Competitive Strategies Strategies that strongly position the company against competitor and give the company strongest possible strategic advantage. Competitive Strategies helps in: Building profitable customer relationships Gaining competitive advantage Analyzing their competitors No company can follow only one strategy. For example, Johnson & Johnson uses one marketing strategy for its common product such as BAND-AID & Johnson’s baby products; and different marketing strategy for its High Tech healthcare products such as Vicryl Plus, antibacterial surgical sutures or NeuFlex finger joint implants. Threat of New Entrants Profitability in the Industry attracts new players Existence of large consumer base Government policies on entry of global firms Existing and potential incentives for the Industry Role of technology and Innovations Bargaining Power of Suppliers Powerful suppliers – Concentrated, significant switching costs and produce highly customized products. Examples (Rolls Royce, GE, etc. for the aircrafts) Weak Suppliers – Many competitive suppliers (Ancillary goods) Examples: Automobiles, crops, textile Bargaining Power of Buyers Two situations can be visualized Powerful buyers – Products are standardized, buy significant proportion Examples: Indian Railways (electrical fans, catering), AMUL Weak Buyers – Fragmented, significant buyer switching costs Examples: Small Scale Industries Threat of Substitutes Availability of close substitutes Prices of substitutes Threat for new substitutes Examples: TV, DTH; Bottles and cans Barriers to Entry and Exit Its related to threats of substitutes Easy to enter – common technology, low branding, low scale of operations, access to distribution channels Difficult to enter – High brand pull, technology is patented and restricted distribution channels Easy to exit – assets are saleable, low exit costs, independent business Difficult to exit – high exit costs (insurance, infrastructure like power), specialized assets and inter-related business Intra-Industry Rivalry Top 10 firms in different decades Some firms vanish from the Industry Intense price-wars Examples: Mobile tariff reductions, Air fares BCG Matrix Portfolio planning model-Strategic Business Units based on market growth and market share Dogs – low market share and low growth rate Question Marks – growing rapidly but low market share-problem child Stars – high growth rates, consume large cash Cash Cows – generate more cash than they consume VALS Framework Innovators-sophisticated, high self esteem, upscale and image is important Thinkers- conservative, practical, income allows many choices, look for value Achievers- Goal oriented lifestyle, image is very important Experiences- Like “cool stuff”, like excitement and variety spend high proportion of income on fashion

1. MARKETING MANAGEMENT
ENVIRONMENT
By :
Pooja (02)
Chitra (06)
Rashmi (14)
Sunil (15)
Jagannath (17)

2. Competitive Strategies
• Strategies that strongly position the company
against competitor and give the company
strongest possible strategic advantage.
Competitive Strategies helps in:
1. Building profitable customer relationships
2. Gaining competitive advantage
3. Analyzing their competitors

3. Competitive Strategies
• No company can follow only one strategy.
For example, Johnson & Johnson uses one
marketing strategy for its common product
such as BAND-AID & Johnson’s baby products;
and different marketing strategy for its High
Tech healthcare products such as Vicryl Plus,
antibacterial surgical sutures or NeuFlex finger
joint implants.

4. Porter Competitive Model
Potential
New Entrants
Intra-Industry
Rivalry
Strategic Business Unit
Bargaining
Power
of Buyers
Bargaining
Power
of Suppliers
Substitute
Products
and Services
Source: Michael E. Porter
“Forces Governing Competition in Industry
Harvard Business Review, Mar.-Apr. 1979

5. Threat of New Entrants
• Profitability in the Industry attracts new players
• Existence of large consumer base
• Government policies on entry of global firms
• Existing and potential incentives for the Industry
• Role of technology and Innovations

6. Bargaining Power of Suppliers
• Powerful suppliers – Concentrated, significant
switching costs and produce highly customized
products.
• Examples (Rolls Royce, GE, etc. for the aircrafts)
• Weak Suppliers – Many competitive suppliers
(Ancillary goods)
• Examples: Automobiles, crops, textile

7. Bargaining Power of Buyers
• Two situations can be visualized
• Powerful buyers – Products are standardized, buy
significant proportion
• Examples: Indian Railways (electrical fans, catering),
AMUL
• Weak Buyers – Fragmented, significant buyer switching
costs
• Examples: Small Scale Industries

8. Threat of Substitutes
• Availability of close substitutes
• Prices of substitutes
• Threat for new substitutes
• Examples
– TV, DTH
– Bottles and cans

9. Barriers to Entry and Exit
• Its related to threats of substitutes
• Easy to enter – common technology, low branding,
low scale of operations, access to distribution
channels
• Difficult to enter – High brand pull, technology is
patented and restricted distribution channels
• Easy to exit – assets are saleable, low exit costs,
independent business
• Difficult to exit – high exit costs (insurance,
infrastructure like power), specialized assets and
inter-related business

10. Intra-Industry Rivalry
• Top 10 firms in different decades
• Some firms vanish from the Industry
• Intense price-wars
• Examples
– Mobile tariff reductions
– Air fares

11. BCG Matrix
• Portfolio planning model-Strategic Business Units based on
market growth and market share
• Dogs – low market share and low growth rate
• Question Marks – growing rapidly but low market share-problem
child
• Stars – high growth rates, consume large cash
• Cash Cows – generate more cash than they consume

12. BCG Growth Share Matrix

14. General Electric

15. Market Attractiveness
 Annual market growth rate
 Overall market size
 Historical profit margin
 Current size of market
 Market structure
 Market rivalry
 Demand variability
 Global opportunities

16. Business Strength
 Current market share
 Brand image
 Brand equity
 Production capacity
 Corporate image
 Profit margins relative to competitors
 R & D performance
 Managerial personal
 Promotional effectiveness

17. Strategies
 Protect Position
• Invest to grow
• Effort on maintaining strength
 Invest to Build
• Challenge for leadership
• Build selectively on strength
 Build Selectively
• Invest in most attractive segment
• Build up ability to counter competition
• Emphasize profitability by raising productivity

18. Strategies
 Protect & Refocus
• Manage for current earning
• Defend strength
 Selectivity for Earning
• Protect existing program
• Investments in profitable segments
 Build Selectively
• Specialize around limited strength
• Seek ways to overcome weaknesses
• Withdraw if indication of sustainable
growth are lacking

19. Strategies
 Limited Expansion for Harvest
• Look for ways to expand
without high risk
 Manage for Earnings
• Protect position in profitable segment
• Upgrade product line
• Minimize investment
 Harvest
• Sell at time that will maximize cash value
• Cut fixed costs and avoid investment
meanwhile

20. FMCG INDUSTRIES
Hindustan
Unilever
Ltd.
Indian
Tobacco
Company
Nirma Ltd
Nestlé India Dabur India
Ltd Henkel Spic
Cadbury
India Modi Revlon
Godfrey
Phillips
BUSINESS ATTRACTIVNESS
BUSINESS STRENGTH
LOW MEDIUM HIGH
STRONG MEDIUM LOW

21. EXPLANATION……
• HUL is leader in the market is has high business strength and high
industry attractiveness .
• ITC has medium business strength and high industry attractiveness.
So it can invest more to become a leader.
• Nestle India has strong business strength and medium industry
attractiveness. So it can invest more to become a leader.
• Godfrey Phillips has low business strength and low industry
attractiveness. So it can divest.
• Cadbury India has strong business strength and low industry
attractiveness. So it can invest more to have stable in market.

22. VALS Framework
VALS is actually a proprietary term of SRI international. The term was
developed by Social scientist and futurist Arnold Mitchell on different classes
of people.

23. VALS Framework
1. Innovators-sophisticated, high self esteem,
upscale and image is important
2. Thinkers- conservative, practical, income
allows many choices, look for value
3. Achievers- Goal oriented lifestyle, image is
very important
4. Experiences- Like “cool stuff”, like excitement
and variety spend high proportion of income
on fashion

24. VALS Framework
5. Believers- conservative, like familiar and
establish brand
6. Strivers- trendy and fun loving, money defines
success, concern about the opinion of others
7. Makers- Practical people, do it yourself,
unimpressed by material possession, prefer
value to luxury
8. Survivors- Few resources, buy at a discount,
very modest market, little motivation to buy

25. Values, Attitudes and Life-Styles
(VALS)
• Vals which is also known as values attitude and lifestyle
• Its one of the primary ways to perform psychographic segmentation.
• VALS was based on the work of two psychologists:
– Abraham Maslow's hierarchy of human needs
– David Riesman's concept of social character.
• All terms are
Intangible  inert nature of the consumer
• If you know what your consumer is
thinking  kind of promotions /communications will attract him most
how  determining his vals
• VALS is different for different people.
• Example:
Sec A dining out in top class restaurants, wearing only branded clothes, buying the best cars out there
Middle class  be more wary of spending money and would rather concentrate on savings
• How does VALS affect a marketer?
• Example: Banker
high income lifestyle  sell them investment options, also a term for high income
individuals known as HNI (high networth individuals)
low income lifestyle  more likely to be targeted for savings

26. • Resources – Included resources available to an individual such as
income, education, intelligence, emotional support, etc.
• Primary motivation – Which determined what actually drives the
individual. Is it knowledge, the desire to achieve something or is it
to be social.
• Innovators
– top of the vals framework.
– high income and high resource individuals
– independence is very important
– have their own individual taste in things
– motivated in achieving the finer things in life.
• Buy BMW, Luxury watches, Alien ware
• Thinkers
– have high resources and are motivated by their knowledge
– are rational decision making consumers
– are well informed about their surroundings
– are likely to accept any social change because of their knowledge level.
• well educated professional, buy branded products, renowned books

27. • Believers
– more social in nature
– lower resources
– likely to accept innovation on their own
– are the best class of word of mouth consumers
• Old brands like BATA
• Achievers
– motivated by achievements
– want to excel at their job as well in their family
– more likely to purchase a brand which has shown its success over time
– are said to be high resource consumers but good switchers
• Buy Honda, i-pad etc
• Strivers
– trendy & fun loving
– low resource consumer group
– wants to reach some achievement are known as STRIVERS
– customers do not have the resources to be an achiever
– have values similar to an achiever
– if a striver can gain the necessary resources such as a high income or social
status then he can move on to becoming an achiever
• Buy lottery ticket, playboy etc

28. • Experiencers
– high resources but also need a mode of self expression are known as
Experiencers
– it consists of people who want to experience being different e.g. young adults
– class of consumers is filled up with early adopters who spend heavily on food,
clothing and other youthful products and services
• Buy designer jeans, branded & stylish sport shoes
• Makers
– are practical, responsible, self-sufficient
– are consumers who also want self expression
– are limited by the number of resources they have
– would be more focused towards building a better family rather than going out
and actually spending higher amount of money
– making themselves into better individuals and families becomes a form of self
expression for the Makers
• Buy comfortable chairs, cushions, basic t-shirts

29. • Survivors
– least resources  least likely to adopt any innovation
– not likely to change their course of action regularly into brand loyal
customers
• Old age pension earners living alone for whom the basic necessities are important and
they are least likely to concentrate on anything else
• Buy milk, bread
• Conclusion:
– Thus the vals framework can be used primarily to
classify consumers based on their values, attitudes
and lifestyle
– Once the classification has been done, you know
which types of customers you want to target
– Depending on your target customers vals, you can
make up your marketing strategy and your
promotional message such that it hits your audience
at the right spot.

30. Thank
You