Introduction

MARKETING STRATEGY

FOCUS on MARKETING ORIENTATION

Evolution of the Marketing Concept
Product Orientation
Late 19th century: efficient production of goods allowed firms to meet strong customer demand.

Sales Orientation

Mid-1920s–early 1950s: weakened demand required that products would have to be “sold.” (personal selling, advertising, and distribution was the focus) Early 1950s–2000s: adopting a customer focus means a commitment to researching and responding to customer needs.

Marketing Orientation

Important Terms

Marketing
 The

process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment

 

Customers
 The 

purchasers of organizations’ products; the focal point of all marketing activities

Target Market
A

specific group of customers on whom an organization focuses its marketing efforts

Marketing Management

Marketing Management
 The

process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently

  Effectiveness

The degree to which an exchange helps an organization achieve its objectives The process of minimizing the resources an organization must spend to achieve a specific level of desired exchanges

 Efficiency

Marketing Management (cont’d)

Planning
 Assessing

opportunities and resources  Determining marketing objectives  Developing a marketing strategy and plans for implementation and control

How, when and by whom are marketing activities performed?

Organizing
 Developing

the internal structure of the marketing unit
Functions, products, regions, customer types

Marketing Management (cont’d)

Implementation
 Coordinating

marketing activities  Motivating marketing personnel  Developing effective internal communications within the unit
 

Control
 Establishing

performance standards  Comparing actual performance to established standards  Reducing the difference between desired and actual performance

Important Terms

The Marketing Mix
 Four

marketing activities—product, distribution, promotion, and pricing—that a firm can control to meet the needs of customers within its target market

 

Product
 Goods, 

services, or ideas that satisfy customer needs

Distribution
 The 

ready, convenient, and timely availability of products

Promotion
 Activities

that inform customers about the organization and its products

Important Terms

Pricing : Decisions and actions that establish pricing objectives and policies and set product prices

Exchange : The provision or transfer of goods, services, or ideas in return for something of value

Customer Value : The ratio between the customer’s perceived benefits and the resources used to obtain those benefits. Customer Retention: The overall objective of Retention providing value to customers continuously and more effectively than the competition, to have highly satisfied customers.


Important Terms

Relationship Marketing
 Establishing

long-term, mutually satisfying buyer-seller relationships allowing for cooperation and mutual dependency

 

Customer Relationship Management (CRM)
 Using

information about customers to create marketing strategies that develop and sustain desirable customer relationships

O N S U M E R D E C I S I O N P R O C E S

Input

Firm’s Marketing Efforts 1. Product 2. Promotion 3. Price 4. Channels of  distribution

Socio­cultural Environment 1. Family 2. Informal sources 3. Other noncommercial  sources 4. Social class 5. Subculture and culture

External  Influence

Consumer Decision  Making

Need  Recognition

Process

Pre­purchase  Search

Psychological Field 1. Motivation 2. Perception 3. Learning 4. Personality 5. Attitudes Experience

Evaluation of  Alternatives

Output

Post­ Decision  Behavior

Purchase 1. Trial 2. Repeat purchase Post­purchase  Evaluation

STRATEGY......
§ The word ‘Strategy’ was initially introduced and defined in the ancient military dictionaries § § It comes from the Greek word ‘strategos’, strictly meaning a general in command of an army; it is formed from ‘stratos’, meaning army and ‘ag’, meaning to lead

§ First time in business literature by William Newman (1951)

THE CONCEPT OF ‘STRATEGY’

Generic
§ a plan of attack for winning § a plan for beating the opposition


Organisational
§ a plan for achieving organisational goals § a plan for securing a competitive advantage in a given market

Case Study: “Marriage made in heaven has become a nightmare”

With rambus in 1996, - memory chip technology 6% in micron technology, 100m $ in samsung, Intel tried to push the overall market towards Rambuswith plans for microprocessors that would only work with that type of memory.


 


 

Recently, recall of 1m PC motherboards due to several high-profile chip problems. Withdrawn low-cost PC microprocessor (Timma) bcoz, it required expensive rambus memory chips


  

Retrospect view:

“We made a big bet on Rambus and it did not work out’ – Craig Barrett, CEO- Intel Depending on a third party for a technology that gates your performance.

 

 

THE CONCEPT OF ‘STRATEGY’
 

“The direction and scope of an organisation over the long(er) term, which ideally matches its resources to its changing environment and, in particular its markets, customers or clients so as to meet stakeholder expectations”

Johnson & Scholes (1999)

PURPOSE OF STRATEGY
§ To set the future organisation.

direction

for

the

§ To state how it is to create value to customers.

§ To identify what product/s and in which markets the firm will invest its resources.

§ To describe how it is to perform better than competition.

hierarchy of strategy

What is ‘sbu’

An SBU is an operating unit focus that groups a distinct set of products or services, which are sold to a uniform set of customers, facing a well-defined set of competitors. the phrase "Strategic Business Unit" came into use in the 1960s, largely as a result of General Electric's many units.

 

3 LEVELS OF STRATEGY

Corporate

This describes a company’s overall direction in terms of growth and the management of its various businesses to achieve a balanced portfolio of products and services.

Competitive/Business (SBU)

which emphasizes improvement of the competitive position of a corporation’s products or services in the specific industry or market segment served by that division. How to compete in individual product-markets and support the corporate strategy

 

Functional

Functional strategies for the organisation’s functional areas in support of SBUs and corporate strategies

Marketing strategy

In the early 1980s, marketing strategy was defined as an indication of how each element of the marketing mix will be used to achieve the marketing objectives. “The broad conception of how product, price, promotion and distribution are to function in a coordinated way to overcome resistance to meet marketing goals”

 

 

THE INTER-RELATIONSHIP BETWEEN MARKETING AND CORPORATE STRATEGY
Ø INFORMS Ø DIRECTS Ø GUIDES Ø CONTROLS
    

Corporate Strategy •Specifying the organisation’s mission •Allocating resources •Defining Organisational objectives
        

    

Marketing Strategy •Identifying product market/s to compete in •Selecting market segments to target •Developing the marketing mix
Ø ACHIEVES Ø SUPPORTS

Marketing strategy development…..
 

The development of marketing strategy can be seen at three main levels. First, the core strategy of the company is selected and the marketing objectives and the broad focus for achieving them are identified. Second, market segments and targets better than the competition is identified.

 

 

Third level, a marketing department capable of putting the strategy into practice must be created. The marketing department, at this stage is responsible for developing the marketing mix programs that can convey both the positioning and the products/services to the target market.

 

Marketing strategy development to British Airways (BA)
 

First level, the company’s core strategy and marketing objectives have been set to ensure that BA is the “customer’s first choice through the delivery of an unbeatable travel experience”. Second level, BA has elected to provide overall superior service and good value for money in every market segment in which it competes. At third level, BA’s marketing program including advertising, pricing, distribution and customer services have been designed to support its product/services.

 

 

Marketing Strategy Orientation
 

Should the development of marketing strategy be oriented by

Ø Consideration of customers or Ø Ø Consideration of competitors

 

Does

organisation having a market orientation make sense? What are the advantages?

 

Advantages

• Promotes listening to the customer • • Happier customers more likely to be retained easily – good for long term profitability • • More customer and competitive information is likely to be obtained and used – good for profitability • • More likely to identify changes in market and competitive conditions – avoid being blindsided • • Helps employees focus on profit, not sales volume

 

WORK OUT ?

ØState your career strategy and your stakeholders

Organization stakeholders
         

SHARE HOLDERS EMPLOYEE CUSTOMERS SUPPLIERS & DISTRIBUTORS

WEBSTER’S MARKETING PRINCIPLES

that serve to guide marketing thought and action in marketing strategy development Principle 1: Focus on customers Principles 2: only compete in markets where you can establish a competitive advantage Principle 3: customers do not buy products Principle 4: Marketing is too important to leave to the marketing department Principle 5: Markets are heterogeneous Principle 6: Markets and customers are constantly changing







Recent developments affecting the strategic role of marketing
       

Globalization Increased Importance of Service Information Technology Relationships across functions and firms

Corporate growth strategies
Current Products New products

Current  Markets

Market penetration strategies

Product development strategies

New Markets 

Market development strategies

Diversification strategies

DISCUSSION QUESTION
 Which

should come first – the customer need or the product idea?

Planning framework for strategy making process

4 main ways of approaching marketing strategy – by douglas west & John ford

What is competitive marketing strategy
 

A

market-oriented strategy that establishes a profitable & sustainable market position for the firm against all forces that determine industry competition by continuously creating & developing a competitive advantage from the potential sources that exist in a firm’s value chain.”

 

Some advantages are sustainable over a long period of time while others can be duplicated by competitors almost immediately. Establishing a competitive advantage means that a firm builds a wall around its position in the competitive market.

 

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people

Components of Strategic Marketing

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