Introduction to

Strategic Marketing Management

Faisal K. Qureishi
Agenda
1. Marketing and its Strategic Role
2. Competencies and Core
Competencies
3. Competitive Advantage and its
Sources

The Primary Purpose of
Marketing
Societal process by which individuals and
groups obtain what they need and want,
by creating, offering and freely
exchanging products and services of
value with others.
What is Marketing
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 goals.
The Role of Strategy
Difference between:
Vision: Futuristic in intent describes where an
organization would like to be in the next 5 10 years
or more
Mission: Typically defines business operations,
focuses on products, markets, customers and value
proposition that distinguish the organization
Strategy: Describes how the organization will achieve
its vision and continue to sustain and improve its
mission

Levels of Strategy
1. Functional-level strategy: a plan of action to
strengthen an organizations functional and
organizational resources, as well as its coordination
abilities, in order to create core competencies
2. Business-level strategy: a plan to combine
functional core competences in order to position
the organization so that it has a competitive
advantage in its domain
Levels of Strategy
3. Corporate-level strategy: a plan to use and develop
core competences so that the organization can, not
only protect and enlarge its existing domain, but
also expand into new domains
Competencies & Core
Competencies
Competencies are resource based strengths enjoyed
by an organization; may be confined to specific task
and specializations
Core Competency is an organizations most
cherished and important resource-based strength;
mostly cross-functional in nature
Competitive Advantage is gained when an
organizations successfully leverages its core
competency primarily with the help of effective
marketing

Where would you place Marketing Strategy?
Corporate



Business




Functional
Operational & Tactical
Importance of Marketing Strategy
To develop a competitive advantage, so
that an organization an organization
should:
1. Perform marketing activities at a cost
lower than that of its rivals, or
2. Perform marketing activities in a way
that clearly differentiates its goods and
services from those of its rivals
Processes in Strategic
Marketing Management
1. Aligning with the organizations
vision, mission, and business
strategy
2. Identifying and framing market
growth opportunities
3. Formulating product-market
strategies
4. Ensuring implementation of
strategy
5. Evaluating, controlling and
developing recovery strategies
Business Definition
By defining a business from a
customer or market perspective
an organization is appropriately
viewed as:
a customer satisfying endeavor
a goods-producing or service delivery
enterprise.
not
Products and services are transient, as is often
the technologies or means used to produce and
deliver them. Basic customer needs are more
enduring. (Encyclopedia Britannica)
An organization should define a business
by: (Product-Market-Customer Scope)

The type of customers it is currently
serving
The particular needs of those customer
groups it is currently trying to satisfy
The means or technology by which the
organization is satisfying the customer
needs
What business are we in?
Competitive Advantage
Hallmark of High Performance Business
Something of value that your firm provides to
the market in comparison to the competitors
which enables the firm to substantially
improve its financial performance
VALUE
WILLINGNESS
TO PAY
WILLINGNESS
TO SUPPLY
PRICE
COST
VALUE TO BUYERS
PROFIT MARGIN TO FIRM
VALUE TO SUPPLIERS
The Value Chain
The value chain provides a map of firms capabilities
and allows systematic search for core competencies
Infrastructure
Human Resources
Research and Development (Innovation)
Materials Procurement
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Primary Activities
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Marketing Strategy and Coherence
Business
Strategy
Marketing
Strategy
Other
Functional
Strategies
Tools for Building Competitive Advantage
Resources are inputs into a firms production processes:
Tangible Resources Intangible Resources
Financial resources Technological
resources
Physical resources
Innovative
resources
Human resources
Reputation

Organizational resources

Organizational Resources consist of the capability, leadership
and vision of the top-management
CRITICAL FACTORS FOR COMPETITIVE ADVANTAGE
COMPETITIVE
ADVANTAGE
PROFITABLE
RARE
INIMITABLE
TRANSFERRABLE
NON-SUBSTITUTABLE
CRITICAL FACTORS FOR
COMPETITIVE ADVANTAGE
Profitable is the CA profitable for the company as well
as (valuable) to the customer?
Rare how many rival firms already possess this
resource/capability?
Inimitable do firms face a cost disadvantage in
obtaining this resource/capability compared to firms that
already have it?
Non-substitutable are there strategic alternatives
available to other firms and customers?
Transferrable can the competitive advantage be used
to enter new domains?
A Competitive Advantage enables a firm to:
Outperform competitors
Grow despite competitors
Competitive Advantage is found in:
Products that are different and better than
competitors
Alternative distribution channels
Pricing and cost structures
Imitation
Too often firms make the mistake of imitating
other firms resource strengths and
capabilities to develop a competitive
advantage
Disadvantages of Imitation
Firms trying to imitate another firms core
competence are at a cost disadvantage
relative to rivals due to:
Unique Organizational Design
Human Capital
Cultural Differences
Organizational Design consists of organization
structure, technology and manner of coordination
amongst its personnel and departments
Building Blocks of Competitive
Advantage
Efficiency
Innovation Quality
Customer
Responsiveness
Lower Costs
Higher Prices
Competitive Advantage via Efficiency
Manufacturing Economies of scale/Learning
curve; Reducing variability

Marketing Building brand image / customer loyalty

Infrastructure Multi-purpose
facilities/equipment/cutting-edge technology

Human Resources Training/Developing
skills; team-work
Performance incentives

R&D Manufacturing OR
Process innovation

Materials management
(Supply Chain) JIT, Strategic Alliances, etc.
Competitive Advantage via Quality
Manufacturing Trace and eliminate defects
Input from employees

Marketing Focus on customer
feedback for enhancing quality

Infrastructure State-of-the-art

Human Resources Training/Developing
a quality-focused culture

R&D Manufacturing
Process & product innovation

Materials management
(supply Chain ). TQM, 6-Sigma etc.
Competitive Advantage via Innovation
Manufacturing Flexible
Responsive

Marketing Customer focus for product innovation

Infrastructure Invest in R&D tools


Human Resources Hire talented innovators
Incentives/opportunities for
innovation

R&D Focus on product innovation

Materials management Whatever complements R&D
Competitive Advantage via Customer
Responsiveness
Manufacturing Customization

Marketing Micro-marketing/Personalization

Infrastructure Suited to customer responsiveness
Information systems for feedback

Human Resources Customer focused training
Employee incentives/Job security

R&D Involving Customers in innovation
process (Customerization)

Materials management Build responsive logistics/delivery
systems