ChapterIILiteratureReview II.1TheoreticalFoundation Tofindthesolutiontotheresearchquestions,theauthorhaslookedthroughafewprevious similarstudiesthatworksasafoundationtotheresearch.Yu,etal.,hastheneweststudyin 2023regardingmarketingtoolsthataffectscustomers’purchasingbehavioronhealth supplements.Inthisstudy,socialmediaadvertising,celebrityendorsement,andelectronic word-of-mouth(eWOM),aretheindependentvariables,whilstthepurchaseofhealth supplementproductsisthedependentvariable.Thisisaquantitativestudyusingthesurvey methodwith322adultsocialmediausers.Theresultshowedthatsocialmediaadvertising appealandeWOMhaveapositiveeffectonthepurchasingofhealthsupplementproducts, butcelebrityendorsement’seffectisinsignificant.Thisstudyhelpsdietarysupplement companiesunderstandtheimportanceofdesigninganeffectivesocialmediaadvertising strategyandmanagementofeWOM,includingreviews,ratings,rankings,comments,and socialconversations.Companiescanalsorethinktheirideastodirectmassivemarketing budgetstocelebrityendorsementorinfluencermarketing,asitmightnotaffecttheir revenue,andlikelyonlytowardsmoreawareness. Inthesameyear,Suparwo(2022)didastudyonhowonlinepromotion,price,andbrand imageaffectspurchasingdecisionsondietarysupplementsinthecasestudyofNeosaipress herbalproducts.Theindependentvariableofthisresearchisonlinepromotion,price,and brandimage.Meanwhile,purchasingdecisionsarethedependentvariable.Thisstudy utilizesaquantitativemodelwith80respondentsthatonlyincludedNeosaipressproduct consumers.Thefindingsofthisstudyshowedthatonlinepromotionandbrandimage influencepurchasingdecisionspartially,butpricedoesn’thavethesamerelationship.Price affectsthepurchasingdecisionsdirectly.Thisstudyhelpedthecompanythatcreated Neosaipresstoimprovetheirmarketingstrategiesaccordinglyiftheyareaimingtoimprove therevenue. 29 In2020,astudybyTajuddinetal.foundarelationshipbetweenelectronicword-of-mouth (eWOM),brandimage,andtheconsumers’purchaseintentionofhealthcareproducts.In thisstudy,eWOMistheindependentvariable,brandimageisthemoderatingvariable,and theconsumer’spurchasingintentionisthedependentvariable.Theresearchdesignis correctionalresearchwith384respondents,amodelthatisabletodescribetherelationship betweentheindependent,correlating,anddependentvariable.Thisstudysuccessfully provedthehypothesisthatthereisarelationshipbetweeneWOMandcustomerpurchase intention,moderatedbytheirbrandimage.Thisstudyhelpeddietarysupplement manufacturersunderstandthateWOMcommunicationisimportanttobeplannedcarefully, astechnologycanindeedmakecustomerschangetheirdecision,forexamplebyreading onlinereviews.Additionally,thisstudyshowedthatcustomerpurchasecanbeincreasedby aneffectiveeWOMthatisalsosupportedbyapositivebrandimage. Astheinfluenceofvariousmarketingstrategiestopurchasingdecisionswasstudied,the customerpersona’seffectswasalsodonepreviously,oneofitwasdoneinSouthKoreaby J.Choiin2019.Thisquantitativestudywasdoneamongstuniversitystudents,ayounger agegroupthatwereincreasinglypurchasingdietarysupplementsandseenasanewmarket opportunity.Theyoungeragegrouphasahugepotentialinincreasingbrandawarenessand revenuebecausetheyarehighlypenetratedonsocialmedia,buttheirbehaviorisnot understoodenough.Thisstudyaimstohelpstakeholdersinfindingthebeststrategyto approachthisdemographic.Healthconditions,healthconsciousness,involvement, knowledge,andfuturebehavioralintentionsworkasindependentvariables,andthe dependentvariableispurchasingbehavior.Itwasfoundthatbetweenthosestudentsthat consumedietarysupplementsanddon't,healthinvolvementishighlyrelatedwithfuture purchaseintentions.Ontheotherhand,theexpectationsonefficacyandknowledgedonot affecttheirpurchaseintentions.Additionally,recommendationsfromfamilyandfriendsare highlyinfluencing,andtheirknowledgeofnutritionislow,thereforerequiringeducational intervention. 30 Anotherstudyaroundcustomerinvolvementintheirpurchasingbehaviorofdietary supplementswasdonein2017byFitriyanietal.Thisquantitativestudyincludes100 Indonesianstobetheparticipantsoftheirsurveyandgatheredinsightfuldataaboutthe market.Inthisstudy,thereareafewrelationshipsbeingstudiedusingthesamevariables, theyaremotivation,stimulusfactors,involvement,productknowledge,engagement,and purchasingbehavior.Theconclusionofthisstudyisthatmotivationandstimulusfactors hadsignificanteffectsonconsumerinvolvement,whichaffectsproductknowledgeand purchasingbehavior.Additionally,animportantfindingisthatproductknowledge’seffects onpurchasingbehaviorisinsignificantcomparedtotheothers.Thesefindingsgivestrategy suggestionstoincreasedietarysupplementpurchases,suchaseducatingthebenefitsand uniquenessoftheproduct,campaigningonfoodalternativesforchildren,andviral marketingbasedontestimonyoreWOM.Asanaddition,companiescandodigital marketingtoraiseawarenessofriskandtheimportanceofconsumption. InThailand,astudyaroundcustomers’dietarysupplementwasdone,butitfocusesmoreon theconsumptionratherthanthepurchasingbehavior.Wangcharoenetal.(2013)was lookingforfactorsthataffectdietarysupplementconsumptionofadultsinChiangMai.This studyusedthequantitativemethodbycarryingoutquestionnairesfor494consumersaged 20andolder.Theindependentvariablesofthisresearcharedifferentconsumer characteristicssuchasage,gender,andbehaviors.Meanwhiledietarysupplement consumptionisthedependentvariable.Thefindingofthisstudyshowedthatparticipants thathaverecommendedwaistline,higherincome,usuallystressedordevelopadegreeof sickness,andpreferredeatinghealthyfoodanddrinkwateroften,tendtohaveahigher consumptionrateofdietarysupplements.Additionally,theparticipantsalsoputproduct quality,attractiveness,andadvertisement,asthemainfactorsthatmadetheirpurchasing decision.EverystakeholderaroundthedietarysupplementindustryinThailandcanbenefit fromthisstudybyunderstandingtheircustomerbetterandcreatingmoreeffectivestrategies toapproachthem. 31 AnotherstudywasdoneinThailandregardingcustomer’sbehaviorindietarysupplement consumptionandpurchasing,specificallyintheBangkokarea(Isa,2020).Thisstudyused secondarydataasanexploratorysourceandfollowedbyasurveyof400consumersaged above18andincomefrom5,000baht.Theindependentvariablesofthisstudyaregender, educationlevel,andincomelevel.Ontheotherhand,theimportanceofdietarysupplements remainsasthedependentvariable.Itwasfoundthattheimportanceofdietarysupplements correlateswithgender,meanwhilefactorstoconsiderpurchasingdecisioncorrelateswith educationlevel.ThisstudyhelpedstakeholdersunderstandthebehaviorofThaiurban consumers,especiallyregardingsupporttotheirhealth.Preferenceslikeproductquality, capsuletabletasthemostpreferredform,TVasamediumtogainrecognition,andpersonal sellingasthemostpreferreddistributionchannel,areimportantinsightsthatcanbeutilized tocreatedecisions. Lastbutnotleast,anotherstudythattheauthorlearnedtosupportthisstudyisthestudyby Yangin2002.TheobjectiveofYang’sstudywastoanswerwhysomepeoplepurchase healthsupplementproductsandothersdonot.Thisstudyusedperceivedvalueof supplement,perceivedgeneralhealthtraits,externalcues,aswellasfivepersonalitytraits andthreesocio-demographicvariablesastheindependentvariables.Therearetwelve researchhypothesesinthisstudyderivedfrompreliminaryqualitativeresearch(65in-depth interview)andliteraturereview.Afterwards,aquantitativemethodusingasurvey questionnairewasdoneusing974respondents.Thisstudyshowedthatthemostpowerful predictorsofwhysomeoneconsumesdietarysupplementswereperceivedvalueof supplementandexternalcues.Holisticorientation,internalhealth,andopennessto experience,alsoshowedpositivecorrelationtothebehavior.Thisstudygaveathorough dataforconsumerdecision-makingforhealth-carestareholders,eitheritsbythehealth supplementindustry,practitioners,educators,orpolicy-makers. 32 II.2ConceptualFramework Theconceptualframeworkbelowwasdesignedbasedontheliteraturereview.Aperson’s awarenessofabrandandpurchasingbehaviorwasbasedontwomajorcategories,whichare theirownpersonalbackgroundandthemarketingstrategyofbrandsorfirms.Brand awarenessmayalsoleadtoapurchasingbehaviorwhentheperson’sbackgroundinsistsor there’sastrongneedfromtheirside,andabrandstandsoutfromtheotherbasedontheir marketingstrategy.Purchasingbehaviorwillleadtomarketperformancethatcanbe describedfromtherevenuefromsales,satisfaction,retention,andrepurchasing. FigureII.1ConceptualFramework Source:(CreatedbyAuthor,2023) Therearemanytoolsthatcanbeutilizedinordertobetterunderstandthebusiness environmentofdietarysupplementandanswertheresearchobjectivesinthisresearch.The externalanalysiswillbedividedintotwocategories,theyaretheindustryandcustomer analysis.Toconductindustryanalysis,thewriterhaschosenthePESTLEanalysis,Porter’s FiveForces,andCompetitiveProfileMatrix.Meanwhile,todocustomeranalysis,thewriter haschosenCustomerJourney5As.Ontheotherhand,internalanalysiswasdoneusing STP(Segmenting,Targeting,andPositioning),MarketingMix4Ps,VRIO(Value,Rarity, Inimitability,Organized),andValueChainAnalysis.Theresultofexternalandinternal 33 analysiswillbeusedtogenerateaSWOT(Strength,Weakness,Opportunity,andThreat) analysis.TheSWOTanalysisresultwillbeabaseforthewritertomakeavalueproposition recommendation,whichlateralsoprovidesamarketingstrategyproposal. 2.2.1PESTLE PESTLEanalysisisaframeworkinmarketingprinciplesthatisusedtotrackthe environmentacompanyisoperatinginorareplanningtoreleaseanewproductorservices. PESTLEstandsforPolitical(P),Economic(E),Social(S),Technological(T),Legal(L), andEnvironmentalorEthics(E).Thisframeworklooksatabusinessenvironmentfrom multipleanglestohelpfirmsindevelopingtheirnewproductorservices.Eachofthese anglescanhavedifferentimportancetodifferentindustries,buteitherway,companiesare encouragedtodoPESTLEanalysisbeforepenetratingamarketwithanewproductor service.Additionally,PESTLEanalysiscanhelpfirmstoidentifytheirSWOTanalysisas theytakeintoaccountkeyaspectsintheexternalenvironmentandhowitwouldaffectthe firm,theindustry’sattractiveness,marketpotential,trendsandfuturegrowth(Alanzi, 2018). FigureII.2PESTLE/PESTELFramework Source:(B2U,2016) 34 EveryaspectinthePESTLEframeworklooksatasituationdifferently.Politicalanalysis explaingovernmentconditionorpolicythatmightimpact4LifeIndonesia’sselling, includingtaxpolicies,regulation,infrastructure,andlaws.Economicanalysisfactorthe impactoftheeconomyonto4LifeIndonesia’sorganizationandprofitability,suchas unemploymentrate,inflation,materialcosts,andcurrencyexchangerates.Socialangle focusesonthesocialenvironmentandtheemergingtrendsamongsttheintendedmarket, suchastheirdemographics,education,culturalbackground,andlifestyleandattitude. Technologicalfactorsconsiderwhetherinnovationandrelateddevelopmentsmayimpact 4LifeIndonesia,themarket,ortheindustryofdietarysupplements.Thisnotonlycovers digitaltechnologyadvancements,butalsomanufacturingandlogistics.Legalfactorsputits centralpointonwhether4LifeIndonesiaoperatesaccordingtothelaw,whetherits consumerlaw,healthandsafety,andhowitdiffersfromonecountrytoanother.Lastly, environmentalfactorslookathow4LifeIndonesiainfluencesitsenvironmentandecology, especiallywiththerisingawarenessofcorporatesustainabilityresponsibility. 2.2.2Porter’sFiveForces ThefiveforcesframeworkwascreatedbyMichaelE.Porter,aHarvardBusinessSchool professor,andthedesignwasmeanttohelpcompanieslookatdifferentanglesbefore enteringanindustry.Doingthiswillincreasethecompany’sperformanceand decision-makingabilityinsolvingissues,measuretheindustry’scompetitiveness,and createacorporatestrategythatissuitablefortheindustry.ThePorter’sFiveForceshelps firmstoexploreforcesthatmightinfluencetheindustry’sprofitabilityandcompetitiveness (Bhaskar,etal.,2019). ThehorizontalforcesofthisframeworkareCompetitiveRivalry,ThreatofNewEntrants, andThreatofSubstitutes.Competitiverivalryistheforcethatfocusesonindicating intensityofrivalrywithintheindustry.Ifanewcompanyenterstheindustry,therewillbe 35 morecompetitivepressurethatcouldaffectpricesandprofitsoftheothercompanies.High competitionrivalrycanbeacknowledgedwhentherearesimilarproductsinonemarket thatofferidenticalfeaturesorsimilarbenefits,similarstrategiesusedbythecompeting firms,slowindustrygrowth,andthebarrierstoentryarelow(Llusar&Mercedes,2006). Thesecondforceisthethreatofnewentrants,theanalysisofhownewcompaniesorfirms thatenteranindustryimpactstheothers.Profitableindustrywillattractnewplayersthat mayormaynotchangetheindustrydynamics.Thiscanbemanagediftherearehigh barrierstoentry,suchasknowledgefrompatentsandrights,accesstotechnologyand infrastructure,governmentsupport,highinitialcapital,andthedifficultytosecureraw materialsandeffectivedistributionchannels.Thethirdforceisthethreatofsubstitute products,whichfocusesontheavailabilityofotherproductsfromoutsidetheindustrythat maymeettheneedsofthecustomers.Moresubstitutesorreplacementproductsmeansless profits,especiallyifitcostsless. FigureII.3Porter’sFiveForcesFramework Source:(Porter,2008) 36 Meanwhiletheverticalforcesaremadeoutoftwoforces,theBargainingPowerofBuyers andBargainingPowerofSuppliers.Thefourthoutofalloftheforcesisbargainingpower ofbuyers,whereitfocusesonhowmuchtheconsumer’sbuyingpowermeetstheactual productprices.Anydynamicsthathappentotheconsumer'stendencyandmoneypower canaffectthesales.Thelastforceisthebargainingpowerofsuppliersthatprovidesthe goodsandmaterialsornecessaryservices,includingworkforces.Thesuppliersdetermine theirterms,prices,andtimeline,andfirmswithintheindustrymustfollowitaccordingly. 2.2.3CompetitiveProfileMatrix(CPM) Analyzingcompetitorswithinthesameindustryisnecessaryasithelpsfirmstoidentify opportunitiesandthreatsthatlaterwillbeusedtomakedecisions.Competitoranalysiswill helptodriveanorganization’sstrategy(Adom,etal.,2016).Oneofthetoolsthatcanbe usedtobetterunderstandcompetitorsisCompetitiveProfileMatrix(CPM).Accordingto Zimmereretal.(2008),CPMisatoolthathelpscompaniestoassessthemselvesalongside theircompetitorsusingcriticalsuccessfactorswithintheirindustry.Therearethreestepsto doCPM,whicharefindingKeySuccessFactors(KSF),followedbyidentifyingafirmand theircompetitors’ratingforeveryKSF,andfollowedagainbymultiplyingtheweightof theratingforeachfactortogetatotalweightedscore. TableII.1ExampleofCompetitiveProfileMatrix(CPM) KeySuccessFactorsWeight CompanyA Competitor1 Competitor2 Score Weighted Score Score Weighted Score Score Weighted Score Innovation 0.25 4 1.00 4 1.00 3 0.75 Advertising 0.20 2 0.40 3 0.60 4 0.80 BrandName 0.20 1 0.20 4 0.80 2 0.40 ProductQuality 0.15 4 0.60 2 0.30 2 0.30 CustomerService 0.10 3 0.30 2 0.20 1 0.10 PriceCompetitiveness 0.05 3 0.15 3 0.15 4 0.20 37 TechnologicalCompetence0.05 3 0.15 1 0.05 2 0.10 Total 1.00 2.80 3.10 2.65 Source:(Sohel,etal.,2014) ThetableaboveshowedanexampleofaCPManalysis.Thefirststepisdeterminingkey successfactorsonthefirstcolumn.Thekeysuccessfactorsarefactorsviewedvaluableby customersorhavesignificantadvantageintermsofcost.Thesefactorsmayvaryfrom industrytoindustry,measuredinastudybyaskingdirectlytocustomerswhattheyfind importantinchoosingaproductorservicefromacompany.Thenacertainweightmustbe putoneachfactorwithatotalof1.00,eachaccordingtotheirimportance.Thesecondstep istogiveratingvaluesof1to4toeachfactorfromeachcompany.1representsmajor weakness,2isminorweakness,3isminorstrength,and4ismajorstrength.Inthelaststep, eachscorewillbemultipliedwiththepreviouslyassignedweight.Fromthetableabove,it canbeseenthatcompanyA(totalpoint2.80)isstillbehindcompetitor1(totalpoint3.10), especiallyonadvertisingandbrandname.Usingthatdata,companyAcanfocuson improvingtheirweaknessandtrytogetaheadoftheircompetitors. 2.2.4CustomerJourney5A’s PhilipKotlercreatedthe5A'sofcustomerjourneyorpathtomaptheirpositionthrough thesalesprocess.Thisframeworkwasmadetohelpfirmsunderstandtheirusersmore effectively,especiallywhatisimportanttothemtobecomealoyalcustomer.Byanalyzing theircustomerwiththe5A’s,afirmcandevelopanevenmoresmoothandprofitable purchasingprocess.TherearefivestagesofthecustomerjourneyaccordingtoKotler,they areAware,Appeal,Ask,Act,andAdvocate. Thefurtheracustomerisinthisframework,thehigheraretheirloyaltytoacertainbrand orcompanyinpurchasingproducts.AccordingtoKotler(2021),Aware,thefirstphaseis thetimewhereacustomerfirstknowsaboutabrand.Thechannelofmarketingthatleads totheirawarenesscouldbevarious,rangingfromtraditionaltodigitalmarketing.Their 38 purchaseactionsareusuallynotmanyorhighinmonetaryvalue,buttheystarttodevelop interestinthebrandthatmayleadtopurchaseaction.ThesecondphaseisAppeal,wherea potentialcustomerthatisalreadyawareofthebrandstartstofinditmorecompelling. Thesecustomersmightstarttolookformoreinformationaboutthebrand,whetherit's throughtheirwebsite,flyers,orreadingtestimonials.ThenextphaseisAsk,wherethe namedpotentialcustomersarelearningmoreaboutthebrand,evenaskingarepresentative ofthatbrandtogainevenfurtherinformationaboutit.Inthisphase,thepotentialcustomer isgettingreallyclosetomakingtheirpurchase.ThisphaseisfollowedbyAct,aphase wherethepotentialcustomerbecomesanactualcustomerbymakingapurchase.Thekind ofproductorservicepurchased,themonetaryvalueofit,andthecustomer’send-to-end experienceonthepurchasingprocess,allplaysapartinwhetherthecustomerwillgetto thenextphase,Advocate.Advocatorsarethosethatarenotonlylikelytomakethenext purchase,theyalsomightrecommendtheproductandservicestheyexperiencedtoothers viawordofmouth,whetherit'sinpersonorelectronically(eWOM). FigureII.4TheNewCustomerJourney5A’s Source:(Kotleretal.,2021) InMarketing4.0,Kotleretal.(2021)mentionedthattheframeworkusedtobeshapedlike afunnel,butithadexperiencedashift.Asthefigurebelowshows,itcanbeseenthateven thosewhoareawareofacertainproductmaynotappeal,ask,oract,buttheymightstill 39 advocateforit.Customerjourneysnolongerworkonlyinalinearway,ratherjumping fromoneanother.Forexample,therearecustomerswhowentdirectlytoactiondueto promotion,orpurchasewithoutlookingforinformation,evenadvocatingwithoutknowing theefficiencyoftheproductsimplybecausesomeonetrustworthyrecommendedittothem. Inconclusion,loyaltyisnotalwaysaboutthewholephase,butitisaboutanyonewho wouldrecommendtheproductandthosewhoappealtotheproductandtakeactionforit. 2.2.5MarketingMix4Ps Marketingmixisaconceptthatiscontinuouslybeingutilizedbymarketers.Oneofthe reasonsishowbeneficialitistomarketersincreatingstrategies,suchastounderstand which‘P’istheirstrengthandwhichistheirweakness,howtomaximizeoneandminimize theother,anditalsorevealsapartthatisn’tvisibletomarketersbeforehand.Withmultiple factors(thatallstartedwiththeletterP)inthemarketingmix,developmentshavebeen madeaccordingtowhatisconsideredrelatabletothecurrentmarketsituation.McCarthy developedtheoriginal4Pmarketingmixwhichincludesproduct,price,promotion,and place.Lateron,theother3Pwasaddedforfirmsthatfocusonsellingservicestotheir customers,theyarepersonnel,physicalassets,andprocedures(Jain,2013). FigureII.5The4PsMarketingMix Source:(TrueNorth,2023) The4Psareallconnectedandmeanttodefineallmarketingelementsnecessaryfora successfulpositioningmarketofferfollowingtheSTP.Productreferstothespecificgoods 40 orservicesthatarebeingofferedbythebrandtothemarketforanypurposeofmarketing, suchasacquisition,consumption,orfulfillingtheirneeds.Productscomeinmanyforms andhavetheirownuniquevaluepropositiontocompete.Pricereferstothewillingnessof customerstospendacertainamountofmoneytogetacompany’sproductorservice. Pricingreflectssupplyanddemandrelationshipsintheindustry,andcan’tbedonewithout carefulconsiderations,especiallytowardsprice-sensitivesegments.Promotionreferstothe sellingtechniquesthatsupportamarketingcampaign,beittraditionaladvertising,digital advertising,directselling,orpublicrelations.Greatproductswithagreatpricethatisnot properlycommunicatedthroughapromotionprogramisnotgoingtobringprofittothe company(Jain,2013). 2.2.6Segmenting,Targeting,andPositioning(STP) Creatingaprofitablebusinessinvolvesidentifyingthemostprofitablemarketsegments. Ratherthantryingtoapproacheverycategoryofthepopulationimmediately,brandscan trytofocusonthatparticularsegmentbeforetryingtopenetratetheothers.Eachsegment requiresdifferentmarketingstrategies,waystoapproach,andproductstodistribute. Methodssuchasmassmarketingareknownnowadaystoonlyleadcustomerstoan awareness,butlesslikelytoprogressinthecustomerjourneypath.Itisthepersonalized approachthatmovedcustomer’stoahigherpurchaseintention.STPorSegmenting, Targeting,andPositioningisamarketingapproachinunderstandingatargetaudienceand usingtheresultoftheanalysisasabasetomakestrategicmarketingdecisions(Camilleri, 2018). FigureII.6IllustrationofSegmenting(left),Targeting(middle),andPositioning(right) Source:(Unknown,n.d) 41 Marketsegmentationistheprocessofdividingabroadcustomerbaseintosub-groupsthat havesimilarcharacteristics,suchasneeds,interests,lifestyle,ordemographicprofiles. Eachsegmentwillrequireadifferentmarketingmix,thereforeithastobeidentifiedin detailandaccurately.Onceidentified,theirexpectationsorwhatisimportanttothemin purchasingaproductmustbeidentified,whetheritsproductquality,price,orthesocial valuesthatcomeswiththeproductorbrand.Thisidentificationprocesswillhelpmarketers tofindamoresystematicapproachinthefuture.Thetraditionalwaystosegmentamarket istoidentifythembydemographic,geographic,psychographic,behavioral,orproduct related(Camilleri,2018). Thenextphaseistargeting.Unlikesegmentationthatfocusesonidentifyingthemarket segments,targetingisaboutchoosingwhichsegmenttotargetandtospecialize.Themost importantpartistochoosethesegmentthatismostprofitableandifpossibleisleast adequatelyservedbycompetitors.Thethreestrategiesthatmightbeappliedinthisphase areundifferentiatedmarketing,differentiatedmarketing,andconcentratedmarketing. Undifferentiatedmarketingmeanstotreatallsegmentssimilarly.Thisapproachisunlikely tobeapplicableintoday’smarketsincetheyhavedifferentexpectationsinproducts. Differentiatedmarketing,ontheotherhand,isastrategywheremarketersfocuson multiplesegmentswithindividualofferingandmarketingplan.Lastly,concentrated marketingisastrategythatfocusesononeorveryfewsegments,mostlikelyduetoits highprofitabilityorreturnoninvestments.Whichstrategytousereallydependsonthe company’sresources,theavailabilityofproductportfolio,marketdiversity,and competitor’sstrategy(Camilleri,2018). Lastly,there’salsothepositioningphase.Thisisthepartwherecompaniesorbrands determinehowtheywanttopositionthemselvesinthemarketorintheircustomer’sminds, especiallycomparedtotheircompetitorsinthesameindustry.Inchoosingtheirposition, companiescanfocusontheirbenefitsthatcanbeserved,productdifferentiationorvalue 42 propositioncomparedtoothercompetitors,skillsandcredibilitiesoftheirteam,andmake surethatthepositionisstrongandhaslowimitability(Camilleri,2018). 2.2.7Valuable,Rare,Inimitable,Organized(VRIO) Animportanttooltoanalyzethecompany’sinternalresourcesandcapabilitiestoensureits competitiveadvantageistheVRIOframework.Accordingtothisframework,aresourceor capabilityofacompanymusthavefourimportantattributes,theyare:value,rarity, inimitability,andisabletobeexploitedintheorganizationalprocess. Valuereferstohowmuchtheresourceisvaluabletothecompany.Valuableresourcesare theattributesthatenabletheexploitationofopportunitiesorneutralizethreatsfromoutside. Itmustalsobeabletobringeconomicvalue,eitherit'stogenerateprofitortoprevent losses.Thisincludesthetangibleresourcessuchasbuildings,equipment,andinventories, aswellastheintangibleresourcesaswellastheintellectualproperty,brandrecognition, andcustomerrelationships.Rarityreferstohowraretheresourcesareandnotwidely availabletoothercompanies.Anattributethatisraremakesitmoredifficultfor competitorstoexploreinasimilarway.Thisincludestheproprietarytechnologyand uniqueprocesses.Inimitabilityreferstohowtheresourcesaredifficulttoimitatebyother competitors.Manywaystomakeanattributeinimitableareiftheyarepathdependent, haveacomplexrelationshipbetweenresources,sociallycomplex,havelegalproperty rights,andtoimitatewillrequirealengthyprocess.Thisincludesthepatentsandoverall complexprocesses.Lastly,organizationreferstohowmuchacompanyisabletoutilizethe resourcetotheefficientprocess.Thisincludestheabilitytocoordinateactivities,allocate resources,andmanageoperations.Overall,theVRIOframeworkwillhelptoassessthe resourcesandcapabilitiesanddeterminestrategiestocapitalizestrengthsandworkontheir weaknesses. 43 FigureII.7VRIOFrameworkIllustration Source:(Crowjack,2022) AnothercommontoolthatisusedquitesimilarlywiththeVRIOframeworkistheVRIN analysis.AlthoughtheVRIstandsforthesamefactor,Nstandsfornon-substitutable.The VRINframeworkhelpsfirmstoanalyzetheirresourcesandhowtheycanbesuperior comparedtoothers.Nevertheless,thisframeworkfocusesonlyontheresourcelevel,rather onthefunctionalityorusefulnessoftheresourceandcapabilities.TheVRIOframeworkis moreapplicableasitcanbedeeperontheresources’usetothecompany,howitis managedbythepeople,howmuchitcouldbenefitthefirm,andoverallgiveamore thoroughperspectiveonthecompetitiveadvantagecomparedtothecompetitors(Sultan, 2023). 2.2.8ValueChainAnalysis Lastly,anothertoolthatwillbeusedtoanalyzethecompetitiveadvantageofafirmisthe valuechainanalysis.AsconceptualizedbyMichaelPorterin1985,thisframeworkoutlines thesequentialseriesofactivitiesthroughwhichacompanyaddsvaluetoitsproductsor services.Thischainencompassesalltheinternalprocessesinvolvedindesigning, producing,marketing,delivering,andsupportingtheendproduct.Porteremphasizesthata firm'svaluechainreflectsitshistoricalevolution,strategicapproach,andunderlying 44 economicsofitsactivities.Porterdistinguishesbetweentwomaincategoriesofbusiness activitieswithinthevaluechain:primaryactivitiesandsupportactivities.Primaryactivities directlycontributetotransforminginputsintooutputs,encompassingactivitieslike inboundlogistics,operations,outboundlogistic,marketingandsales,andserviceafter sales.Ontheotherhand,supportactivitiesfacilitatetheefficiencyandeffectivenessof primaryactivities,suchashumanresourcemanagement,procurement,firminfrastructure, andtechnologydevelopment. FigureII.8TheValueChain Source:(InstituteofManagementAccountant,1996) ExpandingonPorter'sconcept,JohnShankandV.Govindarajanin1993proposeda broaderperspectiveofthevaluechain.Theydescribeitasacontinuumofvalue-creating activitiesstretchingfromrawmaterialsupplierstoend-useconsumers,emphasizingthe interconnectednessoffirmswithinanindustry.AccordingtoShankandGovindarajan,the industryvaluechaininitiateswithsupplierswhoproviderawmaterialsandcomponents, 45 followedbyvariousclassesofbuyersorendconsumers,andconcludeswiththedisposal andrecyclingofmaterials.Thisperspectiveunderscorestheholisticviewofvaluecreation, positioningfirmswithinalargernetworkofvalue-creatingprocesses.Insummary,value chainanalysisservesasastrategictoolforbusinessestounderstandthesequenceof activitiesthatcontributetothecreationofcustomervalue,encompassingbothinternal processesandexternalrelationshipswithintheindustryecosystem(Instituteof ManagementAccountant,1996). 2.2.9Strength,Weakness,Opportunity,andThreat(SWOT) SWOTAnalysisisoneofthephasesnecessarytomakeastrategicdecisionthathelpsto reachacompany'sgoals.Externalanalysishelpsfirmstoidentifythreatsandopportunities intheenvironment,andinternalanalysishelpsthemunderstandtheirstrengthsand weaknesses.Eachperspectivehelpstoimproveacompany’scompetitivecapabilitiesand chooseanappropriatestrategytocompetewithinaparticularindustry(GurelandTat, 2017). TableII.2PossibleOrganizationalSWOT InternalStrengthsandWeaknesses Environmental Opportunityand Threat AdvertisingDistributionLeadershipEconomicforces BrandnamesFinancialresourcesLocationsIndustryforces CompanyreputationGovernmentlobbyManagementPolitical-legal CostsHumanresourcesMarketshareSocialforces CustomerloyaltyLaborrelationsProductdifferenceTechnology Source:(GuretandTat,2017) Strengthsandweaknessesarethetwoaspectsthatweredrawninternally.Byidentifying theseaspectswithinthecompany,theycanbetterunderstandtheirresourcesand 46 capabilitiestobettercompete.Strengthsarethoseinternalaspectsthatmayhelpacompany reachtheirobjectives,andweaknessesaretheonesthatmightholdthemdown.Some aspectsthatmightbeastrengthorweaknesstoacompanyarelistedintableII.3. Strengthsshouldbeabletoanswerhowacompanycanstayaheadoftheircompetitors whenthey’refacedwithcertainsituations.Thisaspectistheonethatdefinesthe effectivenessandefficiencyofacompanycomparedtotheircompetitors.Havingastrong internalbaseisveryimportantasitisthefoundationofutilizingtheopportunityservedby theindustry.Ontheotherhand,weaknessistheinabilityofafirmtoperformsomething.It istheirdisadvantageandshowswherethingsarelesseffectiveandefficientcomparedto theircompetitors.Understandingacompany’sweaknesscanhelpthemtoidentifywhich aspectintheircompanythatshouldbeimproved,alsoavoidingfurtherproblemsand limitationsthatmightgrowbiggerinlong-termplansandstrategies(GurelandTat,2017). Whilststrengthandweaknessreferstowhathappensinsidetheorganization,opportunities andthreatsworkmorearoundtheorganization.Opportunitiesmeansconditionsthatmade itpossibleforanorganizationorcompanytohaveacertainactivity.Ithasapositive characteristiclikestrengthbutcomesfromoutsideofthecompany.Thesearedriving forcesoutsidethecompanytoallowthemtoovercomeweaknessorneutralize environmentalthreats.Threatreferstotheconditionsthatmaketherealizationofan activityorplanmoredifficult.Thecharacteristicisnegativeasitmakesacompanymore distanttotheirgoalsandnotfavorableforthecompany.Unlikestrengthandweaknessthat canbecontrolledbythecompany,opportunitiesandthreatsarebeyondcontrolandmust bewiselyhandledforittoworkwiththecurrent,notagainst. 2.2.8ValueProposition Craftingavaluepropositionisveryimportantbeforecreatingamarketingstrategy (Hassan,2012).Acompanyhastoputforthvaluethatalignswiththeconsumervalue, especiallyontheirmarketingactivities.Itisevenbetteriftheinvestmentandproduction 47 decisionsarebasedonthecustomers'perceivedvalueonthebenefitsofthecompany’s productsorservices.Astheenvironmentshifts,thecustomer'svalueshiftsalong.And companiesmustcontinuetoinvestfundsinmarketingresearchtogaininsightsandshape developmentplansaccordingly.Thiswillhelpthefirmtogaincustomersandoverpower theircompetitors. Avaluepropositionisawrittenstatementfocusingallthemarketingactivitiesontoa customerelementthatcreatesasignificantdifferentialwithintheircustomer’sdecision process,topreferacertainbrandovertheircompetitor(FifieldinHassan,2012).Thebest valuepropositionisacombinationofinternalcompanyandexternalvalue.Theinternal valuessuchasshareholders'perspectiveswillbeheavyonprofitandefficientcosting, meanwhilethecorporatevaluelieswithintheirmission,vision,andobjectives.Thesecan becollectedthroughcompanydiscussionsanddevelopedthroughoutthetimeline.Butthe othervalue,external,focusesoncustomersandwhatvaluewillsatisfythem.Atraditional pointofviewmightfocusonlyontheinternalvalues,butmodernmarketing5.0mustalso developinsightsfromthecustomerperspective. Acustomervaluecanbeanalyzedfromtheirpersonalandholisticpointofview.Fifield (2007)listedsixquestionsforacompanywhentheywantedtodeliveravaluestatement, theyare: 1)Whoarethetargetcustomers?Thisquestioncanbeansweredbyclearlyidentifyingthe targetmarketandwhichsegmentthatwantstobeacquired.