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8/3/2019 Market as Startegy
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MARKETING AS STRATEGY
PRESENTED:
PROF: PRASANNA SALVI
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GROUP # 9
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SHERWIN.M (M1025)
NIKHIL.P (M1033)
PREMLATA.R (M1042)
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CONTENT
• CHP 5
• CHP 6
• CHP 7
•
CHP 8
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CHAPTER 5
FROM BRANDEDBULLDOZERS TO GLOBALDISTRIBUTION PARTNERS
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INTRODUCTION
• Over the last two decades ,there have been remarkable
shift in power down string
•
Increasing power of resellers
• Most significant M&A activity has been cross-border
• Since manufacturer price for the same product vary by as
much as 60% among countries
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CONT….
• Company like Wal-Mart using global sourcing to get the
best product worldwide
•
The retailers adopting of global pricing policy candramatically effect on manufacturer
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THE CHALLENGE FROM
GLOBAL RETAILERS
• The growth retailing has been substantial
• Example : Carrefour and Metro operate more than 24
countries
• Tesco and Wal-Mart operate in more than 10 countries
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THE RETAILER CHALLENGE TO
MANUFACTURERS
• The emergence of global players has transformed retailing into a
sophisticated, technologically intensive and systems driven
business
• Powerful global retailers are demanding more from their
branded multinational suppliers
• In every part of the world, global customer expect coverage,
speed, consistent and high quality
• They are pushing manufacturer to low price, more promotion,
slotting allowances
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THE CHALLENGES OF GLOBAL
INTEGRATION FOR RETAILER
• You must adapt your food and other product to the local
culture
•
While they many make more decisions centrally on privatelabels and category management
• Regrettably for manufacturer, retailers recognize that
global integration is their key challenge
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DEVELOPING A RELATIONSHIP
MIND-SET
• To implement global account management, suppliers and
their global retail partners must develop a shared
relationship building mind-set
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TWO TOUGH COMPANIES
LEARN TO DANCE TOGETHER
• World has it that P&G and Wal-Mart are two tough
negotiators
•
Over the year P&G established its reputation as a “self -aggrandizing bully of the trade”
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CREATE TRUST, NOT FEAR
• P&G and Wal-Mart partnership illustrates that exploiting
power in distribution channel pays in the short run not in log
run for three reasons
I. Extracting unfair concessions
II. When company systematically exploit their advantage, the
victim ultimately resist by developing countervailing power
III. Only by developing mutual trust and collaboration closely
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ADOPT FAIRNESS PRINCIPLE IN
RELATIONSHIP
• To develop trust, the more powerful party must treat the weaker
one fairly
I. Distributive justice
II. Procedural Justice
Communication
ImpartialityFamiliarity
Explanation
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IMPLIMENT EFFICIENT
CONSUMER RESPONSE
• In which the retailer and manufacturer work closely
together to eliminate excess cast and serve the consumer
cheaper, faster and better
• Through ECR retailer consulting firm, was commissioned
to document the potential saving
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CUSTOMER CENTRIC GLOBAL
ACCOUNT MANAGEMENT
• Many companies moving fast on global account
management
•
Most manufacture are reactive rather than proactive
• Marketing plans and supply chains must become customer
centric instead of country centric
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INFORMATION SYSTEMS
TRANSFORMATION
• Major multinational company go crazy because his people
could not tell him, with any degree of accuracy
•
Information systems transformation very important forMNC company
• EX: P&G and Wal-Mart use information systems
transformation
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HUMAN RESOURCES
TRANSFORMATION
• Coordination
• Co-location
•Composition
• compensation
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CHAPTER 6
FROM BRAND ACQUISITIONSTO BRAND RATIONALIZATION
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INTRODUCTION
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BRAND PROLIFERATION IS
COSTLY
I. Insufficient differentiation
II. Inefficiency
III. Lower market power
IV. Management complexity
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THE CHALLENGE OF BRAND
RATIONALIZATION
• Deleting brand is easy but retaining their sales and
customer is not
• Therein lies of managerial dilemma: How can brand
portfolio be pruned losing the customer and sales revenue
of doomed brand?
• To stem such a losses manager often try to merge two
brands instead of deleting one
• Example: Kal Kan and Crave become a Whiskas.
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THE BRAND RATIONALIZATION
PROCESS
I. Conduct a Brand Portfolio Audit
II. Determine the Optimal Brand Portfolio
III. Select Appropriate Brand Deletion Strategies
IV. Develop a Growth Strategy for the Surviving Brand
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TOP DOWN PORTFOLIO
BASED APPROACH ATUNILEVER
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FROM MARKET-DRIVEN TOMARKET-DRIVING
CHAPTER: SEVEN
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MARKET DRIVEN
• Determined by or responsive to market forces
• Market-driven organizations have a thorough
understanding of customers and potential customers,
including their changing needs and wants
• A key activity for a market-driven organization is
information gathering
• Emphasis must be placed on an organizations ability to
respond to environmental changes.
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MARKET DRIVING
• Dr. Philip Kotler identifies as the fourth major market
orientation
• It focuses on playing a different game, of breaking the rules,
rather than just being better
• “Market-driving strategies define how a firm will embrace
innovative changes in the industry logic and business system to
grow its profit and industry’s demand from marginal and non-
customers,”- Prof. Greg Carpenter of Kellogg Graduate School
of Business
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THE MARKET-DRIVING FIRM
Market Driving IKEA Style
• Ingvar Kampard opened his furniture retailer IKEA in 1950’s
• Turnover of 11 billion euros
• It focussed on young people and young families
• It offers clean Scandinavian design and image, tremendous
assortment, immediate delivery, a pleasant shopping atmosphere
and low prices in exchange for self-service, self assembly, and
self transportation of purchases
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CONDT..
• The key to the success of market-driving firms is that they
create and deliver a leap in benefits, while reducing the
sacrifices and compromises that customers make to receive
those benefits
• They create a product or service experience that vastly
exceeds customer expectations and existing alternatives,thereby elevating the industry landscape
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FOUR ORIENTATIONS TO THE
MARKETPLACE
• Market Driving
• Sales Driven
•
Market Driven
• Customer Driven
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HOW MARKET-DRIVING FIRMS
SEIZE ADVANTAGE
• Lead by Vision Rather Than by Market Research
– Swatch research
–
FedEx
– Sam Walton’s initial attempts at opening stores were
underwhelming
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CONDT..
• Redraw Industry Segmentation
– Destroy the industry segmentation that existed and replace it
with a new segments
– Aravind eye hospital did not accept the segmentation
between rich and poor
– Southwest airlines destroyed the segmentation between
ground transportation and airlines
– Wal-Mart demonstrated that small rural towns could
support huge discounts
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CONDT..
• Create New Price Points for Value
– Swatch, Aravind Eye Hospital, SW Airlines all set
prices much lower than those previously available forsimilar products
– SW Airlines price=ground transportation
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CONDT..
• Educate Customers for Sales Growth
– Task for market driving firms is not to sell but rather to educate
the customer on the existence of, and how to consume, their radical
value propositions
• Aravind Eye Hospital must educate that their vision can in fact
be restored and the surgery is available for them free of charge
• IKEA had to teach the benefits of transporting furniture home
for self assembly instead of buying it preassembled and
delivered
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CONDT..
• Reconfigure Channels
– Reconfigure your channel that yield a unique businesssystem
• FedEx transports packages using its own planes via
a “hub and spokes” air freight system • Benetton subcontracts simple, non essential tasks,
only quality-maintenance task (dyeing) are done bythem
•
Wal-mart insists that P&G and other supplierseliminate wholesalers, adopt edlp and establishelectronic links with its stores, all to eliminateconsiderable costs
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CONDT..
• Exploit the “ Buzz Network” for Brand Attachment
– SW Airlines boasts “We have a lot of ambassadors out
there, our Customers. – Nike did not run a single national television ad until it
reached $1 bn in sales. It used “word-of-foot
advertising” by getting the best athletes to wear its
products.
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CONDT..
• Overwhelm Customer Expectations
– Poor patients of Aravind Eye Hospital never expected to
regain their sight, since surgery was out of their
geographical, economical & psychological grasp
– WalMart although provides good services, but whenever it
rains in Houston, an umbrella-weilding service rep walks
customers to their cars
– SW Airlines had fewest customer complaints, fewest delays,
and fewest mishandled bags between 1987-1993
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BARRIERS TO MARKET
DRIVING IN INCUMBENT FIRMS
• Market-Driving Ideas Are Risky
• Market-Driving Ideas Consistently Lose to Incremental
Innovation• Market-Driving Ideas Cannibalize Existing Business
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THE MARKET-DRIVING
TRANSFORMATION PROCESS
1. Develop Processes to Identify Hidden Entrepreneurs
2. Allow space for Serendipity (Luck)
3. Select and Match Employees for Creativity
4. Offer Multiple Channels for New Idea Approval
5. Establish Competitive Teams and “Skunk Works”
6. Cannibalize Your Own Products
7. Encourage Experimentation and Tolerate Mistakes
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FROM STRATEGIC BUSINESS
UNIT MARKETING TOCORPORATE MARKETING
CHAPTER 8
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INTRODUCTION
• Marketing strategy focuses on business units and ignores
the role of marketing at corporate level whereas, the CMO
position is emerging in companies as diverse as Coca-Cola,
Nokia, KPN Qwest, Pizza Hut and Reuters.
• But still hesitate to appoint CMOs or build a large
corporate marketing function because they do not knowwhether marketing can add any significant value from the
corporate centre.
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THE ROLE OF THE CORPORATE
CENTER• Portfolio choices:
– BCG Matrix
– General Electric Matrix
• Portfolio relationships:
– Disney searches for synergies within its portfolio.
• Parenting skills:
– Parenting advantage exists if the parent has uniquecapabilities, resources , skills, expertise, or access toimportant stakeholders that can help the individual businessunits.
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CONDT..
1. Leverage product platforms:
• Wal – Mart entry into China
• Toyota Camry, Lexus ES300, Sienna minivan,
Toyota highlander and the Lexus RX300 SUV’s
have shared interchangeable parts and a common
platform across generation.
2. Exploit brand platforms:
• Corporate marketing is the steward of the corporate
brand, it develops, refines, and protects the common
brand heritage and strengthens brand equity.
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CONDT..
3. Extend channel platforms:• Ford motor’s luxury brands of Volvo, land rover, and
jaguar could combine their distribution points andconsolidate into larger dealerships rather than individualdealers for each brand.
4. Nurture customer as platforms:
• Citibank & Amazon
5. Develop markets as platforms:
• CM can initiate regional consolidation of marketing staff toexploit economies of scale and scope.
• B&Q China
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EMERGING MARKETS AS A
GROWTH PLATFORM• Targeting growing masses in emerging markets:
– Focus on the emerging markets of Asia, Latin America,
and Africa
– The 2.5billion in China, India& Indonesia account for
more than 40 % of the world population.
– Coca-cola& Honda
• Keep the value proposition simple, and keep it cheap:
–
A typical value proposition of multinational co in theemerging markets is usually a global product with
slight modifications.
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CONDT..
• Reinvent the three Vs model for the model for the masses:
– Reinventing the value networks that underlie the
current industry business models at much lower costs.
– Banco Azteca (bank in Mexico)
• Hindustan Lever:
– An emerging market winner
Indian mass market, Indian consumersProject shakti
– Transfer best practices across markets
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G C S O
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BUILDING CUSTOMER-
FOCUSED CAPABLITIES
• A customer-focused organization has a customer
orientation (strategy & culture), a customer-driven
configuration (organization and processes), and customer
investments (competences and resources).
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CONTD..
1. Customer-Focused Strategy Map:
1. Strategy is asking the right question
2. Customer- Focused Processes Map:
1. New Product Development Process
2. Order Fulfillment Process
3. Customer Relationship Management Process
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CONDT..
3. Customer- Focused Organization Map
1. Organize Around Customer
2. Specify Measures And Rewards Customer-OrientedBehaviors
3. Empower Employees To Resolve Customer Problems4. Customer- Focused Culture Map:
1. Create a Customer-Driven Mission
2. Involve General Managers With Customers
3. Manipulate Symbols To Reinforce The Primacy Of Customers
4. Develop Norms Of Customer Obsession
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CONDT..
5. Customer- Focused Competences Map:
1. Continuously learn about customers
2. Benchmarking marketing
3. Develop marketing talent
4. Invest in customer-focused systems6. Customer- Focused Resources Map :
1. Understanding the Role Of Marketing Metrics
2. Define Marketing Matrix
3. Conduct Marketing Experiments To Demonstrate ReturnOn Investment
4. Confront Marketing Mix Allocations
5. Allocate Adequate Resources To Marketing
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THE CHALLENGES OF BEING A
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THE CHALLENGES OF BEING A
CUSTOMER- FOCUSED FRIM
• CM to define what it needs from all other functions, what
it will contribute and where collaboration is necessary.
– Making Market Transformation Happen
– The CEO As Commander, Chairman, Coach, And
Catalyst
– Stimulate Great Conversations Around Customers
– Marketing as a change agent
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THANK YOU