Chapter 2 (1)

Aijaz [email protected]

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Chapter-2

Direct Marketing Strategies

Strategic thinking deals with the formulation and implementation of a set of decisions, in order to realize a sustainable competitive advantage (manifested in long-term above average profitability).

The characteristics of successful strategies are…..

ö Clear objectives (e.g., how well does everybody in your company know what the goals are? how consistent are these goals across the company?)

ö Good understanding of the external environment (e.g., how solid is your insight in what the customers want, the competition aspires, the context may have in store for you?)

Nature of Strategic Marketing

ö Profound appreciation of internal strengths and weaknesses (e.g., when was the last time you made a rational analysis of your resources vis-à-vis those of the competition?)

ö Effective implementation (e.g., once a decision has been taken, how good is the company in making everybody walk and talk in a coordinated direction?)

Source: http://quizlet.com

Sustainable Competitive

Edge

ö A long-term competitive advantage that is not easily duplicable or surpass able by the competitors.

ö Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry.

ö Examples: Easy Paisa, Orient Entertainer, Volvo Car etc……….

Source: Wikipedia

Steps to Create a Competitive Edge ?

Source: Youtube

The Strategic marketing

planning process

Situation Analysis

ö Extent of Demand

ö Nature of Demand

ö Strategy Analysis

ö Life Cycle Stage

ö Macro-Environmental Trends

ö International Issues

ö Strengths and Weaknesses

ö Nature of Competition

Problems, Opportunities, and Threats

ö Problemsö Opportunitiesö Threats

Objectives

Alternativesö Marketing Alternativesö Evaluation of Alternatives

Decisionö Recommendationsö Implementationö Monitoring

Extend of Demand

Size & Potential of Global Market

Size & Potential of Regional Market

Size & Potential of National/Local Markets

e.g Actual Size and Potential of;ö Beverages Products,

öHygiene ProductsöAviation Market Size etc

Nature of Demand

Segmentation

ö Identification of Segments

ö Reviewing of Segment’s Demographics, Psychological characteristics etc

ö What key Competitors are covering the Segment and how they have segmented it

Decision Making

ö Who, What, Where, Why, When make decisions ?

ö Factors that buyer consider before making decision

ö Frequency of purchase decision made or repeated

ö Who Influence the decision makers

Strategy Analysis

Marketing Strategy

Marketing strategy is a process that allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. *

Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives. *

ö Does firm have an integrated marketing strategy ?ö Is it made up of individual product, price, promotion and distribution

strategies ?ö Is the role selected for each marketing mix element with the overall

program objectivesö Are adequate resources available to carry out marketing strategy ?ö Are resources committed to target markets according to the importance

of each ?

Source: Wikipedia *

Product Strategy

Product strategy is focused on determining what features to invest in developing. Strategy is more than just a set of plans. As a product manager, your job is to analyze the results of those decisions on an ongoing basis to ensure your plans are on track.*

ö Is the product mix geared to the needs of the firm seeks to address for each product market?

ö What branding strategy to be usedö How to position the brand against competitorsö The firm need to evaluate the product offer and performance on regular

basisö If necessary, firm need to review and make decisions regarding any

addition, deletions and/or modifications according to market feed back

*Source: brandingstretegyinside

r.com

Packaging Strategy

The design of your packaging determines if your product will make it into the shopping cart or not. In every product category, perfumes and apparel to laundry soap and toilet paper, successful packaging design is about connecting emotionally. If the product packaging doesn’t reach out and instantly connect with the consumer, it’s game over.*

Functional Aspect» Safety features such as for preservation of Milk and Juices

in Tetra Packs etc. » Carrying (Such as handles on cooking oil bottles)» It must be easy to remove» Packaging should promote your product's benefits and

reinforce your brand.

Aesthetic Aspect» The packaging "must stand out from the crowd" and be

different from your competitors. » Design, Appearance, Outer look, Color Scheme etc *Source:

brandingstretegyinsider.com

Pricing Strategy

Pricing strategies for products or services encompass three main ways to improve profits. These are that

ö The business owner can cut costs ö or sell more, ö or find more profit with a better pricing strategy.

When costs are already at their lowest and sales are hard to find, adopting a better pricing strategy is a key option to stay viable.*

ö How do the firm’s price strategy and tactics compare to those of its competition?

ö Does price play an active or passive role in product or service positioning ?

ö The firm must understand the Buyer’s price sensitivity for a given product ?

*Source: Wikipedia

Distribution Strategy

ö What distribution means and ways to adopt?ö How well does each distribution alternative reach its target market ?ö How to manage each distribution alternative?ö What improvements needed ?ö Costs to reach customers… is it acceptable ?ö Time to reach customers… is customer satisfied ?ö Handling of product during transit

It's imperative to know how you will satisfy the demand for your product once you have created desire in the hearts of your consumers. Planning your product distribution strategy should be considered during the product development stage.

Promotional Strategy

There are many different types of promotional strategies a company can implement, and promotional products are just one of them. You

need to have complete campaign and strategy in place.

ö Pull Strategy A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product.

ö Push Strategy A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product.

ö What promotional tool/alternative to be used ?ö Go for cost effective alternativesö How effectively DM tool (Brochure, catalogue etc) is communicating message

?

"Taking the product to the customer"

Examples of push tacticsöTrade show promotions to encourage retailer demand öDirect selling to customers in showrooms or face to face öNegotiation with retailers to stock your product öEfficient supply chain allowing retailers an efficient supply öPackaging design to encourage purchase öPoint of sale displays

""Getting the customer to come to you"

Examples of pull tacticsöAdvertising and mass media promotion öWord of mouth referrals öCustomer relationship management öSales promotions and discounts

Life Cycle stage

Make an explicit assumption about, where a product or service is in its life cycle? Four basic stages—introduction, growth, maturity, and decline—through which a successful product progresses.

This might refresh u!!!

Macro Environmental

Trends

Socio-Cultural Environment

Source: Google

Social Taboos

Gender Roles

Religious Conservatism

Family Structure

Personal Choices

Changing Life Styles

Consuming Patterns

Changing Demographics

The Social-cultural environment is made up of institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors. Certain social-cultural characteristics can affect marketing decision-making.

Demographic Environment

Source: Google

Demography is the study of human populations in terms of size, density, location, age, sex, race, occupation, and other statistics.

Demographic trends are constantly changing. Some interesting ones are..

Political and Legal Environment

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The legal & political environment includes laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society.

ö Governments develop public policy to guide commerce--sets of laws and regulations limiting business for the good of society as a whole.

ö Almost every marketing activity is subject to a wide range of laws and regulations. Some trends in the political environment include:

Technological Environment

The technological environment includes forces that create new technologies, creating new product and market opportunities.

ö Technology is perhaps the most dramatic force shaping our destiny

ö New technologies create new markets and opportunitiesö The time between idea, invention, and commercialization is

decreasing ö There seems to be almost unlimited opportunities being

developed daily. Consider the expanding fields of health care, the space shuttle, robotics, and biogenetic industries.

ö The challenge is not only technical but also commercial--to make practical, affordable versions of products.

ö The use of data bases is the wave of the future in direct marketing

Economic Environment

Source: Google

ö Global economic environment is undergoing a dramatic transformation

ö World wide technological change is resulting in more worker productivity and less need of workers, causing massive social and economic dislocations

Competitive Environment

Source: Google

The best performing company will be the one that is strong on what customers value and that can sustain the differential advantage of its competencies over time.

International issues

Direct Marketers needs to be vigilant about changes in international markets opportunities, including shifts in demand and international competitive trends

What issues keep marketers awake at night?

Source: Youtube

Strengths and Weaknesseső Marketing Skillső Production Skillső Management Skillső Financial Skillső Research and Development Skills

Nature of Competitionő Marketers must understand how buyers evaluate alternative

products and services relative to their needs by considering what factors in a market are critical to success and whether the firm is strong in those areas

ő Quantifiable Behavioral ObjectivesStrategic objectives are invariably behavioral. They are concerned with an immediate, quantifiable response such as an order for a product, a request for information, or a sales call. This should be specific about actionable results: an increase in the number of orders or the number of units sold. With these levels set a program can be evaluated as to whether the objectives are being met.

ő Unquantifiable Non Behavioral ObjectivesNon behavioral objectives include product image enhancements or attitudinal changes.

Objectives

Alternatives are the strategic options or actions that appear to be viable solution to the problem a firm identifies in strategic marketing plan.

ö Marketing AlternativesDirect Marketing alternatives should exemplify the result of making well supported and well reasoned marketing decisions. Generally if the situation analysis is strong; if the problems, opportunities and threats are well defined; the objectives are well stated; and if the alternatives are logically determined and supported , the result should be a good (and defensible) decision.

ö Evaluation of AlternativesThe 1st test of any marketing alternative is whether or not it is reasonable. The financial analysis of alternatives is critical aspect of any strategy evaluation because the goal of all direct marketing activities is financial. Each alternative should address the overall strategy and related marketing mix and program decisions (along with marketing objectives and target market selections) to show that the alternative was seriously considered.

Alternatives

The last part of developing the strategic marketing plan involves decision making based on the analysis of the firm and its products and/or services. It has two parts 1-Recommendations and 2- issues involves in Implementation and monitoring.

ő RecommendationsThe marketeers should avoid recommending a course of action beyond a firm’s means. No organization can possibly pursue all the strategies that could potentially benefit it. The real test for a strategy decision is how reasonable the strategy appears to those who review and evaluate it. Does it appear to be based on sound assumptions? Are the expectations for results realistic? Are the resources needed for strategy available ? Is it the best option for how those resources can be used ? Are the mechanisms in place to implement and monitor the strategy ?

Decision

ő Implementation

The implementation section contains the marketing plan specifics, including all elements in the marketing mix, assigned tasks, and resource allocations. The implementation plan shows that the decisions are both possible and practical.

ő MonitoringThe monitoring part of the decision section should address strategy and control issues. The aim is to identify what monitoring and control systems to use when implementing the strategy. Direct marketing is particularly good at strategy and program monitoring because It allows the firm to know who responded to an offer and under what circumstances.

Thank You