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Strategic Marketing Management

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An Overview of Strategic Marketing

Dr.Amira El-Deeb

Defining Marketing

Marketing

The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment
The purchasers of organizations products; the focal point of all marketing activities

Customers

What is Marketing?

Marketing as a culture characterized by a set of values and beliefs that highlights the importance of the customers interests Marketing as a strategy concerned with the choice of products, markets and competitive attitude Marketing as the set of tactics (essentially the seven Ps of the expanded marketing mix) that provides the basis for the implementation of the business and competitive strategy.
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Market, Sales, Technology Orientation

Components of Market orientation

Figure 1.2

Components of market orientation

Source: After Deng and Dart (1994)

How to create a marketoriented Business?


1.

Information Acquisition

Obtaining information about, customers, competitors, markets Viewing the information from a total business perspective Deciding how to deliver superior customer value
Taking actions to provide value to customers

2.

Inter functional Assessment

3.

Shared Diagnosis & Action

What is the difference between

Marketing Strategy & Strategic Marketing

Marketing Strategy

Its the analysis, strategy development and implementation of activities in :

Targeting strategies Positioning strategies Developing ,implementing and managing the marketing program positioning strategies designed to meet the needs of customers.

Strategic Marketing definition.1

Its a market-driven process of strategy development, taking into account a constantly changing business environment and the need to achieve high levels of customer satisfaction.

Strategic Marketing- definition.2

concerned with the direction and scope of the long-term activities performed by the organization to obtain a competitive advantage to satisfy needs or solving problems
Its both a philosophy and a set of techniques which address everything about the product

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STRATEGIC MARKETING PROCESS

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Strategic Marketing process

Why to study strategic Marketing?.. To face the Challenge of ..

As a marketer , you should manage:

Profit

Optimization
Cost

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Planning, Implementing, and Controlling Marketing Strategies

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Why some Marketers Fail?


Wrong group targeted Weak positioning strategy Marketing environment assessed inadequately Misperception about product or service attributes and benefits

Wrong pricing strategy Insufficient level of new product/new service awareness from advertising Over-optimism about marketing plan

= Inefficient Marketing planning


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Understanding the Strategic Planning Process

Strategic Planning

The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan

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Steps of Strategic Planning


Most large companies consist of 3 organizational levels:

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Levels of Strategic Planning

1. The Corporate level :


Defining the purpose and mission of the Company. Designing the business portfolio. Planning for new business, downsizing older business

2. The Business unit level :

Business unit mission SWOT analysis Goal formulation Designing strategies Developing detailed marketing plans

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Assessing Organizational Resources and Opportunities

Core Competencies

Things a firm does extremely well (strengths), which sometimes give it an advantage over its competition

Financial or production sector Reputation, goodwill, and brand names

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Assessing Organizational Resources and Opportunities

Market Opportunity

A combination of circumstances and timing that permits an organization to reach a target market

Core competencies are matched to opportunities to give competitive advantages

Strategic window
optimal fit between market opportunities (the key requirements of a market) and core competencies

(the particular capabilities of a firm)


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Mission/Strategy/Tactics

Mission

Goals

Strategy

Tactics

Strategy
Mission
The

reason for existence for an organization

Mission

Statement
the question What business are we in?

Answers

Goals
Provide

detail and scope of mission

Strategies
Plans

for achieving organizational goals

Tactics
The

methods and actions taken to accomplish strategies

Planning and Decision Making


Mission Goals Organizational Strategies Functional Goals Finance Strategies Marketing Strategies Operations Strategies

Tactics Operating procedures

Tactics Operating procedures

Tactics Operating procedures

Strategy Example
Example 1

Rita is a high school student. She would like to have a career in business, have a good job, and earn enough income to live comfortably

Mission: Goal: Strategy: Tactics: Operations:

Live a good life


Successful career, good income Obtain a college education

Select a college and a major


Register, buy books, take courses, study, graduate, get job

DEVELOPING VISION & MISSION STATEMENT


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Developing Vision & Mission


Great

benefits can be achieved if an organization


Systematically revisits their vision and mission statement Treats them as living documents Considers them to be an integral part of the firms culture

Developing Vision & Mission Participation by as many managers as possible is important in developing the mission because through involvement people become committed to an organization

Vision & Mission Statement


-

Vision Statement Defines your longterm dream


-

Mission Statement Products and services provided Your business values

Its inspirational statement

WHAT TO DO?

HOW TO DO?

Business vision
Desired future state; the aspiration of the Organization

What are our Dreams?


Where do we want to go? What do we want to look like in 5, 10, 15 years?

Vision Statement Examples

Tyson Foods vision is to be the worlds first choice for protein solutions while maximizing shareholder value.

Vision Statement Examples

General Motors vision is to be the world leader in transportation products and related services.

Vision Statement Examples

Dells vision is to create a company culture where environmental excellence is second nature.

Vision

Clear Business Vision Comprehensive Mission Statement

Mission Statement

A statement of purpose that distinguishes one organization from other enterprises


A declaration of an organizations reason for being= What is our business?, what
the organization does, whom we want to serve.

Mission Statements are also called


Statement of purpose Statement of philosophy Statement of beliefs Statement of business principles A statement defining our business

Products or Services Customers

Markets

Employees

Mission Components

Technology

Public Image Self-Concept

Survival, Growth, Profits Philosophy

Mission Statement Examples


Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries in providing quality products with a passion for customer-driven innovation.
We will emphasize training, embrace diversity and provide growth opportunities for our associates and our dealers. We will lead our industry in the application of appropriate technologies. We will operate at the highest levels of ethics and compliance with a focus on exemplary corporate governance. We will deliver value to our shareholders, positive operating results and industry-leading earnings.

Mission Statement Examples


We aspire to make PepsiCo the worlds premier consumer products company, focused on convenient foods and beverages. We seek to produce healthy financial rewards for investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive to act with honesty, openness, fairness and integrity.

Mission Statement examples


SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company
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Mission Statement examples

MARRIOTTS Mission Statement: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value
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Mission Statement Examples


Dells mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet consumer expectations of highest quality; leading technology; competitive pricing; individual and company accountability; best-in-class service and support; flexible customization capability; superior corporate citizenship; financial stability.

Mission Statement Examples


Proctor & Gamble will provide branded products and services of superior quality and value that improve the lives of the worlds consumers. As a result, consumers will reward us with industry leadership in sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.

Mission Statement Examples

LOreal, we believe that lasting business success is built upon ethical standards which guide growth and on a genuine sense of responsibility to our employees, our consumers, our environment and to the communities in which we operate.

Nokia
Vision :
Our vision is a world where everyone can be connected

Mission :
Nokia helps people to fulfill this need and we help people feel close to what matters to them. We focus on providing consumers with very recent technology that is a joy to use, and beautiful.
Principles of Marketing A.U.C - Amira EL-Deeb 47

Otsuka Pharmaceutical Co.

Vision

The creation of products to serve the better health of people around the world.
Clinical studies are carried in research centers in the USA ,Germany, UK and Japan aiming for products of universal value. With a collaboration among marketing, research sectors so that customers' real needs may be feedback for further product development.

Mission

Principles of Marketing

A.U.C - Amira EL-Deeb 48

Examples Good and Bad Mission Statements


NASA To Explore the Universe and Search for Life and to Inspire the Next Generation of Explorers Walt Disney To Make People Happy

Could be good example since it express the core values of the organization. Also conveys unique qualities about the organization.

Too vague and unclear. Need more descriptive information about what makes the organization special.
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Benefits of Mission Statements

Better financial results agreement on purpose Resource allocation Establishment of culture Focal point for individuals Establishment of work structure Basis of assessment and control Resolution of different views

Market-Oriented Mission
A mission statement should be:
An invisible hand to guide & control everything in the organization. Not too narrow nor too broad Fitting of market environment Based on distinctive competencies Motivating
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Market-oriented & Product-oriented Mission


Do not offer me things. offer me solutions Do not offer me clothes. Offer me attractive looks. Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking. Do not offer me a house. Offer me security, comfort, and a place that is clean and happy. Do not offer me books. Offer me hours of pleasure and the benefit of knowledge.

Market-oriented & Product-oriented Mission


Carrier :

We make air conditioners

(Product oriented )

We provide climate control

( Market Oriented )

Principles of Marketing

A.U.C - Amira EL-Deeb 53

Business Goals
Goals convert the organizations mission into tangible actions and results that are to be achieved, often within a specified time frame.
Three major categories of goals:
1. 2. 3. Production Financial Marketing

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Production Goals Apply to the use of manufacturing and service capacity and to product and service quality.

Financial Goals Focus on profit, cash flow, and shareholder wealth.

Marketing Goals market share sales volume profit customer satisfaction customer value creation
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Marketing objectives

A statement of what is to be accomplished through marketing activities, it should be SMART


Should be stated in clear & Specific words Should be accurately measurable Should be ambitious, achievable, attainable to motivate the others Should be realistic according to market needs Should specify a time frame for accomplishment

e.g.
To increase sales of product globally by 30% within 5yrs.
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GOAL

OBJECTIVE

STRATEGY
i) ii) iii) iv) v) Increase product promotion Design product pricing Penetration New market development Quality improvement

To be No. 1 in the market

Increase market share by 15% in three years

1. The Corporate Strategic Planning

B. Designing the Business Portfolio

Step 1: Analyze the current business portfolio

By classifying Strategic Business unit ( SBU )into one of four categories using the:

Market growth rate SBUs relative market share within the market. Boston Consulting Group matrix
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Through a technique called BCG

1. The Corporate Strategic Planning

B. Designing the Business Portfolio

Step 1: Analyze the current business portfolio

Market Growth rate % =


Total Market Sales this year Total Market Sales last year Total Market Sales last Year

Relative Market Share =


The Company Sales

The Leader Sales


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Source: The BCG Portfolio Matrix from the Product Portfolio Matrix, 1970, The Boston Consulting Group. Reproduced by permission.

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BCG MATRIX
1. Question mark: (high growth market but with low market share),

question mark units or products require lots of money 2. Stars a market leader unit (or product) in a high growth market, the company must spend money to keep up with the high market growth. 3. Cash cow a product still has the largest relative market share although the market annual growth rate is less than 10 %. Although a cash cow business produces a lot of cash for the company, it doesnt have to finance expansion because the market growth rate has slowed down. 4. Dogs are products that have weak market share in a low growth markets.

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After the analysis, the company determines which strategy and budget are to assign to each SBU, and a one of four strategies can be applied:

Build where the objective is to increase market share.


Hold: here the objective is to preserve market share. More investment should be done to keep that level. Harvest: harvesting involves milk the business e.g. eliminating R&D, not replacing the physical plants as it wears out, not replacing sales people, and reducing promotional expenditure. Divest: here is the objective is to sell or liquidate the business because resources can be better used else where.
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Case: SMART
Your company smart is working in the manufacturing and marketing of entertainment products producing four products: DVD, Notebook, videos, and radios,

as a marketing manager you should determine what objective and which strategy and budget is to assign to each product, Before deciding on a strategy, you should explain the reason for adopting such strategy to such product
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2007
Total DVD market Product A Sales SMART DVD 10.000.000 700.000 0 11.800.000 800.000 200.000

2008

Total Notebook market


SMART Notebook

18.000.000
1.800.000

20.700.000
2.200.000

Product B sales

1.000.000

1.200.000

Total Videos market


SMART Videos Product B sales

7.000.000
500.000 250.000

7.500.000
600.000 300.000

Total Radio Market Product A sales SMART radio

5.500.000 700.000 400.000

5.590.000 800.000
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300.000

The GE Matrix
Weak Medium
Strong

Invest or Grow Earn selectively


Harvest or Divest

Strong

Medium

Weak
Business Strength

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GE Matrix

The size of each represents the size of each market. Within each circle is a clearly defined segment which represents the businesss market share within that market. The larger the circle, the larger the market, and the larger the segment, the larger the market share.
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Market attractiveness:

Size of market. Market rate of growth. The nature of competition and its diversity. Profit margin. Impact of technology, the law, and energy efficiency. Environmental impact.
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Competitive position:

Market share. Management profile. R & D. Quality of products and services. Branding and promotions success. Place (or distribution). Efficiency. Cost reduction.
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1. The Corporate Strategic Planning

Planning for new Businesses


a. Intensive growth

Current Product Current Market New Market


Market Penetration

New Product
Product Development

Market Development

Diversification
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Market penetration

where a company would attempt to make more sales to current customers without changing its products.

Market development

a situation where a company would identify and develop new markets for its current products.

Product development = a company would modify or


create new products and offer them to current markets.

Diversification = companies start up or buy


businesses outside of its current products and markets.
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1. The Corporate Strategic Planning :


Planning for new Businesses
b. Integrative Growth Backward integration:

acquiring supplier

Forward integration:

acquiring distributor
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2. Business unit strategic planning

A. Business unit mission

We redefine the mission of our business but for each SBU Analyze the environment around us, externally & internally

B. SWOT analysis

C. Setting the goals & objectives D. Developing Marketing strategy & plan E. Implementation & Feedback
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SWOT Analysis

An assessment of the organizations strengths, weaknesses, opportunities, and threats

Strengths competitive advantages or core competencies Weaknesses

limitations on competitive capability favorable conditions in the environment conditions or barriers to reaching objectives
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Opportunities

Threats

The Four-Cell SWOT Matrix

Source: Reproduced from Nigel F. Piercy, Market-Led Strategic Change. Copyright 1992, p. 371, with permission from Elsevier Science.

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