marketing trends in pakistan 2

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Lecture 2: Marketing Tools and Implementation

Majid Aleem Date: 29/09/2011


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Core Scenario Pakistan has been ruled by dictators for half

its history

Political tug-of-war between civilians andsoldiers still continues. The chief threatcomes from outside parliament

militants opposed to Pakistan pivotal role inthe US-led war against terror.

Efforts to combat militancy are beingfrustrated close ties between some militant groups and

the state Inter Services Intelligence unit (Asper international Community).


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Strengths

Condemned for testing a nuclear bomb in

May 1998, Pakistan has since won Westernacclaim for its leading role in the US-led waron terror. Washington has lifted sanctionsand, in June 2004, President George W.

Bush named Pakistan a major non-NATOally.


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Weaknesses

Civilian institutions are weak in Pakistan.Parliament, comprising the National Assemblyand the Senate, has had its powers vastlyreduced during President Pervez Musharrafera which still continues as it is

Poor relations with India and other

neighbours. The two nuclear-armedneighbours have gone to war three times sincethey were partitioned after independencefrom colonial master Britain in 1947.


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Opportunities

Pakistan could build stronger civilianinstitutions through meaningful democraticreform. However, we believe these areunlikely for the time being.

Ongoing peace talks with India providePakistani leaders with an opportunity toease tension in the worlds most dangerousnuclear flashpoint.


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Threats

Escalating violence by militants opposed toPakistan's leading role in the US-led war onterror poses a key risk to stability.

Attacks on president and prime minister- a

concern for international businesscommunity


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Core Scenario

Economy has strengthened considerably due,

firstly, to wide-ranging reforms aimed atreining in the governments budget deficit

Assistance from foreign governments eagerto reward Islamabad joining the US-led

coalition against terror

Huge losses due to natural disasters

Rising Inflation


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Strengths A gradual tightening of monetary policy by

the State Bank of Pakistan shouldmoderate high inflationary pressures.


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Weaknesses As a result of the massive earthquake

hitting Pakistan in October 2005, Floods in2010 and 2011 economy suffering from veryslow growth

Subsidies to loss making, state-runenterprises continue to stretch publicfinances


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Opportunities

The lapsing in January 2005 of the WTOsMultifibre Agreement, which regulates theglobal textile trade, will provide Pakistanwith an opportunity to boost exports.

The local textile industry is competitiveenough to prosper in a free-tradeenvironment.

BUT WILL IT BE POSSIBLE?


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Threats

Pakistans military-backed/dependent

government lacks legitimacy and mayabandon economic reforms for fear ofalienating public opinion.

Persistently high global oil prices pose a

threat to Pakistans balance of payments.Pakistan imports more than 50mn barrels ofoil a year to satisfy local demand for fuelproducts and record-high prices have led towidening of the trade deficit.


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One of South Asias most liberal foreign

investment regimes.

Pro-market reforms during the 1990s openedmost sectors of the economy to foreign

participation.

One hundred percent foreign ownership is

permitted in the manufacturing sector,though ownership restrictions remain in place

in agriculture and services.


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Foreign firms are allowed to repatriate

capital, profits and dividends.

Security risks are the chief concern forinvestor with foreign-owned businesses

targeted by anti-Western militants in recentattacks.

Businesses must also contend with poorinfrastructure, bureaucratic bottlenecks and

widespread corruption. Ongoing reforms will

help here.


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Strengths Pakistan has one of the most liberal foreign

investment regimes in South Asia. One

hundred percent foreign equity is permittedin the manufacturing and infrastructuresectors.

Ongoing reform of Pakistans trade regimeis reducing tariff barriers. Duty on capitalgoods, plant and machinery notmanufactured locally was cut to just 5%from an earlier range of 5-25%.


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Weaknesses Failing infrastructure, bureaucratic delays

and widespread corruption are key

concerns for investors looking to dobusiness in Pakistan.

Intellectual property rights are poorly

enforced. Pakistan, a leading producer ofcounterfeit goods, was one of 36 countriesnamed on the Office of the US TradeRepresentatives Priority Watch List.


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Opportunities

Pakistan is committed to selling off state-owned assets

and a series of firms are expected to going under thehammer in the coming years.

Threats

Anti-western militants have targeted foreign-ownedbusinesses in recent attacks. A suicide bomber killedeleven French engineers employed by the NavalConstruction Directorate in May 2002 as they boarded abus in Karachi.


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3-4 years of strong growth

Resilience against shock and extra ordinary jerks

Rise in per capita income for US $ 503 in 2002 to US $ 847 in 2006

Robust Consumer spending

Substantial increase in private sector credit

Balance between fiscal deficit and growth

Medium Term Development Framework

Maintenance of external and domestic debt within limits

Reach to Global Capital Markets

Geo political situation post 9/11

Stable exchange rate

Higher foreign direct investment

Reduction in poverty level

Credibility of statistics

Sharp increase in prices of food items

Incompatible contributions of various sectors of economy in tax revenue.

Inefficiency in utilisation of development expenditure

High administrative costs

Perception gap between economic manager and people at large

Quality of governance

Record trade deficit

Concentration of export in restricted items and markets

High cost of doing business

Lack of focus on agriculture sector

Political instability

Shortage of skilled workforce

Energy crisis

Poor HDI indicators

Capacity constraints in Indian IT sector

Recent investment in IT sector

BPOs potential

Telecom and Media revolution

Geo political situation

Foreign Direct Investment

Investment in education and health

Political uncertainty

Issues in Balochistan and Northern Areas

Worsening of situation on Western borders

Anti Pakistan attitude in Afghanistan

Level of corruption

Broadening gap between Rich and Poor

Social unrest

PAKISTANECONOMY

Weaknesses

Strengths

ThreatsOpportunities


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Strengths

3-4 years of strong growth

Resilience against shock and extra ordinary jerks

Rise in per capita income for US $ 503 in 2002 to US $ 847 in 2006

Robust Consumer spending

Substantial increase in private sector credit

Balance between fiscal deficit and growth

Medium Term Development Framework

Maintenance of external and domestic debt within limitsReach to Global Capital Markets

Geo political situation post 9/11

Stable exchange rate

Higher foreign direct investment

Reduction in poverty level


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Weaknesses

Credibility of statistics

Sharp increase in prices of food items

Incompatible contributions of various sectors of economy in taxrevenue.

Inefficiency in utilization of development expenditure

High administrative costs

Perception gap between economic manager and people at large

Quality of governance

Record trade deficit

Concentration of export in restricted items and markets

High cost of doing businessLack of focus on agriculture sector

Political instability

Shortage of s

killed workforce

Energy crisis

Poor HDI indicators


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Opportunities

Capacity constraints in Indian IT sector

Recent investment in IT sectorBPOs potential

Telecom and Media revolution

Geopolitical situation

Foreign Direct Investment

Investment in education and health


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Threats

Political uncertainty

Issues in Balochistan and NorthernAreas

Worsening ofsituation on Westernborders

Anti Pakistan attitude in Afghanistan

Level ofcorruptionBroadening gap between Rich and Poor

Social unrest


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Hierarchy of goals and objectives

Organizational Goals and ObjectivesMarketing Goals and Objectives

Marketing Mix Goals and ObjectivesMarketing Mix Element Goals and Objectives


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What business are you in?

Mission statement

Statement of marketing strategy

Indicates product, market scope

Shows growth factor

Shows differential advantage

Shows management orientation


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Marketing Strategy DevelopmentRecognize and evaluate an opportunity

Market size and potentialKey competitors

Choose target marketDevelop Objectives for each opportunity

Develop Marketing Mix Strategy for each opportunityChoose Marketing mix elements


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Opportunity EvaluationReview of Requirements for Market Size

Review of Relevant Competitive Set


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Target Market Selection

Introduction to Market SegmentationReview of the Strategic OptionsEquivalent Behaviors as the Critical Variable


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Structure of Marketing Mix Strategies

Are all Mix elements equally important?Product as the keyExample using Product Life Cycle


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Generic Marketing Strategies

Cost Leadership Lower costs of production and distribution

Product Differentiation Unique product or brand

Focus Focus on customer needs in a few segments


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Product StrategiesProduct Mix Strategies

Market penetration versus market skimming

Quality

High

Medium

Low

Price

High Medium Low

Premium

Goods

Penetra-

tion

Super

Bargain

Over-

Pricing

Average

QualityBargain

Hit and

Run

Shoddy

Goods

Cheap

Goods


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Product Strategies

Product Market Growth Strategies

Market Penetration

(increase usage)

Product Development

(new uses)

Market Development

(new users)

Diversification

(new users, new uses)

Markets

Products

Old

Old

New

New


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Market Position StrategiesMarket Follower Strategies

Conscious Parallelism

Similar products, prices

Avoid unprofitable segments

Market Niche

Specialize in a very small group of customers

Concentrated segmentation strategy


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Market Position StrategiesMarket Leader Strategies

Increase Size of Total Market

Product-Market Growth Strategies Protect Market Share

Fortification

Assortment of brands, sizes

Innovation Best defense is a good offense

Counteroffensive Increase Market Share

BCG Antitrust constraints


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Market Position Strategies

Market Challenger Strategies

Frontal Attack Out-innovate leader

Tough to do, easier to defend

Flanking/Bypass Attack

Attack where leader is not looking

Find a new market segment


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Price Discount Strategy

Buyers are sensitive to price Works if leader does not cut price

Cheaper Goods Strategy

Lower quality but much lower price

Vulnerable to still cheaper goods

Prestige Goods Strategy

Increase both quality and price


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Cheaper Goods Strategy Lower quality but much lower price

Vulnerable to still cheaper goods

Prestige Goods Strategy

Increase both quality and price


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Attacker

(smaller)

Defender(bigger)

Position

Defense

Preemptive

Defense

Counteroffensive

Contraction

Defense

Flanking Defense

Mobile Defense

Flank Attack

Frontal

Attack

Encirclement

Bypass

Guerilla Attack


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Write a review of the article top ten barriers to

marketing planning according to the

guidelines provided in the course outline.

Due next week in class


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Prepare a report regarding the product/service

you chose during this lecture for Marketing

Strategy Elements and discuss theseelements in context of that product/service

Due next week in class

marketing trends in pakistan 2

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