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 As felt 3 hours one session and 6 sessions in
total to complete all concepts of the subject in
depth is not possible. So giving an overview is
the aim.
Syllabus
 Marketing Strategies. Competitive Advantage: Generic Strategies; Cost
Leadership Strategy; Differentiation Strategy; Focus Strategy; Use of the value
chain.
 New Generic Strategies: Product Leadership; Customer Intimacy Strategy;
Operational Excellence;
 Competitive Strategies; Strategy for Market Leader; Expand the total Market;
Protect its current Market Share; Market Challenger Strategies; Market
Follower Strategies; Market Nicher Strategies;
 International Marketing Strategies; Marketing Mix strategies.
Marketing Strategy-Defined
 A statement of how a brand will achieve its objectives. The strategy provides
decisions and direction regarding variables such as the segmentation of the
market, identification of the target market, positioning, marketing mix
elements, and expenditures. A marketing strategy is usually an integral part of
a business strategy that provides broad direction to all functions.
(Source: American Marketing Association)
 “Marketing Strategy is a series of integrated actions leading to a sustainable
competitive advantage.”
 -John Scully
Competitive Advantage & How it is
Obtained
 Resources+Capabilities = Competitive Edge
Competitive Advantage
 What sets an organization apart -- competitive edge
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Controlling or having something others do not have
Doing something better than other organizations
Doing something other organizations cannot do
Resources, Capabilities & Competitive
Advantage
 Resources are firms specific assets useful for creating a cost or differentiation
advantage that few competitors can acquire easily (patents & trade marks,
Proprietary know-how, Installed Customer base, Reputation of the base, Brand
Equity).
 Capability refers to firms ability to utilize its resources effectively. (Ability to
bring a product faster in the Market)
 Competitive Advantage implies gaining the edge on others – using resources &
capabilities
 But not every firm is able to
 Effectively exploit its resources & capabilities
 Obtain resources & capabilities it needs
 Some firms are able to “pull it together” & develop distinctive capabilities, others
don’t
 As firms strive for sustainable CA, stage for competition is set – low, moderate,
intense.
Competitive Advantage
 “Competitive advantage is a company’s ability to perform in one or
more ways that competitors cannot or will not match.”
--Philip Kotler
 When a firm sustains profit that exceeds the average of industry. The
firm is said to have competitive advantage over its rivals.
 A Competitive advantage exists when a firm is able to deliver the same
benefits as competitors but at a lower cost (cost Advantage) or deliver
benefits that exceed those of competitive products. (Differentiation
Advantage).
Competitive Advantage & Competitive
Strategy
 Competitive strategies are designed to exploit an organization’s
competitive advantage
 Competitive Advantage concentrates on firm & Competitive Strategy
on Industry

Firms exploits competitive advantage by

Finding ways to use resources & capabilities to set firm apart from competitors
• Firms competitive strategy-consists of business approaches to
– Attract customers by fulfilling their expectations
– Withstand competitive pressures
– Strengthen market position
 There are other competitors also trying to develop competitive
advantage & attract customers thus Competitive advantage can be
eroded easily (& often quickly) by rival’s actions.
 The goal of much Business Strategy is sustainable Competitive
advantage
Porter’s Generic Competitive Strategies
 Competitive advantage come from one of two sources:
 Having the lowest cost in the industry
 Possessing a product or offering a service that is perceived as
unique in the industry

Another important factor is the scope of the product-market
(broad or narrow)
 Mix of these factors provide basis for
 Cost leadership strategy (low-cost strategy)
 Differentiation strategy
 Focus strategy
Porter’s Generic Competitive Strategies
Competitive Advantage
Low Cost
Broad
Cost Leadership
Differentiation
Differentiation
Market
Scope
Narrow
Focus
(Low Cost)
Focus
(Differentiation)
Focus
Middle of the
road
Cost
Differentiation
Cost leadership
How?
•New sources of supply
•Relocating to low cost
parts.
•Modification/simplificat
ion of design.
•Operating effectiveness
•Size and economies of
scale-globalization.
•Strategic alliances
Benefits
•The ability to
outperform rivals
•Erect barriers to
entry
•Resist the five
forces
Possible problems
•Vulnerability to even lower cost operators
•Possible price wars
•Difficulty of sustaining it in the long term
Differentiation
How?
•High
performance in
one or more of a
spectrum of
activities
•The consistent
pursuit of those
factors which
customers
perceive to be
important
•The creation of
strong Brand
Equity
Benefits
Possible problems
•A distancing
from others in
the market
•The creation of a
major
competitive
advantage
•Flexibility
•The difficulty of
sustaining the bases for
differentiation
•Possibly higher costs
•The difficulty of
achieving true and
meaningful
differentiation
Focus
Possible problems
How?
•Concentration
upon Specific
product line for a
specific group of
customer
•The creation of a
strong and
specialist
reputation
Benefits
•A more detailed
understanding of a
particular segments
•The creation of
Barriers to entry
•A reputation for
specialization
•The ability to
concentrate efforts
•Limited
opportunities for
sector growth
•A reputation for
specialization which
ultimately inhabits
growth and
development into
other sectors
•The possibility of
outgrowing the
Market
•The decline of the
sector
Cost Leadership Strategy
• Objective:
–
–
–
Gain sustainable competitive advantage over competitors, using
low-cost (not price).
Produce for broad customer base
Product quality prime parameter for success.
• Keys to Success:
Low-cost relative to competitors
 Low cost implies overall low cost with focus on Quality
–
 low manufacturing or production cost.
 Marketing Cost
 Human Resources
Best Example in India
 Telecom Industry Players
 Chinese Toys
 Beverage: Tea (Agni)
 Pharma Companies as Mankind
Example-Reconfiguring Value Chain Systems
to Lower Costs -- Software Industry
A. Value Chain System of Software Developers Using Traditional WholesaleRetail Channels - Highest Cost
Software
development
activities
CD-ROM
production and
packaging
activities
Technical
support activities
Marketing and
promotion of
software
Warehousing and
shipping of
wholesalerretailer orders
Activities of
software retailers
Activities of
wholesale
distributors of
software
products
Example-Contd, Reconfiguring Value Chain
Systems to Lower Costs -- Software Industry
B. Value Chain System of Software Developers Using Direct Sales and
Physical Delivery of CDs
Software
development
activities
CD-ROM
production and
packaging
activities
Direct and online
marketing and
promotion
activities
Ware-housing
and shipping of
customer orders
Technical
support and
customer service
activities
C. Value Chain System of Software Developers Using Online Sales and
Internet Delivery - Lowest Cost
Software
development
activities
Online
marketing and
promotion
activities
Systems to
accept credit
card payment
and allow
immediate
download
Technical
support and
customer service
activities
Characteristic of Cost Leaders
Champion frugality
• Strict attention to production controls
• Rigorous use of budgets
Little product
differentiation
• Limited market segmentation
Emphasis on
productivity
improvements
• Distinctive capabilities found in manufacturing &
materials management
Successful Pursuit of Cost Leadership Strategy
Every strategic decision
is aimed at keeping cost
as low as possible
• Efficiency is sought in all areas of operation
• All functional strategies & capabilities are
directed at efficiency
• Doesn’t have deep & wide product lines
Market products aimed
at “average” customer
• Little or no product frills or differences
When Cost Leadership Works Best
Price competition is vigorous.
Product is standardized or readily available from many suppliers.
There are few ways to achieve differentiation that have value.
Most buyers use product in same ways Buyers incur low switching
costs.
Buyers are large and have significant bargaining power.
The Competitive Strengths of Low-Cost
Leadership-Porters 5 Forces Impact
Low-cost provides
some protection from
bargaining leverage of
powerful BUYERS
Low cost puts a
company in position to
use low price as a
defense against
SUBSTITUTES
Better positioned than
RIVAL
COMPETITORS to
compete offensively on
basis of price
Low-cost provider’s
pricing power acts as a
significant barrier for
POTENTIAL
ENTRANTS
Low-cost provides
some protection from
bargaining leverage of
powerful SUPPLIERS
Drawbacks of Cost Leadership Strategy
Being overly aggressive in cutting price
Low cost methods are easily imitated by rivals
Becoming too fixated on reducing costs and ignoring
• Buyer interest in additional features (tastes)
• Declining buyer sensitivity to price
• Changes in how the product is used
Technological breakthroughs open up cost reductions for rivals
Differentiation Strategy
• Objective
– Offering products/services perceived as unique over the brands of
rivals in an industry.
• Keys to Success
– Offer products/services that create value to customers
– Offer products/services not easily matched or easily copied by
rivals
– Not spending more to differentiate the firm’s products or service
than the price premium that can be charged
Benefits of Differentiation
• A product / service with unique and appealing attributes
allows a firm to
– Command a premium price and/or
– Increase unit sales and/or
– Build brand loyalty
Differentiation Themes
• Unique taste -- Maggi
• Special features -- Iphone, Blackberry
• Superior service -- FedEx, DTDC
• Spare parts availability -- Caterpillar
• More for your money -- McDonald’s, Wal-Mart
• Engineering design and performance -- Mercedes
• Prestige -- Rolex
• Quality manufacture -- Honda , Toyota, Pharma Co’s
• Technological leadership -- Microsoft, Intel
• Top-of-the-line image -- Starbucks, Gap
Characteristics of Successful Differentiators
Every strategic decision & action is directed at setting the firm apart from
competitors
All functional strategies & capabilities are aimed at isolating & understanding
specific market segments & developing product features that are valued by
customers
Has broad and wide product lines -- many different models, features, price ranges,
etc.
Has many market segments & product features
Controls costs but not as rigorous as the cost leader to preserve source of
differentiation
Strives to establish brand loyalty
Competitive capabilities tends to be in marketing and research & development
The Competitive Strengths of a
Differentiation Strategy-Porters 5 Forces
Mitigates bargaining power
of large BUYERS since
other products are less
attractive
Differentiation puts a seller
in better position to fend
off threats of
SUBSTITUTES not having
comparable features
Buyers develop loyalty to
brand they like best--can
beat RIVAL
COMPETITORS in the
marketplace
Buyer loyalty acts as a
barrier to POTENTIAL
ENTRANTS
Differentiation puts a seller
in better position to
withstand efforts of
SUPPLIERS to raise prices
When Differentiation Works Better
There are many ways to differentiate a product that have value and please
customers
Buyer needs and uses are diverse
Few rivals are following a similar type of differentiation approach
Technological change is fast-paced and competition is focused on evolving
product features
Drawbacks of Differentiation
Trying to differentiate on a feature buyers do not perceive as lowering their
cost or enhancing their well-being
Over-differentiating such that product features exceed customers’ needs
Charging a price premium that customers perceive is too high
Failing to signal value
Not understanding what customers want or prefer and differentiating on
the “wrong” things
Competitive Strategy Principle
A low-cost producer strategy
can defeat a differentiation
strategy when buyers are
satisfied with a standard
product and do not see extra
attributes as worth paying
additional money to obtain!
Focus Strategy
 Firm pursues either a cost leadership or differentiation strategy but in a
narrow customer group of segment
 Concentrates on serving specific market niche
 Geographical area
 Type of customer -- specific group of customers
 Specific & specialized product line
Focus Strategy
 Objective
 Serve the niche customers better than competitors
 Keys to Success
 Choose a market niche where buyers have distinctive preferences,
special requirements, or unique needs
 Develop unique capabilities to serve needs of target buyer segment
Focus Approaches
 Approach 1: Cost Advantage
 Achieve lower cost than rivals in serving the specific or narrow
segment
• Focus Low-cost
– Ikea: Young furniture buyers who want style at low cost (price
sensitive and low service customer groups)
– Southwest Airlines: Short-haul, point-to-point service between
midsize cities & secondary airports in large cities (low pricing & low
service)
– KB Fair Price Shop
Focus Approaches…
 Approach 2: Differentiation Advantage
 Offer customers in niche market something unique in that market
Product features
 Product innovations
 Product quality
 Customer responsiveness
• Focus Differentiation
 Rolex: Serve highest end of wristwatch market (premium pricing &
image)
 Rolls-Royce: Serving luxurious end of automobile market
(premium pricing & image)

Advantages of the Focus Strategy
The focuser knows its market niche and knows it well
The focuser can stay close to customers and respond quickly to their
changing needs
Focuser can develop strong brand loyalty which can be difficult for other
competitors to overcome
Drawbacks of Focus Strategy
Operates in small scale making it difficult to lower costs significantly.
Technological advances has minimized this drawback
Competitors find effective ways to match a focuser’s capabilities in
serving niche market
Niche can become part of the overall market
Segment becomes so attractive it becomes crowded with rivals, causing
segment profits to be splintered
Value Chain Analysis
 Value chain analysis (VCA) is a process where a firm identifies its
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primary and support activities that add value to its final product and
then analyze these activities to reduce costs or increase differentiation.
Value chain represents the internal activities a firm engages in
when transforming inputs into outputs.
Value chain analysis is a strategy tool used to analyze internal firm
activities. Its goal is to recognize, which activities are the most valuable
(i.e. are the source of cost or differentiation advantage) to the firm and
which ones could be improved to provide competitive advantage.
In other words, by looking into internal activities, the analysis
reveals where a firm’s competitive advantages or disadvantages are.
The firm that competes through differentiation advantage will try
to perform its activities better than competitors would do.
If it competes through cost advantage, it will try to perform internal
activities at lower costs than competitors would do.
When a company is capable of producing goods at lower costs
than the market price or to provide superior products, it earns profits.
Value Chain Analysis
 Primary activities add value directly to the production process,
they are not necessarily more important than support activities.
 Primary activities are usually the source of cost advantage, where
costs can be easily identified for each activity and properly managed.
 Support activities are usually the most important source of
differentiation advantage as ‘information systems’, ‘R&D’ or ‘general
management’.
 Competitive advantage mainly derives from technological
improvements or innovations in business models or processes.
Value Chain Analysis
Competitive advantage types
Cost advantage
Differentiation advantage
This approach is used when
The firms that strive to create superior
organizations try to compete on costs products or services use differentiation
and want to understand the sources of advantage approach.
their cost advantage or disadvantage
and what factors drive those costs.
•Step 1. Identify the firm’s primary and
support activities.
•Step 2. Establish the relative importance
of each activity in the total cost of the
product.
•Step 3. Identify cost drivers for each
activity.
•Step 4. Identify links between activities.
•Step 5. Identify opportunities for
reducing costs.
•Step 1. Identify the customers’ value-creating
activities.
•Step 2. Evaluate the differentiation strategies
for improving customer value.
•Step 3. Identify the best sustainable
differentiation.
Value Chain Framework-Implementation
Use of the value chain
 Value Chain Analysis is a useful way of thinking through the ways in
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which you deliver value to your customers, and reviewing all of the
things you can do to maximize that value.
It takes place as a three stage process:
Activity Analysis, where you identify the activities that contribute to
the delivery of your product or service.
Value Analysis, where you identify the things that your customers
value in the way you conduct each activity, and then work out the
changes that are needed.
Evaluation and Planning, where you decide what changes to make
and plan how you will make them.
By using Value Chain Analysis and by following it through to action,
you can achieve excellence in the things that really matter to your
customers.
Competitive Strategies In Operational
Excellence, Customer Intimacy And Product
Leadership
 To succeed in the marketplace, companies must embrace a
competitive strategy.
 Authors Michael Treacy and Fred Wiersma describe three generic
competitive strategies, or value disciplines:
 Operational Excellence
 Customer Intimacy
 Product Leadership
 These are described in their book, The Discipline of Market
Leaders (1997).
 The author’s main premise is that companies must choose—and then
achieve—market leadership in one of the three disciplines, and
perform to an acceptable level in the other two.
Operational excellence as a competitive
strategy
 An operational excellence strategy aims to accomplish cost leadership.
 Here the main focus centres on automating manufacturing processes
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and work procedures in order to streamline operations and reduce cost.
The strategy lends itself to high-volume, transaction-oriented and
standardized production that has little need for much differentiation.
A strategy of operational excellence is ideal for markets where
customers value cost over choice, which is often the case for mature,
commoditized markets where cost leadership provides a vehicle for
continued growth.
Leaders in the area of operational excellence are strongly centralized,
with strong organizational discipline and a standardized, rule-based
operation.
Measuring the performance of key processes and benchmarking
costs comprise an integral part of the operations of these companies who
relentlessly seek to streamline their processes in order to eradicate errors.
Disciplines such as TQM, SCM and Six Sigma are cultivated in a volumeoriented business model.
Examples of companies pursuing this competitive strategy include WalMart, IKEA, Southwest Airlines, McDonald’s and FedEx.
Customer intimacy as a competitive
strategy
 Customer intimacy focuses on the needs of the individual customer
 The customer intimacy strategy focuses on offering a unique range of
customer services that allows for the personalization of service and the
customization of products to meet differing customer needs.
 Often companies who pursue this strategy bundle services and
products into a “solution” designed specifically for the individual customer.
 The successful design of solutions requires vendors to possess deep
customer knowledge as well as insights into their customers’ business
processes.
 These types of companies often keep an entire ecosystem of
partners for the actual production and delivery of products and
services to their customers.
 The solutions offered rarely present the cheapest option for the
customer, nor the most innovative, but are regarded as “good enough.”
Customer intimacy as a competitive
strategy
 Customer-centric companies tend to have a decentralized organization
which allows them to learn and change quickly according to customers’ needs.
 True customer intimacy can only arrive through aligning the product
development, manufacturing, administrative functions and executive focus
around the needs of the individual customer.
 Examples of companies who pursue this type of strategy include IBM, Lexus,
Virgin Atlantic and Amazon.com.
Product leadership as a competitive
strategy
 Product leadership as a competitive strategy aims to build a culture that
continuously brings superior products to market.
 Product leaders achieve premium market prices due to the experience they
create for their customers.
 Product leaders recognize that excellence in creativity, problem solving and
teamwork is critical to their success.
 The corporate disciplines they cultivate include:
 Research portfolio management
 Teamwork
 Product management
 Marketing
 Talent management
 Product Leaders reliance on expensive talent i.e. that product leaders seek
to leverage their expertise across geographical and organizational boundaries
by mastering such disciplines as collaboration and knowledge management.
Product leadership as a competitive
strategy
 Companies pursuing a strategy of product leadership include consumer
electronics, fund management, automotive and pharmaceutical industries, etc.
 Examples of these include Apple, Fidelity Investments, BMW and Pfizer.
Competitive Strategy
Competitive
Positions
 Market Leader
 Market Challenger
 Market Follower
 Market Nicher
 Expanding the total demand
 Finding new users
 Discovering and promoting new
product uses
 Encouraging greater product usage
 Protecting market share
 Prevent or fix weaknesses
 Fulfill value promise
 Keep prices consistent with value
 Build relationships
 Continuous innovation
 Expanding market share
 Joint ventures
 Mergers and acquisitions
 Example: Microsoft, Apple
Competitive Strategy
Competitive
Positions
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Market Leader
Market Challenger
Market Follower
Market Nicher
• Challenge the market leader
 High-risk but high-gain
 Sustainable competitive
advantage over the leader is
key to success
• Challenge firms of the same
size or smaller regional and
local firms
• Full frontal vs. indirect attacks
• Example: Canon in Copiers
displaced Xerox from its
dominant position, Nirma
versus HUL, IBM , Toyota
against General motors.
Competitive Strategy
Competitive
Positions
 Follow the market leader
 Many advantages:

 Market Leader

 Market Challenger
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 Market Follower
 Market Nicher
Learn from the market
leader’s experience
Copy or improve on the
leader’s offerings
Strong profitability
 Does not mean being a
carbon copy of the leader
 Example Ponds followed
Olay in Anti-aging
segment, Moser Beer to
Samsung and Sony.
Competitive Strategy
Competitive
Positions
• Serving market niches means
•
 Market Leader
•
 Market Challenger
•
 Market Follower
•
 Market Nicher
targeting sub-segments
Followed by certain big
companies later on.
Good strategy for small firms
with limited resources.
Earns high margins rather than
high volume
Specialization is key
 Customer size, geographic,
quality-price, service
 Breakfast Cereal category taken
by FMCG Companies, All sizes
from Pantaloons
The Elements of the Marketing Mix for
International Firms
Marketing Mix
Product
Pricing
Promotion
Place
International Marketing Mix Concerns
 How to develop the firm’s products?
 How to price those products?
 Who is the Target Market?
 How to distribute those products to the firm’s customers?
 How to sell those products?
International Marketing Mix
 When launching a product into foreign markets firms can use a
standard marketing mix or adapt the marketing mix, to suit the
country they are carrying out their business activities in.
International Marketing Mix: Product
 Product policy on the international market includes three strategies:
 Product standardization - company introduces unchanged product
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on the foreign market.
Such action makes sense when the product due to its nature, has
similar utility for customers on various markets.
The use of this strategy is comfortable and not very expensive.
Example of companies using this strategy is IKEA.
Product adaptation - involves adjustment of the product and its
properties to the conditions prevailing on the particular market.
This includes packaging, size, symbols (depending on the culture
prevailing in the country concerned), colour.
Adaptation of the product requires large amount of capital and
experience.
Gradual changes in the product - used in situation where there is no
danger of the emergence of competition.
International Marketing Mix: Product
 Basic marketing concepts tell us that we will sell more of a product if
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we aim to meet the needs of our target market.
In international markets this will involve taking into consideration a
number of different factors including consumer's cultural backgrounds,
religion, buying habits and levels of personal disposable income.
In many circumstances a company will have to adapt their product
and marketing mix strategy to meet local "needs and wants" that cannot
be changed.
McDonalds is a global player however, their burgers are adapted to local
needs. In India where a cow is a sacred animal their burgers contain
chicken or fish instead of beef. In Mexico McDonalds burgers come with
chilli sauce.
Coca-cola is some parts of the world taste sweeter than in other places.
The arguments for standardisation state that the process of adapting
the product to local markets does little more than add to the overall cost of
producing the product and weakens the brand on the global scale.
International Marketing Mix: Product
 In today’s global world there is no need to adapt products to local
markets as consumers travel more, watch satellite television,
communicate and shop internationally over the internet, the world is a
smaller than it used to be.
 Brands such as Nike, Levis are all successful global brands where
they have a standardised approach to their marketing mix, all these
products are targeted at similar groups globally.
 Both strategies; using a standard product and an customised product
can work just as well.
 The right approach for each organisation will depend on their
product, strength of the brand and the foreign market that the
marketing is aimed at.
International Marketing Mix: Promotion
 Promotion policy involves transferring information to new potential
buyers about the company, its products in order to make them to buy
these products.
 Selection and use of the instruments needed to achieve these
objectives depends on factors such as:
 Objective of promotion on the international market.
 Financial resources and experience in foreign markets.
 Provisions of the law which regulate promotional activities in each country,
 Cultural factors - e.g. Language, habits, religion, symbols, associations related
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to the colour.
Attitude to foreign products.
Competition on the foreign market, The company may take similar actions as
experienced competitors or, if it is lacking in resources, cooperate with the
participants in the distribution channel and jointly carry out promotion.
The nature and quality of the product
Type of the customer.
International Marketing Mix: Promotion
 As with international product decisions an organisation can either
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adapt or standardize their promotional strategy and message.
Advertising messages in countries may have to be adapted because of
language, political climate, cultural attitudes and religious practices.
For example a promotional strategy in one country could cause offence in
another.
Every aspect of promotional detail will require research and planning one
example is the use of colour; red is lucky in China and worm by brides in
India, whilst white is worn by mourners in India and China and brides in
the United Kingdom.
Many organisation adapt promotion strategies to suit local markets
as cultural backgrounds and practices affect what appeals to consumers.
The level of media development and availability will also need to be
taken into account. Is commercial television well established in your host
country? What is the level of television penetration? How much control
does the government have over advertising on TV, radio and Internet? Is
print media more popular than TV?
Before designing promotional activity for a foreign market it would
be expedient to complete a PEST analysis so that you have a complete
understanding of the factors operating in the foreign market you would
like to enter.
International Marketing Mix: Pricing
 Pricing involves the problem of price management on an
international scale.
 There are two basic points of view:
 Separate pricing -usually, company introduce separate pricing policies on
foreign markets (due to differences of wealth, competition, etc.),
 Global pricing strategy-development of modern communication
technology makes distant markets more similar to each other, which makes
it harder to lead a separate pricing policy at home and abroad.
 In this case, the company carries out a global pricing strategy, when the
processes of internationalization blur the differences between the various
markets.
International Marketing Mix: Pricing
 Pricing on an international scale is a complex task taking into account
traditional price considerations such as fixed and variable costs, competition
and target groups.
 An organisation needs to consider additional factor such as
 The cost of transport
 Tariffs or import duties
 Exchange rate fluctuations
 Personal disposal incomes of the target market
 The currency they want to be paid in and
 The general economic situation of the country and how this will influence pricing.
 The internet has created further challenges as customers can view global
prices and purchase items from around the world.
 This has increased the level of competition and with it pricing pressures, as
global competitors may have lower operating costs.
International Marketing Mix: Place
 The Place element of the marketing mix is about distributing a
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product or service to the customer, at the right place and at the
right time.
Distribution in national markets will probably involve goods being
moved in a chain from the manufacturer to wholesalers and onto
retailers for consumers to buy from.
In an overseas market there will be more parties involved because
the goods need to be moved around a foreign market where business
practices will be different to national markets.
For example in Japan there are approximately five different types of
wholesaler involved in the distribution chain.
Business will also need to investigate who they would like to sell
their products and services to government, businesses, wholealers,
retailers, or directly to consumers.
International Marketing Mix: Place
 Businesses will need to investigate distribution chains for each
country they would like to operate in.
 The distribution strategy for each country a business operates in
could be different due to profit margins and transportation costs.
Questions
 Q 1) Fill in the blanks
Resources are firms specific assets useful for creating a cost or differentiation advantage
that few competitors can acquire easily (patents & trade marks, Proprietary know-how,
Installed Customer base, Reputation of the base, Brand Equity).
ii.
Capability refers to firms ability to utilize its resources effectively. (Ability to bring a
product faster in the Market).
iii. Competitive Advantage implies gaining the edge on others – using resources &
capabilities.
iv. A low-cost producer strategy can defeat a differentiation strategy when buyers are
satisfied with a standard product and do not see extra attributes as worth paying
additional money to obtain
v.
Value chain analysis (VCA) is a process where a firm identifies its primary and support
activities that add value to its final product and then analyze these activities to reduce
costs or increase differentiation.
vi. Value chain represents the internal activities a firm engages in when transforming inputs
into outputs.
vii. Primary activities add value directly to the production process, they are not necessarily
more important than support activities.
viii. Support activities as ‘information systems’, ‘R&D’ or ‘general management’ are usually
the most important source of differentiation advantage
ix. Product standardization - company introduces unchanged product on the
foreign market.
x.
Product adaptation - involves adjustment of the product and its properties to the
conditions prevailing on the particular market.
i.
Questions
 Q 2) Discuss any one Porter’s Generic Competitive Strategies in
detail?
 Q 3) Discuss Value Chain Analysis & Use of the value chain?
 Q 4) Discuss Competitive Strategies in Operational Excellence,
Customer Intimacy and Product Leadership?
 Q5) Write short notes on
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Market Leader
Market Challenger
Market Follower
Market Nicher
Product standardization
Product Adaptation
 Q 6) Discuss International Product Mix?
Thanks