Marketing Strategy

Lecture 1:

Strategic Marketing andThe Marketing Planning Process

Taufique HossainMarketing StrategyMKT 460Learning ObjectivesBe able to conceptualise marketing strategy.

Appraise the nature and processes of strategic marketing planning.

Assess the importance of marketing strategy/planning to a business and identify the kinds of things that can go wrong!

Marketing DefinedMarketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchange and satisfy individual and organizational objectives (AMA 1985).

Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably (CIM 2001).

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).

3Marketing is a young discipline.

Mutually Beneficial ExchangesPROVIDERSGoalsCUSTOMERS GoalsSurvivalFinancialSocialSpiritualEcologicaletcSolutionsBenefitsAltruismWell beingetcCustomer & Provider SatisfactionOFFERSProducts, services etcPurchases, support RESPONSESThe Concept of Market OrientationOrganization wide generation, dissemination, and responsiveness to market intelligence (Kohli and Jaworski 1990).

The organizational culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and thus, continuous superior performance for the business (Narver and Slater 1990).

Components and Context of Market OrientationMarket-led Organisational CultureCustomer OrientationCompetitor OrientationInter-functional Co-ordinationFocus on the Long TermFabric of the New Marketing ConceptCreate customer focus throughout the business.Listen to the customer.Define and nurture the organizations distinct competencies.Target customers precisely.Manage for profitability, not sales volume.Make customer value guiding star.Let the customer define loyalty.Fabric of the New Marketing ConceptMeasure and manage customer expectations.Build customer relationships and loyalty.Define the business as a service business.Commit to continuous improvement and innovation.Manage culture along with strategy and structure.Grow with partners and alliances.Destroy marketing bureaucracy.Resource-Based View of MarketingFollows from work on the resource based view of the firm in strategic management:

The locus of interest concerns resources and capabilities possessed by the firm, which can be deployed by its strategy to achieve competitive advantage and superior performance.

The source of superior performance lies in the possession and deployment of distinctive, hard to imitate or protected resources.

Marketing ApproachesProduct Push MarketingCustomer-Led MarketingResource-Based MarketingMarket NeedsOrganisational Capabilities

Organisational StakeholdersFocal OrganisationCustomersShareholdersManagersEmployeesSuppliersDistributors

Marketing and Performance Outcomes Market-Oriented CultureMarketing ResourcesMarket PerformanceFinancial PerformanceAssetsCapabilitiesCustomer Satisfaction & LoyaltySales Volume & Market shareSummary of Marketing FundamentalsFocus on the customer.Only compete in markets where you can establish a competitive advantage.Customers do not buy products.Marketing is too important to leave to the marketing department.Markets are heterogeneous.Markets and customers are constantly changing.

The Role of Marketing in Strategic ManagementIdentify and communicate customer wants and needs throughout the organisation.Determine the competitive positioning to match the needs of the customers with company capabilities.Marshal all relevant organisational resources to deliver customer satisfaction.Strategic Fit

Marketing PlanningFirst step is to define the business purpose or mission:

What business are we in?What business do we want to be in?

Mission statementA statement of the organizations purpose and what it wants to accomplish in the wider environment.

Components of MissionMissionObjectives and StrategyStrategic IntentVision of what you want to beMarket DefinitionCustomer TargetsCompany ValuesGuiding PrinciplesCompetitive PositioningDifferential AdvantageDistinctive CompetenciesCore skillsThe Marketing Strategy ProcessIndustry AnalysisMarket TargetCompetitive AdvantageOrganisationControlCompetitive PositioningImplementationCore StrategyMarketing MixCompany AnalysisBusiness PurposeEstablishing the Core StrategyAnalysis of organizational resources.

Analysis of the markets served.

Analysis of SWOT constituents.SWOT AnalysisInternalExternalStrengthsWhat are we good at relative to competitors?OpportunitiesWhat changes are creating new options for us?WeaknessesWhat are we bad at relative to competitors?ThreatsWhat emerging dangers must we avoid or counter?Good PointsDanger PointsSWOT Strategic ImplicationsOpportunitiesThreatsStrengthsWeaknessesExploit existing strengths in areas of opportunityUse existing strengths to counter threatsBuild new strengths first to take advantage of opportunitiesBuild new strengths to counter threatsCore StrategyImprove PerformanceIncrease SalesImprove ProductivityExpand MarketIncrease ShareIncrease MarginsReduce CostsNew usesNew usersIncrease use frequencyNew products

Win shareAcquire shareCreate alliancesIncrease priceAdd valueChange product mixCapital costsFixed costsVariable costsCreation of Competitive PositioningMarket targets

Differential advantage:

Cost leadershipDifferentiationFocusReadingHooley et al. Chapters1 and 2.

Nohria, Joyce, and Robertson (2003), What Really Works, Harvard Business Review, July, pp. 42-53.

Piercy and Morgan (1994), The Marketing Planning Process: Behavioral Problems Compared to Analytical Techniques in Explaining Marketing Plan Credibility Journal of Business Research, 3, pp.167-178.