Strategic Marketing

LECTURE 1 9-02-2014

What is Marketing?
Marketing is a process by which companies create

value for customers and build strong customer relationships to capture value from customers in return (Kotler and Keller, 2012). Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders (American Marketing Association, 2004).

What is Marketing?
The activity, set of institutions, and processes for

creating, communicating, delivering and exchanging offerings that have value for customers, partners, and society at large (American Marketing Association, 2007).
Meeting customer needs profitably OR Building profitable relationships.

Marketing vs. Marketing Management

Marketing is a concept, the essence of which is that

customer should be the focus of a companys marketing efforts. While marketing management is a process which is used as a vehicle for implementing marketing concept. The process typically involves:

(a) identifying a target segment; and

(b) determining a mix of product, price, promotion and distribution variables (called marketing mix) to satisfy the need of the chosen segment

What is Strategy?
Managers face three central questions in evaluating

their companys business prospects:

Whats the companys present situation? Where does the company need to go from here? How should it get there?

Whats the companys present situation? prompts

managers to evaluate

industry conditions and competitive pressures, the companys current performance and market standing, its resource strengths and capabilities, and its competitive weaknesses.

What is Strategy? (Cont)

Where does the company need to go from here? pushes

managers to make choice

about the direction the company should be headed

what new or different customer groups and customer needs it should endeavor to satisfy, what market positions it need to be staking out, what changes in its business makeup are needed.

How should it get there? challenges managers to craft

and execute a strategya full-blown action plancapable of moving the company in the intended direction, growing its business, and improving its financial and market performance.

What is Strategy? (Cont)

A companys strategy is managements action

plan for running the business and conducting operations. Thus a companys strategy is all about how

how management intends to grow the business, how it will build a loyal clientele and outcompete rivals, how each functional piece of the business (research and development, supply chain activities, production, sales and marketing, distribution, nance, and human resources) will be operated, how performance will be boosted.

What is Strategy? (Cont)

A companys strategy consists of the competitive

moves and business approaches that managers are employing to grow the business, attract and please customers, compete successfully, conduct operations, and achieve the targeted levels of organizational performance.

What is Strategy? (Cont)

A strategy is a fundamental pattern of present and

planned objectives, resource deployments, and interactions of an organization with markets, competitors, and other environmental factors (Walker and Mullins, 2006).

 This definition suggests that a strategy should

specify

(1) what (objectives to be accomplished), (2) where (on which industries and product-markets to focus), and (3) how (which resources and activities to allocate to each product-market to meet environmental opportunities and threats and to gain a competitive advantage).

The Components of Strategy

Scope. refers to the breadth of strategic domain of an

organization

the number and types of industries, product lines, and market segments it competes in or plans to enter.

Goals and objectives. Strategies also should detail

desired levels of accomplishment on one or more dimensions of performance. Resource deployments. Deciding how resources are to be obtained and allocated, across businesses, product-markets, functional departments, and activities within each business or product-market.

The Components of Strategy (C0nt)

Identification of a sustainable competitive advantage.

how the organization will compete in each business and productmarket within its domain. How can it position itself to develop and sustain a differential advantage over current and potential competitors? To answer such questions, managers must examine the market opportunities in each business and product-market and the companys distinctive competencies or strengths relative to its competitors.

Synergy. Synergy exists when the firms businesses,

product-markets, resource deployments, and competencies complement and reinforce one another. Synergy enables the total performance of the related businesses to be greater than it would otherwise be: The whole becomes greater than the sum of its parts.

The Hierarchy of Strategies

(1) Corporate strategy,

(2) Business-level strategy, and

(3) Functional strategies

What is Marketing Strategy?

The primary focus of marketing strategy is the

effective allocation and coordination of marketing resources and activities to realize the firms objectives within a specific product-market. (Walker et al., 2006)

What is Marketing Strategy? (Cont..)

Marketing strategy refers to an organizations

integrated pattern of decisions that specify its crucial choices concerning

marketing activities to perform and the manner of performance of these activities, and the allocation of marketing resources among markets, market segments and marketing activities toward the creation, communication and/or delivery of a product that offers value to customers in exchanges with the organization and thereby enables the organization to achieve specific objectives. (Varadarajan, 2010).

What is Marketings Role in Formulating and Implementing Strategies?

The essence of strategic planning at all levels is identifying

threats to avoid and opportunities to pursue. The primary strategic responsibility of any manager is to look outward continuously to keep the firm or business in step with changes in the environment. Marketing managers occupy positions at the boundary between the firm and its customers, distributors, and competitors, they are usually most familiar with conditions and trends in the market environment.

What is Marketings Role in Formulating and Implementing Strategies? (Cont..)

Consequently, they are not only responsible for developing strategic plans for their own productmarket entries, but also are often primary participants and contributors to the planning process at the business and corporate levels as well.

Market-Oriented Management
Marketing concept holds that the planning and

coordination of all company activities around the primly goal of satisfying customer needs is the most effective means to attain and sustain a competitive advantage and achieve company objectives over time.