Strategic Marketing: Week 1

STRATEGIC MARKETING
WEEK 1
Rizwan Umer
LLB, MSc Strategic Marketing Management (England)
• 2
Today’s
By the end of this session you should:
Will have an idea of the evolution of marketing
Be able to outline the elements of strategy
Be able to distinguish between corporate, business and

marketing strategy
Understand some of the key factors that affect the success

of strategies
• 3
4 Eras of Marketing
• Pre-Marketing: (before 1900)
• Distinctive Characteristics:
• No distinguishing field of study
• issues are embedded within the field of economics
• 4
Era I: Founding the Field of Marketing (1900-1920)
Development of first courses with “marketing” in

title.
Emphasis on defining purview of marketing’s

activities as economic institution.
Focus on marketing as distribution.

• 5
Era II: Formalizing the Field (1920-50)
• Development of generally accepted foundations

or “principles of marketing.”
• Establishment of knowledge development

infrastructure for the field.
• Professional association (AMA), conferences,

journals (Journal of Retailing and Journal of
Marketing).
• 6
Era III: A Paradigm Shift—Marketing,

Management, and the Sciences (1950-80)
• Growth boom in U.S. mass market and

marketing body of thought.
• Two perspectives emerge to dominate the
marketing mainstream:
• (1) the managerial viewpoint and
• (2) the behavioural and quantitative sciences as keys
to future knowledge development.
• Knowledge infrastructure undergoes major
expansion and evolution.
• 7
Era IV: The Shift Intensifies—A Fragmentation

of the Mainstream
• New challenges arise in business world: short-term

financial focus, downsizing, and globalization.
• Dominant perspectives are questioned in philosophy of

science debates.
• Knowledge infrastructure expands and diversifies into

specialized interest areas.
• 8
Marketing Myopia
• What is myopia?
 Nearsightedness--not inherited. It can be

prevented.
• Short sighted and inward looking approach to
marketing that focuses on the needs of the firm
instead of defining the firm and its products in
terms of the customers' needs and wants.
• 9
A few quotes
• Markets don’t buy anything - customers do Tom Peters
• There’s only one valid definition of business purpose

• To create a customer Peter Drucker
• To create and keep a customer Ted Levitt
• The sole purpose of strategic planning is to enable a

company to gain, as efficiently as possible, a sustainable
edge over its competitors Kenichi Ohmae
• 10
Primary Question?
• “What business are you really in?”
• Focus on effectiveness (doing the right things) and

innovation
• Not on efficiency (doing what you do well)
• “Organizations must learn to think of itself not as

producing goods or services but as buying customers,
as doing the things that will make people want to do
business with it.” …….Ted Levitt
• 11
Contd.
• To focus too much on the competition means
you’re relying on them to do their marketing
job right Michael Swavely (Compaq
Computers)
• You can’t just ask customers what they want

and then try to give that to them. By the time
you get it built, they will want something new.
Steve Jobs
• 12
What is Marketing?
• 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. (AMA 2008 definition)
• 13
Fabric of New Marketing Concept

1. Create customer focus 9. Measure and manage
throughout the customer experiences
business 10. Build customer
2. Listen to the customer relationships and loyalty
3. Define and nurture the 11. Define the business as
organization’s distinct a service business
competencies 12. Commit to continuous
4. Define marketing as improvement and
marketing intelligence innovation
5. Target customers 13. Manage culture along
precisely with strategy and
6. Manage for profitability structure
not for sales 14. Grow with partners
7. Make customer value and alliances
the guiding star 15. Destroy marketing
8. Let the customer define bureaucracy.
loyalty
What is strategy?
The elements of strategy might be defined as:
• Who? Where are we going to compete (and where not)? Target
markets: what types of customer/business have the most
attention/investment?
• What? In what way are we going to compete (and what not)? What are
we/can we be good at (value proposition)? How do we gain/seek/build
competitive advantage? How do we deliver customer value?
• How? How do we deliver our value proposition? Resources and
competences. Organic (internal), partnerships, acquisitions
What identifies a strategic choice? Clear impact on long term prospects:

sustainable competitive edge
• 15
Creating a distinctive strategic position

Adapted from Markides (2004)
• 16
Strategic management – a similar view

Lynch (2009)
• Strategy is developed by a consideration of the
resources of the organisation in relation to its
environment, the prime purpose being to add
value.
• Five key elements to strategy:
• Sustainable decisions: what?
• Processes to deliver strategy: how?
• Competitive advantage: why?
• Exploitation of linkages between the organisation and its
environment: where?
• Vision: when? With what result?
What is strategy anyway?
Piercy (2009)
• Strategy is about
• competitive arenas: where we will be active?
• vehicles: how we will get there?
• differentiators: how will we win in the
marketplace?
• staging: speed and sequence of our competitive
moves
• economic logic: how will we obtain returns?
What is strategy anyway?
Piercy (2009)
• A simple view of strategy
• being best at the things that matter most to customers
• finding new and better ways of achieving this
• Strategy should not be so complex no-one can

understand it
• What strategy is NOT
• strategic planning
• analytical techniques
• operational efficiency
• 19
What is Corporate Strategy?
“Corporate strategy is the way a company creates

value through the configuration and
coordination of its multimarket activities”
(Collis and Montgomery, 1997, p. 5)
• This definition has 3 important aspects:

• Value Creation
• Configuration
• Coordination
• 20
A Diversified Company has 2 Levels of Strategy
Business Level Strategy--How to create competitive advantage

in each business in which the company competes
- low cost
- differentiation
- integrated low cost/differentiation
- focused low cost
- focused differentiation
Corporate-Level Strategy-- How to create value for the
corporation as a whole
• 21
Summary of ways in which strategy

may evolve
• Strategy as design – resource-based
• Strategy as experience – adaptation through the

experience of managers; culture-driven (taken-for-
granted assumptions); resolved through bargaining
and negotiation
• Strategy as ideas – emergent strategy; day-to-day

coping with uncertain and changing environment;
innovative responses
• 22
Levels of strategic planning

• Corporate
• Overall direction of the company and management of
its businesses; across all units of the organisation
• Business
• Involves all the resources which must be brought to
bear on the identified markets
• Competitive and cooperative strategies
• Functional, including Marketing
• Maximise resource productivity (functional strategies)
• Marketing: based on markets, customers, products
• 23
Marketing approaches
Hooley Piercy Nicoulaud 2008

• 24
HR, Operations, Finance –
Organisational value drivers enables value drivers which also
• Core capabilities feed into financial value
• Skills
• Systems Marketing value drivers
• Marketing knowledge
Creating
• Leadership
• Motivation • Differential advantage shareholder
ena
• Customer loyalty value
ble • Strategic relationships
s
• Market selection
Financial value drivers
• Strong brands
• Revenue
ena • Margin
ble
s • Cash flow
• Investment
• 25
The process of going to market

Creativity
Innovation
Reinvention
Processes that define value

Eg market knowledge and learning, CRM, research, intelligence
Processes that create value Customer

Eg new product development, innovation,
brand development, strategic relationships value
Processes that deliver value
Eg channels, supply chain, customer service
Resources
Capabilities
Strategic relationships
Customer value
• Sources of superior customer value
• our capabilities, skills and resources
• our organizational processes
• our innovation and change processes
• our commitment and service capabilities
• 27
Value concepts
• Value proposition: the implicit promise to customers of the
value combination offered – differential advantage; price;
opportunity cost
• Value-driven operating model: operating processes,
management systems, structure and culture needed to
deliver on value proposition [Value of intangible assets:
marketing knowledge; brands; customer loyalty; channel
relationships.]
• Competitive advantage comes from the integration of the
two elements
• Embedded in core values, core purpose, envisioned future
(big hairy audacious goal)
Collins, Porras 1996

• 28
Big hairy audacious goals

Porras and Collins (1996)
• Ambitious, even outrageous, goals

• Motivate people and focus them toward concrete
accomplishments.
• Symbian: To become the most widely used operating system in
the world.
• Twitter: To become "the pulse of the planet."
Instant mission kit • 29
Mission statement components

We want to be
… a market leader
… a total quality supplier
… a socially responsible producer
… a green/environmentally friendly firm
… a caring employer
… a safeguarder of shareholder interests
… a global player
… a provider of excellent service
… dedicated to improving life on this planet
… a good corporate citizen
… a customer-oriented organization
… a responsible partner with distributors
… a builder of human dignity
… with the imagination to think bigger
… respectful of nature and living things
• 30
A structured model of mission
Internal External
Organizational Product-
philosophy market domain
What do we Where are we

want to be? going to operate?
Broad Mission Broad

Narrow statement Narrow
Organizational Critical success
key values factors
How do we want What do we have

our people to to be good at?
behave?
Internal External
• 31
Strategic fit
• 32
The strategic pathway

Piercy 2009
Strategic thinking and

thinking strategically
Market
sensing Strategic
and market Customer
learning choices value Strategic
strategy and strategy relationships
targets and and
positioning networks
Strategic
transformation
and strategy
implementation
• 33
Is strategy love or war?

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STRATEGIC MARKETING

Will have an idea of the evolution of marketing

Be able to outline the elements of strategy

Be able to distinguish between corporate, business and

Understand some of the key factors that affect the success

• Pre-Marketing: (before 1900)

Era I: Founding the Field of Marketing (1900-1920)

Development of first courses with “marketing” in

Emphasis on defining purview of marketing’s

Focus on marketing as distribution.

Era II: Formalizing the Field (1920-50)

• Development of generally accepted foundations

• Establishment of knowledge development

• Professional association (AMA), conferences,

Era III: A Paradigm Shift—Marketing,

• Growth boom in U.S. mass market and

Era IV: The Shift Intensifies—A Fragmentation

• New challenges arise in business world: short-term

• Dominant perspectives are questioned in philosophy of

• Knowledge infrastructure expands and diversifies into

 Nearsightedness--not inherited. It can be

• There’s only one valid definition of business purpose

• The sole purpose of strategic planning is to enable a

• Focus on effectiveness (doing the right things) and

• “Organizations must learn to think of itself not as

• You can’t just ask customers what they want

Fabric of New Marketing Concept

What identifies a strategic choice? Clear impact on long term prospects:

Creating a distinctive strategic position

Strategic management – a similar view

• Strategy should not be so complex no-one can

What is Corporate Strategy?

“Corporate strategy is the way a company creates

• This definition has 3 important aspects:

Business Level Strategy--How to create competitive advantage

Summary of ways in which strategy

• Strategy as experience – adaptation through the

• Strategy as ideas – emergent strategy; day-to-day

Levels of strategic planning

Hooley Piercy Nicoulaud 2008

The process of going to market

Processes that define value

Processes that create value Customer

Collins, Porras 1996

Big hairy audacious goals

• Ambitious, even outrageous, goals

Mission statement components

A structured model of mission

What do we Where are we

Broad Mission Broad

How do we want What do we have

The strategic pathway

Strategic thinking and

Is strategy love or war?

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