Strategic Marketing

Learning Objectives
Recognize the three strategic C. Understand the importance of Strategic Marketing Determine the characteristics of Strategic Marketing Visualize the future of Strategic Marketing Comprehend the process of Strategic Marketing

The Concept of Strategy

Evolution of Business Strategy
Long term Planning of the Firm
Strategy is the determination of the basic, long term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary to carry out these goals (Chandler, 1962).

Capability-Opportunity fit
Strategy is a mediating force between the organization and its environment; there are consistent patterns of streams of organizational decisions to deal with the environment (Mintzberg, 1979)

The Concept of Strategy

Planning to gain Competitive Advantage
The job of a strategist is to achieve superior performance, relative to competition, in the key factors for the success of business (Ohmae, 1982) Porter (1985) defines strategy as a central vehicle for achieving competitive advantage.

Copability in a Turbulent Environment

Companies are facing unprecedented uncertainty due to global competition, pathbreaking technology, shifting consumer tastes and everchanging exchange rates. Shift from matching ability to coping ability in a turbulent environment.

The Concept of Strategy

Different Approaches to Strategy Formulation
Strategic hierarchy Shotgun strategies vs rifle strategies Street smart planning vs formal planning Intuitive planning vs analytical planning Generic strategies Strategic intent Strategic posture Logical Incrementalism Proactive strategies vs Creative Strategies Random Walk Strategy as a Revolution.

Strategic hierarchy
Mission Objectives Goals

SWOT Analysis
Strategy Structure Management Control and Information Systems

Shotgun strategies vs rifle strategies

Define the target market, understand the needs and develop products according to tastes Develop good products as defined by technologists and make them available in the market. Street smart planning vs formal planning

Intuitive planning vs analytical planning

9 II. High Intuition - based Strategy (1,9) V. High Logic and High Intuition Strategy (9,9)

I n t u i t i o n

IV. Compromise Strategy ( 5.5 )

I. Cessation of Any Type of Strategy (1,1) 1 Logic

III. High Logic -based Strategy (9,1) 9

Generic strategies
Overall cost leadership Differentiation Focus

Strategic intent
Setting-up ambitious goals (Hamel and Prahalad 1989)

Strategic posture
Proactive strategy Crisis management strategy Reactive strategy

Logical Incrementalism
One step at a time processes

Proactive strategies vs Creative Strategies

Changing in accordance with the change anticipated Creative approach enables the company engineer changes to suit itself.

Random Walk
Steps taken in random directions without much analysis or evaluation.

Strategy as a Revolution
The companies that overturn the industrial order.

Marketing Concept
Understand the needs and wants of people and satisfy them Find wants and fill them Make what you can sell instead of trying to sell what you can make We have to stop marketing makeable products and learn to make marketable products Love the customer not the product

Shifts in Marketing Approach

Old Approach New Approach

Independent buyer seller relationship

Transaction based relationship Uniform products for segments Top priority to comfort and convenience of seller Monologue (communication through mass media) Marketing activity to be carried out by marketing department

Interdependent buyer-seller relationship

Mutually beneficial relationship Customized products for individuals Top priority to maximize the joy of procurement and use by buyer Dialogue (face-to-face interaction with customer) Marketing activity to be carried out by everyone in the organization.

Business Strategy vs Marketing Strategy Strategic Linkages

Corporate strategy
Strategic Marketing Marketing Management

Strategic Marketing vs Marketing Management Item Strategic Marketing Marketing Management Short term Marketing mix decisions

Time frame Scope

Long term
Product market decisions and competitive strategies

Decision Bottom-up making process

Top-down

Item

Strategic Marketing

Environ ment scan Nature Ever-evolving to of plans accommodate new developments Strategic Proactive posture
Strategic Creativity and approach originality

Marketing Management Dynamic tracking on Snapshot view at a continuous basis fixed at intervals
Fixed for the planning period Reactive

Logical incrementalism

Strategic Marketing
Strategic marketing provides frameworks and techniques for effective strategies
Environmental Analysis Customer Analysis Competitor Analysis Company Analysis Market Analysis Marketing Mix Analysis Strategy Formulation

External Analysis
External Analysis
Strategic Decisions Where to compete How to compete

Identification Trends/future events Threats/Opportunities Strategic uncertainties

Analysis Information-need areas Scenario analysis

Strategic Uncertainties
Will a major firm enter?

Strategic Decisions

Investment in a product market Will a cream-based dessert product Investment in a cream-based be accepted? product Will technology be replaced? Investment in a technology Will computer-based operations Investment in a new system be feasible with current technology? How sensitive is the market to A strategy of maintaining price? price parity what will be the future demand?
-----Performance improvements? ------Competitive technological development? -----Financial capacity of health care industry?

Customer Analysis
Segmentation Who are the biggest customers? The most profitable? Do the customers fall into any logical groups based on needs, motivations or characteristics? How could the market be segmented into groups that would require a unique business strategy?

Customer Analysis
Customer Motivations What elements of the product/service do customers value most? What are the customers objectives? What are they really buying? How do segments differ in their motivation priorities? What changes are occurring in customer motivation? In customer priorities?

Customer Analysis
Unmet Needs Why are some customers dissatisfied? Why are some changing bands or suppliers? What are the severity and incidence of customers problems? What are unmet needs that customers can identify? Are there some of which consumers are unaware? Do these unmet needs represent leverage points for competitors?

Competitor Analysis
Who are the competitors Against whom do we usually compete? Who are our most intense competitors? Less intense but still serious competitors? Makers of substitute products? Can these competitors be grouped into strategic groups on the basis of their assets, competencies and/or strategies? Who are the potential competitive entrants? What are their barriers to entry? Is there anything that can be done to discourage them?

Competitor Analysis
Evaluating the Competitors What are their objectives and strategies? Their level of commitment? Their exit barriers? What is their cost structure? Do they have a cost advantage or disadvantage? What is their image and positioning strategy? What are the most successful/unsuccessful competitors? Why?

Competitor Analysis
What are the strengths and weaknesses of each competitor or strategic group? What leverage points (our strategic weaknesses or customer problems or unmet needs) could competitors exploit to enter the market or become more serious competitors? Evaluate the competitors with respect to their assets and competencies. Generate a competitor strength grid.

Concept of strategic marketing

Within a given environment, marketing strategy deals essentially with the interplay of three forces known as the strategic three Cs: the consumer, the competition, and the corporation. Marketing strategies focus on ways in which the corporation can differentiate itself effectively from its competitors, capitalizing on its distinctive strengths to deliver better value to its customers.

Characteristics of Marketing Strategy

a clear market definition; a good match between corporate strengths and the needs of the market;

and superior performance, relative to the competition.

Importance of Strategic Marketing

Marketing plays a vital role in the strategic management process of the firm. The experience of companies well versed in strategic planning indicates that failure in marketing can block the way to goals established by strategic planning.

Characteristics of Strategic Marketing

Emphasis on Long-Term Implications.

Strategic marketing is a commitment, not an act.

Varying Roles for different products /Markets. Strategic marketing starts from the premise that different products have varying roles in the company. Organizational Level. Strategic marketing is conducted primarily at the business unit level in the organization.

Characteristics of Strategic Marketing

Corporate Inputs:
Corporate culture ~ refers to the style, whims, traits, taboos, customs, and rituals of top management.

Corporate publics ~ are the various stakeholders with governments and society constitute and organizations stakeholders. Corporate resources ~ include the human, financial, physical, and technological assets/experience of the company.

Characteristics of Strategic Marketing

Relationship to Finance.
Strategic marketing decision making is closely related to the finance function. Its very important of maintaining a close relationship between marketing and finance, and, with other functional areas of a business. In recent years, frameworks have been developed that make it convenient to simultaneously relate marketing to finance in making strategic decisions.

Future of Strategic Marketing

The battle for marketing share is intensifying in many industries as a result of declining growth rates. Deregulation in many industries is mandating a move to strategic marketing. Many companies in hitherto nonmarketingoriented industries are attempting to gain market share through strategic marketing.

Future of Strategic Marketing

Shifts in the channel structure of many industries have posed new problems. More and more countries around the world are developing the capacity to compete aggressively in world markets. The fragmentation of markets - the result of higher per capita incomes and more sophisticated consumers.

Future of Strategic Marketing

In planning an early entry in the marketplace, strategic marketing achieves significance. To successfully develop corporate imagination and expeditionary policies, companies need strategic marketing.

The Process of Strategic Marketing