WELCOME TO THE STRATEGIC

MARKETING MANAGEMENT COURSE

S G Raja Sekharan

INTRODUCTIONS
S G Raja Sekharan B. Tech in Chemical Engineering (1984) and PGDBM from XLRI (1989) Worked in SPIC, HCL, WIPRO, SRF, Ramco Systems, SAP and Keane. Also managed my own company for 2 years in IT industry. Last assignment - was heading HR for Keane in India till April 2010. Prior to this, was managing the business for Keane in Asia, Middle east and Africa. Visiting faculty in CUIM now for the past one year. Desirous of sharing my experiences and learning with all of you

INTRODUCTIONS - I WANT TO KNOW YOU

BETTER Roll number Name Your last degree and overall score. Any work experience? What industry you want to join What is your dream company give one name What is your dream role in this company post training Expectations from this course?

DIRECT OBJECTIVES OF THE COURSE

To introduce to you marketing practices at a strategic level To give you all a hands on experience of strategic level thinking that senior managers do everyday.

INDIRECT OBJECTIVES OF THE COURSE

To improve your learn_ability skills To make you think To improve your team interaction skills To build you up for success in life

BROAD PLAN FOR THE NEXT 30 HOURS

BROAD PLAN FOR THE NEXT 30 HOURS

Course lectures from me -15 hours Team presentations 12 hours Sharing of experiences from visiting executives 3 hours

Strategic Marketing Management course Session 1/2 Team formation and my inputs on Strategic analysis - where we are now and team presentations and discussions on Where we are now My inputs on Strategy formulation where do you want to go My inputs on Strategy implementation How to get there - Discussion on Principles of marketing warfare, description of current Indian Markets, discussion on services marketing, discussion on segmenting, positioning, branding, pricing, distribution, communication Team presentations on Strategy formulation and implementation by your companies - where do you want to go and how do you go there My inputs on Measuring success of implementation Did we get there Reserved for corporate interaction

Session 3 Session 4/5/6

Session 7/8

Session 9 Session 10

SESSION 1 TEAM FORMATION AND MY INPUTS ON STRATEGIC ANALYSIS - WHERE ARE WE NOW

SALES /MARKETING

ORG STRUCTURE IN MOST

INDUSTRIES

HeadMarketing and Sales

The strategy team

ManagerPromotion

Manager Market Research

Manager Sales

Manager Market Logistics

Manager Customer Service

INDUSTRIES/ COMPANIES THAT WE MAY BE

DISCUSSING AS STRATEGY TEAMS Automotive 2 wheelers Hero Honda, Bajaj, Automotive 4 wheelers Maruti Suzuki Financial services Banks ICICI Hotels Taj group FMCG Dabur, HUL, P&G, Asian Paints, IT services Infosys, TCS

LET US SEE SOME RECENT DATA/ NEWS ON THESE COMPANIES /

INDUSTRIES

AUTOMOTIVE INDUSTRIES

June 2, 2011 - Indian auto industry set to grow bigger on stronger demand
Maruti Suzuki sold more than 1 lac units per month in May on the back of good sales of its mid segment car Swift and Swift Dezire y Tata Motors saw higher sales of 62000 vehicles (up by 10%) due to surge of sales of Commercial vehicles (19% yoy) even though Indica and Indigo sales fell by 35% yoy y Mahindra saw a 20% growth yoy in sales helped by its utility vehicle business it sold 34000 units in May 2011
y

AUTOMOTIVE INDUSTRIES

June 2, 2011 - Indian auto industry set to grow bigger on stronger demand
Hero Honda sold over 5 lac vehicles in May ( its third month in a row) and is on target for a 6 million sale for the year 2011-12. y Bajaj Auto sold over 3.18 lac in May an 18% growth yoy y TVS Motors also saw an 18% growth in sales YOY to reach 1.81 lac units
y

FINANCIAL SERVICES INDUSTRY

For the quarter ended March 31, SBI posted a meager Rs 20.9 crore profit - a whooping 99 per cent decline over the same quarter last year - the lowest quarterly profit in its corporate history. With its 12,000 branches and 90 million customers, SBI - the country's largest bank - commands about 18 per cent market share in deposits and loans. Canara Bank reported a 34.48 per cent rise in its consolidated net profit to Rs 4,034.19 crore for the year-ended March 31, 2011. ICICI bank raises $1 B through issue of bonds @ 4.75% rate from Dubai operations and it will be used for its International operations Bank of Baroda will increase its international branches from 85 to 100 this year these new branches will be opened in the countries where it is already present in Kenya, Tanzania, New Zealand and other parts of Africa and ME.

HOTEL INDUSTRY NEWS

Indian companies are looking for stand-alone properties in the US and Europe, which are up for grabs following losses they made during the global slowdown, and also to use them tap into the growing breed of Indian travellers. Outbound travel has been grown by 7-10% every year since 2009 with about 11 million Indians going abroad annually. Most leading international hotels have set shop in India and are introducing all their brands across all categories. These hotel firms have strong loyalty programmes that help them drive occupancies into their hotels not only from international but domestic guests.

FMCG INDUSTRY NEWS

India's economic resurgence is driven by domestic consumption. The fast-moving consumer goods (FMCG) industry has more than trebled in the last decade to Rs 1,300 billion, according to a study by the CII. The relative under penetration of FMCG products, though, shows that the Indian consumption story is still in its early stages The three Indian FMCG companies in Africa- Marico, Godrej and Dabur have all been performing better in African markets than their established global peers for several quarters now. The African market is similar to the Indian market in terms of diversity and consumer behaviour and it is at a stage where India was 12 -15 years ago. So Indian companies understand the market better.

IT SERVICES INDUSTRY NEWS

Are Infosys and Wipro going through a mid life crisis? both are restructuring at the top and both have given revenue guidance that have disappointed analysts.

INDUSTRIES/ COMPANIES THAT WE MAY BE

DISCUSSING AS STRATEGY TEAMS Automotive 2 wheelers Hero Honda, Bajaj, TVS Automotive 4 wheelers Maruti Suzuki, Hyundai Financial services Banks ICICI, HDFC Hotels Taj group, Oberoi FMCG Dabur, HUL, P&G, Asian Paints, IT services Infosys, TCS

Can each one of you decide what industry interests you? You will be part of a 5 member team that will analyse the marketing strategy for a company in this industry in the next 3 months.

INTRODUCTION TO MARKETING
STRATEGY

THE CONCEPT OF STRATEGY

Generic
a plan of attack for winning  a plan for beating the opposition


Organisational
a plan for achieving organisational goals  a plan for securing a competitive advantage in a given market


THE CONCEPT OF STRATEGY

the direction and scope of an organisation over the long(er) term, which ideally matches its resources to its changing environment and, in particular its markets, customers or clients so as to meet stakeholder expectations
Johnson & Scholes

PURPOSE OF STRATEGY


To set the future direction for the organisation. To state how it is to create value to customers. To identify what product/s and in which markets the firm will invest its resources. To describe how it is to perform better than competition.

STRATEGY HELPS IN:



Defining the scope of business. Finding Strategic Fit between organisation and its environment. Identifying a Sustainable Competitive Advantage (SCA). Guiding the allocation of resources.

HIERARCHY OF STRATEGY
Corporate CORPORATE
The plan for achieving the overall goals of the business, often expressed in financial terms

SBU SBUs
How to compete in individual product-markets and support the corporate strategy

Functional FUNCTIONAL AREAS

Functional strategies in marketing, finance, production, services etc to achieve the SBU / Corporate goals

TITAN INDUSTRIES

HIERARCHY OF STRATEGY
Titan Industry Watches Jewellery Precision Engg. Eye wear

CORPORATE

SBUs

FUNCTIONAL AREAS

TITAN WATCHES A BRIEF HISTORY

Titan Industries started in 1987 as a watch company, at a time when India had only HMT and Allwyn watches In those days watches

had mechanical drives and hence were thick and needed winding and were not 100% accurate y were sold through wholesalers/ retailer channel where the company had little contact with the customer and the shops selling watches were dingy and old plus there were far fewer choices on design then. y Were seen as time keeping devices and hence everyone needed only one watch y the existing companies had not invested much in technology or markets
y

TITAN WATCHES A BRIEF HISTORY

Titan Industries changed the game by

y y y

Introducing quartz based slim and accurate watches Focusing on styling and large variety of options Titan introduced the catalogue style advertisement in India for the first time. Bringing in the concept of retailing into the watch market by establishing a network of fine showrooms which would later become the world's largest network of exclusive watch stores Investing in Brand building - right from Day 1 despite having many sub brands like Raga, Fast track, Xylis, etc, Titan remains a super brand and its background music is probably the longest playing jingle in India.

Titan changed the perception of watches from a time keeping to a fashion accessory. In about 25 years, Titan has emerged as the market leader in watches with over 60% market share in organized sector the sheer scale of offering sin the market, the number of retail outlets where one can buy it, the quality of the watches, the post sale service infrastructure Titan has set benchmarks in each of these areas. Titan today is the 5th largest watch maker in the world

TITAN WATCHES A BRIEF HISTORY

Titan has kept innovation core to its strategy, realising fully that the only way to sustain the fashion accessory perception is by continuously coming out with collections that make the current ones somewhat dated, thereby creating a certain discomfort in the consumers' mind, which leads to another purchase. This impact has shown up in every one of the collections. Every new design is fresh and distinctive, unlike what consumers have seen before, and hence it creates curiosity, walk-ins and sales.

TITAN INDUSTRIES A BRIEF HISTORY

Titan has also done the seemingly impossible reverse thing: taking Indian quality to international markets Titan today sells in the UK, Spain, Portugal, Greece, Singapore, Dubai, Malaysia, Oman, Philippines and many more countries. The customers are no longer only NRIs. They are the Thais, the Greeks, the Arabs, the Filipinos - through a combination of Contemporary Style, Great Quality and Great Prices

2010, More than a billion $ company

6000 5000 4000 3000 2000 1000 0 2007 2008 2009 2010 2136 3000+
i

5000+ 4000+

Income in Rs Crores

STRATEGIC PLANNING MODEL

THE INTER-RELATIONSHIP BETWEEN MARKETING AND CORPORATE STRATEGY

   

INFORMS DIRECTS GUIDES CONTROLS

Corporate Strategy Spe fy ng the o gan at on on Allo at ng e ou e Def n ng O gan at onal obje t ve

Marketing Strategy Ident fy ng produ t market/ to compete in Selecting market segments to target Developing the marketing mix
ACHIEVES  SUPPORTS  OPERATIONALISE


OPERATIONAL VS STRATEGIC MARKETING

Operational Marketing Action-oriented Existing opportunities Non-product variables Stable environment Reactive behaviour Day-to-day management Marketing department Strategic Marketing Analysis-oriented New opportunities Product market variables Dynamic environment Proactive behaviour Longer range management Cross-functional organisation

MARKETING STRATEGY AT STRATEGIC BUSINESS UNIT (SBU) LEVEL

At the SBU level, marketing can play a significant role in guiding the organisations whole activities. At the functional level, the role of marketing is to influence the level, timing and character of demand in a way that will help achieving the marketing objectives.

DEFINITION - COMPETITIVE MARKETING STRATEGY

A market-oriented strategy that establishes a profitable & sustainable market position for the firm against all forces that determine industry competition by continuously creating & developing a competitive advantage from the potential sources that exist in a firms value chain.

KEY ELEMENTS OF COMPETITIVE MARKETING

STRATEGY
Market-oriented: Establishes a profitable market position: Establishes a sustainable market position: Forces that determine industry competition: Continuously creating & developing CA: Potential sources that exist in a firm s value chain: Strategy based upon the needs & wants of the marketplace End goal of strategy to make a profit in the for-profit sector or to meet alternate metrics (NFP sector) Marketing strategy not about one-off transactions. Aim is to find a place in the market Complex mix of ingredients that create the marketing whirlwind Find a spot where, if need be, the primary challenges can be tackled What value any organisation wants to create using its available marketing resources

DEFINITION COMPETITIVE MARKETING STRATEGY

A market-oriented strategy that establishes a profitable & sustainable market position for the firm against all forces that determine industry competition by continuously creating & developing a competitive advantage from the potential sources that exist in a firms value chain. What were the key elements of competitive marketing strategy of Titan in Watches:
Quality Technology Styling Retail Branding investment Positioning as Fashion accessory

OUR METHODOLOGY FOR THIS COURSE

Figure 1.3: The Marketing Strategy Funnel

Phase One:
Where are we now?

Market Scan Portfolios SWOT/TOWS Objecti es/Financial Decisions Segmentation Position Action Plan Control Implementation

Phase Two:
Where do you want to be?

Phase Three
How will we get there?

Phase Four
Did we get there?
Corporate Social Responsibility

WHERE ARE WE NOW?

ANALYSIS


OF

CURRENT SITUATION

What are the major trends and possible changes in the marketing environment? Who are our competitors? How can we make ourselves different from competition? Who are our target customers & what are their needs? What competitive advantages and core competences do we have? Where do we stand on market share, profitability vis a vis the competitors?

 

STRATEGIC CHOICE
Strategic choice involves understanding the underlying bases guiding future strategy, and generating strategic options for evaluation and selecting from among them

WHERE WE WANT TO GO?

STRATEGIC CHOICE
A set of interrelated strategic decisions about:
Strategic direction (generic strategy) Product/s to offer Market/s to target Competitive stance to take Positioning strategy

STRATEGIC IMPLEMENTATION
Strategic implementation is concerned with the translation of strategy into organisational action through organisational structure & design, resource planning and the management of strategic change

STRATEGY IMPLEMENTATION PLANNING MARKETING ACTIVITIES



Design the Marketing Mix to support the chosen strategy and achieve strategic objectives. Decide on tactics for positioning products in the chosen markets. Define targets & time frame. Identify who will be responsible for different tactics.

 

ARRIVAL?
MEASURE, EVALUATE & CONTROL ACTIVITIES


Methods of control and evaluation - not only at the end of the time frame but on a regular basis. Ease of measurement depends on the types of activities implemented. Measurement reveals effectiveness of evaluation & helps decide if contingencies must be put in action.

OUR METHODOLOGY FOR THIS COURSE

Figure 1.3: The Marketing Strategy Funnel

Phase One:
Where are we now?

Market Scan Portfolios SWOT/TOWS Objecti es/Financial Decisions Segmentation Position Action Plan Control Implementation

Phase Two:
Where do you want to be?

Phase Three
How will we get there?

Phase Four
Did we get there?
Corporate Social Responsibility

Strategic Marketing Management course Session 1/2 Team formation and my inputs on Strategic analysis - where we are now and team presentations and discussions on Where we are now My inputs on Strategy formulation where do you want to go My inputs on Strategy implementation How to get there - Discussion on Principles of marketing warfare, description of current Indian Markets, discussion on services marketing, discussion on segmenting, positioning, branding, pricing, distribution, communication Team presentations on Strategy formulation and implementation by your companies - where do you want to go and how do you go there My inputs on Measuring success of implementation Did we get there Reserved for corporate interaction

Session 3 Session 4/5/6

Session 7/8

Session 9 Session 10

STRATEGIC ANALYSIS
)

STRATEGIC ANALYSIS
Strategic analysis is concerned with understanding the strategic position of the organisation in terms of its external environment, internal resources & competencies, and the expectations and influence of stakeholders
)

WHERE ARE WE NOW?

ANALYSIS


OF

CURRENT SITUATION

What are the major trends and possible changes in the marketing environment? Who are our competitors? How can we make ourselves different from competition? Who are our target customers & what are their needs? What competitive advantages and core competences do we have? Where do we stand on market share, profitability vis a vis the competitors?

 

MARKETING ENVIRONMENT

ENVIRONMENTAL ANALYSIS


Environmental scanning is the process of gathering information about the various forces in the environment. It involves observation, perusal of secondary sources, such as business, trade, government and general interest publications and marketing research. Environmental analysis is the process of assessing and interpreting the information gathered through market intelligence and environmental scanning.

MACRO (REMOTE) ENVIRONMENT: PEST MODEL

PEST:
Political Factors, Economic Factors, Socio-cultural Factors, Technological Factors

A framework that assists in analyzing the external (remote) environment and identifying the existing opportunities & threats

POLITICAL/LEGAL
Monopolies legislation Environmental protection laws Taxation policy Employment laws Government policy Legislation Others?

ECONOMIC FACTORS
Inflation Employment Disposable income Business cycles Energy availability and cost Others?

SOCIOCULTURAL

FACTORS

Demographics Distribution of income Social mobility Lifestyle changes Consumerism Levels of education Others?

TECHNOLOGICAL
New discoveries and innovations Speed of technology transfer Rates of obsolescence Internet Information technology Others?

ENVIRONMENTAL IMPACT MATRIX: MACRO (REMOTE) ENVIRONMENT FOR TITAN WATCHES

actor Political / legal
Impact of actor

Potential Opportunity or Threat

Economic

Reduction of Customs duty on Significant threat imported watches (-3) Chinese Yuan appreciation Positive impact (+2) Little innovation likely from competitors Increased affordability for lifestyle products

Technological

Neutral impact (0) Significant opportunity (+4)

Socio-cultural

Porters Five forces analysis

Potential entrants Threat of entrants

Suppliers Bargaining power

COMPETITIVE RIVALRY

Buyers Bargaining power

Threat of substitutes

Substitutes

Five Forces Analysis: Key Questions and Implications

What are the key forces at work in the competitive environment? Are there underlying forces driving competitive forces? Will competitive forces change? What are the strengths and weaknesses of competitors in relation to the competitive forces? Can competitive strategy influence competitive forces (eg by building barriers to entry or reducing competitive rivalry)?

ENVIRONMENTAL IMPACT MATRIX: PORTERS FIVE FORCES MODEL FOR TITAN

WATCHES
Factor Impact of factor Increasing rivalry in premium segment and lower segment Increased organised retailing in India Few suppliers for very high precision products Newer international brands can enter Indian markets Potential opportunity or threat

Competition

Significant threat (5)

Buyers

Significant opportunity (+5) Significant opportunity (+5)

Suppliers

Threat of new entrants

Threat (-3)

ANALYSIS OF INTERNAL ENVIRONMENT

Two models to use in analysing the internal environment:
1.

Resource audit: financial resources, human resources, physical resources, intangible resources Porters Value Chain Model: Help analysing
Firms Competitive Advantage and Core Competencies

2.

STRATEGIC CAPABILITY PROFILE RESOURCE AUDIT FOR TITAN WATCHES

Internal Area Resource/ Competence New facilities incorporating latest technology Evaluation

Physical resources

Major Strength (+4)

Human resources

Highly trained technical Major Strength (+4) staff Cash rich operation 75% revenue coming from Tanishq range Major Strength (+4) Weakness (-2) Significant strength (+5)

Financial resources

Intangible resources

Brand value, market leadership position and retail reach

PORTERS VALUE CHAIN

VALUE CHAIN ANALYSIS: IDENTIFYING COMPETITIVE ADVANTAGE

Competitive advantage will arise through:

y

Providing buyer value comparable to competitors but performing value chain activities more efficiently cost based advantage

and / or
y

Performing value chain activities in unique ways that create greater buyer value than competitors and hence command a premium price differentiation based advantage

STRATEGIC CAPABILITY PROFILE VALUE CHAIN ACTIVITIES TITAN

WATCHES
Internal Area Intangibles Resource/ competence Evaluation

Significant strength (+5) Strong corporate image in the marketplace Significant strength (+4) Well-established brands and market leadership position Less dependence on few key suppliers Highly automated logistics system Very good network of company owned stores and partner retailer network Strength (+1) Strength (+2) Significant strength (+4)

Inbound logistics/ procurement Outbound logistics etail network

Human resource management

Well trained, high skilled and Significant strength (+4) motivated employees across the value chain

WHAT YOU NEED TO DO

Based on your choice and my analysis each one of you will be part of a team and each team will represent a company In the next class, each team needs to analyse WHERE ARE WE NOW please cover macro environment, competitive environment and internal environment Use all the content in this ppt and more if you can Each team needs to make a presentation for 1015 mins each ( max) in the next class

OUR SECOND SESSION

Sequence of presentation will be based on draw of lots. Each team will get 15 mins of presentation time plus 5 mins (max) for discussion please keep the time as we will run short. Please share the ppt with me. For rating I will use the following criterion

y y y y y y

Have you put in enough work Content gets preference over style Availability of data over perceptions Ability to analyze data to come up with inferences Coverage of Macro, Operating & Internal environments and the SWOT/TOWS framework Overall clarity of the big picture on where are we

Strategic Marketing Management course Session 1/2 Team formation and my inputs on Strategic analysis - where we are now and team presentations and discussions on Where we are now My inputs on Strategy formulation where do you want to go My inputs on Strategy implementation How to get there - Discussion on Principles of marketing warfare, description of current Indian Markets, discussion on services marketing, discussion on segmenting, positioning, branding, pricing, distribution, communication Team presentations on Strategy formulation and implementation by your companies - where do you want to go and how do you go there My inputs on Measuring success of implementation Did we get there Reserved for corporate interaction

Session 3 Session 4/5/6

Session 7/8

Session 9 Session 10

THANK YOU