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Driving Marketing Strategy: Concepts and Structure

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Marketing concepts and structures provide quick reference points as to default or initial options for marketing strategies. A brand’s market position (leader, challenger, follower, nicher, loser), product life cycle (intro, growth, maturity, decline) and market life cycle (emergence, growth, maturity, decline). The applicabililty of these concepts will vary on real-life marketing situations but these are useful guides. Why reinvent the wheel? Adapt the wheel to your brand’s specific needs.
Group exercises and a series of videos (downloaded from youtube) focusing on the 10 year tuna wars (and the collateral reactions in the corned beef segment) were also used to demonstrate and apply the concepts.

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Driving Marketing Strategy: Concepts and Structure

  1. 1. CP Lights Camera Action Directing Marketing Strategy (Concepts and Structure) Prof. Remigio Joseph A. De Ungria Strategic & Marketing Management Department Ateneo Graduate School of Business
  2. 2. CP Lights Camera Action What is this day about? (2 year MBA) Strategy Marketing Directing
  3. 3. CP Lights Camera Action What is this day about? (Race 42k) Strategy Ready Marketing Get Set Directing Go
  4. 4. CP Lights Camera Action What is this day about? (Warfare) Strategy Ready Ready Marketing Get Set Aim Directing Go Fire
  5. 5. CP Lights Camera Action What is this day about? (Movie Epic) Strategy Ready Ready Lights Marketing Get Set Aim Camera Directing Go Fire Action
  6. 6. CP Lights Camera Action Provide CFPI stakeholders (YOU) Structure/ Framework To Craft Brand Strategies Module Objective
  7. 7. CP Lights Camera Action Additional “customer” musts: For Non- CFPI brands- Case Studies For CFPI brands Market leader – defend share & expand category Not market leader – how to compete vs leaders (Bear Brand, TJ Hotdogs, Mega Sardines)
  8. 8. CP Lights Camera Action Market Positions & Shares Concept 1
  9. 9. CP Lights Camera Action In Chess & Consumer’s Minds Each position or space occupied by only 1 object or brand (most is 2) Prime space (PS), profitable, powerful (think center/ corner) 1. Occupy PS 2. Defend PS 3. Grab PS from your opponent at a lower cost to you (pawn for a queen)
  10. 10. CP Lights Camera Action Brands are constantly battling for consumer’s minds...
  11. 11. CP Lights Camera Action 3 Mind Reactions to What Brands Say: Wow! You are My Brand! Good Idea!Really?
  12. 12. CP Lights Camera Action Strong occupied positions... What brand has them? Olympic Energy Drink Love ko to 887-8888 Triathlete UAAP Cheer Dance Champions
  13. 13. CP Lights Camera Action There are 4 (sustainable) market positions. Leader Challenger Follower Nicher Loser (not a sustainable position)
  14. 14. CP Lights Camera Action There are 4 (sustainable) market positions with hypothetical shares... Leader – 40% Challenger – 30% Follower – 20% Nicher – 10% Loser (not a sustainable position) - < 1%
  15. 15. CP Lights Camera Action Groupwork Guidelines 1. Use the template 2. Dont be limited by the template 3. Customize those in ( ) 4. Aim to contribute 5. Aim to win the group competition
  16. 16. CP Lights Camera Action #1. Identify the brands for the different positions for your assigned CFPI brand #2. Choose a non-CFPI category or industry. Ideal choice would be where the leader is relatively new. Identify the brands like in #1 (To avoid duplication, announce your choice!) #3. From your 2 lists, generate at least 2 insights about market positions & behavior Groupwork #1 (15 minutes): Market Positions & Share Guess-timates
  17. 17. CP Lights Camera Action (Color & CFPI brand) Group (What is your insight #1?) Position CFPI Non CFPI CATEGORY Leader Challenger Follower Nicher Loser (What is your insight #2?)
  18. 18. CP Lights Camera Action Sample filled up template
  19. 19. CP Lights Camera Action There are 4 (sustainable) market position. Each position has default strategic options. Leader Challenger Follower Nicher Loser (not a sustainable position)
  20. 20. CP Lights Camera Action Market Leaders must EPI Not HAPPY
  21. 21. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases (usually) LEADS Price changes New Product Introductions Distribution Coverage Promotional Intensity (What do you notice about the above?) Lead in 4Ps
  22. 22. CP Lights Camera Action Marketing Mix 4 P’s mean more! 22
  23. 23. CP Lights Camera Action Market Leader EPI on Current Market
  24. 24. CP Lights Camera Action Market Leader EPI 1Expands,
  25. 25. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects
  26. 26. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases
  27. 27. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases
  28. 28. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 1. Expand Total Market Demand A. New Customers A. Not Using It (market penetration) B. Never Used It (new market segment) C. No Access to It (geographical expansion)
  29. 29. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 1. Expand Total Market Demand A. New Customers 1. Not Using It (market penetration) 2. Never Used It (new market segment) 3. No Access to It (place expansion) B. More Usage 1. Amount (eg. Larger Packaging, Discounts on large sizes) 2. Frequency (eg. Daily shampoo, every meal Coke) 3. New ways to use (Star kanin)
  30. 30. CP Lights Camera Action Market Leader LEAPS! Case Study: Philips Lighting (As Country Marketing Manager) Initiated: Price changes: Increase or Decrease New Product Introductions: CFL, LED Distribution Coverage: MT and hardwares Promotional Intensity: TV & car raffles
  31. 31. CP Lights Camera Action Curious Case of 3 Lighting Products (from the Market Leader)
  32. 32. CP Lights Camera Action 2009: 13 million CFLs swapped with incandescent Cost to govt: $18 Million Savings of govt: $ 100 Million in Fuel Costs $ 450 Million deferred plant construction
  33. 33. CP Lights Camera Action Curious Case of 3 Lighting Products (All 4Ps pointed to rapid adoption) 85% saved 20% saved Base P30 P 100 P200
  34. 34. CP Lights Camera Action Curious Case of 3 Lighting Products Government wont do it (ban incandescents) Philips tried to lead by not selling it but lost share Modern Trade led it Manufacturers realized the old look was hard to replace
  35. 35. CP Lights Camera Action Customer must find worth and value in the innovation (example: technology)
  36. 36. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 2. Protect Market Share. • How? continuous innovation • Avoid incorrect customer orientation/ focus • “Tyranny of the served market” • Shape the market to your own interests (know others do too) • Dont be the best player. Change the rules of the game.
  37. 37. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases
  38. 38. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases
  39. 39. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases
  40. 40. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases
  41. 41. CP Lights Camera Action Needs are still basic, universal human requirements. Respond to 6 Types of needs: 1. Stated 2. Unstated 3. Real 4. Delight 5. Secret 6. Unknown Basic needs have not changed.
  42. 42. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 2. Protect Market Share A. Proactive Marketing 1. Reactive (Meet Stated Need) 2. Anticipate (Look Ahead to Future Need) 3. Creative (Market-Driving. Discover New Solutions to Unstated and Unknown Needs) Discuss: C2 drink, Walkman, Sun Cellular, Uber
  43. 43. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 2. Protect Market Share B. Defensive Marketing 1. Position: Own most desirable space (Tide clean, Google search)
  44. 44. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 2. Protect Market Share B. Defensive Marketing 1. Position: Own most desirable space (Tide clean, Google search) 2. Flank: outposts (ex. price brands) to protect weak flank or support a possible counterattack
  45. 45. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 1. Position: Own most desirable space (Tide clean, Google search) 2. Flank: outposts to protect weak flank or support a possible counterattack 3. Preemptive defense (pre-announcement, guerilla, beta) 4. Counteroffensive (after attack, counter frontally or at flank: lower prices, pre-announce sale or upgrade, lobby regulators)
  46. 46. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 2. Protect Market Share B. Defensive Marketing 5. Mobile- stretch domain to new territories (diversify)
  47. 47. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 2. Protect Market Share B. Defensive Marketing 5. Mobile- stretch domain to new territories (diversify) 6. Contraction (strategic withdrawal)
  48. 48. CP Lights Camera Action Market Leader EPI 1Expands, 2Protects & 3Increases 3. Increase Market Share (Buy?) especially when market is not growing fast enough A. Acquire Competitors B. Increase Capacity or Distribution C. Massive Promotions D. Forward Integration (Captive Market)
  49. 49. CP Lights Camera Action Market Challenger ATTACKS Leaders (primarily) & others
  50. 50. CP Lights Camera Action
  51. 51. CP Lights Camera Action 5 Challenger Attack Strategies Market Challenger ATTACKS Leaders (primarily) & others
  52. 52. CP Lights Camera Action 1. Frontal: 4Ps match 2. Flank: if limited resources, find weak spot, unserved markets & needs 3. Encirclement: with superior resources, multiple attacks 4. Bypass: easier markets thru diversification (products, geography, technology) 5. Guerilla- small, interminent, selective, harassment, footholds Market Challenger ATTACKS 5 Strategies
  53. 53. CP Lights Camera Action Case Discussion Group Work: Best answers win! Once upon a time, Mang Inasal was growing rapidly and aggressively attacking Jollibbee’s Chickenjoy market share 1. What was Mang Inasal doing right? 2. Why cant Jollibee counterattack frontally? 3. Why did Mang Inasal (and earlier Chowking) sell out to Jollibbee despite their seeming success?
  54. 54. CP Lights Camera Action “Product imitation might be as profitable as Product Innovation” -Theodore Levitt, “Innovative Imitation Market Followers Dont Rock the Boat Profitably imitating Imitation avoids costs of 1. New product development 2. Market & consumer education 3. Channel development 4. Market research ** Risk takers are “sometimes” rewarded with market leadership
  55. 55. CP Lights Camera Action “Follow the leader” is common in industries: 1. Capital intensive 2. Homogenous-product 3. Little opportunities for product/ image / service differentiation 4. Price sensitivity is high Market Followers Dont Rock the Boat Profitably imitating Examples: Moldex pipes, Pag-Asa Steel, SM Bonus rice
  56. 56. CP Lights Camera Action 1. Counterfeiter (100%)- thru bad sellers (ex. Fake Nike in Greenhills sold at Nike price) 2. Cloner (90%) – slight variation on name & packaging to avoid lawsuit; buyer beware (Roles not Rolex; Frosen instead of Frozen Disney) 3. Imitator (<90%) – differentiated in packaging, advertising, pricing, location (“Class B” branded) 4. Adapter (<50%)- introduces improvements (a reputable company’s option. Apple did it with ipod vs Creative and iphone vs. other smart phones. Eight O Clock vs. Tang, _____ vs Kraft. ) ** the copy percentages cited here are representative numbers created by Professor Bong to facilitate learning Market Followers COPY the LEADER 4 Broad Strategies/ “% Copy**”
  57. 57. CP Lights Camera Action 1. Keep Costs Low 2. Enter Markets as they Open Up 3. Keep Existing Customers Loyal and Win New Ones 4. Bring some degree of competitive advantage to its target markets 5. Dont invite competitive retaliation Market Followers Dont Rock the Boat What Followers Must Be Able to Do Examples: Moldex pipes, Pag-Asa Steel, SM Bonus rice
  58. 58. CP Lights Camera Action P&G – for its brands GE- Jack Welch- BU must be #1 or #2, or else Japanese companies often take long term view 1. American companies- only end result is important 2. To Japanese- the process and result are both important Market Followers Not a Profitable Option for Some Leading Companies
  59. 59. CP Lights Camera Action Choose: Big fish in small pond is better a small fish in a big pond Market Nichers Be #1 in a Small but Feasible Market
  60. 60. CP Lights Camera Action Choose: Be on a crowded market or be alone in a blue ocean Market Nichers Be #1 in a Small but Feasible Market
  61. 61. CP Lights Camera Action Market Nichers Have market or time-bound opportunities Some markets, for some time Are too small for Market leaders and challengers But times can change rapidly...
  62. 62. CP Lights Camera Action Nichers or adapters? Who adapted who?
  63. 63. CP Lights Camera Action Sensodyne- had to permanently drop price by 25% to respond to Colgate Sensitive? Sensodyne Freshmint Print Ad, Philippine Daily Inquirer, Feb. 10, 2011
  64. 64. CP Lights Camera Action Market Nichers Specialize in at least 1 thing 1. End users (Chinese speaking, high net worth) 2. Vertical level: (collector of used bottles) 3. Customer size (accumulators of tiangge and trade events, races) 4. Specific customer (SM affiliates only) 5. Geographic (department store in far flung provinces)
  65. 65. CP Lights Camera Action Market Nichers Specialize in at least 1 thing 6. Product or product line (“battery” retailer) 7. Quality price (low or high end) (“Mercedes Benz repair shop” vs. “shops for jeepneys”) 8. Product or product line (“battery” retailer) 9. Job-shop (dressmakers, made to order furniture) 10. Service ( tow trucks) 11. Channel (selling through network marketing only)
  66. 66. CP Lights Camera Action Product Life Cycle Concept 2
  67. 67. CP Lights Camera Action 2016: Barbie is 57 and politically correct and socially acceptable
  68. 68. CP Lights Camera Action PLC means: 1. Products have limited life 2. Stages are distinct 3. Profits rise and fall 4. Different strategies for each stage
  69. 69. CP Lights Camera Action In what product life cycle stage is your brand?
  70. 70. CP Lights Camera Action Competition has their own PLC. What is their stage?
  71. 71. CP Lights Camera Action There is a point where profits/losses are not worth the trouble...
  72. 72. CP Lights Camera Action Re-investing in the brand can reverse the decline. No guarantees...
  73. 73. CP Lights Camera Action What brands hope to do with their PLC... Resume growth, delay decline, stretch time #forever young!
  74. 74. CP Lights Camera Action The time element is a key strategic criteria whether to enter, re-invest or divest
  75. 75. CP Lights Camera Action
  76. 76. CP Lights Camera Action
  77. 77. CP Lights Camera Action Market cycle trumps PLC (Emergence = Intro)
  78. 78. CP Lights Camera Action Market Life Cycle of Tech Categories…
  79. 79. CP Lights Camera Action Famous Brands that We Know “PLC” Case Studies Assumes that all things being equal Share Prices provide Meaningful Insights About the Brand
  80. 80. CP Lights Camera Action Instantaneous data are important but...
  81. 81. CP Lights Camera Action Trends provide more insights...
  82. 82. CP Lights Camera Action What happened to CFPI June/July? Stock or cash dividend? Purchased a new company? CPFI 1 Year Stock Price http://www.advfn.com/stock-market/PSE/CNPF/stock-price
  83. 83. CP Lights Camera Action Markets/ industries life cycle have large influence on products and brands (must understand other factors) PSE! Phil Stock Exchange Index CPFI 1 Year Stock Price http://www.advfn.com/stock-market/PSE/CNPF/stock-price
  84. 84. CP Lights Camera Action Sales and stock prices are good indicators of PLC (filter out external effects)
  85. 85. CP Lights Camera Action 1. Tech? 2. Oil? 3. Fashion? 4. Cars? What can we learn from world’s most valuable brands & their industries?
  86. 86. CP Lights Camera Action Twitter is dying?! Failure to convert users to paying customers (demand!)
  87. 87. CP Lights Camera Action Facebook has converted customer insight to sales!
  88. 88. CP Lights Camera Action Google 5 yrs- growing!
  89. 89. CP Lights Camera Action Google 10 yrs of continuous growth!
  90. 90. CP Lights Camera Action Yahoo since 2000- stagnant?
  91. 91. CP Lights Camera Action Meyer effect on Yahoo?
  92. 92. CP Lights Camera Action Yahoo: $ 2.8 Billion for 53 Apps
  93. 93. CP Lights Camera Action How does World’s Most Valuable brand look ( 5 years...)
  94. 94. CP Lights Camera Action Proof of Strong Brand Equity: Apple stock price still grew after Steve Jobs death Oct. 2011
  95. 95. CP Lights Camera Action 3 month Samsung shares Decline. Recovery. Repeat.
  96. 96. CP Lights Camera Action Resilient, strong brands bounce back
  97. 97. CP Lights Camera Action Stories in perspective. What are the long term effects?
  98. 98. CP Lights Camera Action Where is your brand now? Marketing assessment tools
  99. 99. CP Lights Camera Action Plot your brand in BCG Matrix
  100. 100. CP Lights Camera Action Appropriate strategies to a brand’s position in the matrix
  101. 101. CP Lights Camera Action Or can apply a more detailed GE matrix
  102. 102. CP Lights Camera Action There are only 3 ways to gain strategic advantage...
  103. 103. CP Lights Camera Action 4 Ways to Growth
  104. 104. CP Lights Camera Action Create Positioning Maps 1st Map: 2 x 2 Matrix showing the 2 Most Critical Variables for Consumer choice This 1st Map should allow differentiation/ non-clustering of the direct competitors Example: Price vs. Age Size of bubbles= represent relative market shares of the brands 2nd Map: Functional Benefit vs. Brands/ Variants
  105. 105. CP Lights Camera Action Example of a 2x2 competitive position map for toothpaste Price vs. Age Matrix
  106. 106. CP Lights Camera Action Example of a benefit positioning vs. brand map for toothpaste Benefit Positioning vs. Brand Matrix FunctionalBenefit Colgate Kids Colgate Fresh Colgate Total+ Whitening Colgate Sensitive CloseUp Gel CloseUp White Hapee Kids Hapee Fresh Hapee Total+ Whiten Unique Sensodyne PreventsToothDecay WhitensTeeth FreshensBreath Mouthwashin1 FreshConfidence ConfidenceUpCloseto Kiss Protect24hours Funforkids Savesmoney Reducesteethsensitivity Harder to stand out amidst the competitive clutter.

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