CHAPTER THREE

3. STRATEGIC MARKETING
3.1 STRATEGY
Introduction
What is the term “Strategy” mean?
 The term strategy is derived from a Greek word “Strategos”
which means generalship.
 Literally, therefore, the word strategy means the art of
general.
 In business parlance (speaking), there is no definite meaning
assigned to strategy.
 It is loosely used to mean a number of things. 1
 STRATEGY…
• According to Alfred D. Chandler (1962), strategy was
defined as “The determination of the basic long-term
goals and objectives of an enterprise and adoption of the
course of action and the allocation of resources necessary
for carrying out these goals.”
Here, we can note that Chandler refers to three aspects:
 Determination of basic long-term goals and objectives.
 Adoption of courses of action to achieve these objectives;
and
 Allocation of resources necessary for adopting the course of
action.

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STRATEGY…
 According to William F. Glueck (1972), “A unified,
comprehensive and integrated plan designed to assure that the
basic objectives of the enterprise are achieved.”
• According to Arthur Sharplin (1985), “A plan or course of
action which is of vital, pervasive or continuing importance to
the organization as a whole.”
• According to Ansof (1984), “Basically a strategy is a set of
decision making rules for guidance of organizational behavior.”

• In general, strategy is a game plan that helps achieve the

organizational goals or objectives.
• Strategy is a means to an end.
• The organization can achieve its goals or objectives using
different strategies (game plans).
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 STRATEGY…
For example, if the goal of the organization is to increase its market
share (sales volume), it should set the following strategies in order to
achieve its goal.
1. Price reduction
2. Increased spending on ads
3. Increasing the size of sales force
4. Increasing distribution network/channels
5. Increasing sales promotion
6. Product differentiation
 The goal of growth of sales volume (market share) can be
achieved only by increasing expenditure or lowering profit
margins per unit.
 However, if the objectives were profit increasing, we could take
up the opposite of the previous list, which is increasing price
and/or decreasing all the costs would be the remedy. 4
Strategic Planning
Strategic planning is the process of developing and maintaining a viable
fit between the company’s objectives & resources, and the
opportunities available in the market.
The core concepts and things associated with strategic planning are:
Mission 
 From very beginning, when an organization is established, it has to
set its mission.
 Organizations relate their existence to satisfying a particular need of
the society.
 They do this in terms of their mission statement.
 Mission is a statement, which defines the role that an organization
plays in the society.
 Each business unit needs to define its specific mission within the
broader company mission.
 For example, the faculty of social sciences sets its specific mission
within the broader University mission. 5
strategic…

The mission of the faculty of social science is “To produce highly

qualified personnel who could yield professional service to the
society in the competitive market”.

 Objectives: Where the organization is projected to go.

 Strategy: it refers to the general collective way the company follow
to achieve its objective.
 Tactic: More or less the same with strategy but different in terms of
scope and the thing for which they stand. Strategy is general and
tact is specific.
Levels of Strategic Planning
We shall consider strategy at two levels:

• Company (Strategic company planning)

Vs.
• Functional (Strategic Marketing planning) levels

The strategic Company planning process consists 

1. Defining the Business mission
2. Situation Analysis (SWOT)
3. Developing goals or objectives
4. Strategy formulation
Strategic Marketing Planning (functional level)
• Marketing plan is one of the most important outputs
of the marketing process.
Strategic Marketing planning as a process consists
of the following four steps:
 Situation analysis
 Developing marketing objectives
 Select target market and determining positioning
and defferential advantage
 Design a strategic marketing mix plan for the
selected target markets.
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The Nature and Content of a Marketing Plan:
As may be seen hereunder, Strategic marketing plans have several
sections:
1. Executive summary and table of contents: Executive summary
presents a brief overview of the proposed plan in a few pages of the
plan’s main goals and recommendations.
The executive summary permits the higher management to grasp
quickly the plan’s major thrust. A table of contents should follow the
executive summary.
2. Current marketing situation: Presents relevant background data on
the market, product, competition, distribution and macro-
environment.
Current marketing situation consists of the following situations:
 Market situation: Here the data of past several years are presented.
Data on consumer needs, perceptions, and buying-behavior trends are
also presented. 9
…sections…
 Product situation: Here the sales, prices, contribution margins, and
net profits are shown for each major product in the line for several
past years.
 Competitive situation: The major competitors are identified and
described in terms of their size, goals, market share, product quality,
marketing strategies, and other characteristics that are needed to
understand their intentions and behavior.
 Distribution situation: This section presents data on the size and
importance of each distribution channel.
 Macro - environment situation: This section describes broad trends –
demographic, technological, political/legal, social/cultural- that bear
impact on the product line’s future.
3. SWOT analysis: Identifies the main strengths/weaknesses,
opportunities/ threats, and issues facing the product line.
…sections…
4. Objectives: After the product manager has summarized
the issues involved, he must decide on the plan’s
objectives. Two types of objectives must be set:
Financial and Marketing.
 Financial objectives: The organization wants each
business unit to deliver a good financial performance.
E.g. The product manager sets the following financial
objectives.
– Earn an annual rate of return on investment over next
5 years
– Produce net profits of $2 million in 2022/2023
– Produce a cash flow of $4 million in 2023/24
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…sections…
Marketing objectives: The financial objectives are
converted to marketing objectives. E.g. The following
marketing objectives can be set:
 Achieve total sales revenue of 12 million in 3 year.
 Expand consumer awareness of the brand from
15% to 20 % over the planning period.
 Expand the number of dealers by 10 percent and
so on.
Therefore, objective defines the plan’s financial and
marketing goals in terms of sales volume, market
share and profit.
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…sections…
5. Marketing Strategy:
• The marketing manager outlines the broad marketing strategy or
game plan that s/he will use to accomplish the plan’s objective.
• The marketing strategy consists of: target market, positioning,
product line, distribution outlets, sales force, service,
advertising, sales promotion, research and development,
marketing.
• In developing the strategy, the product manager needs to talk
with purchasing and manufacturing people to make sure they are
able to buy enough material and produce enough units to meet
the needed sales-volume levels.
• He also needs to talk with the sales manager to obtain the
planned sales force support, and to the financial officer to make
sure enough ads and promotion funds will be available.
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…sections…
6. Action Plans: The marketing plan must specify the broad
marketing programs designed to achieve the business objectives.
Each marketing strategy element must be elaborated to answer:
What will be done? When will it be done? Who will do it? How
much will it cost? And where will it be done?
7. Projected profit- and–loss statement/Marketing Budget:
Action plans allow the product manager to build a supporting
budget. Forecasts the plans expected financial outcomes.  
8. Controls: Indicates how the plan will be monitored. Some
control section include contingency plan.
A contingency plan outlines the steps that the management would
take in response to specific adverse developments such as
price wars or strikes.

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OF
CHAPTER THREE