Transcript Marketing Strategies in the Asia Pacific

Marketing Strategies in
the Asia Pacific
Asia-Pacific Marketing Federation
Certified Professional Marketer
Copyright
Marketing Institute of Singapore
Outline
 Porter’s Three Generic Strategy
 Growth strategies
 Ansoff Grid—Product-Market Strategies
 Market Penetration Strategy
 Product-Development Strategy
 Market-Development Strategy
 Diversification Strategy
Introduction
 Many strategies had been used since
time immemorial. Fortunately for us,
Prof. Michael Porter had condensed them
into 3 generic types
Porter’s Three Generic Strategies
 See next slide: Figure: A model for
developing strategic orientation
Strategic Orientation—
Porter’s Three Generic Strategies
Low Cost
Position
Uniqueness
Differentiation
Focus
Differentiation
Overall Cost
Leadership
Focus
Focus Low Cost
Strategic Advantages
Porter’s Three Generic
Strategies
 Differentiation
 Achieve superior performance over the
competition
 e.g. Canon uses superior quality to differentiate
itself in the photocopying industry
Porter’s Three Generic
Strategies (cont’d)
 Overall Low Cost
 Achieve the lowest cost in the industry
 e.g. Naxos in the compact disc field
 Focus
 Either focus differentiation or focus low cost by
concentrating on a narrow segment of the
market
 e.g. Raffles Hotel
(Source: Marketing Management, 2nd Ed. 1999, Philip Kotler et. al.)
Growth Strategies
Three Major classes
 Intensive Growth
 Market penetration, market development &
product development (see next slide)
 Integrative Growth
 Backward, forward & horizontal integration
 Diversification Growth
 Concentric, horizontal and conglomerate
Source: Marketing Management, 2nd Ed. 1999, Philip Kotler et. al.
Ansoff Matrix—
Product-Market Strategies
Existing
Existing
New
Market
Penetration
Market
Development
(Expansion)
New
Product
Development
(Expansion)
Diversification
Market-Penetration Strategy
 Why ?
 How ?
To dominate market
To increase usage or get new customers;
reduce price; expand distribution or increase
promotional activities
 When ? When market is growing
 What to look out for ? Competitive reaction;
cost of
conversion
 Example: Airlines used reduced fares
& promotion
various family travel packages to penetrate market
Product-Development Strategy
 Why ? To satisfy buyer’s need
 How ? New or improved product; innovate or
augment product
 When ? Customer has a need or a problem
 What to look out for ?
 Market size/volume
 competitor reaction
 effect on existing products
 resources to deliver new products
 Examples: Acer; Soundblaster 1,2,3
Market-Development Strategy





Why ?
How ?
To venture into new markets
Sell existing products in new markets;
modify product; use different distribution; use different
advertising/sales strategy
When ? Present market is saturated
What to look out for ? Competitive reaction;
understand new buyers; adaptability
Example: Hong Kong and China Gas (Towngas) is to
invest HK$2 billion in the transmission of natural gas in
China, in a continued bid to expand away from its base
in Hong Kong.
(Source: SCMP; June 29, 2001)
Diversification Strategy
 Why ? Growth opportunities outside current business
 How ? New products for new markets
 When ? Distinctive competencies available
 What to look out for ? High risks, resources required,
need to understand new markets, fit with distinctive
competencies
 Examples:
 In July 1997, DBS Land diversified into Healthcare by
acquiring a stake in Parkway Holdings, a leading
healthcare provider in Asia and in 1999, DBS Land
bought into Vista Healthcare
Diversification Strategy
(cont’d)
 Three types of diversification
 Concentric, horizontal and conglomerate
 Three essential tests of success
 Attractiveness
 Cost-of-entry
 Better-off
 PIMS findings on diversification
 Not very encouraging
Vertical Integration
 Why?
 To gain operating economies i.e. to lower costs
 To gain access to or control supply demand
 To enhance technological innovation
 How? Integrate backward and forward
 When? Basic industry is in a growth stage
 What to look out for? Problems in managing very
different businesses; increase risk, reduced flexibility;
cost of excessive in-growing
Example of Vertical
Integration
 Japanese keiretsu systems
 Korean chaebols
 Airlines integrate backward to in-flight
kitchens; forward to travel agencies