Star cement[www.writekraft.com]

"A STUDY OF MARKETING STRATEGIES AND DISTRIBUTION
CHANNELS INCLUDING DEVELOPING AN EFFECTIVE SERVICE
DELIVERY MODEL: CASE STUDY STAR CEMENT INDIA

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................5
1.1. BACKGROUND OF THE STUDY......................................................5
1.1.1. MARKETING STRATEGIES......................................................... 6
1.1.2. IMPORTANCE OF SERVICE DELIVERY....................................7
1.1.3. DISTRIBUTION CHANNELS........................................................7
1.1.4. STAR CEMENT INDIA................................................................10
1.2. STATEMENT OF PROBLEM ...........................................................11
1.3. OBJECTIVES OF THE STUDY........................................................11
1.3. SIGNIFICANCE OF THE STUDY......................................................12
1.4. SCOPE OF THE STUDY AND LIMITATIONS OF THE STUDY ....13
2. LITERATURE REVIEW...........................................................................14
2.1. THE CONCEPT OF STRATEGY .....................................................15
2.1.1. COMPETITIVE MARKETING STRATEGIES.............................25
2.1.2. Cost Leadership Strategy............................................................26
2.2. SUSTAINABLE LEADERSHIP STRATEGIES ................................28
2.3. OBJECTIVES OF THE MARKET LEADERS...................................28
2.4. MARKETING STRATEGIES FOR LEADERS .................................35
2.5. INTERNAL ENVIRONMENTS OR FACTORS ................................39
2.6. PROBLEMS WITHIN THE MARKETING FUNCTION ....................44

2.7. MARKETING STRATEGIES EMPLOYED BY STAR CEMENT.....46
2.8. DISTRIBUTION CHANNELS............................................................49
2.8.1. Descriptions of Distribution Channels.........................................49
2.8.2. Position in Distribution Channels ................................................51
2.8.3. Distribution Channel in Focus.....................................................52
2.8.4. Distribution Channel Matters.......................................................53
2.8.5. Channel Functions.......................................................................54
2.9. IMPORTANCE OF RETAILERS.......................................................56
2.9.1. Retailer Image..............................................................................56
2.9.2. Retail Growth and Retail Consolidation......................................57
2.9.3. Retail Supply Management.........................................................57
2.9.4. Retail Brands ...............................................................................58
2.9.5. Implications of Retail Developments ..........................................59
2.9.6. Expanding Offerings of Manufacturers.......................................60
2.10. SERVICE DELIVERY CONCEPT - THE PARADIGM SHIFT......63
2.10.1. The Components of Service Delivery......................................66
3. RESEARCH METHODOLOGY..............................................................79
3.1. POPULATION OF THE STUDY.......................................................80
3.2. SAMPLE SIZE DETERMINATION...................................................80
3.3. SOURCES OF DATA........................................................................80
3.3.1. PRIMARY DATA..........................................................................80
3.3.2. SECONDARY DATA...................................................................80

3.4. DATA COLLECTION INSTRUMENTS.............................................81
3.4.1. QUESTIONNAIRE METHOD.........................................................81
4.1. Historical Background of Study......................................................82
4.2. Presentation of Data.......................................................................83
4.2.1. Responses to the Question.........................................................83
5. FINDINGS................................................................................................89
6. RECOMMENDATIONS...........................................................................92
7. CONCLUSION.........................................................................................94
8. BIBLIOGRAPHY......................................................................................96
APPENDIX I ..................................................................................................98
APPENDIX II .................................................Error!Bookmark notdefined.

1. INTRODUCTION
1.1. BACKGROUND OF THE STUDY
Even in a relatively developing economy like India the importance of
marketing as a profit making activity aimed at facilitating the flow of the
required products from the place of production to the consuming public or
users is recognized.To achieve effectiveness,such activity requires a lot of
planning and marketing strategies.
Aware of the fact that, there is a good number of cement producing
companies in the country and the fact that profit, which is one of the
objectives of every business enterprise, can only be realized by selling
products rather than merely producing them.
Therefore,business as an act can be seen from a couple of ways. As many
as these ways are not withstanding, business can be summarized as the
act of marketing goods and services geared towards satisfying customers’
or users’ need and wants with the primary aim of making profit. For this aim
to succeed,every business therefore has several ways and styles of having
enough money to operate or stay out of debt. This can be subsumed to
simply mean, business strategy. However, part of any business is to be
competitive. That is, competing against other business set-ups or being
competed against.
Competition can be very interesting, especially when it is healthy and
practice within the rules of the game. Because through healthy competition,

business bodies can do self-assessment, readjust and seek avenues for
innovation and development.
1.1.1.MARKETING STRATEGIES
As challenging as competition can be in business, and as dynamic as
competition can be in improving products and services, if an organization
does not have some competitive advantage, it will liquidate in future. For a
company to remain competitively advantaged, lead and maintain its
leadership position in the market, it is very vital for such company to
employed viable and or result oriented business strategies that will give it
edge over other competing companies within the marketing environment
marketing.
Marketing strategies are consistent, appropriate and feasible sets of
principles through which a particular company hopes to achieve its long run
customers and profit objectives in a particular competitive environment.
Competitionis part and parcel of business activities. Because of that, firms
design deliberate strategies that will give their business defence against
competitive threats and for survival in a competitive environment. This
explains why almost everything in business today appears to be hinged on
strategies as companies engage in this in order to out- do each other in the
struggle to improve their products and services as they compete for new
customers and do everything possible to retain old customers. At the macro
level, marketing strategies focus on manipulation of the marketing mix
elements such as product, price, place and promotion.

1.1.2.IMPORTANCE OF SERVICE DELIVERY
The business model of yesterday supported mass marketing, mass
production, and standardized products and services. Companies that
continue to rely and operate on this obsolete model will fall behind the
competition. (Berry, et al 2002). The reasons for this development are
several but include the following; more sophisticated and knowledgeable
customers; dramatic changes in technology; the rise of competition; and
declining product differentiation in the global business environment.
Today's business world continues to change and has become more volatile
in nature. It is against this background that Weinstein & Johnson (2003)
recommend that at least 75% of an organization's marketing effort should
be focused on customer retention, by building and maintaining strong
relationships with customers. Service Deliveryuses event driven tactics and
treats marketing as a process over time, rathe r than a collection of single
unconnected events. Past and current customer behaviour is the best
predictor of future customer behaviour. The longer customers are retained
by a business, the more profitable it becomes as a result of predictable
customer purchasing behaviour, decreased business operation costs,
customer referrals, willingness of customers to pay price premiums, and
reduced customer acquisition costs for the organization.
1.1.3.DISTRIBUTION CHANNELS
Many companies do not sell their products directly to end users. In mass
production and consumption industries in particular, many manufacturers
rely on distributors, representatives, sales agents, brokers, retailers or
some combination of these intermediaries to distribute their products
(Hughes and Ahearne, 2010). These intermediaries perform a variety of

functions and constitute a marketing channel, that is also referred to a trade
channel or distribution channel (Kotler andKeller, 2008). The importance of
channel intermediaries has grown in recent years, largely due to increased
size, improved level of product knowledge, technical competence,
specialisation and various other factors (Kalafatis, 2000). In a typical
distribution channel for consumergoods,for example,manufacturers sell to
retailers, which sell to consumers in markets. Retailers break bulk, holds
inventory, provide shelf space,create promotionaldisplays and advertising,
create one-stop-shopping convenience and a pleasant shopping
environment, all of which increases demand for the manufacturer’s product
(Desiraju and Moorthy, 1997). Retailers gain a central position in many
industries thanks to their increasing degree of concentration and
internalisation, successful launching of retailer brands and by controlling
more and more of the value-adding functions with the distribution
Distribution Channels (Burt, 2000; Dawson, 2000; Elg, 2003).
The conditions for conducting business in the cementindustry are changing
rapidly, as they are in many other industries. Driven by a complex mix of
technological, social, economic and political factors, mergers, acquisitions
and internal restructuring have reshaped the competitive environment of
cement industry (Hingley et al., 2006). Changes have occurred in various
areas of the business and, in almost all the cases, they have involved an
increase in concentration. For most consumers, cement retail shops
represent the final and therefore the most visible point of supply chain.
Consequently, developmentat this level consequently has a direct effecton
suppliers and consumer choices (Dobson et al., 2003).

So, setting strategy comprises of selecting the most appropriate price of
the product, designing and advertising programme, and the deciding on a
plan distribution. Star Cement India has a number of strategies that have
given the company a leading edge over other cement companies. For the
purpose of this research work, I would assess the strategies employed by
this company and how these strategies are being implemented to meet its
target objectives; one of which is; maintaining its leadership position in a
competitive environment.
As we always said that, change is the only permanent thing in human
behaviour and relationship. Changes happen frequently in the environment
and these lead to changes in the standard of living of the people and the
quality of product they need. This in effect increases competition between
producers and marketers of products and services that people patronized.
The marketer’s job is to think about plans and formulate strategies in a
particular way. The market reaction has to be evaluated and continually
appraised in order to ensure that customers or user’s needs and wants are
satisfied and also to ensure that the existing and potential markets are not
lost due to unsatisfied products and services. This explains the reason why
the application of marketing concepts is a continuous activity, if any
company wants to maintain a leading role. Star cement India can be said to
be moving along this line.
A major challenge most managements encounter in making a wise choice
as to the resources available to them is selecting an appropriate strategy. A
well planned and executed marketing strategy may not always lead to
expected results but management must continue making changes until the
required level of performance is reached. Leadership is maintained through

this way. Every marketing strategy is unique, but if we identify from
individual details, each can be reduced into a generic marketing strategy.
Considering Michael Porter’s generic strategies, Michael Porter (1980),
assessed strategy on the dimensions of strategic scope – strategic scope
refers to the breadth of market penetration and strategic strength –
strategic strength refers to the firms’ sustainable competitive advantage. In
other words, the Star Cement India’s strategic strength is the company’s
sustainable competitive advantage.
1.1.4.STAR CEMENT INDIA
Cement Manufacturing Company Limited (CMCL) is the largest cement
manufacturer in north east India. The plant is spread across 40 acres of
land in the idyllic town of Lumshnong, a strategic location at Meghalaya
that ensures easy availability of high-grade limestone. The brand “Star
Cement” has established itself as the most accredited brand of the region
on grounds of both quality and fair pricing.
Cement Manufacturing Company Limited is one of the most profitable
cement manufacturers in North East India.
 Because of its prudent locational advantage
 Because of its timely raw material linkage
 Because of its proactive capacity expansion
 Because of its expert brand positioning

1.2. STATEMENT OF PROBLEM
The Star Cement India enjoys a fast growing status in the cement industry.
This is a position it has created over the years. Although quite a number of
other cement companies that were in existence challenge this monopoly
Star cement India had being enjoyed for quit some years. Nevertheless,
Star cement India does not for any reason want to relinquish its position to
any of these competitors. In an attempt to sustain the position in this
competitive environment, the Star cement India has adopted some
strategies and implemented through the marketing mix variables. These
variables are; product, price, place and promotion. The Star Cement India
manipulates these variables in sustaining their role within the marketing
environment. The weaknesses identified by the customers and challenges
that could be exploited as opportunities by competitors in the bid to
maintain leadership position are some of the problems the researcher
intends to address in this study.
1.3. OBJECTIVES OF THE STUDY
According to Meekyace (1992), the research aim is the overall statement of
the thrust of the project. It is a statement of a desire for demonstration or
achievement, disproof tests for aspects of a theory or model construct
hypothesis or empirical observation. The major aim of this research work is
to examine how the applications of marketing strategies have sustained
Star Cement India’s leadership in a competitive environment.
Some of the specific objectives of this research are;
a) To identify the marketing strategies those sustain the leadership position
of Star Cement India.

b) To identify the problems associated with the implementation of those
marketing strategies employed by Star cement India.
c) To recommend appropriate solutions to the problems of marketing
strategies implementation for Star cement India.
d) To find out how can cement manufacturers’ distribution strategy
developments be described and analyzed
e) To analyze how can cement suppliers address customer needs when
developing and marketing offerings
f) To establish the level of customer satisfaction in Star Cement India Ltd.
g) To establish the level of customer orientation in Star Cement India Ltd.
1.3. SIGNIFICANCE OF THE STUDY
This study intends to satisfy the pervading curiosity about what has kept
Star cement India to be continuously growing in cement market in India.
This is due to the fact that Indians are used to having relatively new product
marketing companies knock off existing companies that have a firm grip on
the market.
Examples can be drawn from Ariel, which effectively took over the
detergent market from Nirma and local brands.
This research will educate the general public on the marketing strategies
the distribution strategies and service delivery model in the cement industry
that work particularly in the Indian environment.
On the part of the company under study, it will expose to them the areas
they need to improve upon in their marketing strategies, the distribution

department and the service delivery aspect and how to effectively combat
their competitors’ strategies. At the end of this study, finding will be useful
to research students who will like to make further research on the subject
matter in future. It will also broaden the researchers’ knowledge in the
areas of strategic marketing.
1.4. SCOPE OF THE STUDY AND LIMITATIONS OF THE STUDY
This research examines the Star cement India, with a focus on the
Company’s marketing strategies, distribution channels and service delivery
model for maintaining its leadership position in a competitive environment.
No business operates in isolation. Every business organization operates
within an environment which could be either micro or macro. Within the
macro environment are various competitors for market share acquisition.
For the purpose of this study, Star Cement India operates in an
environment where competitors like ACC Cement, Birla Cement, JK
cement, Portland and other cement companies exist.

2. LITERATURE REVIEW
This chapter has two main purposes. The first is to review the theories
associated with the research questions in order to provide readers with an
understanding of the theoretical domain. The second purpose is to relate
the theories to the research questions and develop a theoretical framework
for analysis. The reason for discussing the theories is not to produce a
comprehensive survey of their richness but rather to provide a framework
within which to facilitate the collection of empirical evidence, conduct the
analysis and, finally, achieve solutions to the research questions.
This chapter intends to review existing literature on marketing strategies
with the view to provide conceptual frame work for the study. Marketing
product strategy for any product is very vital for the success of any
marketing organisation. Marketing links two basic functions in the society,
that is, production and consumption. As the society grows and becomes
more complex, the processes of production and supply vary from
communities to communities. Therefore, the means by which these
communities are supplied withthe products and services they demand has
itself become more complicated and important. In organised business
environments, marketing activities are the means by which business
enterprises ensure that products and services are supplied to the market
where what the customers wish to buy are made available. In other words,
marketing activity means, ensuring that business organisation supply the
market with products and services that the 'customers wish to buy.
According to Kotler (1980) Marketing "is the human activities directed at
satisfying needs and want through exchange process". Any activity of
exchange process is what marketing is all about". Therefore, the emphasis

of marketing organizations should be, to understand, consumers needs and
wants and then determine how best to satisfy them.Nwokoye (2004)
defines marketing as "the set of activities that facilitate exchange
transaction involving economic goods and services for the ultimate purpose
of satisfying human needs".Onu (2000), defines marketing as satisfactions
become available through the process of exchange in society. Marketing
with its emphasis on satisfaction exists because society has needs that
must be met and wants that must be satisfied. Therefore the goal of
marketing is to facilitate exchange of all parties involved. Since marketing
involves economic goods and services matching process, failure to offer
this economic goods and services will l ead to failure of the organisation
concern. The economic goods and services include activities such as
productdesign, development,production, branding, pack aging, distribution
and promotion. Fi nally, marketi ng embraces all those activities that relate
to the product's pricing, the various forms of distribution, advertising and
promotion, after sales service, marketing research and sales forecasting.
Kotler (2 009) defines marketing as "a societal process by which individuals
and groups obtain what t hey need and want through creating, offering and
freely exchanging products and services of value with others".
2.1. THE CONCEPT OF STRATEGY
Every organisation competing in an industry has a competitive strategy
whether explicit or implicit. This strategy may have originated explicitly
through a well articulated planning process or it may have implicitly
Each part on its own will inevitably pursue its own approaches dictated by
its professional orientations the incentives that go along with them.

The concept of strategy is ancient. The word strategy itself was derived
from the Greek word strategia, which means the art or science of being a
general. In business, the term refers to action by management to offset
actual or potential action of competitors.
A strategy is a long-term plan to achieve certain objectives.A marketing
strategy is therefore a marketing plan designed to achieve marketing
objectives.For example, marketing objective may relate to becoming the
market leader by delighting customers.The strategic plan therefore is the
detailed planning involving marketing research, and then developing a
marketing mix to delight customers.Every organisation needs to have clear
marketing objectives,and the major route to achieving organisational goals
will depend on strategy. It is important, therefore,to be clear about the
differencebetweenstrategy and tactics.
These terms originate from military use (military strategy before and during
a military campaign is the general policy overview of how to defeatthe
enemy). Developing a strategy involves establishing clear aims and
objectives around which the framework for a policy is created. Having
established its strategy, an organisation can then work out its day-to-day
tools and tactics to meet the objectives.
Marketing can thus be seen as the processof developing and
implementing a strategy to plan and coordinate ways of identifying,
anticipating and satisfying consumerdemands,in such a way as to make
profits.It is this strategic planning process that lies at the heart of
marketing.
Marketing is now accepted as a strategic discipline or general management
function and in this respectmust care for the health of a business in the

future - especially against competitive influences.This is because it is
increasingly realised that although making a profitis important, an
organisation should also develop its market share and search for brand
leadership as well. So the marketer must monitor the profitability of the
business and attempt to anticipate the likely trends. At the same time rival
companies should be monitored and examined for vulnerable points.
Successfulmarketers must therefore be concerned with every aspectof
their business,including future project and other areas of their industry.
Successfulcompanies plan five or ten years and more in advance and
often know as much about their competitionas they know about
themselves.
Marketing is not just a series of business-related functions,but more wide-
reaching than this. It is a business philosophydesigned to develop an
attitude of mind which should be shared by everyone in an organisation
and is often enhanced by both frequent and open communication.
Developing such an attitude of mind reduces the likelihood of crisis and
contributes to the developmentof the overall future of an enterprise at both
strategic and tactical levels.
At the heart of marketing lies the degree to which an organisation becomes
marketing-orientated. The more committed a company is to its marketing
activities, the more able it will be to pursue its corporate objectives and
develop and retain customers.Every business in existence relies upon its
customers forsurvival, and those who bestmeet customerneeds will
always survive a period of change.
The marketing function is therefore an essential ingredient of corporate
strategy, and this marketing focus should be communicated through
marketing planning into all aspects of business activity.

In choosing a marketing strategy a frequentdistinction that is made is
between undifferentiated marketing and differentiated marketing.
Undifferentiated marketing is where a single marketing mix is offered to the
total market. In contrast differentiated market is the processof attacking the
market by tailoring separate productand marketing strategies to different
segments of the market, for example,the spectaclesmarket can be broken
down into fashion segments and functional segments,high price and low
price segments,and segments for individuals with differenttypes of vision
problems.
Marketing strategy is defined by Prophet's David Aaker as a processthat
can allow an organization to concentrate its resources on the optimal
opportunities with the goals of increasing sales and achieving a
sustainable competitive advantage.[1]
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 companyand the formulation, evaluation
and selectionof market-oriented strategies and therefore contribute to the
goals of the company and its marketing objectives.[2]
Marketing strategies serve as the fundamental underpinning of marketing
plans designed to fill market needs and reach marketing objectives.[3]
Plans
and objectives are generally tested for measurable results. Commonly,
marketing strategies are developed as multi-year plans, with a tactical plan
detailing specificactions to be accomplished inthe current year. Time
horizons covered by the marketing plan vary by company, by industry, and
by nation, however, time horizons are becoming shorteras the speed of
change in the environment increases.[4]
Marketing strategies are dynamic
and interactive. They are partially planned and partially unplanned.

See strategy dynamics. Marketing strategy needs to take a long term view,
and tools such as customerlifetime value models can be very powerful in
helping to simulate the effectsof strategy on acquisition, revenue per
customerandchurn rate.
Marketing strategy involves careful scanning of the internal and external
environments.[5]
Internal environmental factors include the marketing
mix andmarketing mix modeling,plus performance analysis and strategic
constraints.[6]
External environmental factors include customer
analysis, competitoranalysis, target market analysis, as well as evaluation
of any elements of the technological,economic,cultural or political/legal
environment likely to impact success.[4]
A key componentof marketing
strategy is often to keep marketing in line with a company's
overarching missionstatement.[7]
Once a thorough environmental scan is complete,a strategic plan can be
constructed to identify business alternatives, establish challenging goals,
determine the optimal marketing mix to attain these goals, and detail
implementation.[4]
A final step in developing a marketing strategy is to
create a plan to monitor progress and a set of contingencies if problems
arise in the implementationof the plan.
Marketing Mix Modeling is often used to help determine the optimal
marketing budgetand how to allocate across the marketing mix to achieve
these strategic goals. Moreover, such models can help allocate spend
across a portfolio of brands and manage brands to create value.
Marketing strategies may differdepending on the unique situation of the
individual business.However there are a number of ways of categorizing

some generic strategies. A brief descriptionof the most common
categorizing schemes is presented below:
Strategies based on market dominance - In this scheme,firms are
classified based on their market share or dominance of an industry.
Typically there are four types of market dominance strategies:
 Leader
 Challenger
 Follower
 Nicher
According to Shaw, Eric (2012). Marketing Strategy: From the Origin of the
Conceptto the Developmentof a Conceptual Framework. Journal of
Historical Researchin Marketing., there is a framework for marketing
strategies.
 Market introduction strategies
"At introduction, the marketing strategist has two principle strategies to
choose from:penetration or niche" (47).
 Market growth strategies
"In the early growth stage, the marketing manager may choose from two
additional strategic alternatives: segmentexpansion (Smith, Ansoff)or
brand expansion (Borden, Ansoff,Kerin and Peterson,1978)" (48).
 Market maturity strategies

"In maturity, sales growth slows, stabilizes and starts to decline. In early
maturity, it is commonto employa maintenance strategy (BCG), where the
firm maintains or holds a stable marketing mix" (48).
 Market decline strategies
At some point the decline in sales approaches and then begins to exceed
costs.And not just accounting costs,there are hidden costs as well; as
Kotler (1965,p. 109)observed:'No financial accounting can adequately
convey all the hidden costs.' At some point, with declining sales and rising
costs,a harvesting strategy becomesunprofitable and a divesting strategy
necessary" (49).
Early marketing strategy conceptswere:
 Borden’s “marketing mix”
"In his classic Harvard Business Review (HBR) article of the marketing mix,
Borden(1964) credits James Culliton in 1948 with describing the marketing
executive as a 'decider' and a 'mixer of ingredients.' This led Borden, in the
early 1950s,to the insight that what this mixer of ingredients was deciding
upon was a 'marketing mix'" (34).
 Smith’s “differentiationand segmentation strategies”
"In product differentiation,according to Smith (1956,p. 5), a firm tries
'bending the will of demand to the will of supply.' That is, distinguishing or
differentiating some aspect(s)of its marketing mix from those of
competitors,in a mass market or large segment,where customer
preferences are relatively homogeneous(or heterogeneity is ignored, Hunt,
2011,p. 80), in an attempt to shift its aggregate demand curve to the left

(greater quantity sold for a given price) and make it more inelastic (less
amenable to substitutes). With segmentation, a firm recognizes that it faces
multiple demand curves, because customerpreferencesare
heterogeneous,and focuses on serving one or more specific target
segments within the overall market" (35).
 Dean’s “skimming and penetration strategies”
"With skimming, a firm introduces a product with a high price and after
milking the least price sensitive segment,gradually reduces price,in a
stepwise fashion, tapping effective demand at each price level. With
penetration pricing a firm continues its initial low price from introduction to
rapidly capture sales and market share, but with lower profitmargins than
skimming" (37).
 Forrester’s “productlife cycle (PLC)”
"The PLC does not offermarketing strategies,per se; rather it provides an
overarching framework from which to choose among various strategic
alternatives" (38).
There are also corporate strategy concepts like:
 Andrews’ “SWOTanalysis”
"Although widely used in marketing strategy, SWOT (also known as
TOWS)Analysis originated in corporate strategy
The SWOT concept,if not the acronym, is the work of Kenneth R. Andrews
who is credited with writing the text portion of the classic:Business Policy:
Text and Cases (Learned et al., 1965)" (41).

 Ansoff’s “growthstrategies”
"The most well-known, and least often attributed, aspect of Igor Ansoff’s
Growth Strategies in the marketing literature is the term 'product-market.'
The product-market conceptresults from Ansoff juxtaposing new and
existing products with new and existing markets in a two by two matrix" (41-
42).
 Porter’s “generic strategies”
Porter generic strategies - strategy on the dimensions of strategic scope
and strategic strength. Strategic scope refers to the market penetration
while strategic strength refers to the firm’s sustainable competitive
advantage. The generic strategy framework (porter 1984)comprises two
alternatives each with two alternative scopes.These
are Differentiation and low-cost leadership each with a dimensionof Focus-
broad or narrow. ** Productdifferentiation ** Costleadership ** Market
segmentation* Innovation strategies — This deals with the firm's rate of
the new product developmentand business model innovation. It asks
whether the company is on the cutting edge of technology and business
innovation. There are three types: ** Pioneers ** Close followers ** Late
followers * Growth strategies — In this scheme we ask the question, “How
should the firm grow?”.There are a number of differentways of answering
that question, but the mostcommongives four answers:
 Horizontal integration
 Vertical integration
 Diversification
 Intensification

These ways of growth are termed as organic growth. Horizontal growth is
whereby a firm grows towards acquiring other businesses that are in the
same line of business for example a clothing retail outlet acquiring a food
outlet. The two are in the retail establishments and their integration lead to
expansion. Vertical integration can be forward or backward. Forward
integration is whereby a firm grows towards its customers forexample a
food manufacturing firm acquiring a food outlet. Backward integration is
whereby a firm grows towards its source of supply for example a food outlet
acquiring a food manufacturing outlet. A more detailed scheme uses the
categoriesMiles,Raymond (2003). Organizational Strategy, Structure, and
Process.Stanford: Stanford University Press. ISBN 0-8047-4840-3.:
 Prospector
 Analyzer
 Defender
 Reactor
 Marketing warfare strategies - This scheme draws parallels between
marketing strategies and military strategies.
BCG’s “growth-share portfolio matrix” "Based on his work with experience
curves (that also provides the rationale for Porter’s low costleadership
strategy), the growth-share matrix was originally created by Bruce D.
Henderson, CEO of the Boston Consulting Group (BCG) in 1968
(according to BCG history). Throughout the 1970s,Hendersonexpanded
upon the conceptin a series of short (one to three page) articles in the
BCG newsletter titled Perspectives (Henderson,1970,1972,1973,1976a,
b). Tremendouslypopular among large multi-product firms, the BCG

portfolio matrix was popularized in the marketing literature by Day (1977)"
(45).
Osaze (1998) sees strategies as a means of operationalising a policy and
for achieving some predetermined objectives. Chandler (1962) defines
strategy as "the determination of the basic term goals and objectives in an
enterprise and the adoption of causes of action and the allocation of
resources necessary for carrying out these goals”. Strategy statement
therefore, communicates the principles used in selecting and or utilizing
various company strategies either marketing strategy, promotional strategy,
advertising campaign strategy, product strategy and so on.Anao (1979)
defines strategies as schemes, methods, manoeuvres which management
hopes to deploy in order to move the organisation from its present position
to arrive at its target goal by the end of a specified period, recognising that
during the intervening period a host of changes are going to take place in
the environment.
2.1.1.COMPETITIVE MARKETING STRATEGIES
A competitive advantage is an advantage over competitors gained by
offering consumers greater value, either by means of lower prices or by
providing greater benefits and services that justify higher prices. Following
on from his work, analysing the competitive forces in an industry, Porter
(1980)suggests four"generic" business strategies that could be adopted in
order to gain competitive advantage. The four strategies -as shown in the
diagram below relate to the extent to which the scope of businesses'
activities are narrow versus broad and the extent to which a business
seeks to differentiate its products.

The differentiation and cost leadership strategies seek competitive
advantage in a broad range of market or industry segments. By contrast,
the differentiation focus and focus strategies are adopted in a narrow
market or industry.
2.1.2.Cost Leadership Strategy
With this strategy, the objective is to become the lowest -cost producer in
the i ndustry. Many, perhaps all market segments i n the industry are
supplied with the emphasis placed on minimising costs. If the achieved
selling price can at least equal or near the average for the market, then
 Differentiation
 Focus
 Differentiation
 Focus Cost Leadership the lowest - cost producer will, in theory,
enjoy the best profits. This strategy is usually associated with large-
scale businesses offering "standard" products with relatively little
differentiation that are perfectly acceptable to the majority of
customers. Occasionally, a low- cost leader will also discount its
product to maximise sales, particularly if it has a significant cost

advantage over the competition and, in doing so, it can further
increase its market share.
2.1.2.1. Strategy - Differentiation
This strategy involves selecting one or more criteria used by buyers in a
market; and then positioning the business uniquely to meet those criteria.
This strategy is usually associated with charging a premium price for the
product, often to reflect the higher production costs and extra value-added
features provided for the consumer. Differentiation is about chargi ng a
premium price that covers more than the additional production costs, and
about giving customers clear reasons to prefer the product over other less
differentiated products.
2.1.2.2. Differentiation Focus Strategy
In the differentiation fours strategy, a business aims to differentiate within
just one or a small number of target market segments. The special
customer needs of the segment mean that there a re opportunities to
provide products that are clearly different from competitors who may be
targeting a broader group of customers. The important issue for any
business adopting this strategy is to ensure that customers really do have
different needs and wants - in other words that, there is a valid basis for
differentiationand that existing competitor's products are not meeting those
needs and wants.
2.1.2.3. Focus Strategy
Here a business seeks a lower- cost advantage in just one or a small
number of market segments. The product will be basic - perhaps a similar

product to the higher-priced and featured market leader, but acceptable to
sufficient consumers. Such products are often called "me-too's".
2.2. SUSTAINABLE LEADERSHIP STRATEGIES
Marketing is neither inherently attractive nor unattractive simply because it
promises rapid future growth. Managers according to Walker (1996) must
consider how the market and competitive situations are likely to evolve and
whether their firms can exploit growth opportunities to establish competitive
advantage. The primary objective of leaders in a growth market is often that
of share maintenance that is, maintaining its leadership position in the
competitive environment
Leaders in a growth market must achieve two tasks:
i. Retain its existing customers and
ii. Continue to capture the major portion of sales to the growing number of
new customers entering the market for the first time.
According to Akpan (2003), the leader might strategically achieve its
objectives by trying to build on its early scale and experience advantages to
achieve low - cost production and reduce prices. This is done by focusing
on rapid Product improvement, expanding its product line to appeal to
newly emerging segments and or increasing its market and sales efforts.
2.3. OBJECTIVESOF THE MARKET LEADERS
As share leaders go for share sustenance they have two objectives in
mind. Akpan (2003) says:

a. They must retain their current customers by encouraging them to remain
loyal. Loyalty is very important for repeat or replacementof consumer non -
durable service industries.
b. The firm must stimulate selective demand among late adapters.
The ability of the firm to work out strategies that will achieve these
objectives keeps or sustains the firm's leadership position. The strategy
involved here as discussed by Akpan (2003) includes;
A fortress or position defence strategy. Under this strategy, the leader tries
to build an impregnable fortress capable of repelling attacks by current or
fut ure c omp eti ti ons. T hi s strategy i s an aspect of a l eaders s hare
maintenance effort. By shoring up an already strong position, the firm can
improve satisfaction of current customers while increasing the
attractiveness of its offering to new customers with needs and
characteristic similar to those of the early adapters, the premise here is that
both current and potential customers have relatively homogenous needs
and desired and the company offering already enjoys a high level of
awareness and preference in the mass
market. It has been observed that in most homogenous market a well -
implemented position defence strategy in likely to be the only strategy
needed for share maintenance. It is worth mentioning here t ha t any action
the firm can take to improve customer's satisfaction and
loyalty, encourage, and simplify repeat purchasing should help base and
make its offering more attractive to new customers. Walker et al (1996) list
some of the specific actions appropriate for accomplishing these two
objectives as follows:

i. Actions to Improve Customer Satisfaction and Loyalty. This shall be
discussed as below.
a. Give Attention to Post-Sale Service. As demand grows, the firm may not
be able to service its customers effectively. This can lead to a loss of
existing customers as well as encourage negative word of mouth that might
scare new users away from the firm's products.From the ongoing it is clear
that the growth phase will often require increased investment to expand the
firm's parts inventor and in personnel and dealer development.
b. Shift from Perpetual Prospecting. There should be a shift from
prospecting for new accounts to servicing existing customers. This is very
essential for industrial goods. The way to do this is to get major account
managers.
c. Increase Customers' Perception of the Product. As advertising shifts
from stimulating primary demand to building selective demand, appeal
should emphasise the brand's unique selling propositions. Sales promotion
efforts while aimed at stimulating trial among late adopters should also be
used to encourage repeat purchases among existing customers. One
popular way of doing this is to include kobo – off coupons inside the
package to give customers a prick break on their next purchases of the
brand.
d. Continuous Modification an d Innovation. This will reduce t he
opportunities for competitors to differentiate their products by designing in
features of performance level the leader does not have. Another way is for
the leader to reduce low price competition. limited or no positive past
experience with the product, and are likely to be totally disappointed when

a purchase does not live up to expectations. It has been observed that
rapid expansion of output necessary to keep up with a growth market can
often lead to quality control problems for the market leader. The truth here
is that, as new plant, equipment, and personnel are quickly brought online,
bugs can suddenly appear in the production process.
a. Market Expansion or Mobile Strategy. This strategy is seen as a more
proactive version of the flanker strategy. The leader is seen to defend its
relative share of the market by establishing positions in a number of
different market segments. In doing this, the leader wants to capture a
large share of new customer groups who may go for differentiated
offerings. This has the tendency of protecting the firm from future
competitive threat from a number of different directions. This strategy will
find its fit in fragmented markets, if the leader has the required resources to
undertake multiple product development and marketi ng effort. To achieve
market expansion, the leader can develop new brands, line extensions, and
alternative product forms using similar technology to appeal to multiple
market segments. Walker and his colleagues give the example of Pillsbury.
According to them, "although Pillsburyholds a strong position in the
refrigerated biscuit dough category ... Pillsbury developed a variety of other
product forms that use the same refrigerated dough technology and
production activities but appeal to different customers segments". A less
expensive way of appealing to a variety of customer segment has been
suggested. It involves retaining the basic product but vary other elements
of the marketing program to make it relatively more attractive to specific
users. A leader can do this by creating a specialised sales force to deal
with the unique concerns of different user groups. It can also offer different

auxiliary service to different types of customers or tailor sales promotion
efforts to differentsegments. The mobile defence strategy is actually based
on the ideas discussed by Theodore Levitt in "Marketing Myopia" (1960).
The author warns that in pursuing a strategy of market broadening, the
market strategies should not lose sight of two major principles:
i. The principle of objective (pursue a clearly defined and realistic
objective).
ii. The principle of mass (focus your effort on the enemy's point of
weakness),
b. Contraction or Strategic Withdrawal. There are occasions in some highly
fragmented market a leader may be unable to defend itself adequately in all
segments. This may happen when newly emerging competitors have more
resources than the leader. The firm may therefore opt for withdrawal from
those segments and geographical areas in which it is more vulnerable or in
which it feels there is the least potential. The firm then concentrates its
resources in those areas in which, perhaps by virtue of its mass, it
considers itself to be less vulnerable.
c. Maximization of ProductAvailability. The firm must reduce stock outs, on
retail shelves or shorter delivery times for industrial goods. can be done by
investing in equipment to expand capacity in advance of demand, and
implement adequate inventory control and logistics system to provide a
steady flow of goods through the distribution system. It is also suggested
that the firm should continue to build its distribution channels.

d. Flanker Strategy. The fortress strategy j ust discussed has an inherent
shortcoming. A challenger might simply choose to avoid the leader's
fortress and try to capture territory where the leader has not yet established
a strong presence. This can represent a significant threat when the market
is
fragmented into several segments with several needs, and perhaps the
leader's brand has not been able to effectivelyreach the s egment or more.
This might present an opportunity to a competitor with skills and assets to
capture a substantial share of the leader's market with hi s differentiated
product offering. To defend against an attack directed at a weakness in its
current offering, (its exposed flank) Walker et al (1996) suggests that a
leader might develop a second brand (a flanker or fighter brand) to
compete directly against the challenger's offering. According to them this
might involve trading up, where the leader develops a high quality brand
offer at a high price to appeal to the prestige segment of the market.
Usually, a flanker brand is a lower — quality product designed to appeal to
a low — price segment to protect the leaders' primary brand from direct
price competition. According to Walker and his colleagues, a flanker
strategy is always used in conjunction with a positiondefence strategy. The
leader simultaneously strengthens its primary brand while introducing a
flanker to compete in segments where the primary brand is vulnerable.
'This suggests that a flanker strategy is only appropriate when the firm has
sufficientresources to develop and fully support two more entries. A flanker
will end up being of little value if it is so lightly supported that a competitor
can easily wipe it out. It has also been observed that flanker strategy can
either beproactive or reactive. The leader can come out with a flanker in

anticipation of a competitor's entry either to establish a foothold before the
competitor arrives or to discourage the competitor from entering. This
response can take one of the following forms:
a. Sit back and wait for the competitor to fail.
b. Attack the attacker's flank.
If the leader has established a strong position and attained a high level of
preference and loyalty among customers and the channel members, it may
be able to sit back and wait for the competitorto fail. However, where this is
not possible, the leader may have no choice but to confront the competitor
directly. Walker and his colleagues are of the opinion that, if the leader's
competitive intelligence is good, it may decide to move proactively and
change its marketing program before a suspected competitive challenge
takes place. By nature however, a confrontational strategy is always
reactive. What the leader does is to beat the attractive features of a
competing offering — by going into product improvements, increasing
promotional efforts, or lowering prices only after the challenger's success
has become obvious. Wilson and Gilligan (2001) have suggested an
alternative to the above actions. According to them, "the market leaders
can try searching for a gap in the attacker's armour, a strategy that was
used in the United States Cadillac when faced with stronger marketing
push by Mercedes. Cadillac responded by designing a new model, the
Seville, which it claimed, had a smothe ride and more features than
Mercedes." It has been pointed out that simply meeting the improved
features or lower prices of a challenger however does nothing to re-
establish a sustainable competitive advantage for the leader. "And a

confrontation based largely on lowering prices creates an additional
problem of shrinking margins for all concerned Nagle, (1993). Unless
decreased prices generate substantial new industry volume, and the
leader's production costs fall with that increasing volume, the leader may
be better off responding to price threat with increased promotion or product
improvement while trying to maintain its profit margin. VValker et al, (1996);
Doland and Jewland ( 1981),pointed out that, in products markets with high
repeat purchase rates or a protracted diffusion process, the leader may be
wise to adopt a penetration pricing policy in the first place to strengthen its
share position and pre-empt low price competitors from entering.
In actual fact, the leader can avoid the problem of a confrontation strategy
by re-establishing the competitive advantage eroded by investment i n
process reengineering aimed at reducing unit costs, improvement in
products and service quality, and the overall value chain.
2.4. MARKETING STRATEGIES FORLEADERS
Leaders are those companies that did most to develop market sector in
their early days. Typically, they have a substantially higher market share
and take the greatest risk and are prone to failure than their conservative
competitors. Leaders enjoy first mover advantages. These advantages if
sustained through the growth stage and into the maturity stage of the
product life cycle can result in a strong share position and substantial
returns. Kevin, Varandarjan and Peterson (1992) have provided the
following sources of competitive advantage as marketing strategies for
leaders.

a. High Product Quality. Successful leaders are known to offer high quality,
well — designed product from the beginning, thus removing potential
differential advantage for late followers. Competent engineering, thorough
product and market testing before launching and good quality control and
monitoring during the production process are all vital to the continued
process of leaders.
b. Heavy Promotional Expenditures. Relatively high advertising and
promotional expenditures as a percentage of sales are unique
characteristics of successful leader. Such promotion initially helps to
stimulate awareness and primary demands for new products category,
build volume, and reduce unit cost. Later, this promotion performs a major
task of building selective demand for the leader brand and reinforcing
loyalty as new competitors enter.
c. First Choice of Market Segment and Positions. The leaders are in a
favoured position to develop a product offering with attributes that enhance
brand acceptability. In this case the leader's brand can become a standard
of reference customers use to value other brands. This makes it difficult for
followers with "me too" products to convince existing customers that their
new brands are superior to the older and their products in ways that are
attractive to the mass – market segment.The only way out for them may be
to target a smaller peripheral segment or niche instead.
d. Ability to Define the Rules of the Game. The leaders dictate the rules of
such variables as product quality, price, distribution, warranties, after sales
services,promotional appeals and budgets. Subsequent competitors must

either meet or beat these standards. If the leader's standard is high enough
they may become reasonable entry barriers for potential competitors.
e. Distribution Ad vantages. The leaders still have the first mover
advantage and the most options in assigning a distribution channel to bring
new products and services to the markets. This is of remarkable advantage
for industrial growth. A well thought out and timely channel options should
end up with a network of the best distributors. This has the tendency of
excluding late entrants from some markets. By nature, distributors are often
reluctant to take on second or third brands. This is especially true when the
product is perceived as technically complex and the distributor must carry
large inventories of the products and spare parts and invest in warehouse
space and in specialized training service. However, for consumer-
packaged goods attempts to slow the entry of l ate competitors by
preempting distribution channels can be difficult. In any case the leader still
has the competitive advantage of attaining more shelves facing as the
products enter the growth stage.
f. Economiesof Scale and Experience. The first mover advantage gives the
pioneerthe ability to gain accumulated volume and experience and thereby
lower per unit cost at a faster rate than followers. The significance of this
advantage is pronounced where products are technically complex and
require high development costs or when its life cycle is likely to be short
with sales increasing rapidly during the introduction and early growth
stages. The leader can then deploy these cost advantages in a number of
ways to protect its early lead against followers. One way i s low price, this
can become an entry barrier to the market because it raised the volume
necessary for them to break even. Another way is for the leader to invest in

additional marketing efforts to enhance its penetration of the market, such
as heavier advertising, a larger sales force, or continuing product
improvements of line extension.
g. High Switching Cost for Early Adopters. According to Kevin et al,(1992),
"customers who are early to adopt a leader's new product may be reluctant
to change suppliers when competitive products appear. This is particularly
true of industrial goods where the cost of switching can be high."
Compatible equipment and spare parts, investment in employee training,
and the risk of lower product quality or customer services coupled with the
general transactional uncertainty of t he buyer, make it easier for the leader
to retain it early customers over time. However, in some cases, switching
cost can work against the leader or in favour of the followers. For example,
a leader may have trouble converting customers to a new technology if
they must bear high switching cost to abandon their old ways of doing
things.
i. Large Entry Scale. Leaders who were successful had adequate capacity,
or could expand quickly enough, to pursue a mass market targeting
strategy, usually on a national rather than a local or regional basis. They
could therefore expand their volume quickly to achieve the benefits of
experience curve effect before major competitors could confront them.
j. Broad Product Line. Successful leaders are capable of adding line
extensions or medications to their initial product to match their offering with
specific market segments. This reasonably shields them from late entrants
who might differentiate themselves by targeting one or more peripheral
markets.

There are certain factors that affectthe successful implementation of these
marketing strategies in a competitive environment. These factors are
classified into two board headings. They are the micro or internal
environment or the internal factors and the macro environment or external
factors. The internal factors can be controlled by the firm. But the firm
cannot control the external factors, therefore, it adapt to it.
2.5. INTERNAL ENVIRONMENTSOR FACTORS
Essentially, organizations perform four basic functions namely, marketing,
personnel, production and finance otherwise referred to as organic
business functions. The marketing management personnel of an
organization, in formulating market i ng strategies must take into account
the other departments in the organization. These include production,
finance and personnel departments. Marketing managers must seek the
approval of marketing strategies by top management before they can be
implemented. Therefore, the internal environments consist of these
different departments that interact with the marketing department, thus,,
affecting the entire organization's transactions with its target market. These
effects can be analysed as follows:
i. Leadership
The organization leadership may be opposed t o the objectives of the plan
for a number of reasons, take for instance when leaders are frown non –
marketing disciplines and they feel that the need for change is not apparent
or simply they are comfortable with "steady state" management style.
Whatever their reason, according to Fifield (1999)"unless strong leaders

are brought into the vision and strategy completely, little progress is likely
to be made".
ii. Organizational Culture/Design. According to Fifield (1999) "when dealing
with organizational culture and design, it is important to consider its 'soft
element' such as well as the traditional "hard value" organization this is
nothing without people who work are designed for conveniences and
administrative ease of work, rather than being designed in order to deliver
satisfaction to customers.
It is unrealistic to design a customer-focused marketing strategy without
spending some time looking at the organization’s ability to deliver what they
promise their customers. If organizations are so rigid that they cannot be
redesigned, then marketing strategy may not be implemented accordingly.
iii. Functional Policies. Sometimes refers to a sub- set of organization
structure, some functions in an organization (Finance, Operations, human
resources and marketing) tend to grow and produce a number of functional
policies and procedures which determine how parts of organization and
staff should manage day- to -day affairs of the business. The intended
marketing strategy of the organization may fall foul of these functional
processes and will encounter a blockage on the path of implementation.
The marketing strategy is not just a strategy for the marketing department;
it is the strategy, which guides the whole organization's activities relative to
the customers. Therefore, marketing strategy should not be something,
which is imposed on other functions, but a route and direction which staff
and managers from other functional areas share with other members of the

organization. After all, the customer i s every one's responsibility not just
the marketing department
iv. Resources. The proposed marketing strategy in any business firm may
require either significant additional resources to be allocated, to certain
function or even re - appropriation of resources into different areas of the
organization. Successful implementation of strategic marketing plan would
depend upon these resources either being available of the implementation
of the plan or making the appropriate resources available so that the plan
can be implemented fully. The potential problem here is likely to be either in
the resources simply not being available or that the senior management
considers that other causes are more deserving. In any case, this could
provide a significant blockage to implementation.
v. Evaluation and Control Procedures. The lack of appropriate monitoring
and evaluation procedure in any business organization will bring a
significant blockade to the successful implementation of any strategic
marketing plans. No matter how long term strategy is aimed at improving
and developing customersatisfaction levels, if the organization is managed
and motivated by monthly sales figure, that is what will be achieved. If there
is no proper control measures put in place, then implementation of
marketing strategy becomes a problem in any organizational set up be it
banking or manufacturing industries.
Kotler (2003) states that “Companies and their suppliers, marketing
intermediaries, customers, competitors and public, all operate in a macro
environment or forces and trends that shape opportunities and pose
threats. These forces represent "non controllable to which the company

must monitor and respond. In the economic arena, companies and
consumers are increasingly affectedby global forces". There are a number
of macro factors influencing the successful implementation of marketing
strategies, some of these factors are:
i. Demographic Factor: People make up market. A growing population that
lacks the willingness and ability to pay do not lead to increasing demand.
Marketing management must monitor the structure and size of the
population that affectmarketing strategies in organization. Areas of interest
are size and growth rate of the population, age distribution, and regional
characteristic.
ii. Social and Cultural Factors: Changing social patterns have a major
impapt on any strategies plan. Adeleye (1998)say "The society that people
live in affects their values, norms and beliefs, indeed, cultural and social
fabrics shape peoples patterns of behaviour". Social and cultural values
consist of attitudes towards health and nutrition, materialism, need for self-
expression, product safety and ecological concerns among others.
Marketing management personnel must identify the changing cultural a nd
social conditions that affect marketing strategies in organisations.
iii. Political, legal and Government Factors. There are quite a number of
laws that affect business activities on wide scale. Marketing strategies are
substantially affected bydevelopments in the political, legal and a multitude
of authorities such a s r egulations (and deregulation) regarding product's
advertisements, product labeling and testing requirements, pollution
control, limitations regarding product control limitations regrinding product
contents and restrictions or incentives as regards the activities of importers

or exporters. Marketers must pay close attention to major trends in income
and consumer spending patterns. The prevailing economic conditions in
India offer a mixture of opportunities and threats to marketing strategies.
The large population constitutes a potentially large domestic market that
can sustain fairly large manufacturing plants. Indeed, India's population
makes her the largest single market among the entire Asian countries, thus
offering a great opportunity to the multinationals to invest in the country.
The high exchange rates of the Naira to the Dollar, Pound Sterling and
some other major foreign currencies have created the problem of low
capacity utilization for local ind ustries that normally fail to procure enough
quantities, of-raw materials aboard with the foreign currencies. The
inadequacy of economic and social infrastructure also offers opportunities
and threats to marketing strategies. Technological changes, since the
destiny of the organization is influenced by the technology can be a
constraint when opportunities exist while the necessary equipment is
lacking. This greatly influences the implementation of strategies in a
competitive environment.
vi. Natural Environment: Natural environment is another factor that
availability of natural resources, climate, physical barriers and terrains.
Marketing management should be aware of several trends in the natural
environment. These include: the growing shortages in raw material which
could be finite or infinite, increased population and increased government
intervent ion in natural resources management.

2.6. PROBLEMS WITHIN THE MARKETING FUNCTION
There are a number of aspects of marketing department or functions which
can also cut as potential to the development and implementation of
strategic marketing plans. These include the followings:
i. The role of Marketing/ Market: The role of the marketer depends largely
upon the organization culture and structure. In the non — market oriented
organization marketing tends to be synonymous with advertising and
promotion. The marketing manager is often taken on as a necessary and
expensive evil because the competition seems to be making inroads into
the organizations market by advertising. Other managers in the
lii) organization often have little understanding of marketing concepts and
Don’t appreciate their role in satisfying customers. The role of market in the
product or production oriented organization is twofold- to give his or her
internal customers what they want and secondly, to act as catalyst for
organizational change towards a more customer-oriented position. In the
case of a customer or market – oriented organization, the role of the
marketer’s and the marketing functions is quite different.
. To do this, it needs much more that depth knowledge of advertising and
promotional methodology and techniques. In this type of organization, the
marketer's key area of responsibility is to understand the organization's
customers and to feed this information back into organization and other
functional areas so that the people may act upon it profitably.
To achieve this, marketing needs to interact positively with other functional
departments within the organization.

iii. Marketing Feedback. How effective a marketer is in his or her job and
how well the marketing strategy is implemented will depend on how
relevant and how good information is and how well it is interpreted and
acted upon. Information is critical to any organization. Information and
feedback on a plan's progress is never 100% accurate but it does act to
both reduce on uncertainty in planning and improves the quality of action.
Critically the marketer may not be in complete control of the information
sources and the speed at which they are delivering quality information back
to the marketing function. A great data is often raised elsewhere in the
organization but often not a form, which will provide adequate information
for marketer's use. The marketer has two main flows of Data; one from the
environment and the other from internal operations. Some, but not all, are
likely to be under the marketer's direct control, for the rest other
departments need to understand the importance of quality and timely
information flows and initial marketing can help this process.
The final critical area of marketing and market feedback i s market
research. In many organizations, some market research is carried out but
invariably it is insufficient to meet the organization's need. Market research
should not be regarded as a crutch to support weak decision – making but
as an essential investment in the market place and future prosperity of the
organization. Unfortunately many organizations oftenproduct, productionor
planning oriented do not see investment aspect of market research but
rather
iv) Considerit as a cost.As competition increases and market continue - to
fragment, it is unlikely at investment in market research will decline in the
most successful organization.

2.7. MARKETING STRATEGIES EMPLOYED BY STAR CEMENT
From the information gathered through the research, we have been able to
come up with the following strategies carried out by the Star Cement to
maintain its leadership position in a competitive environment.
i. Good Quality Products
Considering the Company’s mission statement as stated earlier, good
quality cement products for their target market give them the ability to
remain a leader. The Company has been able to do this through committed
people delivering excellent consumer satisfaction. From the information
realized Star cement’s products have high quality different from other
cement companies within the Indian market. These other competitors have
always desired to acquire the leadership position over the years, but have
remained impossible for them. Customers of these products have also
confessed positively on the quality of Star cement. This has made most
customers continued buying Star cement’s products.
The Star Cement has always been the first in term of quality cement
products and it is a solid point behind their leadership. Good manufacturing
practice, quality control and good research and development are their
guiding light to quartering the satisfaction of their customers.
ii. Pricing.
As it was stated earlier in this chapter, being one of the cement companies
in India, the company’s pricing has always been on top. The company
dictates the rules of such variables as price, product quality and
distribution, to its customers. These other competitors have not been able
to beat, but have remained followers. Prices of products are done

commensurate to the quality of the products so that this can meet the
satisfaction needs of customers.
For quite a long period, other cement companies set their prices
immediately Star Cement does so, invariably Star Cement has remained a
leading company through this strategy. Pricing therefore is the p-factor of
the marketing strategy of any organization. The efforts of the company will
fail if the products are not properly priced.
iii. Good Delivery System
The primary aim of the Star Cement is to reach out to their customers
satisfactorily. This is done through distribution strategy. The distribution
process includesthe physical handling and distribution of products,the Star
Cement several trucks networking the several outlets that exist for the
company and distributors do not need to pay transport cost to buy their
products for sale. These products are conveyed by the company trucks to
all the outlets that exist for the company. With this good distribution
strategy, they acquire a large market, thereby achieving economics ofscale
in their sales. They also have major and mini depots located at strategic
places to ease distribution to customers who may want to buy.
iv. Incentives
The Star Cement gives incentives to their customers and distributors to aid
them in their marketing activities. Incentives like the provision of
warehouses for distributors who may not have a enough capital to have
warehouse on their own. They also supply their outlets with cements
product where necessary, to facilitate the delivering of their products. They
also give wheel barrows that aid in moving some of these cements within

short distances especially places that their big trucks for distribution might
not be able to enter either as a result of bad road or no road at all.
Competitors in the environment are not into some of these acts and so Star
Cement taking the lead and maintaining it.
v. Advertising
For many years, Star Cement had the market concerned, but as the market
got more and more lucrative, professional advertising became more and
more important. The Star Cement has been leading the way in advertising
ever since. According to Kotler (2009) “Advertising is any paid form of non
personal presentation and promotion of ideas, goods or services by an
identified sponsor. Advertisers include not only business firms, but also
museums, charitable organization, and government agencies that direct
messages to target publics. Adverts are a cost – effective way to
disseminate message, whether to build brand preference for cement
products or to educate people to avoid hard drugs”.
Organizations handle advertising in different ways. In small companies,
advertising is handled by someone in the sales or marketing department
who works with an advertising agency. A large company will often set up its
own department whose manager reports to the vice president of marketing.
The advertising department’s job is to propose a budget, develop
advertising strategy, approve adverts and campaign and handle direct mail
advertising, dealer displays and other forms of advertising, most companies
use an outside agency to help create advertising campaigns and to select
and purpose media. Star Cement relies on heavy advertisements to
promote their products.This is done basically through the use of images of

happiness and togetherness, tradition, and nationalism, perpetually to
maintain its original lead.
Their advertising strategy adds a lot of value to their product as i t catches
not only few but also most customers. Issues of life are sometime being
conveyed through their advert messages. They hardly advertise through
people using their product rather they put up some well cultured and
strategic images to convey messages that are attractive. This way they cut
across a wide range of the market and capturing customers which
eventually lead to a large market share.
2.8. DISTRIBUTIONCHANNELS
2.8.1.Descriptionsof Distribution Channels
As a result of the growing interest in industrial markets and networks,
researchers have found themselves flooded with a number of terms, such
as “supply chains”, “demand pipelines”, “value streams” and “support
chains”. The Distribution Channels concept originated in logistics literature,
and logistics has continued to have a significant impact on the concept
(Chen and Paulraj, 2004). Initially, the emphasisof this concept was on
assisting product movement and coordinating supplier and buyer (Bechtel
and Jayaram, 1997). Logistic managers in high inventory industries, such
as the grocery and retail industries, observed a great benefit from the
management of materials coming in and going out. Since its introduction in
the retail industry, the Distribution Channels concept has spread to many
other industries (Bechtel and Jayaram, 1997).
The Distribution Channels is the chain links each element of the
manufacturing and supply process, from raw material to end users (New

and Payne, 1995; Scott and Westbrook, 1991). A Distribution Channels
consists of all parties that are directly or indirectly involved in fulfilling
customer demands. Typically, this includes the manufacturer, supplier,
transporter, wholesalers, retailers and customers (Chopra and Meindl,
2007). The scope of Distribution Channels can be defined in terms of the
number of firms involved in the Distribution Channels and the functions
involved (Cooper et al., 1997). Cooper et al. (1997) also defined that
Distribution Channels structure is the configuration of companies within the
supply chain. Dimensions to consider include the length of the Distribution
Channels and the number of suppliers and customers at each level.
New and Payne (1995) described that the Distribution Channels as
including activities such as planning, product design, fabrication, assembly,
transportation, warehousing, distribution, post-delivery and customer
support. Cooper et al. (1997) used a slightly different perspective to
describe the activities involved in a supply chain: business process, which
a set of activities designed to fulfill certain objectives. Typically there are
seven processes: (1) customer service management, (2) demand
management, (3) order fulfillment, (4) manufacturing flow management, (5)
procurement, (6) product development and (7) commercialization (Cooper
et al., 1997). The discipline of Distribution Channels management
(SCM) has received increased attention due to the fact that it focuses on
creating both top- and bottom-line improvements by streaming the flow of
material and information across the chain, which creates competitive
advantages for the Distribution Channels or companies in the Distribution
Channels(Christopher, 1992).

2.8.2.Position in Distribution Channels
Nicovich and Dibrell (2007) described how value is added within an
industry, through a series of sequential operations or stages in a supply
chain. A specific company may undertake a few stages but the company
will tend to favour one or the other as its primary focus. The position
chosen in its industry Distribution Channels will have significant economic
and marketing implications (Nicovich and Dibrell, 2007). Harland (1997)
added that the industry Distribution Channels can be separated into two
halves: upstream and downstream. Upstream operations tend to provide a
harder, more tangible package to customers, while intangible service
elements are often more important in the downstream (Harland, 1997).
Companies with activities centered in either half differ greatly in aspects of
success factors.
According to Nicovich and Dibrell (2007), companies in the upstream are
closer to the raw material end of supply chain, at which value is added
through transforming raw materials into standardized commodities or
intermediate products, which can be used by downstream members. In the
upstream, therefore, competitive advantage is more likely to involve
process and cost-oriented mechanisms that facilitate the achievement of
low-cost position. On the other hand, companies in downstream are
relatively closer to the ultimate consumers. These companies are
characterized as being able to produce products that meet the diversified
needs of consumers (Nicovich and Dibrell, 2007). Value added in the
downstream is the contribution that intermediaries make to complete
exchanges with end customers (Kim and Frazier, 1996). Value is added
through advertising, positioning products and marketing channels. Instead

of competing based on cost position, success at the downstream lies in
proprietary features, product development and customization (Nicovich and
Dibrell, 2007). It is also worth noting that value added by downstream
intermediaries might not be economic or monetary value; the development
of close social and personal relationships may also be regarded as adding
value to the products and distribution (Kim and Frazier, 1996).
2.8.3.Distribution Channelin Focus
Coughlan et al. (2006) defined a distribution channel as a set of
independent organisations involved in the process of making a product or
service available for use or consumption.
The ultimate goal of a distribution channel is to bridge the gap between
producers and consumers by adding value to products or services (Kim
and Frazier, 1996). Typically, manufacturers, intermediaries (wholesaler,
retailer, specialized) and end users are perceived as the key actors of a
distribution channel (Coughlan et al., 2006).Based on these definitions, it is
not easy to determine where the distribution channel actually starts, since
there might be multiple producers involved in manufacturing the final
products at different levels. Some of these producers are close to the end
at which raw material is supplied, while others are closer to the end that
deals with final buyers or users.
There are two essential decisions when designing a channel of distribution:
a strategic decision and a tactical decision. The former one decides the
number of levels between supplier and consumer, while the latter
determines the intensity of the selected structure and policies of channel
management (Rangan and Jaikumar, 1991). The complexity of these

decisions is increased by widely different social, culture, economic and
political patterns (Ensign, 2006). Compared to Distribution Channels
management, distribution channel seems to have a view of “inside the
chain”. It is more common for distribution channel studies to investigate the
seller-buyer dyad, and they often take either the seller’s perspective or the
buyer’s perspective (e.g., Amato and Amato, 2009;Deusen et al., 2007). In
contrast, Distribution Channels management appears to have a view of
“over the chain”, which means that studies of Distribution Channels
management tend to take a globe angles and try to encompass multiple
interfaces (e.g., Gunasekaran and Ngai, 2005; Love et al., 2004).
2.8.4.Distribution ChannelMatters
Strategic management of distribution channels is growing in both popularity
and significance in the business world (Levi andWeitz, 2008). There are
several reasons for this. Firstly, as value has shifted towards customer,
distribution has moved from being the backwater of strategy to the main
stream, since it is where much of the profit in many industries can be found
nowadays (Wise and Baumgartner, 1999). In other words, distribution and
its network have become an important source of success and competitive
advantage. This phenomenonhas beenemphasised extensively. Anderson
and Narus (1990) reported that it is mutually recognised and understood
that the success of manufacturers and distributors depends on the other
firm. Their statement indicates that a manufacturer’s success can not be
reached from their own effort alone; having a good partner in distribution is
very important. Loomba (1996) also suggested that in order to compete
effectively, today’s firms must re-evaluate their existing distribution and
make adjustments when necessary. Hyvönen and Tuominen (2007)

claimed that the changing business environment has recently challenged
many firms to seek out new methods to achieve sustain performance
advantage through market orientation and distribution channel
collaboration.
Secondly, distribution channel strategies affect many other aspects of
marketing strategies.
According to Kotler and Keller (2008), distribution affects sales, since if the
product is not available, it cannot be sold. Most customers will not wait until
it can be reached. Delivery is seen as a part of the product that influences
customer satisfaction.
Thirdly, the choice of distribution network has long-term consequences.
The structure of the distribution network is one of the most difficult
decisions to change. According to Chopra and Meindl (2007), the impacts
of selecting a distribution network often lasts for decades. Changing on the
channels and channel shifting is too costly. In the long run, distribution
channel strategies involved in strategic alliances and partnerships that are
founded on trust and mutual benefits create distinguishable interests
(Chopra and Meindl, 2007).
2.8.5.ChannelFunctions
The channel function concept has already been extensively discussed by
academics (e.g.,
Ajzen and Fishbein, 1980; Mallen, 1973; Rangan et al., 1992). McCammon
and Little (1965) argued that functions are considered to be the basic
determinants of channel structure; that is, a system designed to carry out
necessary tasks. Some researchers have discussed channel structure in

terms of the functions performed by channel members (Mallen, 1973). The
basic idea was that channel functions could be allocated in different
combinations among various channel actors depending on the
characteristics of the channel (Wren, 2007). Channel functions are
categories of activities and services that add value to physical goods as
they move from manufacturers to customers (Atwong and Rosenbloom,
1995). Rangan et al.’s (1992) list of eight channel functions is described
briefly below:
• Product information: Provide information about products for customers,
particularly for those products that are new to market and are technically
complex.
• Product customization: Adjust product technical configuration to fit the
customer’s requirements. Even a standard product must satisfy a specific
customer’s requirements for factors, such as size or grade.
• Product quality assurance: Ensure product reliability for customers.
• Lot size: Provide jointed purchase effort if the product has a high value.
• Assortment: In some cases, a customer may need a broad range of
products under one roof. In other cases, assortment may be related to the
breadth of the product line.
• Availability: Customer demand might be difficult to predict; if so, the
channel must support a high degree of product availability.
• After-sales service: Provide services, such as installation, repair,
maintenance and warranty.

• Logistics: Provide transportation, sorting and supplying products to end
users (ibid)
2.9. IMPORTANCE OF RETAILERS
2.9.1.Retailer Image
Approximately one-third of all consumers’ spending passes through the
retail sector (Nordås, 2008). Retailers are selective in terms of what
merchandise lines are carried in the stores, so as to simplify the consumer
shopping experience (Sternquist, 1994). Retailers provide manufacturers
with access to market segments and consumers (Levi and Weitz, 2008).
Right from its origins, the function of retailers in distribution channels has
been to break down bulky supply into separate stocks(Mulhern, 1996).
Retailers were originally only considered as merchants who made profits
from the price difference between their buying and selling prices (Levi and
Weitz, 2008). However, the scope of the retailing business has moved far
beyond breaking bulk and is now defined as a set of activities that involve
selling products and services to end consumers (Mulhern, 1996). Retailers
today take many forms,including department stores, mass merchandisers,
supermarkets, convenience stores, specialty stores and online stores, etc.
(Coughlan et al., 2006). The total offer to consumers is becoming more
complex, involving a mix of products, services and facilities (Elg, 2003).
The most successful modern retailers are not only outstanding merchants
but have also developed a unique andstrong brand image (Levi and Weitz,
2008). For instance, Walmart has defined itselfas an “everyday low-price”
retailer, and B&Q has positioned itself as a lifestyle retailer. These retailers

create value for consumers by providing more services and a broader
range of products.
2.9.2.Retail Growth and Retail Consolidation
Modern retailers have achieved organic growth, which involves developing
new products or brings existing products to new markets, and acquisition
growth, which involves acquiring business or assets (Bahadir et al., 2009).
Retail growth, especially acquisition growth, affects the retail market
structure in a significant way. The retail consolidation that has occurred in
Europe and North American has led to the emergence of large retailers
(Dragun and Howard, 2003). Market share for small and medium retailers
is shrinking and moving towards two extremes. Gagnon and Chu (2005)
describedthese two extremes as mega retail format and focused specialist
retail format. When it comes to the reasons for retail consolidation, Dragun
and Howard (2003) introduced three causes of retail consolidation: greater
buying power, synergies and cost-saving potentials.
2.9.3.Retail Supply Management
According to Dawson and Shaw (1989), the success of multiple retailers
has been based on particular management systems and philosophies. One
such system has been a strong central control of operations, covering
buying operations, labour policies, advertising, administration and
distribution. The move by retailers towards distribution centre operation can
be seen primarily as a response to the risk of running out of stock (Dawson
and Shaw, 1989), and also about controlling retail distribution (Fernie et al.,
2000).

Moving to a centralised distribution also potentially extends the supply base
for retail brands. Burt (2000)explained that reducing the number of delivery
points allow smaller suppliers and new entrants without established
distribution capabilities to supply retail brand ranges. When it comes to the
supply base of retailers, one significant change is the reduction in the
number of suppliers. Historically, many companies have adopted a
competitive approach of involving many suppliers in order to obtain a better
condition in prices
Literature Review (Ogden, 2006). However, multiple sourcing usually
results in lower prices but requires more time for negotiation and might
delay or disrupt production schedules (Cruz, 1996). With the growing
importance of purchasing as a field, in order to improve the overall
performance of a supply chain, many companies are adopting the strategy
of supplierbase reduction and long-term collaboration development(Sarkar
and Mohapatra, 2006).
Supplier base reduction is often associated with purchase strategy, just-in-
time (JIT), supplier management and partnership (Ogden, 2006).
2.9.4.Retail Brands
In some markets, such as the UK, retail brands have reached a mature
state, while in other markets, such as Spain and Italy, they are still in an
early or developing phase (Elg and Paavola, 2008).Despite the divergence
of developments, more and more authors argue that retail brands are
becoming a major threat and challenge to the leading manufacturing
brands (Elg and Paavola, 2008). From the retailer’s perspective, retail
brands have a significant impact on a retailer’s differentiation and

competitive superiority (Lymperopoulos et al., 2010). Aliawadi et al. (2008)
added that retail brands might also improve customer loyalty. Their study
found out that consumers who buy retail brand from a retail chain are likely
to build some chain loyalty, while those who do not buy retail brands have
no such loyalty.
2.9.5.Implications of Retail Developments
Retailers play a more active role towards manufacturers by setting product
standards, promoting products and obtaining and sharing information on
consumer behaviour (Nordås, 2008). Retailers are also networking
organisations in distribution channels, due to the fact that they coordinate
products from different suppliers (Elg, 2003). Giant retailers always have a
large market demand in the retail market and are frequently the largest
buyer for the manufacturers. Secondly, giant retailers can offer more
demand-stimulating services to promote manufacturers’ products.
Consequently, the giant retailers have made themselves attractive to
manufacturers (Yan and Wang, 2010).
A small number of retailers have taken a larger portion of the market share.
Consequently, the “gate-keeping”role of retailers is becoming obvious due
to the fact that their location in distribution channels is believed to have
become increasingly significant (Burt and Sparks, 2003). The concept of
retailers acting as gate keepers can be traced back to the 1960s. Gross
(1967)adopted the term “gate keeper” to describethe role of big retailers in
distribution channels. A gatekeeper refers to an individual or a group of
individuals with the power to make a decision that allows a particular item
to enter or not enter a particular channel. Gross (1967) argued that large-
scale retailers’ go or no-go decision are very critical to ensure consumer

exposure at the point of sale and, ultimately, the manufacturer’s chances
for success, especially the success of newly developed products.
Thus, in order for a new product to find its space on the shelves of a retail
chain, it must be allowed by the gatekeepers who have the authority to
accept new products (Gross, 1967). Hansen and Skytte (1998) echoed
Gross’s (1967) idea, saying that retail chains in most European countries
have grown so large and powerful that wholesalers are removed, although
their functions are shifted either forward or backwards in the distribution
channel. Retail chains buy the products directly from the manufacturers, if
they accept the products. If the retailers do not accept the products,
however, it becomes almost impossible for the producer to market them
(Hansen and Skytte, 1998).
2.9.6.Expanding Offerings of Manufacturers
A product is generally defined as “anything that can be offered to a market
for attraction, acquisition, use or consumption that might satisfy a want or
need” (Kotler and Keller, 2008, p. 358). With regard to the total product,
Levitt (1980) argued that marketers must think through different levels of
the product, each of which adds more value to the consumers. Four such
levels are generally defined: generic, expected, augmented and potential
product (Levitt, 1980). Lindgreen and Wynstra (2005) argued that the
competition nowadays occur in terms of what is added to products in the
form of packages, service, advertisement, financing, means of delivery,
stock policies and everything else that customers may value.
There used to be a clear partition of products, which divided products into
goods and services (Vargo and Lusch, 2004). However, the boundaries

between services and goods have become blurred, as products today are
often characterised by bundles of services and goods (Wise and
Baumgartner, 1999), which are usually sold in a single package that
delivers value to end customers (Corrêa et al., 2007). As Vargo and Lusch
(2004) explained, either the word “product” or “service” is not sufficient to
describe the true nature of what is exchanged today on the market. Goods
and services are combined in offerings.
Following Brax’s (2005) approach, the present study uses the term
“offering” to denote “any physical good, service, information or combination
of these that a company can offer to its customers” (Brax, 2005, p.143).
Another competitive strategy that has clearly emerged sincethe mid-1990s
is that of the “total solution provider”. Rather than just provide goods,
companies have to manage services to match with goods in order to
provide value (Corrêa et al., 2007). According to Brown (2000), customer
demand is believed to be one major reason why manufacturers have been
transformed into solution providers.Companies are encouraged to focus on
their core competences and outsource many of their other business
activities to external providers.This creates a growing demand for suppliers
to conduct many other types of service activities which were once
performed by customers themselves. The second reason noted by Brown
(2000) is the company’s seek of a unique competitive advantage.
Manufacturers find it difficult to differentiate their products. Service
businesses,however, often offer sustainable forms of differentiation, which
enable manufacturers to obtain higher margins (Brown, 2000).

A variety of authors have described the transition line from pure product
manufacturer to service provider. Oliva and Kallenberg (2003) proposed a
framework that illustrates the change in industrial firms’ offerings, with a
continuum that ranged from absolute product to complete service provider
(Figure 2.1).
Product Service Continuum (Adapted from Oliva and Kallenberg, 2003,
p.162)
Gebauer et al. (2005) added two dimensions - share of service revenue
and cumulative investment in the service business - to measure the
transition from products to services (Figure 2.2). Similar to Oliva and
Kallenberg’s (2003) model, Gebauer et al. (2005) assumed that at one end
of the continuum, a product manufacturer produces core products, with
services purely as an add-on to the products. In this case, revenue and
profits are generated mainly through the company’s core products and the
contribution of service to revenue is low. At the other end of the cotinuum
was a service provider whose product is just an add-on to services. The
major share of revenue comes from providing services and products only
represent a small part of value creation. The transition starts up with a few
product related services business and ends up with a large number of
service offerings, such as customer support, maintenance contracts,

consulting services, financial services, etc. Furthermore, Gebauer et al.
(2005) also pointed out that there is a potential risk of making this
transition. Some companies might be trapped by the service paradox,
which means that high investment in extending service business leads to
increased service offering and higher costs, but does not generate
correspondingly higher returns.
Transition line form Product Manufacturer to Service Provider (Adapted
form Gebauer et al., 2005, p.15)
2.10. SERVICE DELIVERY CONCEPT - THE PARADIGM SHIFT
Marketing is facing a new paradigm, which is Service Delivery (Ravald &
Gronroors, 1996). It is one of the key marketing issues today and it carries
with it a strategic shift in managerial thinking from extracting value from
transactions to developing mutual value through relationships (Ballantyne,
2000). The current paradigm shift in marketing spurs both marketing

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