1. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng STRATEGIC MARKETING MANAGEMENT CHAPTER -3 Chaudhry Muhammad Nadeem Faisal Cell: 0305-7761061 Email: faisal.uk@live.co.ukfaisal.uk@live.co.uk B-Email: info@littlemichael.co.ukinfo@littlemichael.co.uk Url: www.littlemichael.co.uk/faisal/index.htmwww.littlemichael.co.uk/faisal/index.htm

2. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3  Market & strategy  Product-Market Scope & Structure  Describing and Analyzing End User  Analyzing Competition  Developing Strategic Vision about the Feature

3. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Market & strategy Market knowledge is essential in guiding business and market strategy. Market & strategy are Interlinked. Market changes often altering the business and market strategies. The managers that do not understand their market and how they will change in the future, may find their strategies inadequate as buyers, value requirements change and new product available that better satisfy buyers requirements. Many forces casing the transformation of industries and are changing the structure of market and nature of competition. These driver of change include deregulation, global excess capacity, global competition, merger and acquisitions, new technology, changing customer expectation, disintermediation, demographic and changing life and work style

4. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 These influencer create both market opportunity and threats by altering the nature and scope of market and competitive space. E.g. Pepsi or digital technology. Value Migration Value migration means the process of customer shifting their purchase from the products generated outmoded business design to new ones that offer superior values. Shifting form typewriter to word processor and computer, reference book to CD-ROM format and full service airline to discount airline. Anticipating value migration threats is an essential aspect of market driven strategies. Forecasting the exact nature, scope and timing of migration is difficult but essential. As Kodak management did not forecast the digital photography on the imaging market. Value migration points the close relationship between the strategies and markets.

5. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market boundaries & describing the Structure Market & Competitive Space-3 Product-Market Scope & Structure A company’s product/market scope defines the products and markets on which it will concentrate. The choice of products has an important impact on a firm’s business model.. Defining the scope of the product market Analyzing market structure & Compositi on Estimatin g the market will change in future Forecasti ng market size & rate of change

6. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Product-Market Scope & Structure The first two step define the market boundaries and structure. Market are constantly change as it is defined in various ways & how the buyers need couples with product benefits help to define product-market. We discuss several consideration in forming product market (2-4) in previous diagram. Matching need with product benefits New products and services have to offer benefits that meet your customers' needs. Product-market exits only when the buyer have need, have ability to buy and product are available to satisfy there needs, the ability to buying & willing indicate the demand of that product. The product market matches peoples with need that lead to demand. Thus a product market combines the benefits of a product with the need that lead the peoples to express the demand for the products

7. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Product-Market Scope & Structure  how customers needs are currently met  why customers would choose your product or service rather than your competitors', both now and in the future  what risks you are prepared to take to launch your product or service into this market Determining Product-Market Boundaries & Structure Product market boundaries and structure provide the manager with important information for developing business and mark strategy and alter the management to new competition. Source: Victoria L. Crittenden, “ Strategic Marketing management ”, McGraw-Hill, NY,2002.

8. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Product-Market Scope & Structure Determining Product-Market Boundaries & Structure © Jean-Jacques Lambin, 2000. Market-driven Management, published by Macmillan Press Source: Victoria L. Crittenden, “ Strategic Marketing management ”, McGraw-Hill, NY,2002.

9. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Product-Market Scope & Structure Determining Product-Market Boundaries & Structure a.Product market structure Companies brand complete with other companies brand in generic product type and product variant product type Generic Product market: A broad group of product that satisfy a general yet similar needs. Example several types of product can be combine to form the general product market. Product type product-market: All brands of a particular product example ovens Product Variant: For example electric, gas and micro wave ovens provides heating functions but employ different technologies

10. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Product-Market Scope & Structure Determining Product-Market Boundaries & Structure In determining the scope of product market is helpful to identify (1) the basis of indentifying buyers in the product market of interest (geographically area and buyers characteristics age) (2) the market size and characteristics (3) the product categories competing for the needs and wants of the buyers include in the product market

11. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Product-Market Scope & Structure Determining Product-Market Boundaries & Structure Start with the generic need s satisfy by the products category of interest to management Identify the products categories (types) that can satisfy the generic needs Identify the specific product-market within the generic product market ABCD

12. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Product-Market Scope & Structure Determining Product-Market Boundaries & Structure the example of product market structure Supermarket Microwaves Ovens Traditional restaurant Convenience store Fast Food

13. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Product-Market Scope & Structure Forming Product Market The factor that influence how a product market boundaries determines includes Purpose of analysis: to find one or more attractive market segments to target in the product market a much more penetrating analysis is required. Changing Composition of market: market product may change as new technologies become available and new competition emerges. Extent of market Complexity: 1 the function and uses required by the customers 2 the technologies contained the product provide the desired function 3 the different customers segments using the products to perform a particular functions

14. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Describing & Analyzing End User The end user is the individual who uses the product after it has been fully developed and marketed. The term is useful because it distinguishes two classes of users, users who require a bug -free and finished product (end users), and users who may use the same product for development purposes. Indentify & Describe the Buyers Age, family size, income, geographically location, sex and occupation often useful in identifying the buyers in consumer market. In organizational market include type of organization, size, location and type of products. Many published resources are available for use in identifying and describe the customers

15. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Describing & Analyzing End User How buyers make choice The Smart Companies try to fully understand the Customers buying- decision -process, All the experiences in learning, choosing, using and even disposing of products. The marketing scholar developed a stage model of a buying decision process as shown in figure. Customer don’t always pass through all five stages in buying a product. Like when you are going to buy your regular brand toothpaste, you go directly from need the need for toothpaste to the purchase decision and skip the information search and evaluation. Problem Recognition Information Search Evaluation of alternative Purchase Decision Post purchase behavior

16. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Describing & Analyzing End User How buyers make choice. Purchase decision Situational factors Attributes of other Purchase intention Evaluation alternative

17. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Describing & Analyzing End User How buyers make choice. Purchase decision Situational factors Attributes of other Purchase intention Evaluation alternative

18. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Describing & Analyzing End User Environmental Influences In final step to building customer profile is to identify the external factors that influence that buyers and thus impact the size and composition of the market over the time. These influence include the governmental action (tax cut) social changes, economic shifts, technologies and other factors that may alter the buyers need and wants. These factors are not controls by the buyers or the firm so it is important to identify these relevant external factors influences on the product market and to estimate their futures impact..

19. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Describing & Analyzing End User Building Customer profile Start with generic product market at this level customers profile describe the size and general composition of the customer base. For example commercial air travel customer profile for a specific geographical area (south America) would include market size, growth rate, mix of business and pleasure travelers and other characteristics. The product type and variant profiles are more specific about the customers characteristics: needs, wants use situation, activities and interest, opinion, purchase processes and choice criteria..

20. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Describing & Analyzing End User Some common Question while building customer profile 1. Describe the type of person who could be your typical customer (or will be your typical customer). 2. What is the age range of potential customers? 3. Are potential customers likely to be male or female or does gender matter? 4. What is the geographical location of potential customers? Where are they likely to live? 5. What are the most likely occupations of potential customers? 6. What are the general likes /dislikes of potential customers? 7. What does a typical customer want from the product you design and manufacture? 8. What makes your product more suitable to potential customers than that of your competitors?.

21. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Describing & Analyzing End User 9. What are the most common design requirements shared by your potential customers? 10. What factors are your potential customers likely to consider before purchasing your product? 11. What do your customers value from your company, products or services? 12. How will potential customer find out about the product you are selling? 13. What have previous customers said about your company / product? 14. Does the cost of your product influence a customers decision to buy from you? 15. List all the ways in which contact can be made with your potential customers. You may include the following points:.

22. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Analyzing Competition There is a military adage that says, “No strategy ever survives first contact with the enemy.” No business strategy ever survives first contact with the marketplace, as well. It must always be adjusted to deal with the realities of the moment. Know your competitor Who is your competition? Exactly? Your competitor determines what you offer and where you offer it. Your competitor determines your prices and how you charge. Your competitor determines your levels of profitability and how consistently you earn them. Your competitor determines your rate of growth and your very survival. Everything you do must be done with a view toward your existing or potential competitor, and his or her likely responses to your actions..

23. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Analyzing Competition Determine Their Buying Motives Once you have determined why it is that people buy from you, you must then ask and answer, “Why do people buy from my competitors?” What value or benefits are your potential customers convinced that they receive when buying from your competitor rather than from you? What are your competitor’s key strengths? What are his areas of specialization, differentiation, segmentation, and concentration? What does your competitor have that you don’t have? What does he offer that you don’t offer? What is he doing more of or better than you? What is his unique selling proposition?.

24. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Analyzing Competition Determine Their Buying Motives Once you have determined why it is that people buy from you, you must then ask and answer, “Why do people buy from my competitors?” What value or benefits are your potential customers convinced that they receive when buying from your competitor rather than from you? What are your competitor’s key strengths? What are his areas of specialization, differentiation, segmentation, and concentration? What does your competitor have that you don’t have? What does he offer that you don’t offer? What is he doing more of or better than you? What is his unique selling proposition?.

25. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Analyzing Competition Marketing Myopia Many people dismiss or ignore their major competitors. They criticize or belittle them when their names come up. Often they think and say that customers who prefer competitive offerings are simply ignorant or misled. As a result of this self-inflicted myopia, they fail to observe and learn how to outdo their competitors in tough markets. One of the most effective business strategies you can implement is to always admire your successful competitors. Never dismiss them out of hand. Study them. Learn from them. Respect what they are doing well, and look for ways to improve upon their best features..

26. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Analyzing Competition Offset Their Advantages As you study your competitors, look for ways to offset or neutralize the advantages their customers perceive them. What are your competitor’s weaknesses? How can you exploit these weaknesses? In what ways are your products or services superior to their offerings? In what areas do you have a distinct advantage over your competitors? What can you do to offset your competitor’s strengths and maximize your advantages? The more time you take to study and understand why and how your competitors are successful in selling to your customers, the more likely it is that you will find an opportunity to take away their market share..

27. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Analyzing Competition Analyze Your Competition:  Who is your competition for what you sell, with the exact customers you are trying to attract?  What would happen if you changed your offerings in such a way that you targeted a different group of customers, one that would be easier to sell to?  Why do your potential customers buy from your competitors? What advantages do they perceive?  What is your competitor’s unique selling proposition? What special feature or benefit does his product or service have that yours does not?.

28. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Analyzing Competition  In what ways are you superior to your competitors? What can you offer that they cannot? How can you emphasize this advantage in your sales and marketing efforts?  Where is your competitor vulnerable? How could you exploit this to your advantage?  How could you alter your marketing strategy in such a way that you could achieve dominance in a particular area, with a specific customer or market segment?.

29. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Developing a Strategic Vision about the Future A strategic vision points an organization in a particular direction, charts a strategic path for it to follow in preparing for the future, and molds organizational identity. Indication for market changing in future. 1.Are the Industry boundaries are clear & customer are competitor are identifiable. 2.Do firm compete with distinct entities e.g. supplier, end product firms. 3.Is there competition for managing migration path. 4.Is the competition taking place product line, business line and corporate level and these level influence each other. 5.Can there competition cluster of firms to influence standard & industry revolution..

30. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Developing a Strategic Vision about the Future Phase of Competition Initial stage the companies compete the product concepts, technology choices and building competencies. Phase 2 involve partnering of companies with the objective of controlling industry standard. Finely as the markets become clear defined and the competitive space established the competition concentrates on the market share for end products and profits.

31. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Developing a Strategic Vision about the Future Anticipating the Future Information need to anticipate the futures 1. What are the influencer in the product market that have potential to deeply change the market/ competitor structure. 2. Investigate each influencer. a. How will the trend impact customer? b. what is likely economic impact? c. How fast is trend developing? d. Who is exploiting this trend? e. Who has the most to gain/lose? f. What new product opportunity will created by this dis-continuity? g. How can we learn about this trend?.

32. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng Market & Competitive Space-3 Thanks

33. Blekinge Institute of Technology SE-371 79 Karlskrona +46 455 38 50 00 www.bth.se/eng References 1.Victoria L. Crittenden, “ Strategic Marketing management ”, McGraw-Hill, NY,2002. 2.Philip R. Cateora, International Marketing, 9th edition 2000, alpha Sky Printer. 3.http://www.briantracy.com/blog/sales-success/analyzing-your-competition/ 4.http://www.associatedcontent.com/article/259290/developing_a_strategic_vision.html 5.D Cravens, N Piercy, Strategic Marketing, 8 th edition, McGraw Hill, 2005 6.V Rao, J steckel, Analysis for strategic Marketing, Addison Wesley Longmsn, Inc, 1998. 7.Fred R. David, Strategic Management, 6 th edition, Prentice-hall, Inc, 1997.