Market Strategy1. Single Market Strategy
• Concentration of efforts in a single
segment.
• Requirements: (a) Serve the market
wholeheartedly despite initial difficulties
(b) Avoid competition with established
firms.
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2. Multi Market Strategy2. Multi Market Strategy
• Serving several distinct markets.
• Requirements: (a) Careful selection of
segments to serve (b) Avoid
confrontation with companies serving
entire market.
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3. Total Market Strategy3. Total Market Strategy
• Serving the entire spectrum of the market by selling
differentiated products to different segments in the
market.
• Requirements: (a) Employ different combinations of
price, product, promotion, and distribution strategies
in different segments (b) Top management
commitment to embrace entire market (c) Strong
financial position.
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Market Entry Market Entry StrategyStrategy
1. First In Strategy
2. Early Entry Strategy
3. Laggard Entry Strategy
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1. First In Strategy1. First In Strategy
• Entering the market before all others.
• Requirements: (a) Willingness and ability to
take risks (b) Technological competence (c)
Strive to stay ahead (d) Heavy promotion (e)
Create primary demand (f) Carefully evaluate
strengths.
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2. Early Entry Strategy2. Early Entry Strategy
• Entering the market in quick succession after
the leader.
• Requirements: (a) Superior marketing
strategy (b) Ample resources (c) Strong
commitment to challenge market leader.
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3. Laggard Entry Strategy3. Laggard Entry Strategy
• Entering the market toward tail end of growth phase
or during maturity phase. Two modes of entry are
feasible: (a) Imitator(a) Imitator - Entering market with me-too
product (b) Initiator(b) Initiator - Entering market with
unconventional marketing strategies.
• Requirements: ImitatorImitator - (a) Market research ability
(b) Production capability. InitiatorInitiator - (a) Market
research ability, (b) Ability to generate creative
marketing strategies.
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Product Product StrategyStrategy
1. Product Positioning Strategy
2. Product Repositioning Strategy
3. Product Scope Strategy
4. Product Design Strategy
5. New Product Strategy
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1. Product Positioning Strategy1. Product Positioning Strategy
• Placing a brand in that part of the market where it
will have a favorable reception compared with
competing brands.
• Requirements: (a) Successful management of a a
single brandsingle brand requires positioning the brand in the
market so that it can stand competition from the
toughest rival and maintaining its unique position by
creating the aura of a distinctive product.the aura of a distinctive product.
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1. Product Positioning Strategy1. Product Positioning Strategy
• (b) Successful management of multiple brandsmultiple brands
requires careful positioning in the market so that
multiple brands do not compete with nor
cannibalize each other.
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2. Product 2. Product Repositioning Repositioning
StrategyStrategy
• Reviewing the current
positioning of the product and
its marketing mix and seeking
a new position for it that
seems more appropriate.
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• Requirements: (a) If this strategy
is directed toward existing existing
customerscustomers, repositioning is
sought through promotion of
more varied uses of the product
2. Product 2. Product Repositioning Repositioning
StrategyStrategy
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• (b) If the business unit wants to
reach new usersreach new users, this strategy
requires that the product be
presented with a different twist
to the people who have not been
favorably inclined toward it.
• In doing so, care should be
taken to see that, in the process
of enticing new customers,
current ones are not alienated
2. Product 2. Product Repositioning Repositioning
StrategyStrategy
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• (c) If this strategy aims at
presenting new uses of the presenting new uses of the
productproduct, it requires searching
for latent uses of the product, if
any.
• Although all products may not
have latent uses, there are
products that may be used for
purposes not originally intended.
2. Product 2. Product Repositioning Repositioning
StrategyStrategy
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3. Product 3. Product Scope Scope StrategyStrategy
• The product-scope strategy deals
with the perspectives of the product
mix of a company.
• The company may adopt a single-a single-
product strategy, a multiple-product strategy, a multiple-
product strategy, product strategy, or a system-of-a system-of-
products strategy.products strategy.
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• Requirements: (a) Single productSingle product:
company must stay up-to-date on
the product and even become the
technology leader to avoid
obsolescence (b) Multiple Multiple
productsproducts: products must
complement one another in a
portfolio of products
3. Product 3. Product Scope Scope StrategyStrategy
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• (c) System of productsSystem of products: company
must have a close understanding of
customer needs and uses of the
products.
3. Product 3. Product Scope Scope StrategyStrategy
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4. Product 4. Product Design Design
StrategyStrategy
• The product-design strategy deals
with the degree of standardization
of a product.
• The company has a choice among
the following strategic options:
standard product, customized standard product, customized
product, product, and standard product standard product
with modifications.with modifications.
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• Objectives: (a) Standard productStandard product :
to increase economies of scale of
the company (b) Customized Customized
productproduct : to compete against mass
producers of standardized
products through product-design
flexibility (c) Standard product Standard product
with modificationswith modifications : to combine
the benefits of the two previous
strategies.
4. Product 4. Product Design Design
StrategyStrategy
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5. New 5. New Product Product StrategyStrategy
• A set of operations that
introduces (a) within the within the
businessbusiness, a product new to its
previous line of products (b) on on
the marketthe market, a product that
provides a new type of
satisfaction.
• Three alternatives emerge from
the above: product product
improvement/modificationimprovement/modification,
product imitationproduct imitation, and product product
innovation.innovation.
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• Requirements: A new-product
strategy is difficult to implement
if a new product development a new product development
systemsystem does not exist within a
company.
5. New 5. New Product Product StrategyStrategy
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• Five componentsFive components of this
system should be assessed:
• corporate aspirations toward
new products
• organizational openness to
creativity
• environmental favor toward
creativity
• screening method for new
ideas, and
• evaluation process.
5. New 5. New Product Product StrategyStrategy
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Promotion Promotion StrategyStrategy
1. Promotion Mix Strategy
2. Media Selection Strategy
3. Advertising Copy Strategy
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• Determination of a judicious mix of
different types of promotion.
• Requirements :
• (a) Product factors(a) Product factors: (i) nature of
product (ii) durable versus
nondurable (iii) perceived risk (iv)
typical purchase amount
1. Promotion 1. Promotion Mix StrategyMix Strategy
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1. Promotion 1. Promotion Mix StrategyMix Strategy
• (b) Market factors:(b) Market factors: (i) position in the
life cycle, (ii); market share, (iii)
industry concentra tion, (iv) intensity
of competition, and (v) demand
perspectives
• (c) Customers factors:(c) Customers factors: (i)
household versus business
customers, (ii) number of customers,
and (iii) concentration of customers
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1. Promotion 1. Promotion Mix StrategyMix Strategy
• (d) Budget factors:(d) Budget factors: (i) financial
resources of the organization and (ii)
traditional promotional perspectives
• (e) Marketing mix factors:(e) Marketing mix factors: (i)
relative price/relative quality, (ii)
distribution strategy, (iii) brand life
cycle, and (iv) geographic scope of
the market
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2. Media Selection 2. Media Selection StrategyStrategy
• Choosing the channels
(newspapers, magazines, television,
radio, outdoor advertising, transit
advertising, and direct mail) through
which messages concerning a
product/service are transmitted to
the targets.
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2. Media Selection 2. Media Selection StrategyStrategy
• Requirements: (a) Relate media-
selection objectives to product/market
objectives (b) Media chosen should
have a unique way of promoting the
business (c) Media should be measure-
minded not only in frequency, in timing,
and in reaching the target audience but
also in evaluating the quality of the
audience
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2. Media Selection 2. Media Selection StrategyStrategy
• (d) Base media selection on factual
not artificial grounds, (e) Media plan
should be optimistic in that it takes
advantage of the lessons learned
from experience (f) Seek
information on customer profiles and
audience characteristics.
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3. Advertising 3. Advertising Copy StrategyCopy Strategy
• Designing the content of
an advertisement.
• Objective: To transmit a
particular product/service
message to a particular
target.
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3. Advertising 3. Advertising Copy StrategyCopy Strategy
Requirements:
(a) Eliminate "noise" for a clear
transmission of message
(b) Consider importance of :
• source credibility
• balance of argument
• message repetition
• rational versus emotional
appeals
• humor appeals
• presentation of model's eyes
in pictorial ads
• comparison advertising.
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Distribution Distribution StrategyStrategy
1. Distribution Scope Strategy
2. Multiple Channel Strategy
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1. Distribution 1. Distribution Scope Scope
StrategyStrategy
• Establishing the scope of
distribution, that is, the target
customers.
• Choices are exclusive exclusive
distributiondistribution (one retailer is
granted sole rights in serving
a given area), intensive intensive
distributiondistribution (a product is
made available at all possible
retail outlets), and selective selective
distributiondistribution (many but not all
retail outlets in a given area
distribute a product).
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1. Distribution 1. Distribution Scope Scope
StrategyStrategy
• Requirements: Assessment
of :• customer buying habits• gross margin/ turnover
rate• capability of dealer to
provide service• capability of dealer to
carry full product line• product styling
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2. Multiple Channel 2. Multiple Channel StrategyStrategy
• Employing two or more different channels
for distribution of goods and services.
• Multiple-channel distribution is of two
basic types: complementarycomplementary (each
channel handles a different non-
competing product or market segment)
and competitive competitive (two different and
competing channels sell the same
product).
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2. Multiple Channel 2. Multiple Channel StrategyStrategy
• Requirements: (a) Market segmentation,
(b) Cost/benefit analysis.
• Use of complementary channels prompted
by (i) geographic considerations, (ii)
volume of business, (iii) need to distribute
non-competing items, and (iv) saturation
of traditional distribution channels.
• Use of competitive channels can be a
response to environmental changes.
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Pricing StrategyPricing Strategy
1. Pricing Strategies for New Products
2. Pricing Strategies for Established Products
3. Price Flexibility Strategy
4. Price Leadership Strategy
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1. Pricing for 1. Pricing for New ProductsNew Products
• Skimming Pricing Strategy
• Penetration Pricing Strategy
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Skimming Pricing Skimming Pricing StrategyStrategy
• Setting a relatively high price during
the initial stage of a product's life.
• Objectives: (a) To serve customers
who are not price conscious while
the market is at the upper end of the
demand curve and competition has
not yet entered the market
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• (b) To recover a significant portion of
promotional and research and
development costs through a high
margin.
Skimming Pricing Skimming Pricing StrategyStrategy
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• Requirements: (a) Heavy
promotional expenditure to introduce
product, educate consumers, and
induce early buying (b) Relatively
inelastic demand at the upper end of
the demand curve (c) Lack of direct
competition and substitutes.
Skimming Pricing Skimming Pricing StrategyStrategy
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Penetration Pricing Penetration Pricing StrategyStrategy
• Setting a relatively low price during
the initial stages of a product's life.
• Objective: To discourage
competition from entering the market
by quickly taking a large market
share and by gaining a cost
advantage through realizing
economies of scale.
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Penetration Pricing Penetration Pricing StrategyStrategy
• Requirements: (a) Product must
appeal to a market large enough to
support the cost advantage (b)
Demand must be highly elastic in
order for the firm to guard its cost
advantage.
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2. Pricing for 2. Pricing for Established ProductsEstablished Products
• Maintaining the Price
• Reducing the Price
• Increasing the Price
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Maintaining the PriceMaintaining the Price
• Objectives: (a) To maintain position
in the marketplace (i.e., market
share, profitability, etc.) (b) To
enhance public image.
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Maintaining the PriceMaintaining the Price
• Requirements: (a) Firm's served
market is not significantly affected by
changes in the environment (b)
Uncertainty exists concerning the
need for or result of a price change
(c) Firm's public image could be
enhanced by responding to
government requests or public
opinion to maintain price.
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Reducing the PriceReducing the Price
• Objectives: (a) To act defensively
and cut price to meet the
competition (b) To act offensively
and attempt to beat the competition
(c) To respond to a customer need
created by a change in the
environment.
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Reducing the PriceReducing the Price
• Requirements: (a) Firm must be
financially and competitively strong
to fight in a price war if that becomes
necessary (b) Must have a good
understanding of the demand
function of its product.
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Increasing the PriceIncreasing the Price
• Objectives: (a) To maintain
profitability during an inflationary
period (b) To take advantage of
product differences, real or
perceived (c) To segment the
current served market.
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Increasing the PriceIncreasing the Price
• Requirements: (a) Relatively low
price elasticity but relatively high
elasticity with respect to some other
factor such as quality or distribution,
(b) Reinforcement from other
ingredients of the marketing mix
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3. Pricing 3. Pricing Flexibility Flexibility
StrategyStrategy
• One Price Strategy
• Flexible Pricing Strategy
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One Price One Price StrategyStrategy
• Charging the same price to all
customers under similar conditions
and for the same quantities.
• Objectives: (a) To simplify pricing
decisions (b) To maintain goodwill
among customers.
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One Price One Price StrategyStrategy
• Requirements:
• Detailed analysis of the firm's
position and cost structure as
compared with the rest of the
industry
• Information concerning the cost
variability of offering the same
price to everyone
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One Price One Price StrategyStrategy
• Knowledge of the economies of
scale available to the firm
• Information on competitive
prices; information on the price
that customers are ready to
pay.
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Flexible Pricing StrategyFlexible Pricing Strategy
• Charging different prices to different
customers for the same product and
quantity.
• Objective: To maximize short-term profits
and build traffic by allowing upward and
downward adjustments in price depending
on competitive conditions and how much the
customer is willing to pay for the product.
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Flexible Pricing StrategyFlexible Pricing Strategy
• Requirements: Have the information needed
to implement the strategy.
• Usually this strategy is implemented in one
of four ways: (a) by market (b) by product (c)
by timing (d) by technology.
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Flexible Pricing StrategyFlexible Pricing Strategy
• Other requirements include :
• a customer-value analysis of the product,
• an emphasis on profit margin rather than
just volume, and
• a record of competitive reactions to price
moves in the past.
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4. Price Leadership 4. Price Leadership StrategyStrategy
• This strategy is used by the leading
firm in an industry in making major
pricing moves, which are followed by
other firms in the industry.
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4. Price Leadership 4. Price Leadership StrategyStrategy
• Objective: To gain control of pricing
decisions within an industry in order
to support the leading firm's own
marketing strategy (i.e., create
barriers to entry, increase profit
margin, etc.).
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4. Price Leadership 4. Price Leadership StrategyStrategy
• Requirements:
• An oligopolistic situation
• An industry in which all firms are
affected by the same price
variables (i.e., cost, competition,
demand),
• An industry in which all firms
have common pricing objectives
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Source of Reference:
Subhas Jain, Marketing Planning and StrategyMarketing Planning and Strategy, Prentice
Hall International.