Course: ​MARKETING STRATEGY

Shubhra Sharma | PGDBM-MM | 77119732650

1. Taking apt examples for every stage, explain the evolution of stages of the marketing era?

Ans.​ Marketing has progressed through a series of evolutionary stages since the dawn of the Industrial
Revolution. In line with this evolution, the marketing function has evolved through what theorists have
identified as six distinct stages. Understanding how to leverage modern marketing technology and new
communication strategies in the new marketing era can help you to build deeper relationships in the
marketplace. These eras don't have distinct start or end dates, and the practices of each era are still in
use; but their sequence illustrates the evolution of marketing.

● Barter Era: ​This simple trade era stretched from the beginning of history to the middle of the
19th century, when trade revolved around local barter economies. In this era goods were
exchanged for other goods. For example; a camel was exchanged by a trader for a herd of
donkeys, since there was no money as a standard of exchange. The barter system was only
possible when there was a very limited set of goods. It ended when the economy developed and
money was invented and became the standard of exchange
● Production era:​ This era began between the 1860s and 1920s, during the Industrial Revolution.
Mass production became the focus in the production era. Products were produced in mass and
at a low cost and became a primary driver of sales. Also during this era, businesses had the
mindset of, “if produced, someone will buy” and thus increased their profitability. Due to the
current market, businesses could sell anything they produced. For manufacturers, the key to
success was therefore ever more efficient (and low-cost) production, but at the cost of meeting
individual customers’ needs. For example; Ford was a mass manufacturer of cars, and people
were buying them without giving any choices or preferences for features- because they actually
had limited/no options to choose from.
● Product era:​ This era is thought to be a result of oversupply of basic goods. Once everyone
already owned the core benefits of the products concerned, manufacturers needed to provide
something different in order to find new customers. Products with more features, made to a
higher standard, began to be introduced. By the late nineteenth century extravagant claims
were being made for products on the basis of their quality and features. For example; Henry
Ford’s competitive advantage relied upon the efficiency of his vehicles and therefore it
produced only one type of motor vehicle. But in the product era, manufacturers sought to
resolve the problem of diverse customer need by adding in every possible feature. Competitors
were able to supply the market with a variety of motor cars and attracted a greater market
share as a result.
● Sales Era: ​During 1920-1950, as the market continued to become more saturated and intensify,
competition increased among businesses. This created a need for marketing and sales
techniques. In the 1920s ‘Salesmen’ and the ‘sales pitch’ were both born, as men would actively
pursue sales and talk the consumer into purchasing the item, even if they didn’t really need it!
 Companies hoped through persuasion techniques that they could convince customers to
purchase their products. However, companies were concerned with selling products simply to
get rid of them for a profit, not because it would fulfill the needs of their customers. Everything
in the sales era was about the price, not the quality of the products or the customer needs.
For example; firms sell unsought goods such as home improvements and insurance, and it often
results in short-term gains. In the longer term, customers will judge these companies on the
quality of its products and after-sales service, and (ultimately) on value for money.

● Marketing Era: ​Marketing orientation means being driven by customer needs: this is sometimes
also called customer orientation. The 1950s onwards saw the beginning of market research,
something we still value today, allowing companies to sell what the consumer actually wanted
to buy rather than trying to talk them into buying pointless items. Instead of just trying to
persuade consumers to buy the products they were making, companies focused on making
products that customers wanted to buy.
Deciding which products to make and market went from being a case of "filling a hole in the
factory" to one of "filling a hole in the market." It was in this era that the field of market
research really took off. For example; Samsung not only creates products tailored to customers’
preferences but also creates incentive earning opportunities for them, like opening a pop-up
store.
● Relationship marketing era:​ Tn this era marketers began to see long-term customer
relationships as a key to company growth. Companies now try to meet customer’s needs in an
effective manner because they understand that customer loyalty enables long term profitability.
It started with fast food restaurants saying "thanks, see you again" or "have a good day" after
giving you your meal in today's time where companies like OnePlus are running successful
businesses by leveraging the power of community building and consumer loyalty.

-------------------------------------------------------------------------------------------------------------------------------------------

2. Tata Group has various business units under it also called as strategic business units. Study the
business units under the Tata group and explain the importance of SBU’s along with the different
levels of strategy.

Ans. ​A Strategic Business Unit (SBU) is a separate, specialised subsystem in the company which acts as
an independent company. Having SBU assists organisations to plan their strategies and make
manufacturing decisions. Strategic Business Unit (SBU) implies an independently managed division of a
large company, having its own vision, mission and objectives, whose planning is done separately from
other businesses of the company. The vision, mission and objectives of the division are both distinct
from the parent enterprise and elemental to the long-term performance of the enterprise.
For example, the Tata Group of companies is the largest private corporate group in India and has been
recognized as one of the most respected companies in the world which was founded by Jamsetji N Tata
in 1991. It includes various Strategic business units such as Tata Steel, Tata Motors, Tata Consultancy
Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan Industries,
Tata Communications and Taj Hotels, to name a few.

The importance of SBU’s are described as below:

1) Organized Structure :​ The first thing SBU’s do is they help you get organized, which is The first
principle of time management. If an organization as large as Tata Group tries to oversee the plethora of
offerings that they have, all at once; the strategies might end up being hazy, and there will be no time
for creativity or innovation and all the time will be spent in just handling the existing work rather than
expansion. Thus SBU’s help the firms achieve an organized structure.

2) Focus Oriented: ​A structured organization helps achieve a certain level of micro management over
different business lines. Strategic Business Units are Important because they help managers be focused
on the different factors within the same organization. Each product or business unit has various
requirements and these requirements can be managed efficiently by giving them their individual
attention. For example, the MD of Tata Steel would not be responsible to oversee the business of Tata
Global Beverages or vice-versa. Each business line has different functions, different goals & objectives
and different metrics to measure their success.

3) Targeted Business decisions:​ The success of each of the SBUs of Tata group depends on the
Segmentation, targeting and positioning strategies that they adopt for their respective line of
businesses. Each of these processes requires being continuously in touch with the market, receiving
feedback, identifying your target market, targeting them and then positioning accordingly. Thus, these
humongous tasks become easier with targeted and separated business units.

4) Investments:​ Since each SBU is considered an individual business by the Parent company, their
valuation is ranked differently and therefore the investments in each particular SBU differs. For example,
the Tata Group would be willing to invest more in their Tata Steel and TCS SBUs, in comparison to Taj
Hotels due to respective impacts, the current pandemic situation has put on each business.

5) Decision making: ​SBUs propagate the correct decision making. These decisions can be at the micro
level (as explained above – managing STP, strategies) or they can be at the macro level (investments
from the corporate fund, whether to continue investing, etc.) The better performing businesses are
supposed to handle the load of any newly starting business or any business which is undergoing a slump.

6) Profitability:​ By assigning each and every business line into individual SBUs, the parent group can
obtain a holistic view of the organization. This view is also used in preparing the financial statements as
well as to keep tabs on the investments and returns for the organization from each SBU. Thus the overall
profitability of the firm can be decided. Ultimately Strategic Business Units are Important because they
contribute to better profitability of the organization.

The three different strategy levels in SBUs are described as follows:

● Corporate-Level Strategy: ​Corporate level strategy occupies the highest level of strategic
decision making and covers actions dealing with the objective of the firm, acquisition and
allocation of resources and coordination of strategies of various SBUs for optimal performance.
It involves strategies designed by the top management, including the board of directors and the
chief executive officer. The nature of strategic decisions tends to be value-oriented, conceptual
and less concrete than decisions at the business or functional level.
This strategy analyses all business opportunities available to an organisation and thus, helps in
achieving objectives. It also aids in developing the objectives, coordinating SBUs and allocating
resources. This strategy deals with the ‘what’ aspect of a business. It involves major decisions,
such as takeovers, liquidations, mergers and diversification and is innovative, pervasive and
futuristic in nature. It is about selecting an optimal set of businesses and determining how they
 should be integrated into a corporate whole: a portfolio.
● Business-Level Strategy:​ It includes strategies designed by the business heads of each SBU. As
compared to the corporate-level strategy, a business-level strategy is more specific and
action-oriented. At such a level, strategy is a comprehensive plan providing objectives for SBUs,
allocation of resources among functional areas and coordination between them for making
optimal contribution to the achievement of corporate-level objectives. This strategy deals with
the ‘HOW’ aspect of a business. A business-level strategy is important because it:
a. Implements the corporate-level strategies of an organisation
b. Builds coordination among different business units for creating synergy
c. Creates a sustainable competitive advantage for each business unit
d. Assesses the needs of the market and delivers products and services accordingly
Therefore, business-level strategies contribute to accomplish corporate-level strategies. In the
end, the business-level strategy is aimed at gaining a competitive advantage by offering true
value for customers while being a unique and hard-to-imitate player within the competitive
landscape.

● Functional-Level Strategy:​ Functional strategy, as is suggested by the title, relates to a single

functional operation and the activities involved therein. Decisions at this level within the
organization are often described as tactical. It includes strategies designed by functional
managers to carry out the daily activities of an organisation. This strategy allocates resources to
each operation of the business. The role of a functional-level strategy is to ensure the
development and coordination of resources in an organisation. This strategy can be divided
further into operational-level strategies. A functional-level strategy has various functions. Some
of its main functions are as follows:
a. To alleviate coordination among various functional areas, such as production, finance,
marketing and human resource.
b. To coordinate each functional area with respective business-level strategies. This in turn
helps in accomplishing an organisation’s corporate-level strategies.
c. To align various activities in each functional area. For instance, to implement an
effective marketing strategy, various marketing activities such as advertising, promotion
and marketing research should be unified.

-------------------------------------------------------------------------------------------------------------------------------------------

3. ABC Co. is into manufacturing of Garments for the Indian market.

a. If you are the manager there, what according to you would be the issues that you will face while
making strategic business decisions?

Ans (a). ​In any organisation, strategic decision making cannot be examined and explained easily, as it is
immeasurable and quite difficult to perform. Strategic decision making has several issues that may arise
in an organisation. In the type of industry that ABC Co. is in, some of the issues in strategic decision
making are discussed as follows:
● Rationality:​ A final decision is made from different alternatives in such a way that the objectives
of the organisation are achieved in the best possible manner. The fashion retail market in India
is huge and the apparel industry contributes a large chunk. Also, given the rich and diverse
cultural heritage that India has, the way people dress up, changes drastically across the regions.
 To make rational decisions with regards to the product portfolio, keeping in mind all the aspects
of the organisation, such as optimisation and profitability, could be a challenge.
● Creativity: ​The decisions regarding strategic alliances for the development and growth of the
offerings is an issue that might creep up. Since creativity helps in attaining the objectives and
searching alternatives in an exceptional manner, it becomes imminent to be always on a lookout
for opportunities to create synergies with other brands and grow alongside them.
● Volatility:​ Every problem may have different solutions depending on different perceptions of
different individuals. Hence , the consideration of other team members is very important to
keep a balance in the overall business and its processes.
● Different Criteria: ​This involves determining objectives for making particular decisions. Should
the business focus on maximising returns, or should it take small incremental steps are some of
the questions that arise while decision making.
● Individual factors:​ Sometimes human level factors play an important role in decision making.
For example; ABC Co. would
● Individual v/s group: ​Decisions taken by an individual like the MD, wanting to launch a
particular collection, may differ from the thinking and decisions of a group who are actually
considering the market needs and suggest that the collection won’t be as much a success it
should be in the target market in question.

b. What would be the paradigm shift in your marketing strategies?

Ans (b). ​As the manager of a Garments business, which has a severely high competition, and can never
flourish until its customers are satisfied with its products and services, it will become my responsibility
to come up with a marketing mix that not only incorporates the customers’ choices and preferences, but
also gives the power of purchase of every prospect customer out there. For the same reason, I would
make a paradigm shift towards the ‘4A’ models which is not just a customer centric model but is also
pertinent to keep the interest of the rural consumers alive. The elements of the 4A model are
awareness, availability, affordability and acceptability.
● Awareness: ​Our product portfolio would be promoted in a manner that it will make different
consumers aware of their desires, and how our company can help them fulfill their desires with
the large product variety that we would have.
● Availability: ​taking our brand to nook and corners of the country would be my next target, so as
to ensure that our product range is made available to our set of customers anywhere in the
country.
● Affordability: ​The portfolio would consist of the products of a wide price range, so that we have
something for everyone who would want to make a purchase from us.
● Acceptability: ​To gain consumer trust and loyalty, it’ ll be important for us that people love our
brand and accept us. Aspects such as after-sales service would play a vital part in that.

-------------------------------------------------------------------------------------------------------------------------------------------