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)
 The Concept of Strategy
– Planning to gain Competitive Advantage
• The job of a strategist is to achieve superior
performance, relative to competition, in the key
factors for the success of business (Ohmae, 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, pathbreaking
technology, shifting consumer tastes and ever-
changing exchange rates.
• Shift from matching ability to coping ability in a
turbulent environment.
 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, understand the
needs and develop products according to
tastes
• Develop good products as defined by
technologists and make them available in
the market.
Street smart planning vs formal planning
 Intuitive planning vs analytical planning
9 II. High Intuition - based V. High Logic and High
Strategy (1,9) Intuition Strategy (9,9)

I
n
t IV. Compromise Strategy
u ( 5.5 )
i
t
i

o
n III. High Logic -based
I. Cessation of Any Type Strategy (9,1)
of Strategy (1,1)
1 Logic 9
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.
Random Walk
– Steps taken in random directions without much
analysis or evaluation.
Strategy as a Revolution
– The companies that overturn the industrial order.
 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
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
New Approach
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
Time Long term Short term
frame
Scope Product market Marketing –mix
decisions and decisions
competitive strategies
Bottom-up
Decision Top-down
–making
process
Item Strategic Marketing Marketing
Management
Environm Dynamic tracking on Snapshot view at
ent scan a continuous basis fixed at intervals
Nature of
plans Ever-evolving to Fixed for the
accommodate new planning period
Strategic developments
posture Proactive Reactive

Strategic
approach Creativity and Logical
originality 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
Strategic Decisions
External Where to compete
Analysis How to compete

Identification Analysis
Trends/future events Information-need
Threats/Opportunities areas
Strategic uncertainties Scenario analysis
Strategic Uncertainties Strategic Decisions
•Will a major firm enter? •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 be •Investment in a new system
feasible with current technology?
•How sensitive is the market to
price? •A strategy of maintaining
• what will be the future demand? price parity
-----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?
 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, 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
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?
 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. Generate
a competitor strength grid.
Concept of strategic marketing
• Within a given environment, marketing
strategy deals essentially with the interplay of
three forces known as the strategic three
Cs: the consumer, the competition, and the
corporation.

• 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.
 Characteristics of Marketing
Strategy
• a clear market definition;
• a good match between corporate
strengths and the needs of the market;
• and superior performance, relative to the
competition.
 Importance of Strategic
Marketing
• Marketing plays a vital role in the strategic
management process of the firm.
• The experience of companies well versed
in strategic planning indicates that failure
in marketing can block the way to goals
established by strategic planning.
 Characteristics of Strategic
Marketing
• Emphasis on Long-Term Implications.
– Strategic marketing is a commitment, not an act.
• Varying Roles for different products /Markets.
– Strategic marketing starts from the premise that
different products have varying roles in the
company.
• Organizational Level.
– Strategic marketing is conducted primarily at the
business unit level in the organization.
 Characteristics of Strategic
Marketing
• Corporate Inputs:
– Corporate culture ~ refers to the style, whims,
traits, taboos, customs, and rituals of top
management.
– Corporate publics ~ are the various
stakeholders with governments and society
constitute and organization’s stakeholders.
– Corporate resources ~ include the human,
financial, physical, and technological
assets/experience of the company.
 Characteristics of Strategic
Marketing
• Relationship to Finance.
– Strategic marketing decision making is closely
related to the finance function.
– Its very important of maintaining a close
relationship between marketing and finance,
and, with other functional areas of a business.
– In recent years, frameworks have been
developed that make it convenient to
simultaneously relate marketing to finance in
making strategic decisions.
 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.
• Many companies in hitherto nonmarketing-
oriented industries are attempting to gain
market share through strategic marketing.
 Future of Strategic Marketing
• Shifts in the channel structure of many
industries have posed new problems.
• More and more countries around the world
are developing the capacity to compete
aggressively in world markets.
• The fragmentation of markets - the result
of higher per capita incomes and more
sophisticated consumers.
 Future of Strategic Marketing
• In planning an early entry in the
marketplace, strategic marketing achieves
significance.
• To successfully develop corporate
imagination and expeditionary policies,
companies need strategic marketing.
The Process of Strategic Marketing