L1: Fundamentals of Market Strategy (The four A's (Affordability:…
L1: Fundamentals of Market Strategy
Where to play
Go-to market transformation
Mergers & Aquistions
Business Model Innovation
How to win
Maximise the core
Expand into adjacencies
Explore new frontiers
Corporate Strategy is everything that sets the direction and priorities for a company.
Marketing plays a key role in formulating corporate strategy given the fundamental importance of selling products and services to customers.
Corporate Strategy encompasses all aspects of formulation, and marketing plays a central role.
Total Available Market (TAM) 'big'
Total market size, being capable of buying my product or service. ('How many customers in total exist?')
Serviceable Available Market (SAM) 'Medium'
Number of potential customers that could be interested in buying my product or service. (How many might afford my product and are interested?)
Serviceable Obtainable Market (SOM) 'Small'
Estimated target market share that could be achieved, considering: economic trends, existing players, expected demand/forecast, countries, distribution channels (How many products do I think I might sell?)
Case Study: P&G vs. Unilever
Slow economic recovery of America and deteriorating economic situation in Europe have hit P&G harder due to their greater share of revenues in these developed markets
Products of P&G are more expensive compared to Unilever
Strategy to 'taking on every competitor in every category in every region of the world at once' failed
Currently more narrow apporach of ten biggest developing markets, 40 most profitable products and 20 biggest innovations
Arrogance problem in developing countries
The four A's
Affordability: Product Format
Adjusted to buying frequency and disposable incomes
Acceptability: Brand Resonance
Local brands are more easily accepted. Different products for different countries for Nestle
Availability: Route to Market
E.g. Unilever Shakti Sellers
Awareness: Network Effect
Brand considereation (Shelf), Word of mouth, In-store experience
Top 3 learnings for consumer-facing brands
Enough consumers have to want to pay what your product is worth
Competitive advantage is only temporary, so that innovation work mustn't stop
Execution of the strategy is where things always go wrong, so allow for it.
More 18 month strategies instead of 5 years plans
Case Example: Weetabix and breakfast market: Weetabix needed to innovate: But Belvita saturated the bar market
--> Weetabix on the go
Triumph became successful almost by accident: Focused on old guys but was popular with young guys due to retro style. Came up with two different lines