STRATEGIC MARKETING

09-06-2018
FINAL REPORT

SUBMITTED TO
SIR ASIF ANSARI
PREPARED BY
MUHAMMAD MUSAB AHMED
SP17-MBAG-0045
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Strategic Marketing

ACKNOWLEDGMENT
All the thanks to ALLAH, the compassionate, who blessed me with the power & abilities and
remained, contended on all complexities found during the completion of this report.

I am thankful to our respected teacher Mr. Asif Ansari who equipped us this creative chance
to avail a practical understanding and delivered his full support and guidance in the
completion of this report.

Last but not least I am thankful to my parents whose deepest devotions and obligation have
always been strength and a great source of motivation to me. It could be difficult for me to
complete this report without their shadow of love.

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CHAPTER # 01

What is market driven strategy?

Market-Driven strategy is the long term planning of a business to provide the maximum
value or advantages to the customers. The main target of the market driven strategy is to
provide maximum value to the customers.

The characteristics of market driven strategies include:

1. Becoming market oriented.

2. Determining distinctive capabilities.

3. Creating Customer Value.

4. Obtaining superior performance.

Cadbury dairy Milk chocolate is one of the major success story for Cadbury and one of the
world's most famous chocolate brands. Cadbury Dairy Milk is a worldwide brand of
chocolate of United Kingdom Which makes different types of products and promotes in
different countries like Pakistan, India, Italy, Canada, France and etc.

1. Becoming market oriented:

As we know that market-oriented business always gathers information about its customers,
competitors, and the markets; analyze it from a total business perspective, decides how to
deliver superior customer value, and finally takes actions to provide value to customers and
that’s what Cadbury has done in the past. Cadbury understands the market place and the
needs of customers; first they targeted customers like kids, youth and then made products
according to their needs. They have studied the market, competitors and their customers
and make products according to their needs. They have several brands of Dairy Milk like
Dairy Milk Silk, bubbly, fruit & Nuts, crackle, caramel and etc. which are targeting specific

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segment; Cadbury also launches their special edition products on occasion like valentines,
Eid and Diwali to give tough competition to their competitors in order to become market
oriented.

2. Determining distinctive capabilities:

Distinctive capabilities are a crucial part of market-driven strategy. Consumers favor the
Cadbury Dairy Milk Chocolate because it offers the quality, distinctive features, Affordable
price and Cadbury Company devotes its full time to satisfy the new consumers and retain
the oldest consumers.

3. Creating Customer Value:

Customer Value is “the outcome of a process that begins with a business strategy anchored
in a deep understanding of customer needs”. The creation of customer value is an important
challenge for the businesses, since it is an ongoing competitive challenge in maintaining
successful market-driven strategies. Superior customer value occurs when the buyer has a
very positive use experience compared to his/her expectations as well as the value offerings
of competitors.

Customer value is all about building strong relationships with customers and providing them
better products as compare to price which they pay against the product. Cadbury D.M.C
provides all the above values.

4. Obtaining superior performance:

Businesses can obtain superior performances by providing high value to its customers.
Cadbury Dairy Milk has succeeded so far in obtaining superior performance. They have loyal
customers because it provides superior customer value as compare to its competitors
means customers get more benefits as compare to its cost. Especially we can say kids and
youth are loyal customers of Cadbury dairy milk chocolate, because they feel that they pay
low price against more valuable and highly affordable products.

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CHAPTER # 02

What is segmentation?

Segmentation is dividing total population into different groups having similar needs, wants,
characteristics and behaviors.

Pepsi is the world renowned brand. It is a very well organized multinational company, which
operates almost all over the world. In Pakistan It also has proved itself to be the No.1 soft
drink. Revenues generated PepsiCo in the Pakistan and its eight bottlers Rs91 billion for the
financial year ending June 30, 2013, Pepsi has a significant market share 65% in the Pakistan
and dominated as a market leader but Pepsi has lost market share due to Coca-Cola
sponsorship of Coke Studio, previous Pepsi market share is almost 75% that’s why
management changed marketing technique and Pepsi associate with music and sponsor a
music show. Now Pepsi launch a new soft drink and the name is “PEPSI PERFECT “a vitamin-
enriched Pepsi, with 50% less sugar than regular Pepsi, and black in color and flavor stronger
than regular Pepsi. Pepsi Perfect target market is generally anyone between the ages of 15
to 50, especially those peoples they are health conscious and those they want to purchase
novelty things. They advertise heavily in Universities and Schools surroundings, TV channels,
Promotions, Sign boards and restaurants. As far as packaging and distribution concern,
packaging is different from the previous one’s in which straw is built-in in the bottle and
distribute this product through its 08 bottler in Pakistan. These bottlers are Pepsi's strength.
Pepsi has given franchise to these bottlers. Bottlers, produce, distribute and help in
promoting the brand.

MARKET SEGMENTATION OF PEPSI

Pepsi has segmented their market keeping four major segmentation variables in their mind
which are:

01. Geographic
02. Demographic
03. Behavioral

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04. Psychographic

GEOGRAPHIC SEGMENTATION:

In geographic segmentation, PEPSI market is sub divided on the basis of area

Regional differences exist in respect of demand for products. For example, PEPSI
PERFECT buyers from Sindh are different from the buyers in Punjab.

There are differences in buying behavior of urban and rural customers. Accordingly,
PEPSI marketing strategies designed depending upon their likes, dislikes, moods, preferences,
fashions and buying habits.

PEPSI buying is also reflected by the locality within a particular city. For instance,
there are differences in terms of buying patterns of people residing at Korangi and Defence,
within a city.

DEMOGRAPHIC SEGMENTATION:

Company studied PEPSI market at the different aspects of population. Markets can be
divided on demographic factors like age, gender, education etc. The various demographic
factors are:

Analyzing markets by age is to divide the total population into age groups and analyze
the wants and needs of each group.

PEPSI buying patterns depends on income of the consumers. No two individuals or

families spend money in exactly the same way that’s why company launch economy packs
of PEPSI.

The consumption patterns of PEPSI definitely vary with the number of people
in the household that’s why company introduced 1.5 liter & 2.25 liter bottles in the market.

Consumption patterns of PEPSI differ on the basis of race because market research if
first 15% people purchased & used your product which company has launched, others 85%
peoples follow them.

BEHAVIORAL SEGMENTATION:

Buyers are divided into groups on the basis of their response e.g. usage rate, user status,
loyalty status, buying motives, and so on.

One possible way to define target market is by product usage. There can be
heavy users, medium users, light users, and nonusers of Pepsi products. Targeting on the
basis who want to increase consumption by present users and to convince and introduce

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new product such as PEPSI to nonusers and to become users.

PEPSI market can be segmented on the basis of user status of PEPSI products
such as: non-user, ex-user, potential user, first-time user, regular-user, & so on.

PEPSI market can be segmented on the basis of people’s readiness to

buy the product. Some people are well informed and are interested to buy the product.
Some other may be well informed but not interested to buy the product.

Buyers buy the product with different buying motives such as economy,
convenience, prestige, etc. Accordingly PEPSI promotional appeals can be directed to the
target audience.

PSYCHOGRAPHIC SEGMENTATION:

The company also segments its market with respect to social class, lifestyles and
personalities, they focuses their attention towards lower upper and middle class because
those people afford to drink Pepsi.

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CHAPTER # 03

What is Environmental Analysis?

Environmental analysis is a strategic tool. It is a process to identify all the external and
internal elements, which can affect the organization's performance. The analysis entails
assessing the level of threat or opportunity the factors might present.

Today Tapal has become the largest, 100% Pakistani owned Tea Company in the country. It
has modern tea blending and packaging factories, warehouses equipped with state-of-the-
art equipment and a team of highly dynamic professionals headed by Aftab Tapal himself.
Tapal has 9 brands. It’s one of the major competitor is UNILEVER. In order to compete with
its competitor, it is using different defensive strategies in order to gain control of that
territory the Lipton has been able to manage. For this Tapal should know that are the
strengths of its company and what are the weaknesses that they should overcome and how
they should avail their opportunities.

SWOT ANALYSIS:

The strength of Tapal is that they continuously innovates things in order to

increase customer value for example it was the first company to introduce soft packaging in
the country. It was the only company to introduce round tea-bags in Pakistan. It was the
pioneer of Jasmine green tea in Pakistan. Tapal has strong R&D team. It has good brand
awareness in the local target market. Tapal is the largest selling brand in Karachi.

Every company should overcome their weaknesses and increase their

strengths. One of the weaknesses of Tapal is that it has to import some of their products
from other countries due to which their cost becomes too large. One more thing that
increases cost of Tapal is their tight quality control procedures. One disadvantage of this
procedure is that very time consuming and many times it has cause dissatisfaction to the
suppliers. Tapal has a lot of product lines but still not be able to knock out loose tea which is
not branded. One more weak point of Tapal is that it wrongly positioned the Tapal safari
Kenya leaf.
One of the opportunities for Tapal is the market growth of tea-bag market
as it is very easy and convenient to use. As customers are more attracted towards the strong

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tea and the quality of tea, so this will be opportunity for Tapal to focus on these things to
increase their sales. As the green tea marketing is growing which is also a great opportunity
for Tapal to increase its sales through Tapal Gulbahar which is Tapal green tea. Increase in
population is also an opportunity for Tapal this will may increase their customers.

One of the major threats that Tapal is facing is the competitive strategies of
UNILEVER. As its marketing campaigns are very strong and it becomes difficult for Tapal to
defend itself due to low budgets. One more advantage of Lipton is that they have history
but Tapal does not have. This was concluded from our survey that we conducted targeting
housewives as most of the house wives use Lipton as it is being used by them from their
families to families. Climatic conditions are also one of the threats for Tapal as in summer
season people prefer soft drinks over tea

PESTEL ANALYSIS:

PEST analysis is used to describe a framework for the analysis of macro environment factors
included:

1. Political
2. Economic
3. Social
4. Technological

Political factors and government interventions can make or break the industry.
The political factors have played a very kind role for the tea industry. The political arena has
a huge influence upon the regulations of the businesses, and spending power of consumers
and other businesses. The political environment of Pakistan is relatively unstable in the
current situation. The investors are not willing to invest in Pakistan. However, WTO and
trade policies encourage the import of raw materials for Tea industry.

Tea Import Quota: It is an important consideration. Each year there is a certain quota on
tea import in total imports of Pakistan. Each player is given quota to import and
manufacture so one can say that it is a much regulated industry.

Diplomatic Relations: The relations with the tea producing nations and Pakistan play a
vital role as large part of imports comes from Kenya, but now Pakistan is also importing tea
from India.

Unstable Geographic Conditions: Pakistan is situated at a very critical and geographically

strategic location. Due to the uncertainty new investors are not ready to invest in Pakistan.
Economic conditions of an environment have a direct impact on the
development of any industry. The recent economic recession in the world has had an impact
on Pakistan‟s economy as well. Pakistan's economy mainly encompasses textiles, chemicals,
food processing, agriculture and other industries. In 2005, it was the third fastest growing
economy in Asia. Since the beginning of 2008, Pakistan's economic outlook has taken a

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dramatic downturn.

Inflation: Inflation remains the biggest threat to the economy, jumping to more than 9% in
2005 before easing to 7.9% in 2006. The central bank is pursuing tighter monetary policy
while trying to preserve growth. Foreign exchange reserves are bolstered by steady worker
remittances, but a growing current account deficit - driven by a widening trade gap as
import growth outstrips export expansion - could draw down reserves and dampen GDP
growth in the medium term.

The social and cultural influences on business vary from country to country.
It is very important that such factors are considered. Tea has always been an integral part of
Pakistani culture and rituals. It is understood that tea would be present at all events.

Changing Trends: As work environment is becoming more stressful; people require

different forms of refreshment and intakes to increase their energy levels. This further
increase the intake of tea at workplaces, tea is not only just available to the employees
when needed but is also served twice a day in order to keep them going. On the other hand,
media expansion, growth of advertising as a separate industry has resulted in greater
exposure of all the brands and masses. Hence social factors and changing mindsets have
positively affected this industry. Tea has always been acceptable in all social classes because
of its usage. Green tea has recently gained a lot of popularity due to health reasons and is
largely consumed. Another factor is the emergence of ice tea which is indirectly competing
with soft drinks.

Technology is important to gain an edge over competitors and it

drives globalization. Technology helps companies to reduce cost and achieve economies of
scale. Technology also leads to the development of new products and sometimes even
segments. Tea manufacturers like Unilever and Tapal already manufacture tea of the highest
quality and they achieve it by the state of the art production facility that they have. Lipton
has also installed its own plant of Danedar tea production.

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CHAPTER # 04

It can be defined as the ability of organization to know more about the market trends and
customer’s likes and dislikes. It is defined as the organization-wide generation of market
intelligence pertaining to current and future customer’s needs, dissemination of intelligence
across departments and organization-wide responsiveness to it.

 Market Intelligence (Focus Opportunity & Threats)

 Current Customers and Competitors

A CASE STUDY OF COCA COLA BASED ON COLLECTING MARKET INFORMATION

At the 2016 Corporate Researchers Conference, Coca-Cola’s Global Director, Strategy &
Innovation, Jillian Tirath shared a fascinating story – which you can learn from to super
charge your own market research.

In the quest to discover and vet opportunities to grow Coca-Cola brands, Tirath and her
team wanted to gain a deeper understanding of what motivates people to buy and consume
beverages while away from home.

They partnered with the Halverson Group to identify the “jobs” that beverages fulfill in
people’s daily lives. These jobs became a way to quantify how universal life situations and
core human moods interact to influence how people think, feel and act. How did they
collect this data? Through extensive surveys.

At the end of the project, Coca-Cola found an additional 2.5 billion (yes, billion with a “b”)
weekly jobs that their products could help consumers complete while away from home.
That’s a huge untapped potential revenue stream, even for a brand as massive as Coca-Cola.

Here we’ll break down their approach so you can consider adopting it for your own sales
and marketing strategies.

WINDS OF CHANGE AFFECT BRANDS OF ALL SIZES:

It’s easy to imagine that Coca-Cola doesn’t need to chase sales or worry about shifting

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trends. They’re Coca-Cola, after all.

But this presentation is a reminder that no matter our size, audience, or competitive
landscape, organizations need data, backed by custom research, to allow us to, “stay
abreast of these trends and how consumers are responding to them in their daily lives.”

It’s the latter part of this statement – how alterations in macro economic and cultural forces
shape an audience’s daily choices – that many of us fail to consider. We look at customer
lifetime value, average time to purchase, or other brand-centric metrics, but we don’t take
time to examine what changes these might reflect for our audience and customers.

Coca-Cola’s approach, looking at the concept of “jobs” can help shift marketers’ and
researchers’ mindsets to a customer-centric point of view instead of a brand focused one.

BUYING A HOLE, NOT A DRILL:

Ron Halverson’s firm, the Halverson Group, was brought in to help Coca-Cola conduct the
highly detailed, worldwide study needed to reach this new level of understanding. They
based their approach on a simple idea:

So, the notion of a “job” is shorthand for what someone really wants to do in a given
situation. In the September 2016 of the Harvard Business Review, Clayton Christensen et al.
expanded on the notion of jobs further to include:

 The circumstances are more important than customer characteristics, product

attributes, new technologies, or trends.
 Good innovations solve problems that formerly had only inadequate solutions — or no
solution.
 Jobs are never simply about function — they have powerful social and emotion
dimensions.

Given this information, Halverson and Coca-Cola’s hypothesis was that if they could better
understand the Jobs a consumer is trying to accomplish, they would improve innovation hit
rates and marketing strategies.

They dove in (with a little help from surveys).

RISKS OF A JOBS APPROACH:

While the traditional jobs approach can offer uniquely powerful insights into a market, it
comes with three risks:

1. Not determining if the juice is worth the squeeze. Basically, are there enough consumers
trying to accomplish a given job to make it sufficiently profitable?
2. Not determining whose jobs are most important to win. Even if you’ve got Coca-Cola’s
marketing budget you can’t target everybody all the time.

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3. Focusing on disruptive innovations versus also focusing on strategies for winning jobs
with existing products and services. No need to reinvent the wheel if an existing
product, feature, or service can help you audience achieve their job.

To address these three risks, Halverson and Coca-Cola developed the following approach:

When laid out in a sequence, as it might be experienced by a consumer, this approach looks
like this:

It’s important to remember that a job largely hinges on the situation an individual finds
themself in. For instance, a woman who has just worked out might feel accomplished, want
to stay on her healthy track, and so purchase a bottle of water from a convenience store on
her way home from the gym.

After her next workout, however, the same woman might want to celebrate a key milestone
by stopping to get a milkshake from a fast food restaurant on her way home from the gym.

Importantly, two very different people who find themselves in the same situation may end
up with the same job and the same choice of solution, as illustrated here:

HOW THIS APPROACH LEADS TO BRAND GROWTH:

According to Halverson, their Jobs-to-be-Won approach, “measures a wide set of jobs in

people’s lives, sizes and prioritizes jobs to identify growth opportunities and activates
through strategic execution corridors that fuel innovation, positioning, marketing and
sales.”

But Halverson’s team didn’t just investigate the jobs that consumers might solve with Coca-
Cola products. They also looked at the consumption of 600 different beverage brands in 40
different beverage categories across 900 retail outlets.

TURNING 30,000 PEOPLE INTO JOBS TO BE WON:

In the end, they spoke with over 30,000 people in eleven countries about the role of
beverages in their daily lives. Using the jobs framework, they broke the “Person” category
into three groups:

 Core Customers to protect and nurture: People who drive a disproportionate amount of
business and lifetime value, at the category level as well as the brand level.
 Moveable Middle to target for growth: Those who have no significant barriers and are
potentially highly leveragable; efficient targets from which to grow.
 Limited Immediate Potential to monitor: People with little current or future value or
people (Category Rejecters, Brand Rejecters, etc.) and Non-Category Participants.

Each person would encounter various situations that could lead to a beverage purchase.
Halverson’s team found eight life situations that drive 80% of beverage consumption away

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from home, and on which they would focus their attention:

MOODS AND MOTIVATION:

Each situation would bring with it a common mood, which would need to be accounted for
in order to help consumers complete the job at hand. These fell on a continuum like this:

The next piece of the puzzle, the motives, are huge drivers of people’s choices. They
transcend categories and brands, driving people to meet their functional needs as well as
manage their mood in various situations.

For example, if someone’s mood is playful, they may want to engage in behaviors that will
amplify that feeling. If they’re anxious, they’ll look for behaviors that increase their feelings
of control

Once they had all this data in hand, the researchers looked at the Product and Source
information:

 What beverage choice was made, and what was the source?
 What other options were considered?
 How effective was the choice for accomplishing the job?
 What recommendations surface for better accomplishing the job?

REVEALING UNTAPPED POTENTIAL WITH JOBS APPROACH:

In the end, turning their focus to the audience and their individual jobs was a major win for
Coca-Cola. They identified 5 billion untapped away from home opportunities each week in
the U.S., about half of which include a beverage purchase:

These scenarios were spread over nearly all the situations the researchers identified, from
mid-day breaks to shopping trips to working out. Halverson and Coca-Cola also discovered
that beverages played a major role in other choices that people made on a daily basis,
including where they chose to eat away from home. And they did it all with survey software.

TACKLE YOUR OWN CONSUMER BEHAVIOR STUDY WITH SURVEY GIZMO:

Ultimately, for Coca-Cola (and for our own brands), we should remember that situations,
moods, and motives will often predict consumer behavior more accurately than
demographic factors. Through surveys, we can research, explore, and understand the jobs
our audience is hoping our products can complete. With this information, we can create
marketing that’s more focused on the end user, and therefore more successful.

While this may seem daunting, the benefits are huge. An affordable, easy-to-use online
survey tool like Survey Gizmo is the best place to start, so you have the flexibility to create
every kind of survey you need and the ease-of-use to collect and analyze data faster and

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more efficiently than ever before.

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CHAPTER # 05

The Market Targeting decision identifies the people or organizations in a product-market

toward which an organization directs its positioning strategy.

TRAGETING STRATEGY OF DOVE

Dove falls under the umbrella of HUL and offers an assortment of personal care products. It
offers 23 body washes, 15 body bars and products in hair care, skin care, body lotions and
deodorant’s category.

Dove has been considered as a premium brand in the market. If we compare Dove products
with competing brands such as Pears, Olay, L’Oreal Garnier, Ponds, Fair n Lovely etc. it has
maintained an image above the rest through its unique segmentation, targeting and
positioning.

TARGETING:

 The target group of Dove is particularly women above 18 years.

 The brand says they target women of all ages, shapes and sizes.
 Women who are concerned about skin care and belong to high income groups who
would spend extra for a good quality product.
 Dove wants every woman to believe that. “You are beautiful the way you are.
 Primarily Dove targets working women who do not have much time for their skin and
thus, will be inclined towards a product which has both moisturizing and cleaning
properties.
 These working women in the age group 21-35 have purchasing power for quality
products as well.
 They always want to be ready, be it at work or at home. Client Presentations, hectic
work schedules, long working hours, and deadlines are a part of their daily routine.
 We can say. They target high income groups who would be willing to pay Rs.90/- for 50g
face wash tube.

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POSITIONING:

 Research has shown that 80% of all purchase decisions are made by or influenced by
women.
 Dove realized that it is critical to position the brand and market it to women.
 Since 2003, Dove positioned itself through a gender-specific brand positioning.
 Dove Deep Pure face wash has been positioned as a beauty product in the market.
 In 2004, dove launched the ‘Real Beauty Campaign’. The brand realized that women are
not interested to know about products that will help them look younger and prettier.
Instead, they want to feel beautiful in their own skin.
 The Real Beauty Campaign celebrated women in their own sensual skin with a series of
advertisements that without any Photoshop elements used on women in the ads.
 The campaign took a step further; when Dove launched a video where they
showed evolution of a woman in an advertisement when different Photoshop elements
are applied on her body. Totally different!

Thus, from a brand in skin care category which was positioned as a personal care brand
completely transformed itself as a beauty brand and gained momentum in the market. It is a
good example of how good positioning can be a boon to a brand’s strategy.

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CHAPTER # 06

Strategic positioning is defined as doing different activities than your competitors or doing
the same activities differently. This is the way your company becomes a superior performer
in the industry. Many people describe their positioning based on their customer base. For
example, Burger King focuses on young adult males as their target customer. Their strategy
and positioning is directed to satisfy this sector of the market. Wendy's on the other hand
has a different positioning. They base their positioning to satisfy the older health conscious
individuals. They both differ from each other. When you simplify things down it turns out
there are only two basic types of positioning; low cost or differentiation. This is how
you choose to serve your customer base, or how your customer base guides you to
operate. You choose your customer base to be either broad or narrow scope. The company
needs to select one or the other in both categories or they will achieve below average
results and be mediocre.

POSITIONING FOR YOUNGSTERS:

 It’s fun preparing drink, refreshing, and with everlasting natural taste.
 Be bright and strong with healthy and tasty Rooh Afza.

POSITIONING FOR FAMILIES:

 Rooh Afza is full of nutritious contents is best Syrup for everyone in the family.
 The females which are very much keen in giving their families with healthy and hygienic
products for the surety of health of her love ones.
 For Guests using Rooh Afza is the best drink to provide a natural
f l a v o r w i t h hundred percent freshness in taste and fragrance.

POSITIONING FOR KIDS:

 Healthy products are necessary for Good Life.

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 Add Milk to prepare a beneficial Rooh Afza drink (full of vitamins) for your kids and see
your kids more healthy.
 Kids love pure drinks because it is fresh and naturally tasty and will bring a smile to your
child’s face with every glass.
 Rooh Afza is the best drink for newly born children because there is no injurious impacts
on their health after drink it.

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CHAPTER # 07

Strategic relationships can be a highly effective way to build businesses. They enable brands
to compete in new markets, offer unique competitive advantages in their own markets, gain
new distribution, or benefit from positive brand imagery.

STRATEGIC RELATIONSHIP BETWEEN FAYSAL BANK, AUDI PAKISTAN & IGI

INSURANCE

Recently Faysal Bank Limited (FBL), one of the leading banks in Pakistan, joined hands with
Audi Pakistan and IGI Insurance to offer incredible discounts and value added services to
their customers.

As a part of Strategic Alliance between Faysal Bank and Audi Pakistan, customers will avail
unprecedented offers in terms of car financing markup rates, fast track processing, waivers
in processing charges, priority vehicle delivery along with exclusive coverage provided by IGI
Insurance at the most competitive premium rates. In addition to the above customers will
receive preferential treatment in Faysal Bank branches and Audi Showrooms across
Pakistan.

Commenting on the alliance Mr. Fouad Farrukh, Head of Retail Banking, Faysal Bank said
“Faysal Bank Car Finance is one of our flagship consumer products and an obvious choice for
Audi financing. I have a firm belief that entering into a strategic alliance with Audi and IGI
will prove to be instrumental in providing our customers with best of the best services”. He
further added “I am hopeful this alliance will take the market by storm while remaining
beneficial for customers as well as commercially viable for alliance partners.”

Speaking at the occasion Mr. Muhammad Yasin Khan, Chief Financial Officer, Premier
Systems (Pvt) Ltd, said “Driving away in an Audi has never been more convenient. Faysal

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Bank knows our customers require options, not alternatives, which is why they offer flexible
financial plans that will help lower monthly payments. This partnership is a win-win
situation for our customers”.

Expressing his views about this alliance Mr. Tahir Masud, Chief Executive Officer, IGI
Insurance Ltd., said “IGI is proud to be associated with the leading brands of Audi and FBL.
This new partnership is uniquely positioned to provide our mutual customers with swift and
low cost financing and insurance solution. With IGI’s fast-track claim settlement services, we
are confident to take the consumer experience to the next level.”

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CHAPTER # 08

An Innovation Strategy is one which seeks to create exchange, evolve, and apply new ideas,
and thereby produce goods and services which it is hoped will contribute to the success of
an organization.

Innovation is the engine of growth in today's marketplace. The pressures to innovate are
unrelenting and the contribution to total sales revenue derived from new products will
increase significantly over the next decade. This of course is driving the need for
organizations to develop strong innovation strategies and to budget for adequate Research
& Design (R&D) spending. However there is a certain amount of inertia associated with
making the changes required because managers are often biased towards maintaining the
status quo. They face the choice of working within the existing processes to gain
incremental improvements, or, to restructure organizations and invest in new products and
services and employ disruptive innovation strategies. For the survival of many organizations
it is becoming crucial to break through this tension, because without sound innovation
strategies in place many organizations are doomed to decay.

SAMSUNG’S INNOVATION STRATEGY

Everyone has heard about the company named Samsung and the reason why they have
heard of it is because of its innovation strategies. Innovation strategy at Samsung can be
described as the way that made them a leading manufacturer in electronic industry as they
keep the competitors at bay.

In the present business environment, businesses of whatever size must face and defeat
challenges which is posed by accelerated globalization and technological changes. It is not
just innovative strategy that matters, but innovations that embed on themselves some
strategies that are truly game changing.

The game changing innovation of Samsung encapsulates business models, business

processes and manner of positioning themselves vis a vis their competitor. This is what has

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made them survive all these years.

It is a fact that there is a link between innovation and the economy of a country, the culture
of its peoples and those businesses running on it. South Korea, where Samsung originated, is
not rich when it comes to natural resources.

However, people in this place are positive in the belief that one way of effectively keeping
up is though innovations. Innovation strategy at Samsung can be attributed to this belief of
the people on the ability to succeed in the field of electronics. In the late 90s Korea was
gripped with financial failure as an aftermath of Asian crisis.

In 2001, the industry of information technology was gripped by recession and many huge
companies suffer losses and some even collapsed. Samsung electronics emerged unscathed
and was able to post substantial amount of revenue. They were also able to earmarked
substantial resource for their research and development.

According to many practitioners and business analysts, innovation strategy at Samsung also
means proper leadership. This means proper motivation for the working force to withstand
that impatience which is exhibited by some organization in the promotion of innovations.

They have dedicated huge amount of investment not only on human resources but also
focused on the surfacing role of LED as well as mobile telephony services and products.
Innovative strategy at Samsung can be classified as international and domestic upstream
and downstream.

Domestic up-streaming and down-streaming is a kind of strategy which internalizes the

innovation thorough vertical integration of products and organization.

The focus is on digital convergence of the stream of services and products like TFT/LCD,
semiconductors and mobile phone. Domestic down streaming on the other hand is the
method of horizontal expansion of the organization on other markets and countries in which
it can achieve the multinational status. It can be recalled that in the year 2011, Samsung was
the headline of all media channels for overtaking Apple when it comes to sales.

However, not all people noticed that despite beating Apple on sales, it has also registered a
fall on the profit. This means that their innovation strategy was able to create value; it has
also gone wrong in appropriating that value. In the observation of analysts, Samsung have
made their focused more on the competition and not on the competitive strategies.

Many analysts have suggested that innovation strategy at Samsung in the future must focus
on evolving mobile payment system. At the center of any economic growth is a monetized
system which will make business and personal transactions faster, timely and efficient. In
the next years, electronic payments can substantially replace legacy payments.

This will surely create a value for the convenience of the customers. This value proposition
will not only be made but can even be appropriated is the smart phone limitations will be

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removed through software development which will facilitate a payment system that is
contact-less.

If Samsung can focus in this innovative strategy using its smart phone and user-friendly
software, they can surely appropriate not only value proposition but the revenue
proposition as well.

Innovation strategy at Samsung should also include development of technological platform.

The news that highlighted Samsung beating Apple on sales forgot to mention the aspect
which can go against Samsung in the long run. This aspect is the Operating System used
since the company seems to rely only on platform that is created by a powerful player.

While it can make value for the company within short run, it may not be able to address
critical issues in the future. Samsung should develop technological value which will lock in
their customers for their present and future mobile devices.

Huge firms also commented that winners on the technological competitions are those who
possess an excellent platform strategy as well as an excellent ecosystem as its back up.

Innovation strategy at Samsung must include these two propositions if they intend to secure
their place as an organization that is future driven. Electronic manufacturing industries
demand very high level of technological advancement. Samsung should have de novo
approach when it comes to innovations.

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CHAPTER # 09

Strategic Brand Management was defined by Jean-Noel Kapferer in his book "Strategic Brand
Management: Creating and Sustaining Brand Equity Long Term" (published in 1997) as that branch
of brand management that deals with the concept and practice of managing a brand in its totality.

Just like Total Quality Management (or "TQM") is an integrative philosophy of management for
continuously improving the quality of products and processes, Strategic Brand Management is a
long-term and integrative approach that the company adopts in creating, developing and managing
its brand.

The Strategic Brand Management process adds value to the company’s products and services by
creating a unique identity in the marketplace, it allows the company to differentiate itself from its
competitors, and communicate its message and market position in a consistent and holistic manner.

NESTLE’S BRAND MANAGEMENT STRATEGY

The Nestle brand itself had played a key role in the company's globalization efforts. In 1996, about
40% of the total revenues were generated from products covered by the Nestle corporate brand.
Nestle's logo was an important part of the company's corporate identity. The 'nest' was a graphic
translation of Henri Nestle's name, which meant "little nest."

INTERNATIONALIZING THE "KIT KAT" BRAND:

When Nestle acquired Rowntree's brands in 1988, the major challenge before the company was
managing them. Rowntree had a "one product, one brand" policy. The brands Kit Kat, After Eights,
Smarties and Rolo were marketed with no mention of Rowntree. Rowntree's brands were not
strongly managed European brands. Before the 1980s, 'country managers' outside the UK in several
European countries managed Rowntree's business. They were free to run their units provided
business objectives were met. The orientation at Rowntree was short-term just to meet annual

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business objectives and country managers added nothing to the overall organization.

Even though Kit Kat was a leading brand in UK, it was ignored outside the country. In the
early 1980s, Rowntree established Rowntree Continental Europe, which handled business
responsibilities outside the UK in Europe. However, this did not benefit Kit Kat, which was
launched in Europe by Rowntree Continental Europe as a multi-local brand.

DIVESTING NON-STRATEGIC BRANDS:

The success of the Kit Kat brand inspired Nestle to think and act 'glocally' i.e. establishing global as
well as local brand identity. Nestle had taken a similar approach to several other acquired sub-
brands.

Moreover, Nestle introduced the Kit Kat brand in several other countries across the globe. Nestle's
brand management strategy included the divestment of non-strategic brands.

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CHAPTER # 10

A value chain strategy is a set of activities that a firm operating in a specific industry
performs in order to deliver a valuable product or service for the market. The concept
comes through business management and was first described by Michael Porter in his 1985
best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.[1]

The idea of the value chain is based on the process view of organizations, the idea of seeing
a manufacturing (or service) organization as a system, made up of subsystems each with
inputs, transformation processes and outputs. Inputs, transformation processes, and
outputs involve the acquisition and consumption of resources – money, labor, materials,
equipment, buildings, land, administration and management. How value chain activities are
carried out determines costs and affects profits.

VALUE CHAIN ANALYSIS OF STARBUCKS

Starbucks is an American global coffee company located in Seattle, Washington and some
other parts of the world. Through years it has been categorized between one of the most
recognized brand globally. It offers to customers a big variety of beverages, and also pastries
and snacks.

PRIMARY ACTIVITIES:

The inbound logistics for Starbucks refer to company-appointed coffee

buyers selecting the finest quality coffee beans from producers in Latin America, Africa and
Asia. In the case of Starbucks, the green or unroasted beans are procured directly from the
farms by the Starbucks buyers. These are transported to the storage sites, after which the
beans are roasted and packaged. They are then sent to distribution centers, a few of which
are company owned and some of which are operated by other logistic companies. The
company does not outsource its procurement, ensuring high quality standards right from

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the point of selection of coffee beans.

Starbucks operates in 65 countries, either in the form of direct company-

owned stores or licensees. Starbucks has more than 21,000 stores internationally, including
Starbucks Coffee, Teavana, Seattle’s Best Coffee and Evolution Fresh retail locations.
According to its annual report, the company generated 79% of its total net revenue during
fiscal year 2017 from its company operated stores while the licensed stores accounted for
10.5%.

There is very little or no presence of intermediaries in product

selling. The majority of the products are sold in their own or in licensed stores only. As a
new venture, the company has launched a range of single-origin coffees, which will be sold
through some leading retailers in the U.S.; these are Guatemala Laguna de Ayarza, Rwanda
Rift Valley and Timor Mount Ramelau.

Starbucks invests more in superior quality products and high level of

customer service than in aggressive marketing. However, need-based marketing activities
are carried out by the company during new products launches in the form of sampling in
areas around the stores.

Starbucks aims at building customer loyalty through its stores' customer service.
The retail objective of Starbucks is, as it says in its annual report, “to be the leading retailer
and brand of coffee in each of our target markets by selling the finest quality coffee and
related products, and by providing each customer a unique Starbucks Experience.”

SUPPORT ACTIVITIES:

This includes departments like management, finance, legal, etc., which are
required to keep the company’s stores operational. Starbucks' well-designed and pleasing
stores are complemented with good customer service provided by the dedicated team of
employees in green aprons.

The committed workforce is considered a key attribute

in the company’s success and growth over the years. Starbucks employees are motivated
through generous benefits and incentives. The company is known for taking care of its
workforce, a key reason for a low turnover of employees, which indicates great human
resource management. There are many training programs conducted for employees in a
setting of a work culture which keeps its staff motivated and efficient.

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Starbucks is very well-known for use of technology, not only

for coffee-related processes (to ensure consistency in taste and quality along with cost
savings) but to connect to its customers. Many customers use Starbucks stores as makeshift
office or meeting place because of the free and unlimited WiFi. Back in 2008, the company
launched a platform where customers could ask questions, give suggestions and openly
express opinions and share experiences; the company has implemented some of the
suggestions, including for its rewards program, from this forum. Starbucks also uses Apple’s
iBeacon system, wherein customers can order a drink through the Starbucks phone app and
get a notification of its readiness when they walk in the store.

THE BOTTOM LINE:

The concept of value chain helps to understand and segregate the useful (which help in
gaining a completive edge) and wasteful activities (which hamper market lead)
accompanying each step during the product development process. It also explains that if
value is added during each step, the overall value of the product gets enhanced thus helping
in achieving greater profit margins.

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CHAPTER # 11

A business decision in the long run, how much to charge its customers for its product/s.
when deciding on a pricing strategy , the business always takes into account the business’
objectives and the customers’ perceived value of its’ products.

PRICING STRATEGY OF GILLETTE

Gillette is a premium brand company and was founded in the year 1901 by King C Gillette. In
2005 Procter & Gamble, the new owners of the company, merged with Gillette and retained
the brand name. Procter & Gamble is a multi-national company dealing with a variety of
brands and products like Household Care, Health Brands and Beauty Products. The
company slogan of Gillette is ‘The Best a Man Can Get’ and it has become the trademark for
all its products. Gillette deals with personal care and grooming products for men.

PRICING STRATEGY:

The pricing strategy of Gillette is clearly premium pricing. However, the quality of its
products is accordingly very high as well. Products like Gillette mach 3 and now Gillette
mach 5 have taken the world by storm. The price level of Gillette shaving foam and gel is
much more than its competitors but still Gillette has been able to maintain its customer’s
loyalty by its worth as well as marketing policies. Consumers are not afraid to pay the extra
money in order to associate themselves with such an irreplaceable brand.

Nowadays it is not easy to sway a customer’s loyalty by genuine price hike. The company is
asking its consumers to place more value on emotions than on the cost price. The policy of
Gillette is to encourage the customer to try its product at least once. The company is
confident that after using this high quality product it will be difficult for the consumer to
switch to other substandard product. Once the buyer is happy with the product, its high
price does not matter.

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CHAPTER # 12

Advertising is a means of communication with the users of a product or service.

Advertisements are messages paid for by those who send them and are intended to inform
or influence people who receive them.

Promotion refers to any type of marketing communication used to inform or persuade

target audiences of the relative merits of a product, service, brand or issue. The aim of
promotion is to increase awareness, create interest, generate sales or create brand loyalty.
It is one of the basic elements of the market mix, which includes the four P's: price, product,
promotion, and place.

Sales promotion is the process of persuading a potential customer to buy the product. Sales
promotion is designed to be used as a short-term tactic to boost sales – it is rarely suitable
as a method of building long-term customer loyalty. Some sales promotions are aimed at
consumers.

Mercedes Benz is one of the leading premium car brands in the world. One of the strongest
points of Mercedes is its products. Mercedes Benz has a wide range of passenger cars, light
commercial and heavy equipment vehicles as a part of its marketing mix product strategy.
However, the strongest in its product portfolio will be the luxury car segment which consists
of Sedans, SUVs and sports cars as well. In the new generation segment, it has A-class, B-
class and the CLA. In the sedan, it boasts of the E-class, C-class and S-class. Mercedes Benz
also has a wide range of cabriolets and roadsters in its product portfolio while it has the
GLA, GLE, GLC and GLS in the SUV sector. Also the Mercedes Maybach S class is a true
essence of luxury in its own. The Mercedes can boast about its products as not only it has
the best of design and luxury but also the best of technology. The 4matic and BlueTEC is one
of the best technologies till date. Also apart from dealing with new cars, Mercedes also
deals with pre-owned Mercedes through its Mercedes Benz certified portfolio.

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ADVERTIZING & PROMOTION STRATEGY OF MERCEDES BENZ:

Mercedes Benz has always been an aggressive promoter. The marketing mix promotional
strategy of Mercedes Benz uses all media channels like TV, print, online, billboards etc.
Being catering to the luxury segment, Mercedes did not feel the need for the traditional
methods of advertising. Mercedes’s marketing strategy always focused on its products,
technology etc. but with the changing times and customer attitudes they have also resorted
to increase its communication with consumers worldwide through online marketing, social
media presence, print media, etc. Also Mercedes has built its brand awareness through
various customer centric activities like the Mercedes trophy, which is an international
amateur golf tournament where golfers from around the world compete. Also it organizes
various drives like the International driving platform, Luxe drive, etc. where motor
enthusiasts get an opportunity to drive the Mercedes cars in challenging locations. Hence,
this covers the Mercedes Benz marketing mix.

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