Rajagopal. Marketing Dynamics: Theory and Practice

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PREFACE

In the highly competitive and global marketplace of today, the pressure on organizations to find new

ways to create and deliver value to customers grows ever stronger. The growing internationalization

of business induces changes in the positioning of competitors and appropriate competitive strategies.

As the companies attain gradual success in geographically expanding their business and effectively

performing international operations, they reach at critical point and would be able to synchronize the

proximity to the overseas markets and customer needs. Global companies at this point blue print their

successful business systems in the emerging markets by creating relatively decentralized operations

in production, marketing and sales. The largest and powerful multinational business houses prefer to

be aggressive to dominate over the most demanding and emerging sectors. General Motors, for

example is offering credit cards and supermarket groups routinely now offer gasoline, banking,

pensions and saving plans apart from the manufacturing and marketing of automobiles. Companies

that are capable of managing appropriate diffusion of technology and adaptation process among the

customer segments are found to be highly successful. Competition among multinationals these days

is likely to be a three-dimensional strategic game wherein the moves of an organization in one market

are designed to achieve goals in another market in ways that aren’t immediately apparent to rivals

Successful business strategies are those which are cohesive with the marketing in action. Once

such strategy is synchronized, the firm may be involved in every stage in the life cycles related to

products, services and markets. It is not a easy task to identify strategies for entering new markets

or to decide which segments to do business with. Many firms simply rush to the marketplace with

limited business insights and fall far short of their goals. It is often difficult to draw a precise and

powerful strategy for many companies to compete in reference to financial and technological resources,

the seasoned management, and the powerful competing brands. However, local companies often

have more options than they might think.

In the changing business scenario marked by rapid globalization, intensive competition in the

1 Ian C. MacMillan, Alexander B. van Putten and Rita Gunther McGrath : Global Competition— What is the

First Move, HBS Working Knowledge, Harvard Business School, June 23, 2003

products and services segment, fast moving technology and changing consumer preference, it is

essential for the companies to develop the strategic marketing skills for both survival and sustenance

in business. The new school of business and contemporary researchers have emphasized that, towards

maximizing the lifetime value of customers, a firm must manage customer relationships for the long

term. In a disagreement to this notion, a study demonstrates that firm profits in competitive environments

are maximized when managers focus on the short term with respect to their customers

The strategic marketing skills provide a shield to the companies to play defensive during rival

attacks and to go aggressive when they foresee an opportunity in the given business environment.

However, success will depend on the ability of the companies to understand the markets unfolding

around them and develop a rational strategy for long term gains. One of the significant aspects of the

marketing strategy in the contemporary sense may be the convergence of customer focus with

corporate goals for holding the larger share of competitive advantages. Marketing strategy may be

conceived as an innovative mindset and tool for digging deeper into competitive arena of the business

in order to derive optimal solutions for the problems. The most critical aspect of strategy implementation

process in marketing is towards ensuring creation of sustained customer value. The key internal

process for managing implementation and control of marketing strategy includes operations

management, customer relationships, innovation, regulatory and social processes. While critically

examining the business environment we may find complex interplay between consumer and marketer’s

strategy which determines the scope of every product and services in a given market. Such a strategic

move may be understood as the mind of the market. Most of the companies are transforming their

business strategies facing to the customers value chain and an intriguing look at how the mind,

company, and environment interact to drive corporate decisions, this book is a welcome addition to

the existing resources.

This book highlights the most recent trends and developments emerged in marketing theory with

an emphasis on integrated application of strategies between marketing and all the other functions of

the business. It introduces new perspectives in successful strategic market planning, and presents

additional company examples of creative, market-focused, and customer-driven action. Coverage

includes a focus on competitor analysis, brand strategy, sales management, marketing-mix and

marketing research. Chapter topics discuss building customer satisfaction, market-oriented strategic

planning, analyzing consumer markets and buyer behavior, dealing with the competition, designing

pricing strategies and programs, and managing the sales force. Strategy applications and best practices

have been discussed in the book for marketing managers who want to increase their understanding

of the major issues of strategic, tactical, and administrative marketing-along with the opportunities

and needs of the marketplace in the years ahead. This book would benefit largely the undergraduate

and graduate management students who study international marketing course as a core or elective

subject. This book has been written keeping in view the international coverage and contents of the

subject that is commonly adapted in most of the Latin American and Asian universities including

management schools in India.

2 Villanueva Julian, Bharadwaj Pradeep, Chen Yuxin and Balasubramanian Shridhar, Managing Customer

Relationships- Should Managers Really Focus on Long Term, IESE Business School, Working Paper #

D/560, May, 2004, pp 1-37

I express my thanks to my daughter Ananya for being instrumental in drawing the Tables and

Charts in this book. My son Amritanshu always stood by with me in the hectic times of revising the

draft which helped me in de-stressing and regaining the energy back to work. Finally, I express my

deep gratitude to my wife Arati Rajagopal who copy edited the first draft of the manuscript and

stayed in touch till the final proofs were cross checked. She has been the light of the spirit in carrying

this comprehensive work.

Rajagopal

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CONTENTS

1. UNDERSTANDING COMPETITORS AND COMPETITION 1-64

Understanding Competition • Theoretical Framework of Competition

• Competitor Learning • Competitor Learning Models • Playing in the

Competition • Competitor Strategies • Market Place Strategy • Competitor

Analysis: Capabilities and Competency • Analyzing Competitor’s Signals

• Re-engineering Business for Competitive Advantage • Customer Value and

Reengineering Process • Corporate Concepts of Re-engineering Business

• Competitive Focus • References.

Case 1.1

Case of EID-Parry (India) Ltd. – Product- Mix – Product Performance – Competitive

Business Process – Strategic Moves: Alliances and Mergers – IT in Corporate

Business: A Challenge in Competition – Discussion Issues.

Case 1.2

Retail Expansion in Global Arena: Strategies of Wal-Mart to Sustain Competition

– The Wal-Mart Culture – Respect the Individual – Service to Our Customers – Strive

for Excellence – Wal-Mart International Operations – Development Opportunities

– Pricing Philosophy – Retail Divisions of Wal-Mart – Super-centers – SAM’S Club

– Neighborhood Market – WAL-MART.COM – External and Internal Threats.

2. PRODUCT STRATEGY 65-101

Levels of Product • Product Hierarchy • International Product-line Analysis

• Product Design Strategy • Product Life Cycle Management • New Product

Development • Product Planning Matrix • Product Portfolio Matrix • Dimensions

of Product Strategies • Product Repositioning Strategy • Product Strategy

Perspectives • Selected Readings.

Case 2.1

L’oreal Netherlands: Product Marketing Strategy in Europe – The Dutch Market

– Synergie – Skin Care Market – Competition – Consumer Behaviour – Product

Manager’s Review.