Chapter 2

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Chapter 2

  1. 1. Aijaz Shahidaijazshahid@gmail.com fb: directmarketing1 03315575501
  2. 2. Chapter-2 Direct Marketing Strategies
  3. 3. Nature of StrategicMarketing 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?)
  4. 4. 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
  5. 5. SustainableCompetitive Edge
  6. 6. 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
  7. 7. Steps to Create aCompetitive Edge ? Source: Youtube
  8. 8. The StrategicMarketing Planning Process
  9. 9. Situation Analysis Problems, Opportunities, and Threats ö Extent of Demand ö Problems ö Nature of Demand ö Opportunities ö Threats ö Strategy Analysis Objectives ö Life Cycle Stage Alternatives ö Macro-Environmental Trends ö Marketing Alternatives ö Evaluation of Alternatives ö International Issues Decision ö Strengths and Weaknesses ö Recommendations ö Implementation ö Nature of Competition ö Monitoring
  10. 10. 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 Products öAviation Market Size etc
  11. 11. Nature of Demand Segmentation Decision Making ö Identification of Segments ö Who, What, Where, Why, When make decisions ? ö Reviewing of Segment’s Demographics, ö Factors that buyer consider Psychological before making decision characteristics etc ö Frequency of purchase ö What key Competitors are decision made or repeated covering the Segment and how they have segmented ö Who Influence the decision it makers
  12. 12. Strategy Analysis
  13. 13. 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 Are adequate resources available to carry out marketing strategy ? ö Are resources committed to target markets according to the importance of each ? Source: Wikipedia *
  14. 14. 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 How to position the brand against competitors ö The firm need to evaluate the product offer and performance on regular basis ö If necessary, firm need to review and make decisions regarding any addition, deletions and/or modifications according to market feed back *Source: brandingstretegyinside
  15. 15. 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 is 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 products 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: brandingstretegyinside
  16. 16. 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 The firm must understand the Buyer’s price sensitivity for a given product ? *Source: Wikipedia
  17. 17. Distribution Strategy Its 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. 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
  18. 18. 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 Push Strategy A “push” promotional strategy makes use of a companys sales force and trade promotion activities to create consumer demand for a product. ö Pull 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 alternatives ö How effectively DM tool (Brochure, catalogue etc) is communicating message ?
  19. 19. "Taking the product to the customer" Examples of push tactics öTrade 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 promotionöWord of mouth referralsöCustomer relationship managementöSales promotions and discounts
  20. 20. 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.
  21. 21. This might refresh u!!!
  22. 22. MacroEnvironmental Trends
  23. 23. Socio-CulturalEnvironment 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. Gender Roles Religious Conservatism Social Taboos Family Structure Personal Choices Changing Life Styles Consuming Patterns Changing Demographics Source: Google
  24. 24. Demographic Environment 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.. Source: Google
  25. 25. Political and LegalEnvironment 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: Source: Google
  26. 26. TechnologicalEnvironment 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 opportunities ö 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
  27. 27. Economic Environment 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 Source: Google
  28. 28. Competitive Environment 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. Source: Google
  29. 29. International issues Direct Marketers needs to be vigilant about changes in international markets opportunities, including shifts in demand and international competitive trends
  30. 30. What issues keep marketers awake at night? Source: Youtube
  31. 31. Strengths and Weaknesses ő Marketing Skills ő Production Skills ő Management Skills ő Financial Skills ő Research and Development SkillsNature of Competition ő 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
  32. 32. Objectives ő Quantifiable Behavioral Objectives Strategic 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 Objectives Non behavioral objectives include product image enhancements or attitudinal changes.
  33. 33. Alternatives 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 Alternatives Direct 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 Alternatives The 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.
  34. 34. Decision 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 Recommendations The 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 ?
  35. 35. 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 Monitoring The 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.
  36. 36. H Jaya Ek Surprise !
  37. 37. Quiz - 1
  38. 38. Thank You

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