Marketing Strategy & Competitive Positioning

6th edition

Chapter 2
Strategic Marketing
Planning

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
 Introduction

• The essence of developing a marketing strategy

for any organization is to ensure that its
capabilities are matched to the market
environment in which it operates.
• Strategic planning:
1. What is the business doing now?
2. What is happening in the environment?
3. What should the business be doing?

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
 Organization’s Process
EXTERNAL INTERNAL
EMPHASIS EMPHASIS
Outside-In Inside-Out
Processes Processes
Spanning Processes
• Market sensing • Financial management
• Customer order
• Customer linking fulfillment • Cost control
• Channel bonding • Pricing • Technology
development
• Technology • Purchasing
monitoring • Integrated logistics
• Customer service delivery
• Manufacturing/
• New product/service transformation
development processes
• Strategy development • Human resources
management
• Environment health and
safety
Source: George S. Day, Journal of Marketing, October 1994, 41.
Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
 DISTINCTIVE CAPABILITIES

“Capabilities are complex bundles of

skills and accumulated knowledge,
exercised through organizational
processes, that enable firms to
coordinate activities and make use of
their assets.”

George S. Day, Journal of Marketing, October 1994, p.38.

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Figure 2.1
Strategic fit

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Defining the Business Purposes or Mission

Figure 2.2 : Components of mission

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
2-7
Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Google

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Product Orientation vs. Market Orientation
Company Product Market
Missouri-Pacific We run a railroad We are a people-
Railroad and-goods mover

Xerox We make copying We improve office

equipment productivity

Standard Oil We sell gasoline We supply energy

Columbia Pictures We make movies We entertain

people

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
The marketing strategy process (Figure 2.3)

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Establishing the Core Strategy
Figure 2.4 : Product types in the portfolio

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Analysis of Organisational Resources
Exp: Southwest Airline’s Distinctive Capabilities
Organizational Processes
Southwest uses a point-to-point route system rather than the hub-and-spoke design
used by many airlines. The airline offers services to 57 cities in 29 states, with an
average trip about 500 miles. The carrier’s value proposition consists of low fares and
limited services (no meals). Nonetheless, major emphasis throughout the organization
is placed on building a loyal customer base. Operating costs are kept low by using only
Boeing 737 aircraft, minimizing the time span from landing to departure, and developing
strong customer loyalty. The company continues to grow by expanding its point-to-point
route network.
Skills and Accumulated Knowledge
The airline has developed impressive skills in operating its business model at very low
cost levels. Accumulated knowledge has guided management in improving the
business design over time.
Coordination of Activities
Coordination of activities across business functions is facilitated by the point-to-point
business model. The high aircraft utilization, simplification of functions, and limited
passenger services enable the airline to manage the activities very efficiently and to
provide on-time point-to-point services offered on a frequent basis.
Assets
Southwest’s key assets are very low operating costs, loyal customer base, and high
employee esprit de corps
Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Portfolio Planning
Figure 2.5: Balancing the business portfolio

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Figure 2.6
Unbalanced, present-focused business portfolio

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Figure 2.7
Unbalanced, future-focused business portfolio

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
SWOT analysis (Figure 2.8)

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Figure 2.9
SWOT strategic implications

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Core Strategy

Figure 2.10 : Strategic focus

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
 Creation of the Competitive Positioning

• Market Targets
• Differential Advantage:
References:
1.Generic Strategies (Porter)
2. Value-Discipline Positioning (Treacy & Wiersema)
3. Blue-ocean Strategy (Kim & Mauborgne)

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Figure 2.11
Routes to competitive advantage

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Implementation

Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved