Comprehensive Review
Module Presentation
Presented By Group 4
Prateek Jena
Jiger Khona
Nirmit Shah
Srikar Malladi
Manyata Tanna
Diksha Sihag
PORTER’S FIVE FORCES MODEL
Porter’s Five Forces analysis is a framework that attempts to analyse the level of competition
within an industry & for Business strategy development.
It draws upon the Industrial Organisation Economics to derive the 5 forces that determine the
competitive intensity & therefore the attractiveness of an industry which refers to the overall
industry profitability. An “unattractive” industry is one where the combination of these 5 forces
tend to drive down the profitability.
A very “unattractive” industry is one approaching “pure competition”, in which available
profits for all firms are driven to normal profits. This analysis was given forward by Michael E.
Porter of Harvard University.
Components of Porter’s Five Forces
Model
We will take the start-up “MyGate” as an example to further explain the components
1. Threat of New Entrants
• The market is full of competition & the threat to business is not only from the
existing firms but also from the arrival of new players in the market.
• In an ideal scenario, the market is open to entry & exits resulting in comparable
profits for all the firms but in reality the industries have some traits that protects
their profits & helps them in warding off potential new entrants by erecting
barriers.
• In case of MyGate the threat of new entry is from NoBrokerhood, JioGate, Zipgrid,
etc so to erect barriers it is seeking funds through investors like Prime Venture
Partners & Tiger Global Management to offer its product at more competitive
prices than its rivals.
2. Threat of Substitutes
• Substitutes can be defined as the product of other industries which could satisfy
similar needs.
• When no. of substitute product increases the competition also increases as the
customer has more alternatives to select from which leads to the companies
lowering the prices of their respective products.
• For MyGate, being a security management application, the threat should be
from Intercoms, Automatic Boom Barriers, etc but being a technologically
advanced & a niche market product it faces no such threat due to its easy to
use interface and various other features.
3. Bargaining Power of Buyers
• When there are many producers & the customers are few the situation is called
“monopsony” & in such markets the position of the buyers is strong so they set the price
& may also demand a product or service of higher quality at low price.
• Since MyGate is a niche market product and the current market is getting flooded with
competitors like ADDA, VZTrack, Biizlo, Wallix, JioGate, NoBrokerHood, etc they are
compelled to sell the products at competitive prices or sometimes free of cost to use by
the customers.
4. Bargaining Power of Suppliers
• Since company needs raw materials for producing therefore the
producers have to build a strong relationship with the suppliers because
when suppliers have the power in their hands , they can influence the
producing firms by selling them raw materials at higher prices.
• Since there are innumerable suppliers of technological products in the
software industry the cost of raw materials is not that high, MyGate can
have multiple suppliers to get their raw material, their current supplier is
Lenovo.
• Hence bargaining power of suppliers in case of MyGate is low.
5. Rivalry inside the Industry
• For most industries the intensity of competitive rivalry is the major determinant
of the competitive rivalry in the industry.
• The factors for these could be-
i. Competitive advantage through innovation.
ii. Competition between online & offline service providers
iii. Advertising expense
iv. Competitive strategy
v. Degree of transparency
• For MyGate the major competitors are ADDA, JioGate & NoBrokerHood; these
companies provide similar services & features to that of MyGate & they
compete on the basis of price & other value added services.
7 P’s Of Marketing
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People I
I People
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Marketing I
Promotion Place I
Mix
I Extended
I P’s
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Physical
I Process
I Evidence
Price
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Components of Marketing Mix (7P’s)
Product
The Product should fit the task consumers want it for, it should work, it should be what the consumers are expecting to get.
Product components includes product variety, quality, design, features, brand name, packaging, size, service, warranties,
returns etc.
For example for HDFC bank – Product mix would be: -
Saving / Current / Salary account
Safe deposit lockers / rural account / Pension account
Personal loan / Car loan / Business loan
Credit card / Debit card / prepaid card
DEMAT account and other investment options like PPF / Mutual funds etc.
Insurances – Life, health, motor, travel, home, two-wheeler, student travel insurance etc.
Online payment options like Pay bills and shop online, Fund transfer options, bill payments, tax payment, donate online
etc.
premier options include Direct equity, Mutual funds, Fixed income products, Insurance, Private equity funds, Structured
products and Estate planning
Price
The Product should always be representing good value for money.
This does not necessarily mean it should be the cheapest available;
one of the main tenets of the marketing concept is that customers
are usually happy to pay a little more for something that works well
for them.
Price component includes list price, discounts, allowances, payment
period, credit terms etc.
For example for HDFC bank – Price mix would be: -
Interest rate for investments
Interest rate for loans or borrowed fund
Bank charges etc
Place
The product should be available from where your target consumer finds it easiest to shop.
This may be High Street, Mail Order or the more current option via e-commerce or an online
shop.
Place component includes channels, coverage, assortment, location, inventory, transport.
For example for HDFC bank – Price mix would be: -
Branch network – Urban, Rural, Semi-urban, overseas.
Infrastructure facilities
Market coverage
Convenient for both bankers as well as customers who approach banks
HDFC outreached 4500+ branches in approx. 2600 cities/towns with 12000
ATMs.
Promotion
These tools should be used to put across the organization's message to the
correct audiences in the manner they would most like to hear, whether it
be informative or appealing to their emotions.
Promotion component includes sales promotion, advertising, sales forces
public relations, direct marketing etc.
For example – HDFC Bank – Promotion mix would be: -
Large no. of CSR activities mainly targeting for sustainable livelihood,
financial literacy, education, training and community initiatives – HDFC
Bank Parivartan
Advertisement, hoardings, posters, Ads in news papers, magazines,
promotional events, sponsorship etc.
People
All companies are reliant on the people who run them from front
line Sales staff to the Managing Director. Having the right people
is essential because they are as much a part of your business
offering as the products/services you are offering
People generally includes employees, management, culture,
customer service,
For example for HDFC bank –
HDFC Bank gives strong importance on its people ie customers
and employees.
Through its multi demographic culture it is clearly visible that
HDFC believes in diversity and inclusion.
With the help of this advanced technology, HDFC bank
employees will be highly satisfied and they will always get
competitive edge over others.
Physical Evidence
Almost all services include some physical elements even if the bulk of what the
consumer is paying for is intangible.
It includes smart run interface, comfort facilities etc.
For example for HDFC bank –
HDFC provides best in house facilities with up to date infrastructure and global
environment in all its offices.
The complete setup helps the employees to experience the best work environment so
that they perform as per the organization’s expectations.
HDFC offices, branches, credit cards, website etc. are all the physical evidence of the
brand.
Process
The delivery of your service is usually done with the customer present so how the service is delivered is
once again part of what the consumer is paying for.
For example considering HDFC bank –
HDFC bank has several business processes like all other financial institutions. Interest rate for loans or
borrowed fund
Through the various social activities and best practices HDFC maintains a good relations with its
customers and investors, which in turn avoids a bad ‘word of mouth’.
All these helps the organization to grow in long term and motivates its employees to continue being loyal
to it and give their best throughout their tenure.
The customers are also successfully retained and new ones are attracted. Hence, this concludes the
marketing mix of HDFC bank.
MARKET FOLLOWER
STRATEGIES
INTRODUCTION
‘Market Follower strategy’ is a strategy of product imitation. The innovator
bears the expense of developing the new product, bringing in the
technology, breaking entry barriers and educating the market. However,
another firm can come along and copy or improve on the new product.
Although it probably will not overtake the leader, the follower can
achieve high profits because it did not bear any of the innovation
[Link] companies prefer to follow rather than challenge the
market leader. Many runner-up companies do not challenge the market
leader.
TYPES OF MARKET FOLLOWER STRATEGIES
Counterfeiter
Cloner
Imitator
Adaptor
COUNTERFEITER
The best example of counterfeiting is selling the originals via piracy.
Also known as Black market follower strategy.
Example : Music firms, Apple and Rolex watches have been plagued by
counterfeiter problem.
CLONER
Emulates the leader’s products, name and packaging with slight
variation.
Example: If you get watches from RADO as RADA and bags from GUCCI
as GUCCA then that is cloning.
IMITATOR
Imitation is the best form of flattery which can cause the Leader a huge
dent in the profit margins.
They make use of the hard-earned brand equity and give a product with
same characteristics at low price.
They offer a product with compromised quality.
Imitation jewelry is the best and largest example of imitation.
ADAPTOR
It is often termed as white collared market strategy.
They have similar products but try to adapt from closest competition.
They can soon become Market Leaders as they can adapt, learn and
improve.
Cars like Alto, Zen are adapters and adapt the best qualities from each
other by changing the style of the automobiles.
MARKET NICHER
STRATEGIES
INTRODUCTION
Niche marketing strategy is the most effective marketing tool used to
reach the target niche market and stand out from the competition.
An effective niche strategy is designed to create aesthetic appeal to
specific target audience by offering services or products to segment in
the market.
Therefore, Niche marketing enables a company to focus its resources on
small market segment which is more effective and efficient tool than
catering the entire market.
It is very important for niche marketers to have a unique market offering in
order to meet the customer demand.
TYPES OF NICHE MARKETING
STRATEGIES
Online niche marketing strategy
Direct Sales niche marketing strategy
Develop the niche-oriented offer as Niche marketing strategy
Affiliate niche marketing strategy
Tailor your creative approach as Niche marketing strategy
Market Leaders
• A market leader has the largest market share and usually leads in price-changes,
new product introductions, distribution coverage and promotional intensity.
• Some historical market leaders are Microsoft, Gatorade and McDonald’s.
Positioning strategies used by Market Leaders
Expanding Total Market Demand
New Customers
• A company can search for new users under 3 groups:-
1. People who might use it but don’t (Market Penetration Strategy)
2. People who have never used the product (New-market segment strategy)
3. People who live somewhere else (Geographical expansion strategy)
Positioning strategies used by Market Leaders
Expanding Total Market Demand
More Usage
• Marketers can try to increase the amount, level or frequency of
consumption
1. They can do this through packaging or product redesign.
2. Introducing Larger package sizes etc.
3. Example: Cap of Colgate.
Positioning strategies used by Market Leaders
Protecting Market Share
Proactive Marketing
• The front runner should lead the industry in developing new products
through continuous innovation, distribution effectiveness and cost cutting.
• Example: IBM changed from hardware product to a service business
Market Challengers
• A market challenger must first define its strategic objective, which is
usually to increase market share.
• Example: Hyundai
Positioning strategies used by Market Challengers
Frontal Attack
• In a pure Frontal attack, the attacker matches its opponent’s product,
advertising, price and distribution.
• A modified frontal attack, such as cutting price can work if market leader
does not retaliate and if the competitor convinces the market that its
product is equal to the leader’s.
Positioning strategies used by Market Challengers
Flank Attack
• A flanking strategy is another name for identifying the shifts that causes
gaps to develop in the market.
• Flanking is particularly attractive to a challenger with few resources.
• Another flanking strategy is to serve uncovered market needs.
Positioning strategies used by Market Challengers
Encirclement Attack
• Encirclement attempts to capture a wide slice of territory by launching a
grand offensive on several fronts.
• It makes sense when the challenger has superior resources.
Positioning strategies used by Market Challengers
Guerilla Attack
• Guerilla attacks consist of small, intermittent attacks, conventional and
unconventional, include selective price cuts, intense promotions etc. to
harass the opponent eventually and secure permanent foothold
• A guerilla campaign can be expensive though less than frontal or flank
attack.
SATISFIED CUSTOMER-
BENEFITS
