Unit-2 Lesson-19 Industrial Marketing Strategy in India

Marketing planning involves the selection of a marketing strategy and the tactics of implementing it to reach a defined set of goals. Marketing planning differs from Strategic market planning in three ways: time horizon, responsibility, and details. The components of marketing planning are executive summary, current marketing situation, threats and opportunities, objectives and issues, marketing strategies, action plans and control measures. The strategic planning process consists of developing the company's mission; objectives and goals, business portfolio, and functional plans. Controlling requires that various relevant aspects of performance be measured and compared with corresponding aspects of the plan. The purpose of the situation assessment is to identify threats and opportunities posed by changes in the environment (environmental assessment). The issue of strategy formulation and planning for any new product or market is dependent on the product life cycle. There are three basic approaches for strategy formulation for new products. The essential task is to identify a proper product market combination where the barriers to entry are at a minimum. A marketing strategy has to take several factors into account, the prime one being the company's position in the particular market, specifically whether it is a market leader, challenger, follower or nicher. There are four major marketing strategies depending on the timing of the technologically intensive firm's entry into an industry. Follow the Full Product Life cycle, Develop New Products; Follow the Leader, Application Engineering, and Me-too products.

Corporate strategic planning involves four planning activities. The first is developing a clear sense of the company's mission. A well-developed mission statement provides employees with a shared sense of purpose, direction, and opportunity. The second activity calls for identifying the company's strategic business units (SBU). Its customer groups, customer needs, and technologies define a business. SBUs are business units that can benefit from separate planning, face specific competitors, and be managed as independent profit centers. The third activity calls for allocating resources to the various SBUs based on their market attractiveness and company business strengths. Several portfolio models, including those by Boston Consulting Group and General Electric, are available to help corporate management determine the SBUs that should be built, maintained, harvested, or divested. The fourth activity calls for expanding present businesses and developing new ones to fill the strategic-planning gap. The tools described provide powerful support for the Formulation of marketing strategies. In particular, they are useful to evaluate the firm's current Product-Market portfolio, evaluate competitors' current Product-Market portfolio, project the firm's future competitive situation and guide the development of a Strategic Intelligence System.

The- need for a lengthy time frame in industrial marketing can arise from a variety of reasons, like long lead times, long life cycles of many existing industrial products and alternative sources of resources on a long4erm basis. The selection of a suitable forecasting technique depends on (a) identification of new opportunities or threats (b) identification of potential markets and (c) market estimation and product specification.

STRATEGIC PLANNING IN THE INDUSTRIAL MARKET While the basic principles of planning apply in both markets, many organizations have found that what works well in the consumer market fails to do so in the industrial market. Two significant differences between these markets appear to account for this phenomenon. First, unlike the consumer market where products are normally' marketed through one or two channels, most industrial marketers face diverse markets that must be reached through a multiplicity of channels-each requiring a different marketing approach. A producer of communication equipment, for instance, may market to such diverse segments as the commercial, institutional, and governmental market, each of which will require a unique marketing plan Second, in contrast to consumer marketing, successful industrial marketing strategy depends more on other functional areas. Where the elements of planning in consumer marketing can often be contained within specific areas of marketing, such as advertising, selling, and product management, planning in the industrial market is largely dependent on, or constrained by, the activities of other functional areas-for example, engineering, manufacturing, and technical services. When marketing emphasizes tailor-made products and fast deliveries, for instance, manufacturing must be prepared to follow through with product output. Planning, then, in the industrial marketing arena requires a higher degree of integrated effort across functional areas and a closer relationship with overall corporate strategy than in the consumer market. Functional Isolation While planning in the industrial market is as sophisticated as it is in the consumer arena, too often industrial firms concentrate planning efforts in the marketing department, failing to recognize the interdependency between marketing and other functional areas. Perhaps this is due to what may be referred to as "functional isolation."4 That is, not only does marketing tend to ignore its interface with other areas such as finance, manufacturing, and R&D, but "marketing concepts, methods and inputs are frequently ignored in the decision perspectives of other business function & While marketing should take the lead in defining market segments, needs, and opportunities and in determining what it will take to satisfy the various markets and, segments, planning in the industrial arena must be a collaborative effort between all key functional areas. Unfortunately, as

Wind and Robertson point out, the isolation between marketing and other functional areas may continue until we: Find solutions to the inherent conflict between marketing and other functional areas. Develop organizational structures that explicitly incorporate marketing and nonmarketing considerations. Begin using marketing decision models that are based on relevant input from other functional areas 'besides marketing. Functional Conflict While successful planning depends on cooperation between the different functional areas, whenever tasks and objectives are different or unclear between two or more departments a strong tendency for disharmony exists. As Table 6-1 highlights, potential areas of conflict between marketing and engineering exist in such basic matters as new product development, product quality, and technical services. Potentials conflict also exists between marketing and manufacturing in such areas as sales casting and production planning, and between marketing and R&D in the new product development A Catalog of Potential Conflicting Areas Between Marketing/Engineering Areas Responses New product Design Breadth of the variety now product line Product appearance Marketing Responses They don't give us products we can sell. By the time we get them to design the product it will be obsolete. We need more variety. Engineering We're limited in what we can p it design because we have to keep it simple for marketing We have too much

Our line looks so inferior. a lot of fancy Why can't engineering make workable products?

Our line does not need window dressing.

Product problems

Neither the customer nor our marketing department understand the product and how it is supposed to work The information that marketing includes is so exaggerated. We could get sued for false advertising. Trying to package so many products and hold costs down is extremely

Product promo tion

The information we get from engineering is so dull and technical that no one would read it. It looks so cheap and functions so

Packaging

poorly that it makes our products hard to sell. Quality Technical Why can't we have reasonable Quality at reasonable costs. We need a technical expert to soothe customers even though they really do not have a problem. Engineering always goes by the book, they don't understand that you have to bend a little. We must design so many products with numerous options that it is hard to maintain quality and keep costs down. We don't have enough manpower hold the hand of some pet customers of marketing. Marketing wants us to pay the full amount of every claim, even an invalid one.

Warranty

Alleviating Conflict. Alleviating conflict begins with developing an understanding of the basic causes of interdepartmental conflict. As discussed in Chapter five conflicts arises due to the fact that each area is evaluated and rewarded on the different criteria, the inherent complexities of the different functional areas and the different perceptions of the individuals involved. Conflict can also arise differences in how departmental individuals perceive their prestige, power and knowledge. Budget constraints, rapid company growth, and the rapid peace of technological change can also yield potential areas of conflict. Some degree of conflict is necessary and can be very constructive in that it promotes more efficient and effective use of the company's resources. However, when conflict begins to diminish the ability of the organization to coordinate the efforts of its various' functional areas, it becomes counterproductive and impedes the organization's effectiveness in achieving its primary goals. Alleviating conflict, however, is top management's responsibility. Conflict can only be alleviated when an atmosphere of cooperation is created through (1) promotion of clear and straightforward corporate policies, (2) evaluation and reward systems that stress inter functional cooperation and responsiveness, and (3) formal and informal inter functional contacts (e.g., including manufacturing people in sales meetings and marketing people in product design decision meetings or establishing squash courts for noon-hour use by all company members). Marketing executives, however, can assist in alleviating conflict by building their marketing plans around each functional area's ability to service the firm's markets and customers and by analyzing the strengths, weaknesses, and competitiveness of each respective area, similar to analyzing customers and competitors.