Introduction
Firms that are not market leaders in their industry or product category are trailing firms. One or two of them could be close competitors to the market leader and they can be termed as runner-up firms. These firms can take the role of challengers when they make aggressive efforts to further their market share or they can be termed followers when they keep quiet and maintain their market share.
There are successful trailing firms which challenged and became industry No. 1 firms. Canon is one such example in copiers. Toyota is now the world No. 1 company in automobiles; it displaced General Motors.
The challenger companies have to attack the leader, other comparable firms, and smaller firms in their bid to gain market share.
Attack has a greater probability of success when there customer dissatisfaction with the current leader. There is a gap in the market which the leader is not serving. Comparable firms can be successfully attacked when they are underfinanced and are charging excessive prices and customers are showing dissatisfaction. Similarly, underfinanced smaller firms can be attacked to gain market share.
With each attack, the challenger may hope to gain a reasonable increase in its market share.
The following attack strategies are possible.
Frontal Attack
An attack is called a frontal attack when the opponent’s strength is challenged head on. In marketing, the fight is done all fronts in market segments and areas where the opponent is currently strong. The general idea is that to win in a frontal attack, the challenger requires three times the fire power of the opposite side. What is fire power in marketing? Price of the product, quality of the product, sales effort, advertising effort, and service effort etc. are the various types of fire power in marketing. The challenger must be able to deploy superior fire power in the markets he is challenging.
Modified Frontal Attack
A modified frontal attack uses price as the challenging dimension. The challenger matches the opponent in other dimensions but will charge a lower price over an extended period.
Flank Attack
Attacking a weak position in the opponent’s force is flank attack. Challenger identifies the weak areas in the offering as well as marketing territories of the opponent and attacks those areas. A front attack may also be launched simultaneously, but the frontal attack is only to engage the opponent. But the real victory is won in the flanks. Market share gain in weak territories is the objective, but the opponent is forced to defend his share even in his strong territories and products.
Encirclement Attack
In this attack both strong areas and weak areas attacked simultaneously. This type of attack is more often done by a leader when challenged. When the leader makes an aggressive attack to gain market share from the trailing firms, he can use this strategy. Even other firms, can use this strategy when they are attacking a much smaller firm’s market share.
Guerilla Attack
Guerilla attacks consist of waging small, intermittent attacks on different marketing territories of the opposing firm. The aim is to harass and demoralize the opponent initially before launching the main attack.
Bypass Attack
In a bypass attack to gain market share, a firm identifies segments not served by the existing firms and makes efforts to gain market share.
The Marketing Firepower
Price discounts: The challenger can sell a comparable product at a lower price.
Cheaper goods: The challenger can come out with economy goods with lesser number of features. The strategy will succeed when there is significant number of buyers in need of lower priced product.
Prestige goods: A challenger can launch a higher quality product with more features.
Product proliferation: The challenger can offer a greater product variety.
Product innovation: the challenger can come out with an improve product.
Service innovation: Improvement in service offered to the buyers.
Distribution innovation: a new distribution outlet that offers additional convenience to buyers.
Process innovations: The challenger may have done a process innovation that gives better quality or lower cost and it is passed on to buyers.
Advertising innovation: The challenger may have innovative communications strategy that reaches and motivates larger number of potential customers resulting in higher sales.
Challenger needs to have a product-service offer or marketing mix advantage that is of value in the market place. Then he can use that advantage to gain market share by employing a suitable attack strategy.
References
Kotler, Philip (1997), Marketing Management, 9th Ed., Prentice Hall, New Jersey.
Showing posts with label Marketing Strategy. Show all posts
Showing posts with label Marketing Strategy. Show all posts
Saturday, August 30, 2008
Sunday, November 25, 2007
Charles Schwab - Change in Marketing Strategy - 2002
Schwab to change marketing strategy
Firm to battle worries of investors on conflicts
May 2002 Sanfrancisco Chronicle
Charles Schwab will unveil new product offerings and a marketing strategy that capitalize on investor discomfort with the controversy over conflicts of interest that have plagued investment banks. One of the offerings is a new stock research service that will assign a letter grade of A through F to each of the 3,000 U.S. equities that the firm will cover.
The San Francisco brokerage intends to promote the service as free from those conflicts of interest on Wall Street.
In another service announcement that moves it far from its discount brokerage roots, Schwab also will launch an investment advice service for clients who want one-on-one dealings with a stockbroker.
Schwab also plans to set up a service that would even allow wealthy clients to delegate day-to-day management of their portfolios to independent advisory firms that are recommended by Schwab.
The moves come amid a prolonged downturn in trading activity for Schwab and other online brokers, as individual investors have been driven away by the bearish market and revelations over questionable corporate accounting and conflicts of interest on Wall Street.
Schwab said Monday that average daily trades were down 18 percent in April from the same month last year and down 6 percent from the preceding month.
Revelations about Enron, Global Crossing and a host of other companies have contributed to investor skepticism in the public markets. Meanwhile, concern has mounted that the analysts who promoted stocks during the Internet boom of the 1990s merely did so to attract the lucrative fees their banks could win by performing corporate finance services for the companies.
It's unclear how much cache independent research will have with retail investors. Industry observers say some investment banks have struggled with the concept of providing research service independent of their brokerage or investment banking operations but have been unable to find a way to make it "pay for itself."
Schwab's new research service, called Schwab Equity Ratings, is designed to help investors identify stocks that, based on Schwab's analysis, will either outperform or underperform the market. The research will be accomplished in part by quantitative computer analysis of company data as well as Schwab staff research. Schwab has been hiring staff to build its stock advisory service.
The stocks will be graded the same way a student gets scored on a test --
with A for outstanding, and F for failures, with A stocks expected to strongly outperform the market and F stocks expected to strongly underperform.
A's and B's will be considered buy recommendations, and D's and F's will be considered sell recommendations. Schwab is expected to offer an equal number of buy and sell recommendations, whereas Wall Street research is frequently dominated by buys.
This research, which is now offered to Schwab's private client and signature service customers, will be made available to to all of the firm's brokerage clients beginning in the fall.
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/05/16/BU232237.DTL&type=business
Firm to battle worries of investors on conflicts
May 2002 Sanfrancisco Chronicle
Charles Schwab will unveil new product offerings and a marketing strategy that capitalize on investor discomfort with the controversy over conflicts of interest that have plagued investment banks. One of the offerings is a new stock research service that will assign a letter grade of A through F to each of the 3,000 U.S. equities that the firm will cover.
The San Francisco brokerage intends to promote the service as free from those conflicts of interest on Wall Street.
In another service announcement that moves it far from its discount brokerage roots, Schwab also will launch an investment advice service for clients who want one-on-one dealings with a stockbroker.
Schwab also plans to set up a service that would even allow wealthy clients to delegate day-to-day management of their portfolios to independent advisory firms that are recommended by Schwab.
The moves come amid a prolonged downturn in trading activity for Schwab and other online brokers, as individual investors have been driven away by the bearish market and revelations over questionable corporate accounting and conflicts of interest on Wall Street.
Schwab said Monday that average daily trades were down 18 percent in April from the same month last year and down 6 percent from the preceding month.
Revelations about Enron, Global Crossing and a host of other companies have contributed to investor skepticism in the public markets. Meanwhile, concern has mounted that the analysts who promoted stocks during the Internet boom of the 1990s merely did so to attract the lucrative fees their banks could win by performing corporate finance services for the companies.
It's unclear how much cache independent research will have with retail investors. Industry observers say some investment banks have struggled with the concept of providing research service independent of their brokerage or investment banking operations but have been unable to find a way to make it "pay for itself."
Schwab's new research service, called Schwab Equity Ratings, is designed to help investors identify stocks that, based on Schwab's analysis, will either outperform or underperform the market. The research will be accomplished in part by quantitative computer analysis of company data as well as Schwab staff research. Schwab has been hiring staff to build its stock advisory service.
The stocks will be graded the same way a student gets scored on a test --
with A for outstanding, and F for failures, with A stocks expected to strongly outperform the market and F stocks expected to strongly underperform.
A's and B's will be considered buy recommendations, and D's and F's will be considered sell recommendations. Schwab is expected to offer an equal number of buy and sell recommendations, whereas Wall Street research is frequently dominated by buys.
This research, which is now offered to Schwab's private client and signature service customers, will be made available to to all of the firm's brokerage clients beginning in the fall.
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/05/16/BU232237.DTL&type=business
Schwab's CMO on Branding 2006
Becky Saeger, CMO, Charles Schwab
2. How does your marketing strategy embrace new forms of media that are constantly emerging? What are your perceptions about the use of traditional media in your marketing mix?
As we embarked on our new "Talk to Chuck" brand campaign, we believed that executional innovation -- especially in the context of financial services -- was crucial. All of our research and all of our insights and instincts told us that reaching our objectives of differentiation, relevance and emotional connections would require touching our target audience in the context of their lives. Our client, the "average" investor, doesn't bifurcate his or her life into chunks that they set aside for financial services -- "it's 6:00 on Thursday, it must be investing time. . . " She's thinking about it during her commute, when she's drinking coffee, when she's picking something up at the laundry, when she's thumbing through Gourmet Magazine or online checking the sports scores. So we've made a concerted effort to try to reach her there.
We're experimenting heavily with new approaches to online media that have proven to be very effective in building interest in Schwab. And we're also finding that traditional media--yes, TV and even outdoor--continue to be important in achieving the awareness and impact we want--but we have to look at the entire media mix and take advantage of the synergies.
3. One of the key platforms in the "reinvention equation" is marketing accountability. How does your increased focus on accountability influence your marketing decision making?
Creating accountability has been absolutely key. I think its one of the most important mandates for marketers in general, but when you add in the variable that we faced, which was a business that was struggling to regain its historical norm of very high financial performance, you had an environment where we were picking up pennies everywhere we saw them, and in that environment you have to be able to prove that marketing is an investment for growth, not an expense to be cut.
One of our objectives over the last two years has been to build a culture of accountability. It reaches every part of the marketing organization and also informs the basis on which we interact with our business partners. We've put considerable effort into strengthening our database management capabilities, investing in better tracking and analysis tools, putting in place rigorous metrics to help us establish baselines for all our decisions. We test and learn in a more careful way. For example, before launching "Talk To Chuck" nationally, we spent six months in test markets to assure that we had a winning formula. This last year, we worked with an outside consultant to help us develop a marketing investment optimization model, and we've lifted our planning and decision-making process to a fact-based level.
4. How have you created brand loyalty among your consumers and what are you doing to keep them coming back?
At its most basic, we think of brand loyalty as the attachment that our clients have to the brand--their willingness and desire to stick with us, bring their next piece of business to us, refer their friends and colleagues to us. Lots of that attachment is reinforced by what our clients see of us in the marketplace: Are our communications relevant and compelling? Do they give the impression of a place that you can trust, a place that you belong and would be proud to be associated with?
But more fundamentally, brand loyalty stems from the client experience, and so it is a shared challenge that all of us in the business focus on day in and day out. Over the last two years during our turnaround, we focused intensely on reconnecting with our clients by simplifying our business model to make it clear what we stood for, by cutting costs of doing business with us to assure a great value proposition, by making sure that we weren't overburdening clients with excessive mailings and cross selling, and by reinvesting heavily into improvements in the client experience. The business now lives and dies by measurements of client loyalty, and that drives every choice we make--whether you are answering the phone in a call center, developing a new product or writing a direct mail piece.
5. Earlier this year USA Today wrote an article about your new" Talk to Chuck" ad campaign and how it’s a departure from your usually humorous ads What made you decide to change your approach and why do you think it was successful?
Change itself is relatively easy, and there is always a temptation to try and work your way out of a bad situation by going with something new and different. I think the real paradox of what we've accomplished with "Talk to Chuck" and the reinvention of the brand is that we asked ourselves first, what is really true and abiding about this brand? What makes us different that our clients truly value and we never want to lose?
We've been around for over 30 years now and have built an incredible amount of brand equity over those years. What is the essence of that? Once we were confident we understood that, it wasn't a question of doing the next great thing, it was a question of bringing new life and a freshness and relevance to what was already there and great. I believe our execution is very creative and innovative and yes, it is designed to startle and attract attention and to have an element of sly humor... Most important, we want it to feel relevant to investors' mindsets, to connect at emotional levels. But at the same time it reestablishes the core of what we stand for: trust, customer centricity, being an advocate for the individual investor, and providing great value.
Sep 2006
http://ana.blogs.com/liodice/2006/09/qa_with_becky_s.html
2. How does your marketing strategy embrace new forms of media that are constantly emerging? What are your perceptions about the use of traditional media in your marketing mix?
As we embarked on our new "Talk to Chuck" brand campaign, we believed that executional innovation -- especially in the context of financial services -- was crucial. All of our research and all of our insights and instincts told us that reaching our objectives of differentiation, relevance and emotional connections would require touching our target audience in the context of their lives. Our client, the "average" investor, doesn't bifurcate his or her life into chunks that they set aside for financial services -- "it's 6:00 on Thursday, it must be investing time. . . " She's thinking about it during her commute, when she's drinking coffee, when she's picking something up at the laundry, when she's thumbing through Gourmet Magazine or online checking the sports scores. So we've made a concerted effort to try to reach her there.
We're experimenting heavily with new approaches to online media that have proven to be very effective in building interest in Schwab. And we're also finding that traditional media--yes, TV and even outdoor--continue to be important in achieving the awareness and impact we want--but we have to look at the entire media mix and take advantage of the synergies.
3. One of the key platforms in the "reinvention equation" is marketing accountability. How does your increased focus on accountability influence your marketing decision making?
Creating accountability has been absolutely key. I think its one of the most important mandates for marketers in general, but when you add in the variable that we faced, which was a business that was struggling to regain its historical norm of very high financial performance, you had an environment where we were picking up pennies everywhere we saw them, and in that environment you have to be able to prove that marketing is an investment for growth, not an expense to be cut.
One of our objectives over the last two years has been to build a culture of accountability. It reaches every part of the marketing organization and also informs the basis on which we interact with our business partners. We've put considerable effort into strengthening our database management capabilities, investing in better tracking and analysis tools, putting in place rigorous metrics to help us establish baselines for all our decisions. We test and learn in a more careful way. For example, before launching "Talk To Chuck" nationally, we spent six months in test markets to assure that we had a winning formula. This last year, we worked with an outside consultant to help us develop a marketing investment optimization model, and we've lifted our planning and decision-making process to a fact-based level.
4. How have you created brand loyalty among your consumers and what are you doing to keep them coming back?
At its most basic, we think of brand loyalty as the attachment that our clients have to the brand--their willingness and desire to stick with us, bring their next piece of business to us, refer their friends and colleagues to us. Lots of that attachment is reinforced by what our clients see of us in the marketplace: Are our communications relevant and compelling? Do they give the impression of a place that you can trust, a place that you belong and would be proud to be associated with?
But more fundamentally, brand loyalty stems from the client experience, and so it is a shared challenge that all of us in the business focus on day in and day out. Over the last two years during our turnaround, we focused intensely on reconnecting with our clients by simplifying our business model to make it clear what we stood for, by cutting costs of doing business with us to assure a great value proposition, by making sure that we weren't overburdening clients with excessive mailings and cross selling, and by reinvesting heavily into improvements in the client experience. The business now lives and dies by measurements of client loyalty, and that drives every choice we make--whether you are answering the phone in a call center, developing a new product or writing a direct mail piece.
5. Earlier this year USA Today wrote an article about your new" Talk to Chuck" ad campaign and how it’s a departure from your usually humorous ads What made you decide to change your approach and why do you think it was successful?
Change itself is relatively easy, and there is always a temptation to try and work your way out of a bad situation by going with something new and different. I think the real paradox of what we've accomplished with "Talk to Chuck" and the reinvention of the brand is that we asked ourselves first, what is really true and abiding about this brand? What makes us different that our clients truly value and we never want to lose?
We've been around for over 30 years now and have built an incredible amount of brand equity over those years. What is the essence of that? Once we were confident we understood that, it wasn't a question of doing the next great thing, it was a question of bringing new life and a freshness and relevance to what was already there and great. I believe our execution is very creative and innovative and yes, it is designed to startle and attract attention and to have an element of sly humor... Most important, we want it to feel relevant to investors' mindsets, to connect at emotional levels. But at the same time it reestablishes the core of what we stand for: trust, customer centricity, being an advocate for the individual investor, and providing great value.
Sep 2006
http://ana.blogs.com/liodice/2006/09/qa_with_becky_s.html
Schwab's Support to Advisors
How does Schwab Serve Advisors?
Execute your marketing strategy
Once you have established your plan to grow your business, our suite of resources and tactical tools will guide you through implementing your strategy for growth, using proven marketing strategies and business development techniques to maximize your success.
Implement best practices for referrals
Tap into one of the most cost-effective business development strategies — referrals.
Develop a referral culture within your firm
Create and integrate a systematic process for generating referrals
Create marketing materials that work
Our comprehensive set of tools and resources are guided by the best practices of leading firms in the industry. Utilize the tools and templates to design targeted communications to address your clients and prospects strategically and persuasively by:
Crafting a compelling story about your firm to help build relationships with existing and prospective clients that suit your firm’s target client profile
Producing marketing materials that have had proven results on promotional efforts that suit your specific needs
Access comprehensive marketing resources
Strategy and planning resources
Guidance
Tools
Checklists
Assessment tools
Sample tactics and templates
Marketing communications materials, e.g., correspondence, newsletters, press releases
Advice and best practices in marketing for business growth
Third-party resources
Marketing agencies with experience in working with advisors
Schwab events
National, regional and online events
GrowthPoint: Marketing and Business Development Services
Learn more (340K PDF) about strategically planning your growth.
Marketing and Business Development Services
View (120K PDF) the Marketing and Business Development Services homepage to see the tools and resources available to help you grow your firm.
http://www.schwabinstitutional.com/public/supporting/plangrowth_execute.shtml
Execute your marketing strategy
Once you have established your plan to grow your business, our suite of resources and tactical tools will guide you through implementing your strategy for growth, using proven marketing strategies and business development techniques to maximize your success.
Implement best practices for referrals
Tap into one of the most cost-effective business development strategies — referrals.
Develop a referral culture within your firm
Create and integrate a systematic process for generating referrals
Create marketing materials that work
Our comprehensive set of tools and resources are guided by the best practices of leading firms in the industry. Utilize the tools and templates to design targeted communications to address your clients and prospects strategically and persuasively by:
Crafting a compelling story about your firm to help build relationships with existing and prospective clients that suit your firm’s target client profile
Producing marketing materials that have had proven results on promotional efforts that suit your specific needs
Access comprehensive marketing resources
Strategy and planning resources
Guidance
Tools
Checklists
Assessment tools
Sample tactics and templates
Marketing communications materials, e.g., correspondence, newsletters, press releases
Advice and best practices in marketing for business growth
Third-party resources
Marketing agencies with experience in working with advisors
Schwab events
National, regional and online events
GrowthPoint: Marketing and Business Development Services
Learn more (340K PDF) about strategically planning your growth.
Marketing and Business Development Services
View (120K PDF) the Marketing and Business Development Services homepage to see the tools and resources available to help you grow your firm.
http://www.schwabinstitutional.com/public/supporting/plangrowth_execute.shtml
Wednesday, November 14, 2007
Financial Research Corporation, - Consultancy, Research Services
Independent market researcher and consultant to the asset management industry.
About FRC
Boston, MA, October 10, 2007
Financial Research Corporation today announced that October 2007 marks its 20-year anniversary as a trusted, independent market researcher and consultant to the asset management industry.
Since its inception 20 years ago, FRC has continually served its client base with consistently high quality, detailed quantitative and qualitative research and consulting services.
“FRC has succeeded for the past two decades by working closely with our clients and
by providing them with superb client support and reliable market intelligence,” FRC
President Michael Evans commented on the milestone anniversary. “As we enter our
third decade, FRC will capitalize on this great foundation by continuing to invest in
our staff, in our well established line of research services and conferences, including
FRC Monitor and MarkeTrends, and in new research products, such as our Advisor
Insight Series.”
Founded in 1987, when it was launched as a one-man company operating from the
founder’s Chicago apartment, FRC was among the very first independent companies
established to study the mutual fund industry. Since then, FRC has grown and evolved
with the industry, anticipating and analyzing key trends and market opportunities.
“Twenty years is a significant milestone that reflects FRC’s ability to successfully
analyze and provide the intelligence and analysis our clients need to succeed in a highly
competitive industry,” said Evans. “Our proprietary market data and deep understanding
of the asset management markets provide a solid foundation to predict and provide
guidance on the key issues the next 20 years will bring.”
###
FRC assists financial services clients across product development, marketing and distribution and delivers positive, tangible bottom line results. Only FRC can offer this through our unmatched industry expertise, service and support of experienced thought leaders and dedicated relationship managers who integrate all the unique forces of FRC to ensure your most important business goals are achieved.
For twenty years, Financial Research Corporation (FRC) has been the leading provider of insightful research and strategic consulting services designed to assist marketing, product development, and strategic planning professionals in the creation of innovative products and services.
Based in Boston, FRC is at the forefront of assisting its clients to comprehend and respond to the rapid changes occurring in the manufacture and distribution of investment products. More than simply supplying data, FRC provides actionable recommendations and delivers highly focused customized solutions that strengthen your competitive advantage and maximize growth.
The combined power of FRC’s Data Services, Primary Source Market Research and Customized Client Support, we identify strategic opportunities, improve distribution effectiveness, and increase your profitability. Our more than 200 clients include the world's leading asset managers and distributors. Approximately 90% of the 50 largest fund groups utilize FRC research as a continual source of insight and strategy to guide their most critical overall product development, distribution, and marketing decisions.
FRC Staff
Michael Evans-President
Deborah Wetherbee - Senior Vice President
Mike Kandravy - Vice President, Director of Relationship Development
Chris Ahrens - Sales and Marketing Coordinator
Charles Bevis - Editor-In-Chief
Kristin Adamonis - Senior Editor
Lisa Campbell - Editor
Ian Rubin - Senior Vice President
Luis Fleites - Vice President, Director of Retirement Markets
Craig Kilgallen - Vice President
Owen Concannon - Director of Managed Accounts and Alternatives
Scott DeMonte - Director of Variable Annuities
Lynette DeWitt - Associate Director, Retail Investment Markets
Samuel Campbell - Director of Research
Bridget Bearden - Research Analyst
Brian Boswell - Research Analyst
Carol Chow - Research Analyst
Rob Ivanoff - Research Analyst
Calantha Lee - Research Analyst
Peter Welgoss - Research Analyst
Sheila James-Hamler - Vice President
Trisha Langlois - Assistant Director of Marketing
Angela Whitworth - Office Administrative Coordinator
FRC Research Partners
Laura Varas
Contact
United States
100 Summer Street
15th Floor
Boston, MA 02110
Phone:
617.824.1325
Fax: 617-557-0708
http://www.frcnet.com/frccontact.asp
Subject Matter Areas
Mutual Funds
Variable Annuities
Managed Accounts
Retirement Markets
Sub-Advisory Services
College Savings
Alternative Products
Research Products
Monitor
Executive-level research journal that examines trends in the financial services industry, including mutual funds and other retail investment products. This leading-edge, forward-looking publication keeps you at the forefront of not just current trends but also emerging future trends, by providing a distinctive integration of all the subject knowledge areas within FRC.
Advanced Research
Primary source research studies provide detailed business models for successful new and evolving product, marketing and distribution strategies.
Vision
Interpretive, quarterly white papers delivering in-depth recommendations on product, marketing and distribution issues.
Views
Email series summarizing the hottest news and current events in the industry with FRC's expert, candid commentary on how these events will drive the product, marketing and distribution of mutual fund, variable annuity, separately managed account, 529, and retirement markets.
Data Series
Top-tier reports that provide direct, quantifiable data and market analytics such as industry assets, net sales, industry leaders, etc. Provided for mutual fund, variable annuity, and 529 markets.
IMPACT
Integrated next-generation solution merges FRC's market analytics and insightful analysis and research into one comprehensive, user-friendly, Web-based platform. FRC IMPACT delivers monthly updates to assets and net sales data for mutual fund, variable annuity and sub-advised products.
Market Analyst
Competitive review of 100+ leading mutual fund firms highlighting top selling products, product development, performance, advertising, market share, market strategy, and overview of current trends. FRC also offers a VA Market Analyst, which includes electronic competitive product grids providing an overview of current product innovations.
Direct Access
Regular dialogue with FRC can help you develop and validate your firm's unique strategy. Ensure that your team is anticipating trends and evolving market demands, and not just reacting to them. FRC offers an objective and independent view of the financial services landscape. That’s one reason that we’ve been asked to present industry trends and client-specific competitive information to Boards to facilitate product launch, distribution, and overall strategic direction decisions.
Competitive Positioning & Benchmarking Research
Platform Distribution Strategy
Presentation Support
Product Line Evaluation
A recent research study
http://www.frcnet.com/Press_Releases_07/Combine-Institutional-and-Retail-Marketing-Efforts-Now.pdf
About FRC
Boston, MA, October 10, 2007
Financial Research Corporation today announced that October 2007 marks its 20-year anniversary as a trusted, independent market researcher and consultant to the asset management industry.
Since its inception 20 years ago, FRC has continually served its client base with consistently high quality, detailed quantitative and qualitative research and consulting services.
“FRC has succeeded for the past two decades by working closely with our clients and
by providing them with superb client support and reliable market intelligence,” FRC
President Michael Evans commented on the milestone anniversary. “As we enter our
third decade, FRC will capitalize on this great foundation by continuing to invest in
our staff, in our well established line of research services and conferences, including
FRC Monitor and MarkeTrends, and in new research products, such as our Advisor
Insight Series.”
Founded in 1987, when it was launched as a one-man company operating from the
founder’s Chicago apartment, FRC was among the very first independent companies
established to study the mutual fund industry. Since then, FRC has grown and evolved
with the industry, anticipating and analyzing key trends and market opportunities.
“Twenty years is a significant milestone that reflects FRC’s ability to successfully
analyze and provide the intelligence and analysis our clients need to succeed in a highly
competitive industry,” said Evans. “Our proprietary market data and deep understanding
of the asset management markets provide a solid foundation to predict and provide
guidance on the key issues the next 20 years will bring.”
###
FRC assists financial services clients across product development, marketing and distribution and delivers positive, tangible bottom line results. Only FRC can offer this through our unmatched industry expertise, service and support of experienced thought leaders and dedicated relationship managers who integrate all the unique forces of FRC to ensure your most important business goals are achieved.
For twenty years, Financial Research Corporation (FRC) has been the leading provider of insightful research and strategic consulting services designed to assist marketing, product development, and strategic planning professionals in the creation of innovative products and services.
Based in Boston, FRC is at the forefront of assisting its clients to comprehend and respond to the rapid changes occurring in the manufacture and distribution of investment products. More than simply supplying data, FRC provides actionable recommendations and delivers highly focused customized solutions that strengthen your competitive advantage and maximize growth.
The combined power of FRC’s Data Services, Primary Source Market Research and Customized Client Support, we identify strategic opportunities, improve distribution effectiveness, and increase your profitability. Our more than 200 clients include the world's leading asset managers and distributors. Approximately 90% of the 50 largest fund groups utilize FRC research as a continual source of insight and strategy to guide their most critical overall product development, distribution, and marketing decisions.
FRC Staff
Michael Evans-President
Deborah Wetherbee - Senior Vice President
Mike Kandravy - Vice President, Director of Relationship Development
Chris Ahrens - Sales and Marketing Coordinator
Charles Bevis - Editor-In-Chief
Kristin Adamonis - Senior Editor
Lisa Campbell - Editor
Ian Rubin - Senior Vice President
Luis Fleites - Vice President, Director of Retirement Markets
Craig Kilgallen - Vice President
Owen Concannon - Director of Managed Accounts and Alternatives
Scott DeMonte - Director of Variable Annuities
Lynette DeWitt - Associate Director, Retail Investment Markets
Samuel Campbell - Director of Research
Bridget Bearden - Research Analyst
Brian Boswell - Research Analyst
Carol Chow - Research Analyst
Rob Ivanoff - Research Analyst
Calantha Lee - Research Analyst
Peter Welgoss - Research Analyst
Sheila James-Hamler - Vice President
Trisha Langlois - Assistant Director of Marketing
Angela Whitworth - Office Administrative Coordinator
FRC Research Partners
Laura Varas
Contact
United States
100 Summer Street
15th Floor
Boston, MA 02110
Phone:
617.824.1325
Fax: 617-557-0708
http://www.frcnet.com/frccontact.asp
Subject Matter Areas
Mutual Funds
Variable Annuities
Managed Accounts
Retirement Markets
Sub-Advisory Services
College Savings
Alternative Products
Research Products
Monitor
Executive-level research journal that examines trends in the financial services industry, including mutual funds and other retail investment products. This leading-edge, forward-looking publication keeps you at the forefront of not just current trends but also emerging future trends, by providing a distinctive integration of all the subject knowledge areas within FRC.
Advanced Research
Primary source research studies provide detailed business models for successful new and evolving product, marketing and distribution strategies.
Vision
Interpretive, quarterly white papers delivering in-depth recommendations on product, marketing and distribution issues.
Views
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Saturday, November 3, 2007
Marketing Strategies - Kotler's Description
Philip Kotler discussed marketing strategy in 5 chapters in his 9th edition of Marketing Management
Ch. 10 Differentiating and Positioning the Market Offering
Ch. 11 Developing New Products
Ch. 12 Managing Life cycle Stategies
Ch. 13 Designing marketing Strategies for Market Leaders, Challengers, Followers, and Niches
Ch. 14 Designing and Managing Global Marketing Strategies
Ch. 10 Differentiating and Positioning the Market Offering
The issues discussed in the area of differentiating and Positioning the market offering are:
TOOLS FOR COMPETITIVE DIFFERENTIATION
DEVELOPING A POSITIONING STRATEGY
COMMUNICATING THE COMPANY'S POSITIONING
TOOLS FOR COMPETITIVE DIFFERENTIATION
Differentiation - Definition: is the act of designing a set of meaningful differences to distinguish the company's offering from competitor's offerings.
Boston Consulting Group's differentiation opportunities matrix: It is a competitive advantage matrix but because Porter said cost leadership and differentiation are the generic competitive advantages, the matrix is applicable to differentiation opportunities.
Four types of industries identified by BCG matrix are:
Volume industry: only a few but very large competitive advantages are possible. The benefit of the advantage is proportional with company size and market share. Example given - construction industry - I am not happy with it meaning I have not understood the applicability of the idea to construction industry.
Stalemated industry: in this type there are only few opportunities and the benefit from each is small. The benefit is also not proportional to the size or market share.
Example: Steel industry - It is hard to differentiate the product or decrease its manufacturing cost.
Fragmented industry: in this type, there are many opportunities, but the benefit of each of them is small. Benefit does not depend on size or market share.
Specialized industry: in this type, the opportunities are more and benefits of each opportunity is high. The benefit is not related to size or market share.
------------------------------------
Application of the concept to security markets
Think!
What will be the classification of Stock broking, Investment banking and Mutual funds according to BCG matrix
------------------------------------
Kotler mentions, Milind Lele's observation that companies differ in their potential maneuverability along five dimensions:
their target market,
product,
place (channels),
promotion, and
price.
The freedom of maneuver is affected by the industry structure and the firm's position in the industry. For each potential competitive opportunity or option limited by the maneuverability, the company needs to estimate the return. Those opportunities that promise the highest return define the company's strategic leverage. The concept of maneuverability brings out the fact that a strategic option that worked very well in one industry may not work equally well in the other industry because of low maneuverability of that option in the different industry and by the firm in consideration.
Regarding the tools of differentiation, the discussion begins by identifying that market offering can be differentiated along five dimensions.
Product
Services that accompany marketing, sales and after sales services.
Personnel who interact with the customers
Channel
Image
Differentiating a Product
Features
Quality: Performance quality - the performance of the prototype or the exhibited sample, Conformance quality - The performance of every item made by the company under the same specification
Durability
Reliability
Repairability
Style
Design
Services differentiation
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Miscellaneous services
Personnel Differentiation
Competence
Courtesy
Credibility
Reliability
Responsiveness
Communication
--------------------------
Application:
Compare the employees of three mutual funds say UTI Mutual Fund, Reliance Mutual Fund and ICICI Prudential Mutual Fund on the criteria given for differetiating based on personnel.
--------------------------
Channel differentiation
Coverage
Expertise of the channel managers
Performance of the channel in ease of ordering, and service, and personnel
Image differentiation
First distinction between Identity and Image - Identity is designed by the company and through its various actions company tries to make it known to the market.
Image is the understanding and view of the market about the company.
An effective image does three things for a product or company.
1. It establishes the product's planned character and value proposition.
2. It distinguishes the product from competing products.
3. It delivers emotional power and stirs the hearts as well as the minds of buyers.
The identity of the company or product is communicated to the market by
Symbols
Written and audiovisual media
Atmosphere of the physical place with which customer comes into contact
Events organized or sponsored by the company.
DEVELOPING A POSITIONING STRATEGY
Levitt and others have pointed out dozens of ways to differentiate an offering(Theodore Levitt: "Marketing success through differentiation-of anything", Harvard Business Review, Jan-Feb, 1980)
While a company can create many differences, each difference created has a cost as well as consumer benefit. A difference is worth establishing when the benefit exceeds the cost. More generally, a difference is worth establishing to the extent that it satisfies the following criteria.
Important: the difference delivers a highly valued benefit to a sufficient number of buyers.
distinctive: the difference either isn't offered by others or is offered in a more distinctive way by the company.
Superior: The difference is superior to othe ways obtaining the same benefit.
Communicable: The difference is communicable and visible to the buyers.
Preemptive: The difference cannot be easily copied by competitors.
Affordable: The buyer can afford to pay the higher price
Profitable: The company will make profit by introducing the difference.
Positioning is the result of differentiation decisions. It is the act of designing the company's offering and identity (that will create a planned image) so that they occupy a meaningful and distinct competitive position in the target customer's minds.
The end result of positioning is the creation of a market-focused value proposition, a simple clear statement of why the target market should buy the product.
Example:
Volvo (station wagon)
target customer-Safety conscious "upscale families"
Benefit - Durability and safety,
price - 20% premium,
value proposition - The safest, most durable wagon in which your family can ride.
--------------------
Application
Identify and write similar propositions from security market intermediaries
--------------------
How many differences to promote
Many marketers advocate promoting only one benefit in the market (Your market offering may have many differentiators, actually should have many differentiators in product, service, personnel, channel, and image).
Kotler mentions that double benefit promotion may be necessary, if some more firms claim to be best on the same attribute. Kotler gives the example of Volvo, which says and "safest" and "durable".
Four major positioning errors
1. Underpositioning: Market only has a vague idea of the product.
2. Overpositioning: Only a narrow group of customers identify with the product.
3. Confused positioning: Buyers have a confused image of the product as it claims too many benefits or it changes the claim too often.
4. Doubtful positioning: Buyers find it difficult to believe the brand claims in view of the products features, price, or manufacturer.
Different positioning strategies or themes:
1. Attribute positioning: the message highlights one or two of the atrributes of the product.
2. Benefit positioning:the message highlights one or two of the benefits to the customer.
3. Use/application positioning: Claim the product as best for some application.
4. User positioning: Claim the product as best for a group of users. - children, women, working women etc.
5. Competitor positioning: Claim that the product is better than a competitor.
6. Product category positioning: Claim as the best in a product category Ex: Mutual fund ranks - Lipper, CRISIL etc.
7. Quality/Price positioning: Claim best value for price
Which differences to promote:
This issue is related to the discussion of worth while differences to incorporate into the market offering done earlier. But now competitors positioning also needs to be considered to highlight one two exclusive benefits offered by the product under consideration.
COMMUNICATING THE COMPANY'S POSITIONING
Once the company has developed a clear positioning strategy, the company must choose various signs and cues that buyers use to confirm that the product delivers the promise made by the company.
------------------------------------
Application
Identify the signs and cues being used by security market intermediaries to convey their value propositions or punchlines
-----------------------------------
Ch. 11 Developing New Products
Main Themes:
CHALLENGES IN NEW PRODUCT DEVELOPMENT
EFFECTIVE ORGANIZATIONAL ARRANGEMENTS
MANAGING THE NEW-PRODUCT DEVELOPMENT PROCESS
THE CONSUMBER ADOPTION PROCESS
Marketing management should play a key role in the new product development process. It is not lookout of R&D department alone. Marketing should actively participate in every stage of new product development.
The consulting firm Booz, Allen & Hamilton has identified six categories of new products in terms of their newness to the company and to the market place.
New-to-the-world products
New product lines: New product to the company
Addition to product line: New package sizes, flavours etc. of existing products of a company
Improvement and revisions of existing products; product we see with message “improved”
Repositioning: Existing products targeted to new market segments by expanding their value proposition to cover the new market segment (understandably geographic market expansion does not require new product).
Cost reduction: New products that provide similar performance at lower cost. Hindustan Lever developing Wheel in addition to Surf.
Ch. 12 Managing Life cycle Stategies
THE PRODUCT LIFE CYLES
MARKETING STRATEGIES THROUGHT THE PLC
MARKET EVOLUTION
Ch. 13 Designing marketing Strategies for Market Leaders, Challengers, Followers, and Niches
Main Themes:
MARKET-LEADER STRATEGIES
MARKET-CHALLENGER STRATEGIES
MARKET FOLLOWER STRATEGIES
MARKET-NICHER STRATEGIES
This chapter discusses the marketing strategies that take into account the position of the company in the industry structure and competitors’ strategies.
According to Arthur D. Little consulting firm, a firm will occupy one six competitive positions in a market (Robert V.L. Wright, A System for managing diversity, Cambrige, MA, 1974)
Dominant
Strong
Favourable
Tenable
Weak
Nonviable
-----------------
Application
Classify stock broking firms, mutual funds, and merchant banks on the above classification
------------------
Ch. 14 Designing and Managing Global Marketing Strategies
DECIDING WHETHER TO GO ABROAD
DECIDING WHICH MARKET TO ENTER
DECIDING HOW TO ENTER THE MARKET
DECIDING ON THE MARKETING PROGRAM
DECIDING ON THE MARKETING ORGANIZATION
Related Article/Post
Consumer Behavior
http://nrao-mgmt-smi-handbook.blogspot.com/2008/09/consumer-behavior.html
Ch. 10 Differentiating and Positioning the Market Offering
Ch. 11 Developing New Products
Ch. 12 Managing Life cycle Stategies
Ch. 13 Designing marketing Strategies for Market Leaders, Challengers, Followers, and Niches
Ch. 14 Designing and Managing Global Marketing Strategies
Ch. 10 Differentiating and Positioning the Market Offering
The issues discussed in the area of differentiating and Positioning the market offering are:
TOOLS FOR COMPETITIVE DIFFERENTIATION
DEVELOPING A POSITIONING STRATEGY
COMMUNICATING THE COMPANY'S POSITIONING
TOOLS FOR COMPETITIVE DIFFERENTIATION
Differentiation - Definition: is the act of designing a set of meaningful differences to distinguish the company's offering from competitor's offerings.
Boston Consulting Group's differentiation opportunities matrix: It is a competitive advantage matrix but because Porter said cost leadership and differentiation are the generic competitive advantages, the matrix is applicable to differentiation opportunities.
Four types of industries identified by BCG matrix are:
Volume industry: only a few but very large competitive advantages are possible. The benefit of the advantage is proportional with company size and market share. Example given - construction industry - I am not happy with it meaning I have not understood the applicability of the idea to construction industry.
Stalemated industry: in this type there are only few opportunities and the benefit from each is small. The benefit is also not proportional to the size or market share.
Example: Steel industry - It is hard to differentiate the product or decrease its manufacturing cost.
Fragmented industry: in this type, there are many opportunities, but the benefit of each of them is small. Benefit does not depend on size or market share.
Specialized industry: in this type, the opportunities are more and benefits of each opportunity is high. The benefit is not related to size or market share.
------------------------------------
Application of the concept to security markets
Think!
What will be the classification of Stock broking, Investment banking and Mutual funds according to BCG matrix
------------------------------------
Kotler mentions, Milind Lele's observation that companies differ in their potential maneuverability along five dimensions:
their target market,
product,
place (channels),
promotion, and
price.
The freedom of maneuver is affected by the industry structure and the firm's position in the industry. For each potential competitive opportunity or option limited by the maneuverability, the company needs to estimate the return. Those opportunities that promise the highest return define the company's strategic leverage. The concept of maneuverability brings out the fact that a strategic option that worked very well in one industry may not work equally well in the other industry because of low maneuverability of that option in the different industry and by the firm in consideration.
Regarding the tools of differentiation, the discussion begins by identifying that market offering can be differentiated along five dimensions.
Product
Services that accompany marketing, sales and after sales services.
Personnel who interact with the customers
Channel
Image
Differentiating a Product
Features
Quality: Performance quality - the performance of the prototype or the exhibited sample, Conformance quality - The performance of every item made by the company under the same specification
Durability
Reliability
Repairability
Style
Design
Services differentiation
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Miscellaneous services
Personnel Differentiation
Competence
Courtesy
Credibility
Reliability
Responsiveness
Communication
--------------------------
Application:
Compare the employees of three mutual funds say UTI Mutual Fund, Reliance Mutual Fund and ICICI Prudential Mutual Fund on the criteria given for differetiating based on personnel.
--------------------------
Channel differentiation
Coverage
Expertise of the channel managers
Performance of the channel in ease of ordering, and service, and personnel
Image differentiation
First distinction between Identity and Image - Identity is designed by the company and through its various actions company tries to make it known to the market.
Image is the understanding and view of the market about the company.
An effective image does three things for a product or company.
1. It establishes the product's planned character and value proposition.
2. It distinguishes the product from competing products.
3. It delivers emotional power and stirs the hearts as well as the minds of buyers.
The identity of the company or product is communicated to the market by
Symbols
Written and audiovisual media
Atmosphere of the physical place with which customer comes into contact
Events organized or sponsored by the company.
DEVELOPING A POSITIONING STRATEGY
Levitt and others have pointed out dozens of ways to differentiate an offering(Theodore Levitt: "Marketing success through differentiation-of anything", Harvard Business Review, Jan-Feb, 1980)
While a company can create many differences, each difference created has a cost as well as consumer benefit. A difference is worth establishing when the benefit exceeds the cost. More generally, a difference is worth establishing to the extent that it satisfies the following criteria.
Important: the difference delivers a highly valued benefit to a sufficient number of buyers.
distinctive: the difference either isn't offered by others or is offered in a more distinctive way by the company.
Superior: The difference is superior to othe ways obtaining the same benefit.
Communicable: The difference is communicable and visible to the buyers.
Preemptive: The difference cannot be easily copied by competitors.
Affordable: The buyer can afford to pay the higher price
Profitable: The company will make profit by introducing the difference.
Positioning is the result of differentiation decisions. It is the act of designing the company's offering and identity (that will create a planned image) so that they occupy a meaningful and distinct competitive position in the target customer's minds.
The end result of positioning is the creation of a market-focused value proposition, a simple clear statement of why the target market should buy the product.
Example:
Volvo (station wagon)
target customer-Safety conscious "upscale families"
Benefit - Durability and safety,
price - 20% premium,
value proposition - The safest, most durable wagon in which your family can ride.
--------------------
Application
Identify and write similar propositions from security market intermediaries
--------------------
How many differences to promote
Many marketers advocate promoting only one benefit in the market (Your market offering may have many differentiators, actually should have many differentiators in product, service, personnel, channel, and image).
Kotler mentions that double benefit promotion may be necessary, if some more firms claim to be best on the same attribute. Kotler gives the example of Volvo, which says and "safest" and "durable".
Four major positioning errors
1. Underpositioning: Market only has a vague idea of the product.
2. Overpositioning: Only a narrow group of customers identify with the product.
3. Confused positioning: Buyers have a confused image of the product as it claims too many benefits or it changes the claim too often.
4. Doubtful positioning: Buyers find it difficult to believe the brand claims in view of the products features, price, or manufacturer.
Different positioning strategies or themes:
1. Attribute positioning: the message highlights one or two of the atrributes of the product.
2. Benefit positioning:the message highlights one or two of the benefits to the customer.
3. Use/application positioning: Claim the product as best for some application.
4. User positioning: Claim the product as best for a group of users. - children, women, working women etc.
5. Competitor positioning: Claim that the product is better than a competitor.
6. Product category positioning: Claim as the best in a product category Ex: Mutual fund ranks - Lipper, CRISIL etc.
7. Quality/Price positioning: Claim best value for price
Which differences to promote:
This issue is related to the discussion of worth while differences to incorporate into the market offering done earlier. But now competitors positioning also needs to be considered to highlight one two exclusive benefits offered by the product under consideration.
COMMUNICATING THE COMPANY'S POSITIONING
Once the company has developed a clear positioning strategy, the company must choose various signs and cues that buyers use to confirm that the product delivers the promise made by the company.
------------------------------------
Application
Identify the signs and cues being used by security market intermediaries to convey their value propositions or punchlines
-----------------------------------
Ch. 11 Developing New Products
Main Themes:
CHALLENGES IN NEW PRODUCT DEVELOPMENT
EFFECTIVE ORGANIZATIONAL ARRANGEMENTS
MANAGING THE NEW-PRODUCT DEVELOPMENT PROCESS
THE CONSUMBER ADOPTION PROCESS
Marketing management should play a key role in the new product development process. It is not lookout of R&D department alone. Marketing should actively participate in every stage of new product development.
The consulting firm Booz, Allen & Hamilton has identified six categories of new products in terms of their newness to the company and to the market place.
New-to-the-world products
New product lines: New product to the company
Addition to product line: New package sizes, flavours etc. of existing products of a company
Improvement and revisions of existing products; product we see with message “improved”
Repositioning: Existing products targeted to new market segments by expanding their value proposition to cover the new market segment (understandably geographic market expansion does not require new product).
Cost reduction: New products that provide similar performance at lower cost. Hindustan Lever developing Wheel in addition to Surf.
Ch. 12 Managing Life cycle Stategies
THE PRODUCT LIFE CYLES
MARKETING STRATEGIES THROUGHT THE PLC
MARKET EVOLUTION
Ch. 13 Designing marketing Strategies for Market Leaders, Challengers, Followers, and Niches
Main Themes:
MARKET-LEADER STRATEGIES
MARKET-CHALLENGER STRATEGIES
MARKET FOLLOWER STRATEGIES
MARKET-NICHER STRATEGIES
This chapter discusses the marketing strategies that take into account the position of the company in the industry structure and competitors’ strategies.
According to Arthur D. Little consulting firm, a firm will occupy one six competitive positions in a market (Robert V.L. Wright, A System for managing diversity, Cambrige, MA, 1974)
Dominant
Strong
Favourable
Tenable
Weak
Nonviable
-----------------
Application
Classify stock broking firms, mutual funds, and merchant banks on the above classification
------------------
Ch. 14 Designing and Managing Global Marketing Strategies
DECIDING WHETHER TO GO ABROAD
DECIDING WHICH MARKET TO ENTER
DECIDING HOW TO ENTER THE MARKET
DECIDING ON THE MARKETING PROGRAM
DECIDING ON THE MARKETING ORGANIZATION
Related Article/Post
Consumer Behavior
http://nrao-mgmt-smi-handbook.blogspot.com/2008/09/consumer-behavior.html
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