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The document discusses the purpose and concepts of strategic marketing. It states that the purpose of business is to create and keep customers by providing goods and services that people want and value at attractive prices. It describes strategic marketing as establishing a match between a firm and its environment by deciding what business the firm is in and how to successfully compete. Strategic marketing focuses on a business's intentions in a market and how to realize those intentions, differing from marketing management which implements programs. It emphasizes understanding customer needs and developing capabilities to sense market changes and link to customers.
The document discusses the purpose and concepts of strategic marketing. It states that the purpose of business is to create and keep customers by providing goods and services that people want and value at attractive prices. It describes strategic marketing as establishing a match between a firm and its environment by deciding what business the firm is in and how to successfully compete. Strategic marketing focuses on a business's intentions in a market and how to realize those intentions, differing from marketing management which implements programs. It emphasizes understanding customer needs and developing capabilities to sense market changes and link to customers.
The document discusses the purpose and concepts of strategic marketing. It states that the purpose of business is to create and keep customers by providing goods and services that people want and value at attractive prices. It describes strategic marketing as establishing a match between a firm and its environment by deciding what business the firm is in and how to successfully compete. Strategic marketing focuses on a business's intentions in a market and how to realize those intentions, differing from marketing management which implements programs. It emphasizes understanding customer needs and developing capabilities to sense market changes and link to customers.
customers and to do this companies would have to produce goods and services that people want and value them at prices which are more attractive than that of the competitors. - Theodore Levitt In a competitive market. customers expect to Maximize value at the lowest delivery cost This needs Creating Value for Customers An in-depth market orientation of the organization. Customer value is the outcome of a process that begins with a business strategy anchored in a deep understanding of customer needs. Thus the basic premise is that Markets and the customers should be the starting point in business strategy formulation. A key advantage of becoming market oriented is gaining an understanding of the market and how it is likely to change in the future. Developing this vision about the market requires obtaining information about customers, competitors, and markets; viewing the information from a total business perspective; deciding how to deliver superior customer value; and taking action to provide value to customers. Basic Premise Concept of Strategy Strategy is the pattern of major objectives, purposes, or goals and essential policies and plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be. Any organization needs strategy 1. When resources are finite, 2. When there is uncertainty about competitive strengths and behavior, 3. When commitment of resources is irreversible, 4. When decisions must be coordinated between far-flung places and over time, and 5. When there is uncertainty about control of the initiative. Strategy provides a unified sense of direction to which all members of the organization can relate. Strategy is concerned with the deployment of potential for results and the development of a reaction capability to adapt to environmental changes. Hierarchies of Strategies There are hierarchies of strategies: corporate strategy and business strategy Corporate strategy seeks to unify all the business lines of a company and point them toward an overall goal. At the business level, strategy focuses on defining the manner of competition in a given industry or product/market segment. Thus: Organizations must have to distinct capabilities: Market Sensing Capabilities Customer Linking Capabilities Capabilities to align Structure and Processes Leverage organizational resources and capabilities In business organizations, the marketing function represents the greatest degree of contact with the external environment, it has a strategic role to steer organizational growth in the right direction. Marketing and the Concept of Strategy In its strategic role, marketing consists of establishing a match between the firm and its environment. It seeks solutions to problems of deciding what business the firm is in and what kinds of business it may enter in the future and how the chosen field(s) of endeavor may be successfully run in a competitive environment by pursuing product, price, promotion, and distribution perspectives to serve target markets. Marketing and the Concept of Strategy In the context of strategy formulation, marketing has two dimensions: present and future. The present dimension deals with the existing relationships of the firm to its environments. The future dimension encompasses intended future relationships (in the form of a set of objectives) and the action programs necessary to reach those objectives. Marketing and the Concept of Strategy Marketing provides the core element for future relationships between the firm and its environment. It specifies inputs for defining objectives and helps formulate plans to achieve them. Concept of Strategic Marketing In its strategic role, marketing focuses on a businesss intentions in a market and the means and timing of realizing those intentions. The strategic role of marketing is quite different from marketing management, which deals with developing, implementing, and directing programs to achieve designated intentions. To clearly differentiate between marketing management and marketing in its new role, a new termstrategic marketinghas been coined to represent the latter. Marketings Role in Organization Marketings Role in Organization At the corporate level, marketing inputs (e.g., competitive analysis, market dynamics, environmental shifts) are essential for formulating a corporate strategic plan. Marketing represents the boundary between the marketplace and the company, and knowledge of current and emerging happenings in the marketplace is extremely important in any strategic planning exercise. At the other end of the scale, marketing management deals with the formulation and implementation of marketing programs to support the perspectives of strategic marketing, referring to marketing strategy of a product/market. Marketing strategy is developed at the business unit level.
Marketing strategy deals essentially with the interplay of three forces known as the strategic three Cs: the customer, the competition, and the corporation. Marketing Strategy Variables 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. A good marketing strategy should be characterized by (a) a clear market definition; (b) a good match between corporate strengths and the needs of the market; and (c) superior performance, relative to the competition, in the key success factors of the business
Marketing Strategy Variables Major Differences between Strategic Marketing and Marketing Management Major Differences between Strategic Marketing and Marketing Management (contd.)
Corporate Inputs Strategic marketing decisions require inputs from three corporate aspects: Corporate Culture: Style, whims, fancies, traits, taboos, customs, and rituals of top management that over time have come to be accepted as intrinsic to the corporation Corporate Publics: Various stakeholders with an interest in the organization. Customers, employees, vendors, governments, and society Corporate Resources: Human, financial, physical, and technological assets/experience of the company. Corporate inputs set the degree of freedom a marketing strategist has in deciding which market to enter, which business to divest, which business to invest in, etc. The use of corporate-wide inputs in formulating marketing strategy also helps to maximize overall benefits for the organization. Varying Roles for Different Products/Markets Traditionally it has been held that all products exert effort to maximize profitability. Strategic marketing starts from the premise that different products have varying roles in the company. For eg: some products may be in the growth stage of the plc, some in the maturity stage, others in the introduction stage. Each position in the life cycle requires a different strategy and affords different expectations. Products in the growth stage need extra investment; those in the maturity stage should generate a cash surplus. Although conceptually this conceptdifferent products serving different purposes has been understood for many years, it has been articulated for real-world application only in recent years. The lead in this regard was provided by the Boston Consulting Group, which developed a portfolio matrix in which products are positioned on a two-dimensional matrix of market share and growth rate, both measured on a continuous scale from high to low. Varying Roles for Different Products/Markets The portfolio matrix essentially has two properties: it ranks diverse businesses according to uniform criteria, and it provides a tool to balance a companys resources by showing which businesses are likely to be resource providers and which are resource users. The practice of strategic marketing seeks first to examine each product/market before determining its appropriate role. Further, different products/markets are synergistically related to maximize total marketing effort. Finally, each product/ market is paired with a manager who has the proper background and experience to direct it. Organizational Level Strategic marketing is conducted primarily at the business unit level in the organization. At GE, major appliances are organized into separate business units for which strategy is separately formulated. At Gillette, strategy for the Duracell batteries is developed at the batteries business unit level. Organizational Level Strategic marketing is conducted primarily at the business unit level in the organization. At General Electric, for example, major appliances are organized into separate business units for which strategy is separately formulated. At Gillette Company, strategy for the Duracell batteries is developed at the batteries business unit level. Relationship to Finance Strategic marketing decision making is closely related to the finance function. The importance of maintaining a close relationship between marketing and finance and, for that matter, with other functional areas of a business is nothing new. But 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 Insignificant growth due to competition Deregulation Diversification especially in unrelated areas Shifts in the channel structure competition from overseas companies leading to renewed emphasis on marketing strategy achieves significance. Fragmentation of markets requiring strategic-marketing capability. In planning an early entry into the marketplace, strategic marketing achieves significance. To successfully develop corporate imagination and expeditionary policies, companies need strategic marketing. Demographic shifts have created a new customer environment that makes strategic marketing an imperative.
Process of Strategic Marketing Assignment: NE Case - 35 - 38