Advunced MurkeLlng -

MurkeLlng SLruLegv und CompeLlLlve PoslLlonlng

-## :
loteqtateJ Case aoalys|s aoJ u|scoss|oo (llClA kuClA)
um pm:
Morketinq Lnvironment
-zpm :
Lunch
z-: Competitor Ano/ysis
##-#pm:
Customer Ano/ysis ond briefinq on OTWC next
presentotion.
z
otiono/e:
S Essence of marketinq strateqy p|anninq
- cupublllLles = compeLlLlve murkeLlng
envlronmenL
S CrlLlcul ussessmenL of orgunlsuLlon's resources
currenL und fuLure wlLh envlronmenL fuced
(opporLunlLles und LhreuLs)
S 8used on marketinq orientation (costomet
ot|eotat|oo aoJ compet|tot ot|eotat|oo. looq
tetm [ocos aoJ |otet[ooct|ooal cootJ|oat|oo)

#
Exhibit 2.1
Layers of the marketing environment
INDUSTRY ENV.
Set of factors directly
influencing a firm
and its competitive
actions & responses
Competitor ENV
All of the
companies that the
firm competes
against.
. Genero/ environment . Genero/ environment (mucro envlronmenL):
concerns factors that not on|y affect the orqanisation and its
industry, but a|so the qenera| business sector. A|so inc|udes the
industry environment
#. Micro environment #. Micro environment compeLlLlve envlronmenL und lnLernul
envlronmenL
S he competitive environment competitive environment ls concerned wlLh lssues llke Lhe
poslLlon of suppllers buvers und compeLlLors us well us Lhe
vurlous publlc groups whlch huve un lnLeresL or lmpucL on Lhe
orgunlsuLlon (compeLlLor unulvsls und cusLomer unulvsls)
S S lotetoal eov|toomeot lotetoal eov|toomeot (top maoaqemeot aoJ all [ooct|ooal oo|ts |o (top maoaqemeot aoJ all [ooct|ooal oo|ts |o
tle otqao|sat|oo) tle otqao|sat|oo)
#
OPPORTUNITIE5?
THREAT5?
z#z
Lemogruphlc
Lconomlc
PollLlcul-Legul
Soclo-CulLurul
echnologlcul
uLurul
W senslng Lhe envlronmenL' collecLlon und evuluuLlon of
lnformuLlon fromLhe wlder murkeLlng envlronmenL
W n-golng process und glve lnlLlul lndlcuLlon of chunges ln Lhe
envlronmenL LhuL muv slgnul u need for chunges ln sLruLegv
W wo reluLed ouesLlons Lo be uddressed:
WhuL fucLors ln Lhe generul envlronmenL ure uffecLlng Lhe
flrm?
Whlch of Lhese ure Lhe mosL lmporLunL elLher presenLlv or ln
Lhe fuLure? PRlRllZL PRlRllZL RLLSlAlClPAL RLLSlAlClPAL 8 8
RLSPL RLSPL((t|m|oq/exteot) t|m|oq/exteot)
Leuds Lo ldenLlflcuLlon of pporLunlLles und
LhreuLs As well us compunv sLrengLhs und
weuknesses (SW)
z#z
. Uncertainty whuL ls golng Lo huppen ln Lhe
generul envlronmenL? 5TATE 5TATE
z. Uncertainty how wlll lL lmpucL upon orgunlsuLlon
und producLs murkeLlng declslon muklng? EFFECT EFFECT
. Uncertainty how should murkeLers respond Lo
whuL ls huppenlng or golng Lo huppen ln generul
envlronmenL? RE5PON5E RE5PON5E
(Ashi// ond jobber, #

Environment Environment Environment Environment

Environment
Po|itica|/|eqa| Economic 5ocio-cu|tura| and
Oemoqraphic
Techno|oqy
Natura|
W Monopolv
leglsluLlon
W AdverLlslng
ResLrlcLlons
W Prlce
ConLrols
W Llsclosure
regs
W uxuLlon
pollcv
W rude
leglsluLlon
W 8uslness
cvcles und
CLP rends
W lnLeresL ruLes
W lnfluLlon
W Unemplovm
enL
W Level of
WeulLh
W Llsposuble
lncome
W LlsLrlbuLlon
of lncome
W PopuluLlon
demogruphlcs
W ALLlLudes Lo
CSR
W Soclul moblllLv
W LlfesLvle
chunges
W ALLlLudes Lo
work und
lelsure
W Consumerlsm
W Levels of
educuLlon
W CovernmenL
prlorlLles for
reseurch
spendlng
W rends ln
LlecLronlcs
lelecoms
W ew dlscoverles
l developmenL
W Speed of
Lechnologv
developmenL
W RuLes of
obsolescence
W ShorLuge of ruw
muLerluls
W Lnergv cosLs
W RuLe of
LepleLlon of
resources
W PolluLlon of
nuLurul
envlronmenL
concerns
W Recvcllng und
reduclng wusLe
efforLs

SPollLlcul lLegul
SSocloculLurullLemogruphlcs
SLconomlc
Sechnologlcul
SuLurul LnvlronmenL

S ew apptoacl to sttateqy
. Clobal sttateqy
z. Mastet btaoJ
,. uel|vet|oq valoe to tle eoJ oset tltooql
maoaqemeot o[ valoe |o tle eot|te sopply aoJ
J|stt|bot|oo cla|o. (|oteqtat|oo)
. Mass costom|sat|oo
. u|stopt|ve |ooovat|oos
6. Cteatet tespoos|b|l|ty towatJs stakelolJets
z
Porter's five forces of competition
CompeLlLlve rlvuls ure orgunlsuLlons wlLh
slmllur producLs und servlces ulmed uL Lhe
sume cusLomer group = dlrecL compeLlLors
S Rlvulrv umong exlsLlng compunles t|valty |s
|oteose wleo compet|tots ate o[ s|m|lat s|ze
low matket qtowtl. l|ql ex|t batt|ets. l|ql
[|xeJ costs. wlete ptoJoct J|[[eteot|at|oo |s
low.

z. hreuL of murkeL enLrv ls hlgh when entry barriers are |ow low
costs o[ eotty. oew J|stt|bot|oo claooels. low tetal|at|oo. low
J|[[eteot|at|oo. ex|st|oq qaps
hreuL of subsLlLuLes (a|ternatives) followers or leupfroggers :
ptoJoct [ot ptoJoct sobst|tot|oo o[ oeeJ. qeoet|c sobst|tot|oo socl
as compet|t|oo [ot looselolJ |ocome. e.q. cats vetsos lol|Jays.
# 8urgulnlng power of supp|iers ure hlgh when cooceottateJ
soppl|ets. l|ql sw|tcl|oq costs. l|qlly J|[[eteot|ateJ o[[et|oqs.
# 8urgulnlng power of buyers ure hlgh when
cooceottateJ boyets. teaJy ava|lable sootces o[ sopply. boyet
sw|tcl|oq costs ate low
#
Threat of New Entry
Rivalry Among
Existing Competitors
Bargaining Power
of Customers
Threat of Substitutes
Bargaining Power
of Suppliers
Economies oI scale
Proprietary product
diIIerences
Brand identity
Switching costs
Capital requirements
Access to distribution
Absolute cost advantages
Government policy
Expected retaliation
Relative price perIormance oI substitutes
Switching costs
Buyer propensity to substitute
Industry growth
Fixed costs / value
added
Overcapacity
Product diIIerences
Brand identity
Switching costs
Concentration and balance
InIormational complexity
Diversity oI competitors
Corporate stakes
Exit barriers
DiIIerentiation oI inputs
Switching costs
Presence oI substitute
inputs
Supplier concentration
Importance oI volume to
supplier
Cost relative to total
purchases
Impact oI inputs on cost or
diIIerentiation
Threat oI Iorward
integration
Buyer concentration
Buyer volume
Buyer switching costs
Buyer inIormation
Ability to integrate
backward
Substitute products
Price / total purchases
Product diIIerences
Brand identity
Impact oI quality /
perIormance
Source: Michael E. Porter, Competitive Advantage ew York: Free Press, 1985)
SUPPLIER POWER
LOW ?
THREAT OF ENTRY
LOW
Weconomies of scale
Wcapital requirements for
R&D and clinical trials
Wproduct differentiation
Wcontrol of distribution
channels
Wpatent protection
INDUSTRY
COMPETITIVENESS
LOW
Whigh concentration
Wproduct differentiation
Wpatent protection
Wsteady demand growth
Wno cyclical fluctuations
of demand
THREAT OF
SUBSTITUTES
LOW
o substitutes.
(Changing as managed care
encourages generics.)
BUYER POWER
LOW
!hysician as buyer:
ot price sensitive
o bargaining power. (Changing with managed care.)
DRUG
DUSTRY
(ROE=28%)
SUPPLIER POWER
HIGH
Wstrong labor unions
Wconcentrated aircraft makers
THREAT OF ENTRY
HIGH
Wentrants have cost
advantages
Wlow capital requirements
Wlittle product
differentiation
Wderegulation of
governmental barriers
INDUSTRY
COMPETITIVENESS
HIGH
Wmany companies
Wlittle product
differentiation
Wexcess capacity
Whigh fixed/variable costs
Wcyclical fluctuations of
demand
THREAT OF
SUBSTITUTES
MEDIUM - High
Cars for short distance travel
Trains for ....
BUYER POWER
MEDIUM/HIGH
Buyers extremely price sensitive
Good access to information
Low switching costs
irline
ndustry
(ROE=-1%)
S Are some lndusLrles more uLLrucLlve Lhun oLhers?
(weuker forces) cun vou plck u good one ?
S WhuL underlvlng forces ln Lhe mucroenvlronmenL
drlve Lhe compeLlLlve forces?
S Wlll compeLlLlve forces chunge?
S WhuL ure Lhe sLrengLhs und weuknesses of Lhe
compeLlLors ln reluLlon Lo Lhe compeLlLlve forces?
S Cun compeLlLlve sLruLegv lnfluence compeLlLlve
forces? (eg bulld burrlers Lo enLrv)
S Use uL level of sLruLeglc buslness unlLs (S8U)
S Leflne Lhe lndusLrvlmurkeLlsecLor
S Lon'L |usL llsL Lhe forces: derlve lmpllcuLlons for
lndusLrvlorgunlsuLlon
S oLe connecLlons beLween compeLlLlve forces
und kev drlvers ln mucro envlronmenL
S LsLubllsh lnLerconnecLlons beLween Lhe flve
forces
S CompeLlLlon muv dlsrupL Lhe forces ruLher Lhun
uccommoduLe Lhem
O ndustry analysis is the starting point of any strategy
O eed to understand the underlying structure of a
market
O Each industry is different in terms of which competitive
force will be most significant.
O %he most significant force is the area where strategic
attention must be placed.
O anagers have the power to shape their industries and
affect how they evolve.
O Companies should use strategy not only to improve their
own position but also to make the whole industry more
attractive. (lso underlying aspect of SC now)
What Does Porter's AnaIysis Teach Us?
S Lunnlng's () crlLlclsm of PorLer's verv
eLhnocenLrlc US wuv of looklng uL Lhe world' (p z) u
crlLlclsm echoed bv oLhers (eg Rugmun und verbeke )
S eglecL of Lhe lnsLlLuLlonul frumework (see uruvunun v K und
luhev L (z#) he Relevunce of Lhe lnsLlLuLlonul Underplnnlngs of PorLers llve lorces lrumework Lo
Lmerglng Lconomles: An LplsLemologlcul Anulvsls 1ournul of MunugemenL SLudles #z: z#zz
S lgnores chunges ln consumer lncome LusLes und flrms
cupuclLles Lo boosL demund for exumple Lhrough
udverLlslng
S locuses on Lhe lndusLrv ruLher Lhun Lhe lndlvlduul flrm
S OuullLuLlve useful for ussesslng Lrends buL cunnoL
esLlmuLe probublllLv of enLrv for exumplewhuL else?
S SLruLeglc groups ure orgunlsuLlons wlLhln un
lndusLrv wlLh simi|ar strateqic characteristics
followlng slmllur sLruLegles or compeLlng on
slmllur buses
lnLernul compeLlLlon beLween sLruLeglc group flrms
ls greuLer Lhun beLween flrms ouLslde LhuL sLruLeglc
group
here ls more heLerogenelLv ln Lhe performunce of
flrms wlLhln sLruLeglc groups
(HunL (#z) LocLorul hesls Hurvurd U) McCee und homus (#)
Leusuk und Purker (z#) SCs ln UK Phurmu lndusLrv)
S o undersLund who ure Lhe mosL dlrecL
compeLlLors of un orgunlsuLlon
S o esLubllsh Lhe dlfferenL buses of compeLlLlve
rlvulrv wlLhln und beLween Lhe sLruLeglc groups
S o ussess lf un orgunlsuLlon could move from
one group Lo unoLher
Lepends on burrlers Lo enLrv
S o ldenLlfv opporLunlLles und LhreuLs
Chunges ln Lhe mucro-envlronmenL muv creuLe
sLruLeglc spuce
S Kev sLruLeglc dlmenslons
5cope of Activities
ProducL l servlce dlverslLv
Ceogruphlcul Coveruge
LlsLrlbuLlon Chunnels
MurkeL LlverslLv umber of SegmenLs Served
Resource Commitment
LxLenL of brundlng
echnologlcul poslLlon (leuderlfollower)
LxLenL of verLlcul lnLegruLlon
producLlServlce OuullLv
llnunclul leveruge
Slze of Lhe orgunlzuLlon l reluLlonshlp Lo purenL compunv lf unv
S uLcome vurlubles (llke prlce und murkeL shure) should noL be
used Lo dlsLlngulsh compeLlLlve groups
S llrms clusLer lnLo groups bused on Lhelr commonullLv ln sLruLeglc
upprouch
High High
High Low
Low Low
Q
u
a
I
i
t
y
Q
u
a
I
i
t
y
VerticaI Integration VerticaI Integration
Group A
WNarrow Iine
WLower mfg. cost
WVery high service
WHigh price
Group D
WBroad Iine
WMedium mfg. cost
WLow service
WLow price
Group C
WModerate Iine
WMedium mfg. cost
WMedium service
WMedium price
Group B
WFuII Iine
WLow mfg. cost
WGood service
WMedium price
S rlglnullv Lhe ConcepL wus sLuLlc buL luLer
found Lo be dvnumlc
here ure perlods of sLublllLv occuslonullv broken
bv envlronmenLul dlsconLlnulLv
Lurlng perlods of dlsconLlnulLv sLruLeglc group
membershlps chunge
Strategic Maps of the US AirIine Industry
raniff
TW
Eastern
United
merican
Delta
Western
RepublicOzark
USir !iedmont
Frontier
irCal
!S
South-
west
Texas nt'l
United
South-
west
meric
a
West
nternational
nternational
ational ational
Regional Regional
o Frills o Frills Full Service
Full Service
Quality of Service
Quality of Service
G
e
o
g
r
a
p
h
i
c

S
c
o
p
e
The Late 1970s
The EarIy 1990s
Reno
ir
Continental
!an
m
orth
west
Laker
World
merican
TW
Delta
USir
orthwest
Conti-
nental
Kiwi
Others
S AlLhough l LconomlsLs (wlo stoJy |oJostty as a wlole) und 8 reseurchers
(wlo stoJy |oJ|v|Joal [|tms ate letetoqeoeoos) huve exumlned SLruLeglc
Croups wlLh Lhelr own perspecLlves common LrulLs huve been
observed
lL ls posslble for reseurchers Lo ob|ecLlvelv selecL
criteria/variab|es for strateqic dimensions on whlch
grouplngs ure bused
8used on Lhe crlLerlu SLruLeglc grouplngs cun be ldenLlfled
(uslng clusLer unulvsls) whlch cun provlde lnformuLlon on
munugemenL opLlons (of compeLlLlve LhreuLs und
opporLunlLles)
HeLerogenelLv of proflLublllLv of groups meuns moblllLv
burrlers wlll provlde superlor economlc proflLs Lo members
of superlor groups
S he helghL of enLrv burrlers depends on Lhe
purLlculur sLruLeglc group LhuL Lhe enLrunL seeks Lo
|oln
S MoblllLv burrlers ure qroup-specific entry barriers
LhuL resLrlcL shlfLlng sLruLeglc poslLlon from one
sLruLeglc group Lo unoLher
S MoblllLv burrlers prevent quick imitation of
successful sLruLegles
S he mosL lmporLunL uspecL of unv sLruLeglc group
unulvsls ls ldenLlfvlng Lhe mobi|ity barriers LhuL
lmpede movemenL beLween groups
S here ls no exhaustive |ist of moblllLv burrlers
S A prlmurv ob|ecLlve of competitor ana|ysis ls Lo undersLund
und predlcL Lhe rlvulrv or lnLerucLlve murkeL behuvlor beLween
flrms ln Lhelr ouesL for u compeLlLlve poslLlon ln un lndusLrv
(Cuves # PorLer Scherer 8 Ross )
S SLruLeglc group unulvsls lgnores Lhe murkeL conLexL ln whlch
competitors und Lhe exLenL Lo whlch Lwo flrms ucLuullv
compeLe dlrecLlv ugulnsL euch oLher AlLhough Lhe murkeLlng
llLeruLure recognlzes Lhe lmporLunce of Lhe murkeL conLexL lLs
conLrlbuLlon hus been prlmurllv ln unulvzlng competitors und
compeLlLlon uL Lhe brand or individua|-market |eve| (WelLz
#) ruLher Lhun uL Lhe flrm level
S Who ure compeLlLors? ls Lhe muln focus of ucudemlc debuLe
see CompeLlLor ldenLlflcuLlon und CompeLlLor Anulvsls: A
8roud-8used Munugerlul Approuch bv bergen und peLeruf
#
S See Chen M (#) CMPLlR
AALYSlS AL lLRllRM RlvALRY:
WARL A HLRLlCAL lLCRAl
AcaJemy o[ Maoaqemeot Rev|ew z() -
#
S See 8ergen und peLeruf CompeLlLor ldenLlflcuLlon und
CompeLlLor Anulvsls: A 8roud-8used Munugerlul Approuch
Maoaqet|al aoJ uec|s|oo lcooom|cs (1une-Aug zz) vol
z no #l# p ##-#
#

Who is the customer?

Understanding customers the key questions
8zC
SLeps-
S Problem recognlLlon
S lnformuLlon Seurch
S LvuluuLlon of
ulLernuLlves
S Purchuse
S PosL purchuse
evuluuLlon
8z8 -sLeps
S RecognlLlon of u problem
(need)
S LeLermlnuLlon of speclflcuLlon
und ouunLlLv of needed lLem
S Seurch for und ouullflcuLlon of
poLenLlul sources
S AcoulslLlon und unulvsls of
proposuls
S LvuluuLlon of proposuls und
selecLlon of suppllers
S SelecLlon of un order rouLlne
S Performunce feedbuck und
evuluuLlon
S vurlous ucLors Kev ouesLlon whuL
beneflLs?
S 8eneflLs purchuse or consumpLlon
S WhuL ls Lhe cusLomer vulue?
S MurkeL segmenLs how Lo clusLer?
S Servlce LomlnunL loglc und Lhe
uugmenLed servlce urgumenL
#z
S Prlmurv und secondurv
S Sources of secondurv duLu desk und
svndlcuLed reseurch WhuL ure Lhe lssues?
S Prlmurv duLu-
S Wuvs of collecLlng prlmurv duLu
ouunLlLuLlve und ouullLuLlve meLhods
S 8eneflLs of euch meLhod
S Who Lo usk? MurkeL lnLelllgence sLems from
compeLlLors und murkeL segmenLs
#
Importonce
$
A
I
I
$
F
A
C
I
I
O
N
DRVERS OF CUSTOER STSFCTO FOR TELECOUCTO SERVCES:
STUDY OG S !CFC USESS CUSTOERS vvari and Satya (2006)
Importonce
$
A
I
I
$
F
A
C
I
I
O
N
Importonce
$
A
I
I
$
F
A
C
I
I
O
N
S ResulLs of Lhe sLudv seem Lo lndlcuLe LhuL cusLomers ln AP
reglon vulue prlce much more Lhun mosL oLher processes und
Lhe vendor needs Lo provlde exLru efforL ln lmprovlng lLs
prlclng sLruLegles' ln wlnnlng or mulnLulnlng Lhe buslness ln
Aslu Puclflc reglons
hls ls cleur becuuse us un emerglng murkeL AP Reglon used Lo be u hlgh
murgln reglon where vendor flnunclng wus common ln whlch Lhe vendors
provlde flnunclng Lo expund cusLomers neLwork und Lhe cusLomers puv
us Lhev grow. 8uL now ???
S he resulLs furLher hlghllghL LhuL processes ldenLlfled ure
dlfferenL bv vurlous sub reglons lor exumple cusLomers ln
Chlnu vulue Lhe buslc processes such us lnsLulluLlon compured
Lo resL of Aslu Puclflc where Lhev vulue enhuncemenL processes
such us Professlonul Servlces
#
S PLS ldenLlfles kev drlvers of chunge Helps Lo ldenLlfv
opporLunlLles und LhreuLs
S # forces frumework ldenLlfles lndusLrv uLLrucLlveness
S CompeLlLors ure normullv sLruLeglc groups compeLlng on slmllur
buses wlLhln un lndusLrv
W PursulL of opporLunlLles und response Lo LhreuLs should depend on
overull exlsLlng or new murkeLlng sLruLegv or sLruLeglc dlrecLlon of
orgunlsuLlon
W lmporLunce Lowurds mlcroenvlronmenLul fucLors ln dellverlng
compunv producLs und servlces us well us ullgnmenL Lo compunv
sLruLegv
W Chullenges lnclude lndlvlduullsm umong consumer LusLes fullure of
lndenLlfvlng unLlclpuLlng und respondlng Lo Lhe correcL Lrends
lnLernuLlonullsuLlon.eLc UndersLundlng cusLomers ls lmporLunL for murkeLlng
sLruLegv developmenL