STRATEGIC MARKETING –PART II

STRATEGIC MARKETING – Best Practice to Next Practice (PART -II)

Then came Michael Porter’s book on Competitive Advantage Strategy which had a major impact. Most of
Michael Porter’s thoughts come from an old school of thought viz. value chain. The strategy mainly looks at:
· Low cost advantage
· Differentiation
· Focus
Following the competitive advantage strategy, came Michael Treacy and Fred Wiersma book, The Discipline of
Market Leaders: Choose your customers, Narrow your Focus, Dominate your Market, on the argument that
one must find the ‘discipline’ to choose one from among the following ‘value propositions’ while letting the
others slide to “minimal threshold performance levels” :
· Operational Excellence
· Innovation (supported by the next level of technology)
· Customer Intimacy
Marketing Leadership according to Dr Sheth is a matter of corporate choice and it depends how one wants to
measure the leadership position in the market. Thus, it could be
(a) Number based
(b) Proven excellence
(c) Perception
(d) Demonstrated thought leadership
These are category imperatives and variants are possible. The key basis of market leadership for an
organization should be the capability to make other firms in the same industry follow it, be it in new product
introduction, distribution coverage, price changes, etc.
From Market Share to Share of Mind was the next step in strategic marketing evolution. Here the focus
moved towards not just being a market leader in terms of market share but on capturing the consumer’s
share of mind, wallet & heart.
Dr Jagdish Sheth then spoke about his famous contribution – The Rule of Three. In this model, a volume
driven vs margin driven strategy is evaluated. Dr Sheth propagates that financial performance is marked by
return on assets and should be evaluated against market share. He coined the term “The Ditch” where return
on assets (financial performance) & market share are both low. On the right side of the ditch are volume
driven companies whereas on the left side is the margin driven. The product/market specialists are those
who serve niche markets with overall market share sometimes as low as 1%. The right side of the ditch are
full line generalists whose market share generally range between 10% to 40%.
According to him, only a few competitors will survive and the mature market will normally have monopolistic
competition . He observed that in such a market, the No.3 competitor is generally the most innovative. It then
moved from competition to customer market philosophy.
A new concept came about later which can be coined as “Customer Centric strategy”. Here the approach
shifted from product centric to being customer centric. Product centric meant that a supplier interacted only
with a client’s purchase department and not with the user/s. Feedbacks were received by a different service
dept. In a Customer
- .
Interionews 3
Centric scenario, the process ensures that all departments of the supplier & client were in constant touch with
their counterparts in the same function be it Information Systems, HR, Logistics, Contracts, sales, marketing
or service teams. This ensures that the product/s evolve/s for the requirement of the client. Eg : P&G has
over 200 employees in all departments working in sync with Walmart, their largest client.
Then again came Dr Sheth’s contribution of the 4 As of Marketing which is an alternate framework to the 4 Ps
and is highly complementary to it but gives a different perspective:
• Acceptability x Affordability x Accessibility x Awareness
• This is a customer perspective framework of the traditional 4 Ps.
If you offer a superior product at a lower price in a customer friendly manner, you will always win in the
market place. Here he remarked that most companies are good at creating acceptability and awareness value
but not so good at creating affordability and accessibility value. He also remarked that not only the economic
background but also the emotional background of the customer has to be considered. How can you sell more
to the customer today by cross-selling, up-selling, being a one-stop shop and so on.
The evolution curve of strategic marketing then moved on to Relationship Marketing:
• The concept of relationship marketing takes a step towards looking beyond transaction i.e. from
transaction value to lifetime value.
• This involves strengthening the emotional bonding with the customer.
• The concept takes a step away from ‘share of wallet’ to taking a ‘share of heart’
Finally, comes the Share of Heart model. Here, he spoke of the SPICE i.e.
Emotional bonding with
– Society
– Partners
– Investors
– Customers
– Employees
• Value to investors = Value to society X value to partners X value to customers X value to employees.
Rational relationship with customers is not enough. Marketers must also nurture an emotional relationship
with customers to gain a differential advantage. Finally, it is not enough to just win the share of heart of
customers. It is equally important to win the share of heart of employees, the community, suppliers and
investors.
Dr Sheth also spoke on Indic Inc. Goes Global – Roadmap for Success where the roadmap outlined by him is
as follows:
* Have a banker in your pocket
* Scale up through going global
* Dominate domestically
* Earn quality recognition
* Invest in design & research
* Enhance productivity through processes
* Create world class brands

This article is penned by Doreen Rosario with inputs from Arun Kuruvila.









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