Introduction:

Marketing’s influence on strategic thinking

Factors that mediate marketing’s strategic role

• Competitive factors affecting a firm’s orientation

• Influence of different levels of economic development across industries/ countries
• Strategic inertia
• Globalization / Deglobalization of markets and competition / Slobalization
• Rapid development of information, communication and digital technology
• Relationships across functions, firms and networks
• Looming threat of pandemic
• Energy crisis
• Political instability – changing global coalitions/partners

Orientation/Philosophy of the organization

Marketing as a value-creation process

• As a business discipline
• As a functional area
• As a business philosophy
• As a set of specific business activities
• As a distinct unit in a company’s organizational structure

Marketing as a value-creation process

• Marketing as engaging customers and managing profitable relationship

• Marketing as the process by which companies engage customers, build strong
customer relationships, and create customer value in order to capture value from
customers in return
• Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering and exchanging offerings that have value for
customers, partners, and society at large (AMA, 2007).

Marketing as a value-creation process

• Marketing aims to create superior value for target customers in a way that
enables the company and its collaborators to achieve their goals
• The art and science of designing and managing successful value exchanges

Marketing as the growth engine of an organization

Marketing is too important to be left to the marketing department (David Packard).
Good companies fulfill needs, great companies create new markets (Philip Kotler).
Marketing and innovation produce results; all the rest are costs (Peter Drucker).

What’s strategy?

• Systematic plan of action

• “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.”

Strategic Marketing

• It is the way a firm effectively differentiates itself from its competitors by

capitalizing on its strengths to provide consistently better value to customers
than its competitors.
• Aims at achieving sustainable competitive advantages
• 3 key questions: what, where and how

What to accomplish:
Objectives of the organization

Where to compete:
The product market investment decision

How to compete:
● Value
proposition
● Assets &
competencies
● Functional
area strategies
& programs

Strategic thinking

Extending the time frame

● Thinking long-term impact

Thinking systematically: Connecting the dots

● Come out of silos
● Look over & beyond functional activity

Move up the order

Cultivate strategic mindset

● To shift from operational to strategic

○ Free up your time: Delegate
○ Ask your boss and helping the boss with his/her strategic work
○ Explore strategic opportunities within your area
○ Find strategic role models and spend time with role models

From Doing To Envisioning

Advantage

Competitive advantage – sustainable CA

● Two ways to create competitive advantage
● Reduce cost
● Increase value

Strategic thinking skills are any skills that enable you to use criticalthinking to solve
complex problems and plan for the future.

Strategic thinking skills include

● Analytical skills
● Communication skills
● Problem-solving skills
● Planning and management skills
How to improve strategic thinking skills
● Ask strategic questions
● Observe and reflect
● Consider opposing ideas
Some of the strategic questions
● How can we strategically position ourselves to enter a new market?
● What’s the direction for growth for each of our products or services?
● Where will the organization's growth come from in the next five years, and how
● does it compare with where growth has historically come from?
● How should the organization respond to the threat presented by potentially disruptive
● competitors?

3A Framework (According to Rich Horwath, 2016)

• Acumen (what is the key learning)
• Allocation (where should i focus resources)
• Action (which action will lead to advantage)

Develop competencies
• Strategic analysis
• Customer value
• Innovation
• Multiple businesses
• Creating sustainable competitive advantages
• Developing a growth platform

Creating company value

Creating company value: Internal analysis

Three approaches for identifying an organization’s core competencies

Resource-based view (RBV)

• Premise: Organizational performance depends significantly on internal resources

• Categories of resources
• Human resources
• Organizational resources
• Physical resources
• RBV theory: A firm can exploit available opportunities based on available resources
• For solid and sustainable competitive advantage: VRIO resources

The VRIO analysis suggests the user consider the internal competitive advantage
of its key resources using four lenses for analysis.
• Value of the resource
• How rare it is
• If it is inimitable
• How organized the firm is to take advantage of the resource

Asset-based approach

• Divide resources into

• Assets & Capabilities

• Assets
 • Resources that business has accumulated by investing in creating the economies of scale
and scope, brand equity, plant and equipment, locations
• Capabilities
• Combined outcome of the effective and efficient deployment of those assets for the
firm’s purpose

Asset-based approach

• Physical
• Financial
• Operational
• Human
• Legal
• Marketing assets
• Customer-based assets: Image and reputation, Brand franchises, Country of origin
• Distribution-based assets
• Internally based marketing assets
• Alliance-based marketing assets

Innovation audit

• A review of firm’s performance with regard to innovation

• To identify to which extent an organization is focused on the innovation level of its
new products and services
• To examine critical areas such as current performance in relation to innovation,
organizational culture, and policies
• To see whether SBUs are
• Settlers
• Migrators
• Pioneers

Innovation / Value matrix

Aspects of internal analysis

• Financial performance
• Sales & market share
• Profitability
• Shareholder value
• Performance measurement beyond profitability
• Product & service quality
• Brand loyalty
• Brand/firm association
• Relative cost
• Sources of competitive advantage
• Average costing
• Innovation
• Manager/employee capability and performance
• Values and heritage
• Assets and competencies

Creating company value: Value chain concept

Company analysis

• Indicators of working of a company’s strategy

• Resources and capabilities

• Identifying
• Assessing the competitive power

• Value chain
Value chain concept

Value chain analysis

• What are the activities of a company’s value chain?

• Which of them are strategically important in the industry?
• How well do we perform on the activities?
• Which activities generate profits, and which cause losses?
• Which activities constitute competitive advantages and/or core competences?
• Which activities should be outsourced?
Strategic priority analysis
Contribution of value chain analysis

• To identify competitive advantage

• To develop sustainable competitive advantage
• To allocate resource wisely
• To define or redefine scope of the organization and market

Creating customer value: Developing a value proposition

Value

• One of the most overused and misused terms in marketing and pricing (Leszinski
and Marn, 1997).
• Customer value is a customer’s perceived preference for and evaluation of those
product attributes, attribute performances, and consequences arising from use
that facilitate/block achieving the customer’s goals and purpose in use situation
(as cited in Kelly, Johnston and Danheiser, 2017, p. 7).

The real essence of value revolves around the tradeoff between the benefits a customer
receives from a product and the price he or she pays for it.

• Workable definition (Kelly, Johnston and Danheiser, 2017, p. 7):

Value =

Perceived relevant and distinct benefit – Total cost of ownership (or total cost of consumption)

Types of value

Value proposition

• What is your value proposition?

• Who are you?
• What do you do better than any of your competitors?

“A value proposition is a promise of expected future value, illustrating that future

relevant and distinct benefits will overweigh the total cost of ownership” (Kelly,
Johnston and Danheiser, 2017, p. 30).

• Value propositions are suggestions and projections of what impact on their

practices customers can expect. When such a projection is proposed actively to
customers, it is a promise about potential future value creation (Gronroos and
Ravald 2011, 14)
Value proposition: MUSICAL-ER

• Should include
• Monetary calculation
• Unique
• Spend
• Impact
• Capability
• Alignment
• Emotional dimension
• Relational dimension

How do you create memorable and differentiated value propositions?

• Research customer insights

• Identify customer benefits
• Identify target market
• Link benefits to the value offering
• Think compelling, meaningful, and different

Steps to differentiate

• Defining the customer value model

• Building the customer value hierarchy
• − Basic
• − Expected
• − Desired
• − Unanticipated
• Deciding on the customer value package

What is differentiation?
• Differentiation is the act of designing a set of meaningful differences to distinguish
the company’s offering from competitor’s offerings.
• Differentiation opportunity – varies with the type of industry

Strategic approaches/ philosophies forthe development ofsuccessfulstrategies and SCA

• Strategic commitment
• Strategy opportunism
• Strategic adaptability

Strategic approaches/ philosophies Businessstrategy challenges

• Is there a real customer value proposition?

• Is there a perceived customer value proposition?
• Is the strategy feasible?
• Is the value proposition relevant to customers?
• Is the value proposition a point of difference that is sustainable?
Corporate and business-level strategy decisions and their marketing implications

Corporate strategy decision and their marketing implications

Corporate strategy components and issues

Corporate objectives

● Each corporate objective contains four components

● Performance dimension
● Measure or index for evaluating progress
● Target or hurdle to be achieved
● Time frame within which the target is to be accomplished

Common performance criteria and measures that specify corporate, business-unit, and marketing
objectives

Is there a link between customer and shareholder?

Development strategy: Corporate growth strategy

Resource allocation in industry attractiveness-business position matrix

Value-based planning

Sources of synergy

● Knowledge based synergy

● Corporate identity and corporate brand as a source of synergy
● Synergy from shared operational resources

Criteria helpful to evaluate the corporate strategy

• Does the corporate headquarters have a clear overall vision or strategic intent
for its business units?
• Is the portfolio of business units balanced in terms of cash flow and risk?
• Does the portfolio assure sustainable long-term development and growth?
• Does the headquarters develop core competencies, and does it provide
valuable resources and services to the business units?

Business strategies and their marketing implications

Major strategic question at the business-unit level

• Which business are we in?

• How should we compete in this business?

Strategic issue

• Strategic fit
• Good internal and external consistency

Strategic business units (SBUs)

Each BU managers decide which objectives, markets and competitive strategies to pursue

• Steps in developing SBU designs

● To determine unit’s objectives

● To identify scope of its target customers and offerings
● To decide which broad competitive strategy to pursue to build a competitive advantage
● To allocate resources across its product-market entries and functional departments
Strategic business units (SBUs)

• Ideal characteristics
• A homogeneous set of markets to serve with a limited number of related technologies
 • A unique set of product-markets in the organization
• Control over those factors necessary for successful performance
• Responsibility for their own profitability

• Criteria used to decide how product-markets to be clustered into a BU

• Technical compatibility
• Similarity in customer needs or product benefits sought
• Similarity in personal characteristics or behavior patterns of customers in the target markets

Business-unit (BU)

• Objectives
• Refer corporate objectives, to develop BU objectives
• Resource allocation
• How do businesses compete?: Generic business-level strategies
On the basis of overall patterns of purpose, practice and performance in different businesses
• Porter’s generic strategies or competitive positions
• Miles and Snow’s business strategies on intended rate of product-market development

How do business compete?

• Miles and Snow’s business strategies: On intended rate of product-market development
• Prospectors: Focus on growth through the development of new products and
markets
• Defenders: Concentrate on maintaining their positions in established product
markets
• Analyzers: Attempt to maintain a strong position in the core product-market(s) but
also seek to expand into new, closely-related, product markets
• Reactors: Have no clearly defined strategy

Combined typology of business-level competitive strategies

Criteria to select business strategies

• Is the ROI attractive?

• Is there a sustainable competitive advantage?
• Will the strategy have success in the future?
• Is the strategy feasible?
• Does the strategy fit with the other strategies of the firm?
• Is potential synergy captured by the strategy?

Business level and marketing strategy

Test for consistency and viability

• Is the strategy aligned to the vision, mission and corporate strategy?
• Are the 5Ws and 1H clearly addressed?
• Does the strategy exploit opportunities in the market?
• Is the strategy aligned with the key success factors in the market?
• Is the strategy built on core competencies and strengths?
• Are the differentiators sustainable?
• Are the 5Ws and 1H internally consistent?
• Does the company have enough resources to pursue and implement the strategy?

Competitor analysis

Analyzing competition and co-opetition in the market

Competitive behavior

Competitive analysis

• Define business
• Identify competitors
• Assess drivers of competitive forces
• Analyze future changes in the industry/market/sector
• Identify key aspects of market/industry/sector structure
• Evaluate the competitors

Identifying competitors:

Questions to structure competitor analysis

• Against whom do we usually compete? Who are our most intense competitors?
Who are our less intense but still serious competitors? Who amongst them are
makers or substitutes?
• Can these competitors be grouped into strategic groups on the basis of their
assets, resources, competencies, and/or strategies?
• Who are the potential competitive entrants? Are there any barriers to entry? Is
there anything that can be done to discourage their entry?

Identifying competitors

• Current competitors
• From the market perspective
• Brand-use or product-use association
• Indirect competitors
• From the industry structure perspective
• Strategic groups
• Potential competitors

Identifying competitors: Current competitors

• A strategic group is a set of firms that

• Over time pursue similar competitive strategies
• Has similar characteristics
• Has similar assets and competencies

• Member of strategic group faces

• Mobility barrier
• Entry barrier
• Exit barrier

Identifying competitors: Potential competitors

• Entrants that might engage in retaliatory or defensive strategies

• Market expansion
• Product expansion
• Backward integration
• Forward integration
• Acquiring assets or competencies

Identifying competitors: Potential competitors

Selecting competitors to attack or to avoid

• Customer value analysis

● Identify the major attributes customers value
 ● Assess the quantitative importance of the different attributes
● Assess the company’s and competitors’ performances on the different customer
● values against their rated importance
● Examine how customers in a specific segment rate the company’s performance
● against a specific major competitor on an attribute-by-attribute basis
● Monitor customer values over time

• Classes of competitors
• Strong versus weak
• Assets and resources
• Close versus distant
• Industry classification
• Need satisfaction / solution provider
• Good versus bad
• Rules of the game

Key drivers that shape competition

Analyzing competitor’s strengths and weaknesses

• What businesses have been successful over time? What assets or competencies have
contributed to their success?
• What business have had chronically low performance? Why? What assets or
competencies do they lack?
• What are the key customer motivations? What is needed to be preferred? What is
needed to be considered?

• What assets and competencies represent industry mobility (entry and exit) barriers?
• What are the significant value-added components in the value chain?
Competitive position in the market

• Dominant – controls the behavior of the other competitors and has wide choice of
strategic options
• Strong – can take independent action without endangering its long-term position
regardless of competitors’ actions
• Favorable – has an exploitable strength and more-than-average opportunity to
improve its position
• Tenable – performs at a sufficiently satisfactory level to warrant continuing in
business
• Weak – has unsatisfactory performance, but an opportunity exists for improvement
• Nonviable – has unsatisfactory performance and no opportunity for improvement

Competitive position in the market

Type of competitors and their reaction pattern

What makes the organization competitive?

• Out-think and out-perform the competition

• Proactive, offensive actions
● Reduce decisions uncertainty
● Spot new threats
● Monitor competitive initiating
● Exploit competitor’s vulnerability
● Be flexible to quickly respond even during uncertainty

Developing competitive marketing strategies

Attack strategies
• Frontal attack
• Flanking
• Encirclement
• Bypass
• Guerilla

Defense strategies
• Position defense
• Flanking
• Mobile defense
• Counter offensive
• Pre-emptive defense
Assessing Context
Context
• Forces that influence an organization are
• Events
• Trends
• Issues
• Expectations

Characteristics
• Dynamic
• Complex
• Multi-faceted
• Wider ramifications / far-reaching impact

Components of operating environment/industry

• Operating environment / Industry

• Competitors
• Substitutes
• Customers
• Collaborators
• Suppliers / distributors

Strategic implementation

G-STIC framework for marketing management

Appropriateness and execution of a strategy

Factors necessary for strategic success

• Leadership: Task needs, Group needs, Individual needs

• Culture: Corporate culture
• Structure: Levels of authority and responsibility
• Control
• Skills: Critical thinking and problem solving, People skills, Professional attitude
• Strategy
• Systems

Allocation of resources

• Align allocation criteria with business priorities

• Financial criteria
• Strategic criteria
• Marketing criteria

• Specify investment thresholds

• ROI-based thresholds
• Strategy-based thresholds
• Capability-based thresholds
• Continuity-based thresholds
• Benchmark-based thresholds

Strategic issues in marketing implementation

• The link between planning and implementation

• Interdependency
• Evolution
• Separation

Strategic issues in marketing implementation

Marketing control: Framework

Marketing audit
• Conduct time to time to check on marketing performance
• Examine systematically the firm’s marketing objectives, strategy, and performance
• Aid the firm in evaluating marketing activities
• Describing current marketing activities and their performance outcomes
• Gathering information about changes in external and internal environment that may affect
ongoing marketing activities
• Exploring different alternatives for improving the ongoing implementation of marketing activities
• Providing a framework to evaluate the attainment of performance standards, as well as marketing
goals and objectives
• Utilizing technology to help bring together diverse sources of data into useable metrics, insights,
and actions for improvement that aid, but do not overwhelm, those auditing strategy

Contents of a marketing plan

1. Executive summary
2. Current situation and trends
3. Performance review (for an existing product)
4. Key issues
5. Objectives
6. Marketing strategy
7. Action plans
8. Projected profit-and-loss statement
9. Controls
10. Contingency plans

Strategic marketing and sustainability management are interconnected in numerous ways, especially in
today's business landscape, where consumers are increasingly conscious of environmental and social
issues. Integrating sustainability into marketing strategies has become essential for businesses aiming to
create long-term value, build brand reputation, and meet the expectations of socially responsible
consumers. Here are some key points connecting strategic marketing to sustainability management:
1. Brand Image and Reputation: Sustainability initiatives can positively influence brand perception. When
a company incorporates sustainability into its marketing strategy, it communicates a commitment to social
and environmental responsibility, which can enhance brand loyalty and reputation.

2. Consumer Preferences and Behavior: Many consumers prefer brands that demonstrate a commitment to
sustainable practices. Marketing efforts that highlight a company's sustainable actions, such as using
eco-friendly materials, reducing carbon footprint, or supporting social causes, can resonate with these
consumers and influence their purchasing decisions.

3. Market Differentiation and Competitive Advantage: Integrating sustainability into marketing strategies
can differentiate a company from its competitors. Highlighting unique sustainable features or practices
can attract environmentally conscious consumers who prioritize ethical and sustainable products/services,
thereby providing a competitive edge.

4. Long-term Value Creation: Sustainable practices often contribute to long-term value creation by
minimizing operational costs, reducing waste, enhancing efficiency, and fostering innovation. Marketing
these aspects can showcase a company's commitment to long-term success and responsible business
practices.

5. Stakeholder Engagement: Engaging stakeholders, including customers, employees, investors, and

communities, in sustainability initiatives through marketing efforts can create a sense of shared values and
purpose. This engagement can foster stronger relationships and support for the brand.

6. Regulatory Compliance and Risk Management: Adhering to sustainable practices can mitigate risks
associated with regulatory changes and potential environmental or social crises. Marketing strategies that
showcase compliance with environmental standards and ethical practices can help build resilience against
such risks.

7. Transparency and Communication: Transparent communication about sustainable efforts is crucial.

Marketing strategies that effectively communicate a company's sustainability initiatives, goals, progress,
and impact can build trust and credibility among consumers and stakeholders.

8. Innovation and Product Development: Sustainability can drive innovation in product development and
operational processes. Marketing these innovative and sustainable features can attract environmentally
conscious consumers and contribute to market leadership.

Ultimately, integrating sustainability into strategic marketing requires a holistic approach where
sustainability is embedded in the core values, operations, and communication strategies of the
organization. This approach not only benefits the environment and society but also contributes to the
overall success and resilience of the business in the long term.