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)

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. • Shift from matching ability to coping ability in a turbulent environment.The Concept of Strategy – Planning to gain Competitive Advantage • The job of a strategist is to achieve superior performance. relative to competition. pathbreaking technology. shifting consumer tastes and everchanging exchange rates. in the key factors for the success of business (Ohmae.

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

High Intuition . High Logic -based Strategy (9.based Strategy (1. Compromise Strategy ( 5.Intuitive planning vs analytical planning 9 II.5 ) I. High Logic and High Intuition Strategy (9.9) V.1) 1 Logic III. Cessation of Any Type of Strategy (1.1) 9 .9) I n t u i t i o n IV.

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. . Strategy as a Revolution – The companies that overturn the industrial order. Random Walk – Steps taken in random directions without much analysis or evaluation.

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? .

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 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.

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? .

. Generate a competitor strength grid.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.

• 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. . the competition.Concept of strategic marketing • Within a given environment. and the corporation. marketing strategy deals essentially with the interplay of three forces known as the strategic three Cs: the consumer.

• and superior performance. • a good match between corporate strengths and the needs of the market. relative to the competition. .Characteristics of Marketing Strategy • a clear market definition.

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

• Organizational Level. not an act. .Characteristics of Strategic Marketing • Emphasis on Long-Term Implications. – Strategic marketing is a commitment. – Strategic marketing is conducted primarily at the business unit level in the organization. – Strategic marketing starts from the premise that different products have varying roles in the company. • Varying Roles for different products /Markets.

customs. traits.Characteristics of Strategic Marketing • Corporate Inputs: – Corporate culture ~ refers to the style. taboos. . physical. and technological assets/experience of the company. – Corporate publics ~ are the various stakeholders with governments and society constitute and organization’s stakeholders. and rituals of top management. whims. financial. – Corporate resources ~ include the human.

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

• Many companies in hitherto nonmarketingoriented industries are attempting to gain market share through strategic marketing. .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.

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

companies need strategic marketing. strategic marketing achieves significance.Future of Strategic Marketing • In planning an early entry in the marketplace. • To successfully develop corporate imagination and expeditionary policies. .

The Process of Strategic Marketing .

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