WEB BASED STRATEGIES

Gagan Bhatia; Prof.Marketing

Web Site Strategies

Three Web site approaches
Use to disseminate only product information Use as one of several important distribution channels Use as exclusive channel to transact sales with customers

Gagan Bhatia; Prof.Marketing

Using the Internet to Disseminate Product Information

Approach Website used to provide product information of manufacturers or wholesalers
Informs end-users of location of retail stores

Avoids channel conflict with dealers Important where strong support of dealer networks is essential

Gagan Bhatia; Prof.Marketing

Brick-and-Click Strategies: An Appealing Middle Ground Approach

Approach
Sell directly to consumers and Use traditional wholesale/retail channels

Strategic appeal
Communicate with a company Shop for product information

Make purchases Resolve customer service problems

Gagan Bhatia; Prof.Marketing

Strategies for Online Enterprises

Approach Use Internet as the exclusive channel for all buyer-seller contact and transactions Strategic issues for an online company
Whether it will have a broad or narrow product offering Whether to perform order fulfillment activities internally or to outsource them How it will draw traffic to its Web site and then convert page views into revenues

Gagan Bhatia; Prof.Marketing

FUNCTIONAL STRATEGIES

Gagan Bhatia; Prof.Marketing

FUNCTIONAL STRATEGIES
EVERY BUSINESS UNIT DEVELOPS FUNCTIONAL STRATEGIES FOR EACH MAJOR DEPARTMENT

MARKETING STRATEGY
FINANCIAL STRATEGY RESEARCH & DEVELOPMENT STRATEGY OPERATIONS STRATEGY HUMAN RESOURCES STRATEGY

Gagan Bhatia; Prof.Marketing

MARKETING STRATEGIES
Product Strategy
New or existing product? for new or existing customers?

Promotion Strategy
Push - spend Rs. on promotions and discounts to push products Pull - spend Rs. to build brand awareness so consumers will ask for it by name Media selection

Channel or Place Strategy

Distribute through dealer networks Sell directly to consumers through own stores or through internet

Price Strategy
Skim pricing (high) when you are a pioneer Penetration pricing (low) builds market shares
Gagan Bhatia; Prof.Marketing 8

FINANCIAL MANAGEMENT STRATEGIES

CAPITAL ACQUISITIONS Debt Leverage, Stock Sales, & Gains from Operations
Equity financing is preferred for related diversification Debt financing is preferred for unrelated diversification

RESOURCE ALLOCATIONS Dividends & Reinvestment

Reinvest earnings in fast-growing companies Keeping the stockholders contented with consistent dividends Use of stock splits ( or reverses) to maintain high stock prices

Gagan Bhatia; Prof.Marketing

RESEARCH & DEVELOPMENT STRATEGIES

LEVEL OF INNOVATION Pioneer (Leader) v. Copy Cat (Follower)
Technological leadership fits well with differentiation A follower strategy makes sense with cost-leader strategies

Different types of R & D (basic, product, process)

Where is the firms historic expertise / advantage? How competent are the R & D Personnel?

Gagan Bhatia; Prof.Marketing

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OPERATIONS STRATEGIES
MANUFACTURING LOCATION
Internal Production v. Outsourcing

Domestic Plants v. International Locations

SYSTEM LAYOUT
Job Shops v. Mass Production Job shop/small batch production fits well with a differentiation strategy Continuous production / dedicated transfer lines helps achieve cost leadership Use of robots and CAD/CAM v. Labor intense manufacturing

Gagan Bhatia; Prof.Marketing

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LOGISTICS STRATEGIES
TYPE OF MATERIALS TRANSPORTED (Bulky or Compact?)
Raw Materials, Supplies, & Components Finished Goods

BEST MODE OF TRANSPORTATION

AIR RAIL TRUCK

OUTSOURCE TRANSPORTATION OR DO IT YOURSELF?

Gagan Bhatia; Prof.Marketing

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HUMAN RESOURCES STRATEGIES

TALENT ACQUISITION
Recruit from Outside v. Internal Development Require experienced, highly-skilled workers v. we will train you Offer top wages & benefits v. mentoring and a career

WORK ARRNGEMENTS
Timings Safety Pf, Gratuity, Bonuses

MOTIVATION & APPRAISAL

Extrinsic v. Intrinsic Reward Systems Incentives for ideas & originality v. incentives for conformity?
Gagan Bhatia; Prof.Marketing 13

STRATEGIES TO AVOID DUMB STRATEGIES

FOLLOW THE LEADER We can do that toobut maybe its not worth copying ARMS RACE Battles which increase costs and decrease revenues DO EVERYTHING Offering something for everyonetrying to please everyone LOSING HAND Pouring Rs. down the knotholeinvestment because of prior commitments

NONE OF THESE STRATEGIES WILL CREATE A SUSTAINABLE COMPETITIVE ADVANTAGE FOR THE FIRM
Gagan Bhatia; Prof.Marketing 14

ORGANIZATIONAL STRUCTURE

Gagan Bhatia; Prof.Marketing

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Organization Structure
Strategy is implemented through organizational structure.

The primary role of organizational structure and control is two fold :

a) to coordinate employees activities so that they work together

b) to motivate employees and provide them with the incentives to achieve superior efficiency, quality, innovation or customer

responsiveness.

Gagan Bhatia; Prof.Marketing

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Types of Organizational Structure

Product Focused Structure

Market Focused Structure

Function Focused Structure

Virtual Structure

Gagan Bhatia; Prof.Marketing

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Product-Focused Organization
Head of Co./Div

Head Marketing

Head HR

Head Fin

Head Mfg

Support

Product Management

Marketing Research

Product Manager A

Product Manager B

Product Manager C

Gagan Bhatia; Prof.Marketing

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Product-Focused Organization
Characteristics
Classic brand management structure developed by P&G in 1930s Commonly used where different products use the same channels of distribution Product Manager acts as a Mini-CEO
Product Manager has the ultimate responsibility for the brand
Assistant Product Manager is responsible for market and share forecasting, budgeting, coordinating with production, executing promotions, and packaging

Gagan Bhatia; Prof.Marketing

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Product-Focused Organization
Examples of product focused organizations
HUL P&G Dabur Maruti-Suzuki

Gagan Bhatia; Prof.Marketing

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Market-Focused Organization

Head of Co./Div

Head Mfg

Head Fin

Head HR

Head Marketing

Market Manager A

Market Manager 2

Market manager 3

Gagan Bhatia; Prof.Marketing

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Market-Focused Organization
Characteristics
Useful when there are significant differences in buyer behavior in the market segments Does not give managers full responsibility for the services or products delivered

Gagan Bhatia; Prof.Marketing

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Market-Focused Organization
Examples of Market Focused Organization
Cipla Thomas Cook Himalaya Ayurvedic

Gagan Bhatia; Prof.Marketing

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Function-Focused Organization

Head of Co./Div

Head Mfg

Head Fin

Head HR

Head Marketing

Adv. Mgr

Product Marketing

Market Service

Market Research

Sales Promotion

Gagan Bhatia; Prof.Marketing

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Function-Focused Organization
Characteristics
Aligned by marketing functions A single manager is not responsible for day-to-day marketing activities of the product Useful if company has few products

Gagan Bhatia; Prof.Marketing

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Function-Focused Organization
Examples of function focused Marketing Organization
Google IOC (Oil Marketing) SMEs

Gagan Bhatia; Prof.Marketing

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Virtual Structure
The firm has farmed out its finance function to an outside organization. While the finance function exists it is not a part of the firm and hence it makes that part of the firm virtual.
CEO

MARKETING

FINANCE

OPERATIONS

VIRTUAL ORGANISATION

Gagan Bhatia; Prof.Marketing

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Virtual Structure
Both firms must be compatible in vision, business practices, language, employees background and profit perceptions. Both firms must not be too dissimilar in size, as relative importance is then sacrificed to browbeating by the big player.

Business environment of the both must be transparent to the extent possible.

Gagan Bhatia; Prof.Marketing

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Organizational Communication

Gagan Bhatia; Prof.Marketing

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Effective Communication
Use Direct Simple Words

Avoid Words which can have Ambiguous Meaning

Use Face to Face Communication Use Feedback Listen with Understanding Create Constructive Environment for the Expression of Ideas Be Careful about your Non-verbal Communication

Gagan Bhatia; Prof.Marketing

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Communication
Flow in an organization
Horizontal
Upward Downward

Diagonal

Gagan Bhatia; Prof.Marketing

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Barriers to Effective Communication

Assumptions Poorly expressed message Information overload Selective perception

Influence of attitude

Loss by transmission and Difference in status and power poor retention between the sender and the Poor listening and receiver. premature evaluation Several levels in organization hierarchy

Gagan Bhatia; Prof.Marketing

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THANK YOU

Gagan Bhatia; Prof.Marketing

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