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8/3/2019 Marketing Trends in Pakistan 2
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Lecture 2: Marketing Tools and Implementation
Majid Aleem Date: 29/09/2011
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Core Scenario Pakistan has been ruled by dictators for half
its history
Political tug-of-war between civilians andsoldiers still continues. The chief threatcomes from outside parliament
militants opposed to Pakistan pivotal role inthe US-led war against terror.
Efforts to combat militancy are beingfrustrated close ties between some militant groups and
the state Inter Services Intelligence unit (Asper international Community).
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Strengths
Condemned for testing a nuclear bomb in
May 1998, Pakistan has since won Westernacclaim for its leading role in the US-led waron terror. Washington has lifted sanctionsand, in June 2004, President George W.
Bush named Pakistan a major non-NATOally.
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Weaknesses
Civilian institutions are weak in Pakistan.Parliament, comprising the National Assemblyand the Senate, has had its powers vastlyreduced during President Pervez Musharrafera which still continues as it is
Poor relations with India and other
neighbours. The two nuclear-armedneighbours have gone to war three times sincethey were partitioned after independencefrom colonial master Britain in 1947.
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Opportunities
Pakistan could build stronger civilianinstitutions through meaningful democraticreform. However, we believe these areunlikely for the time being.
Ongoing peace talks with India providePakistani leaders with an opportunity toease tension in the worlds most dangerousnuclear flashpoint.
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Threats
Escalating violence by militants opposed toPakistan's leading role in the US-led war onterror poses a key risk to stability.
Attacks on president and prime minister- a
concern for international businesscommunity
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Core Scenario
Economy has strengthened considerably due,
firstly, to wide-ranging reforms aimed atreining in the governments budget deficit
Assistance from foreign governments eagerto reward Islamabad joining the US-led
coalition against terror
Huge losses due to natural disasters
Rising Inflation
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Strengths A gradual tightening of monetary policy by
the State Bank of Pakistan shouldmoderate high inflationary pressures.
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Weaknesses As a result of the massive earthquake
hitting Pakistan in October 2005, Floods in2010 and 2011 economy suffering from veryslow growth
Subsidies to loss making, state-runenterprises continue to stretch publicfinances
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Opportunities
The lapsing in January 2005 of the WTOsMultifibre Agreement, which regulates theglobal textile trade, will provide Pakistanwith an opportunity to boost exports.
The local textile industry is competitiveenough to prosper in a free-tradeenvironment.
BUT WILL IT BE POSSIBLE?
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Threats
Pakistans military-backed/dependent
government lacks legitimacy and mayabandon economic reforms for fear ofalienating public opinion.
Persistently high global oil prices pose a
threat to Pakistans balance of payments.Pakistan imports more than 50mn barrels ofoil a year to satisfy local demand for fuelproducts and record-high prices have led towidening of the trade deficit.
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One of South Asias most liberal foreign
investment regimes.
Pro-market reforms during the 1990s openedmost sectors of the economy to foreign
participation.
One hundred percent foreign ownership is
permitted in the manufacturing sector,though ownership restrictions remain in place
in agriculture and services.
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Foreign firms are allowed to repatriate
capital, profits and dividends.
Security risks are the chief concern forinvestor with foreign-owned businesses
targeted by anti-Western militants in recentattacks.
Businesses must also contend with poorinfrastructure, bureaucratic bottlenecks and
widespread corruption. Ongoing reforms will
help here.
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Strengths Pakistan has one of the most liberal foreign
investment regimes in South Asia. One
hundred percent foreign equity is permittedin the manufacturing and infrastructuresectors.
Ongoing reform of Pakistans trade regimeis reducing tariff barriers. Duty on capitalgoods, plant and machinery notmanufactured locally was cut to just 5%from an earlier range of 5-25%.
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Weaknesses Failing infrastructure, bureaucratic delays
and widespread corruption are key
concerns for investors looking to dobusiness in Pakistan.
Intellectual property rights are poorly
enforced. Pakistan, a leading producer ofcounterfeit goods, was one of 36 countriesnamed on the Office of the US TradeRepresentatives Priority Watch List.
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Opportunities
Pakistan is committed to selling off state-owned assets
and a series of firms are expected to going under thehammer in the coming years.
Threats
Anti-western militants have targeted foreign-ownedbusinesses in recent attacks. A suicide bomber killedeleven French engineers employed by the NavalConstruction Directorate in May 2002 as they boarded abus in Karachi.
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3-4 years of strong growth
Resilience against shock and extra ordinary jerks
Rise in per capita income for US $ 503 in 2002 to US $ 847 in 2006
Robust Consumer spending
Substantial increase in private sector credit
Balance between fiscal deficit and growth
Medium Term Development Framework
Maintenance of external and domestic debt within limits
Reach to Global Capital Markets
Geo political situation post 9/11
Stable exchange rate
Higher foreign direct investment
Reduction in poverty level
Credibility of statistics
Sharp increase in prices of food items
Incompatible contributions of various sectors of economy in tax revenue.
Inefficiency in utilisation of development expenditure
High administrative costs
Perception gap between economic manager and people at large
Quality of governance
Record trade deficit
Concentration of export in restricted items and markets
High cost of doing business
Lack of focus on agriculture sector
Political instability
Shortage of skilled workforce
Energy crisis
Poor HDI indicators
Capacity constraints in Indian IT sector
Recent investment in IT sector
BPOs potential
Telecom and Media revolution
Geo political situation
Foreign Direct Investment
Investment in education and health
Political uncertainty
Issues in Balochistan and Northern Areas
Worsening of situation on Western borders
Anti Pakistan attitude in Afghanistan
Level of corruption
Broadening gap between Rich and Poor
Social unrest
PAKISTANECONOMY
Weaknesses
Strengths
ThreatsOpportunities
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Strengths
3-4 years of strong growth
Resilience against shock and extra ordinary jerks
Rise in per capita income for US $ 503 in 2002 to US $ 847 in 2006
Robust Consumer spending
Substantial increase in private sector credit
Balance between fiscal deficit and growth
Medium Term Development Framework
Maintenance of external and domestic debt within limitsReach to Global Capital Markets
Geo political situation post 9/11
Stable exchange rate
Higher foreign direct investment
Reduction in poverty level
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Weaknesses
Credibility of statistics
Sharp increase in prices of food items
Incompatible contributions of various sectors of economy in taxrevenue.
Inefficiency in utilization of development expenditure
High administrative costs
Perception gap between economic manager and people at large
Quality of governance
Record trade deficit
Concentration of export in restricted items and markets
High cost of doing businessLack of focus on agriculture sector
Political instability
Shortage of s
killed workforce
Energy crisis
Poor HDI indicators
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Opportunities
Capacity constraints in Indian IT sector
Recent investment in IT sectorBPOs potential
Telecom and Media revolution
Geopolitical situation
Foreign Direct Investment
Investment in education and health
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Threats
Political uncertainty
Issues in Balochistan and NorthernAreas
Worsening ofsituation on Westernborders
Anti Pakistan attitude in Afghanistan
Level ofcorruptionBroadening gap between Rich and Poor
Social unrest
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Hierarchy of goals and objectives
Organizational Goals and ObjectivesMarketing Goals and Objectives
Marketing Mix Goals and ObjectivesMarketing Mix Element Goals and Objectives
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What business are you in?
Mission statement
Statement of marketing strategy
Indicates product, market scope
Shows growth factor
Shows differential advantage
Shows management orientation
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Marketing Strategy DevelopmentRecognize and evaluate an opportunity
Market size and potentialKey competitors
Choose target marketDevelop Objectives for each opportunity
Develop Marketing Mix Strategy for each opportunityChoose Marketing mix elements
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Opportunity EvaluationReview of Requirements for Market Size
Review of Relevant Competitive Set
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Target Market Selection
Introduction to Market SegmentationReview of the Strategic OptionsEquivalent Behaviors as the Critical Variable
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Structure of Marketing Mix Strategies
Are all Mix elements equally important?Product as the keyExample using Product Life Cycle
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Generic Marketing Strategies
Cost Leadership Lower costs of production and distribution
Product Differentiation Unique product or brand
Focus Focus on customer needs in a few segments
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Product StrategiesProduct Mix Strategies
Market penetration versus market skimming
Quality
High
Medium
Low
Price
High Medium Low
Premium
Goods
Penetra-
tion
Super
Bargain
Over-
Pricing
Average
QualityBargain
Hit and
Run
Shoddy
Goods
Cheap
Goods
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Product Strategies
Product Market Growth Strategies
Market Penetration
(increase usage)
Product Development
(new uses)
Market Development
(new users)
Diversification
(new users, new uses)
Markets
Products
Old
Old
New
New
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Market Position StrategiesMarket Follower Strategies
Conscious Parallelism
Similar products, prices
Avoid unprofitable segments
Market Niche
Specialize in a very small group of customers
Concentrated segmentation strategy
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Market Position StrategiesMarket Leader Strategies
Increase Size of Total Market
Product-Market Growth Strategies Protect Market Share
Fortification
Assortment of brands, sizes
Innovation Best defense is a good offense
Counteroffensive Increase Market Share
BCG Antitrust constraints
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Market Position Strategies
Market Challenger Strategies
Frontal Attack Out-innovate leader
Tough to do, easier to defend
Flanking/Bypass Attack
Attack where leader is not looking
Find a new market segment
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Market Challenger Strategies
Price Discount Strategy
Buyers are sensitive to price Works if leader does not cut price
Cheaper Goods Strategy
Lower quality but much lower price
Vulnerable to still cheaper goods
Prestige Goods Strategy
Increase both quality and price
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Market Challenger Strategies
Cheaper Goods Strategy Lower quality but much lower price
Vulnerable to still cheaper goods
Prestige Goods Strategy
Increase both quality and price
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Attacker
(smaller)
Defender(bigger)
Position
Defense
Preemptive
Defense
Counteroffensive
Contraction
Defense
Flanking Defense
Mobile Defense
Flank Attack
Frontal
Attack
Encirclement
Bypass
Guerilla Attack
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Write a review of the article top ten barriers to
marketing planning according to the
guidelines provided in the course outline.
Due next week in class
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Prepare a report regarding the product/service
you chose during this lecture for Marketing
Strategy Elements and discuss theseelements in context of that product/service
Due next week in class