Strategic Marketing

Management Course Code

MKTM 632

Chapter I
Introduction to Marketing and
Marketing Strategy
Definition
• Marketing is the process of planning and
executing the conception, pricing, promotion
and distribution of ideas, goods and services to
create exchanges that satisfy individual and
organizational objectives.”
• AMA: ‘Marketing is the activity, set of
institutions, and processes for creating,
communicating, delivering, and exchanging
offerings that have value for customers, clients,
partners and society at large.’
Cont’d
• Marketing management is the art and science
of choosing target markets and getting, keeping,
and growing customers through creating,
delivering, and communicating superior
customer value.
Marketing operating at three levels:
1. as a culture- a set of values and beliefs
2. as a strategy- concerned with the choice of
products, markets and competitive stance
3. as the set of tactics - the seven Ps
The Seven Ps
The management process

• Management can be viewed as being largely an

attitude that reflects a willingness to debate
issues and resolve issues through the use of
appropriate techniques and procedures.
• Management may also be viewed in terms of
its responsibility for achieving desired
objectives which requires the selection of
means to accomplish.
Cont’d
• If the central question in the management
process is making decisions, what and how
decisions should be made.
• Both these issues will be dealt by following a
sequence of stages that reflects a problem-
solving routine.
• Stage One -strategic and marketing analysis
raises the question of where the organization is
now
• Stage Two - strategic direction where the
organization should go in the future
Cont’d
• Stage Three - strategy formulation
• Stage Four - evaluation of alternatives
• Stage Five - implementation of the chosen
means
• Within these stages are to be found the main
managerial activities of:
 Planning
 Decision-making
 Control.
Stages of Problem Solving routine
Strategic decisions and the
nature of strategy
• A strategy is a plan that integrates an
organization’s major goals, policies, decisions
and sequences of action into a cohesive whole
• Strategic decisions are concerned with seven
principal areas:
• the scope of an organization’s activities
• matching of the organization’s activities with
the opportunities
• matching of an organization’s activities with
its resources
Cont’d

• have major resource implications for

organizations
• influenced by the values and expectations of
strategists
• affect the organization’s long-term direction.
• are complex in nature
Cont’d

• Strategic decision making consists of three key

aspects: analysis, choice and implementation.
• Strategic analysis focuses on understanding
the strategic position of the organization
• Strategic choice has three aspects:
• The generation of strategic options
• The evaluation of strategic options
• The selection of a preferred strategy
Cont’d

• Strategic implementation is concerned with

translating a decision into action. It involves:
• Resource allocation
• Organizational structure
Strategic Management

• Strategic management concerns both the

formulation of strategy and how such strategy is
put into practice.
• It is the process by which the guiding members
of an organization envision its future and
develop the necessary procedures and
operations to achieve the future
• greater prominence is placed on implementation
Model of Strategic Management(Johnson
and Scholes 1999) with its Elements
Levels of Strategy
Three distinct levels of strategy have been
identified in a commercial context. These are:
1. Corporate strategy deals with the allocation of
resources among the various businesses or
divisions of an enterprise
2. Business strategy exists at the level of the
individual business or division, dealing primarily
with the question of competitive position
3. Functional level strategy, which is limited to
the actions of specific functions within specific
businesses.
Cont’d
• In organizations that lack strategic direction
devote their attention to cost cutting and to
shedding unprofitable divisions. In other
words, the focus has been on efficiency (i.e. the
relationship between inputs and outputs)
rather than on effectiveness (which is
concerned with the organization’s attainment
of goals).
• The responsibility for efficiency lies with
operational managers, with top management
having the primary responsibility for the
strategic orientation of the organization.
Cont’d

• Effectiveness in marketing terms is the ability

on the part of management to search out and
embrace changing markets and structures and
then reflect this in the marketing strategy.
• In crude terms, to be effective is to do the right
thing, while to be efficient is to do the (given)
thing right. An emphasis on efficiency rather
than on effectiveness is clearly wrong.
Efficiency Vs Effectiveness
Cont’d

• The above summarizes the principal

combinations of efficiency and effectiveness.
• An organization that finds itself in cell 1 is well
placed to thrive, since it is achieving what it
aspires to achieve with an efficient output/input
ratio. In contrast, an organization in cell 4 is
doomed, as is an organization in cell 2 unless it
can establish some strategic direction.
Cont’d

• The particular point to note is that cell 2 is a

worse place to be than is cell 3 since in the
latter the strategic direction is present to ensure
effectiveness, even if rather too much input is
currently being used to generate outputs. To be
effective is to survive, whereas to be efficient is
not in itself either necessary or sufficient for
survival
The Marketing/Strategy
Interface
• Strategic Marketing is the way a firm
effectively differentiates itself from it's
competitors by capitalizing on its strengths
(both current and potential) to provide
consistently better value to customers than its
competitors
• Marketing strategy involves achieving a
superior competitive position within a defined
market.
Cont’d

• Marketing strategy can by characterized by:

(a) analyzing the business environment and
defining specific customer needs
(b) matching activities/products to customer
segments, and
(c) implementing programs that achieve a
competitive position, superior to competitors.
Therefore, marketing strategy addresses three
elements – customers, competitors and internal
corporate issues
The Basis of Marketing Strategy
Cont’d

• Essentially, a marketing strategy aims to deliver

the following:
1 Segmentation - breaks the market down into
groups displaying common characteristics,
behaviours and attitudes.
2 Targeting - involves evaluating and selecting
market segments.
3 Positioning - Establishing a distinctive superior
position, relative to competitors.
Cont’d
Therefore, organizations must develop and
deploy processes, procedures and techniques that
ensure market strategy is:
• (a) relevant to the current/future business
environment,
• (b) sustainable,
• (c) generating optimum benefits to both the
organization and customers, and
• (d) correctly implemented.
• This is the process of strategic marketing
management.
Cont’d
• Strategic marketing management is the
process of ensuring our marketing strategy is
relevant and sustainable
• As a process, strategic marketing has three
distinct phases:
Strategic Analysis
Formulation of strategy
Implementation of the strategy
Cont’d

• Strategic planning logically precedes

marketing planning by providing a framework
within which marketing plans might be
formulated.
• Understanding the strategic situation
confronting an organization is an essential
starting point in developing a marketing
strategy.
Cont’d

• This understanding can be derived from an

assessment of:
 Organizational capabilities
 Threats from environmental forces
 Competitors’ strengths and weaknesses
 Customers’ needs
Differences between strategic
planning and marketing planning
Cont’d
• The strong interdependence of strategic and
marketing planning is clearly seen in the
following diagram. We can use this
interdependence to develop the marketing mix
into a set of elements from which a competitive
strategy might be developed. In this way the
organization should be able to challenge its
competitors from a position in which it can use
its relative strengths.
The strong interdependence of
strategic and marketing
planning
Cont’d
• The potential benefits of a strategic
underpinning to marketing planning are
probably apparent, but what about the problem
of implementation? If implementation is
ineffective, the carefully devised strategy will
be unable to help in improving the
organization’s performance. The question
becomes, therefore: ‘given a specific type of
strategy, what marketing structures, policies,
procedures, and programmes are likely to
distinguish high performing business units from
those that are relatively less effective, efficient,
or adaptable?’
Cont’d

• Part of the answer is undoubtedly the extent to

which the organization reflects a customer
orientation
• The issue of customer orientation has been
stated in terms of what is referred to as left-
handed and right-handed organizations.
Cont’d

• In the case of left-handed or financially-

driven organizations, it is suggested that the
key planning mechanism is the financial plan or
budget, with costs, expenses, debt and assets –
and the elements of the marketing mix – all
being controlled in order to achieve financial
goals. The consequence of this is that when
sales begin to slip there is a tendency to cut
back on areas such as advertising and R&D in
order to maintain or boost profits.
Cont’d

• By contrast, right-handed or market-driven

organizations have as their primary focus the
objective of satisfying customers. This involves
defining and understanding market segments
and then managing the marketing mix in such a
way that customers’ expectations are fully met
or exceeded.