Marketing Strategy MKT 460. Lecture 1: Strategic Marketing and The Marketing Planning Process Taufique Hossain. Learning Objectives. Be able to conceptualise marketing strategy. Appraise the nature and processes of strategic marketing planning.
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Marketing StrategyMKT 460 Lecture 1: Strategic Marketing and The Marketing Planning Process Taufique Hossain
Learning Objectives • Be able to conceptualise marketing strategy. • Appraise the nature and processes of strategic marketing planning. • Assess the importance of marketing strategy/planning to a business and identify the kinds of things that can go wrong!
Marketing Defined • Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchange and satisfy individual and organizational objectives (AMA 1985). • Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably (CIM 2001). • Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (AMA 2008).
Mutually Beneficial Exchanges OFFERS Products, services etc CUSTOMER’S Goals PROVIDER’S Goals Survival Financial Social Spiritual Ecological etc Solutions Benefits Altruism Well being etc Customer & Provider Satisfaction Purchases, support RESPONSES
The Concept of Market Orientation • Organization wide generation, dissemination, and responsiveness to market intelligence (Kohli and Jaworski 1990). • The organizational culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and thus, continuous superior performance for the business (Narver and Slater 1990).
Components and Context of Market Orientation Customer Orientation Market-led Organisational Culture Competitor Orientation Inter-functional Co-ordination Focus on the Long Term
Fabric of the New Marketing Concept • Create customer focus throughout the business. • Listen to the customer. • Define and nurture the organization’s distinct competencies. • Target customers precisely. • Manage for profitability, not sales volume. • Make customer value guiding star. • Let the customer define loyalty.
Fabric of the New Marketing Concept • Measure and manage customer expectations. • Build customer relationships and loyalty. • Define the business as a service business. • Commit to continuous improvement and innovation. • Manage culture along with strategy and structure. • Grow with partners and alliances. • Destroy marketing bureaucracy.
Resource-Based View of Marketing • Follows from work on the resource based view of the firm in strategic management: • The locus of interest concerns resources and capabilities possessed by the firm, which can be deployed by its strategy to achieve competitive advantage and superior performance. • The source of superior performance lies in the possession and deployment of distinctive, hard to imitate or protected resources.
Marketing Approaches Market Needs Customer-Led Marketing Resource-Based Marketing Product Push Marketing Organisational Capabilities
Organisational Stakeholders Customers Shareholders Distributors Focal Organisation Suppliers Managers Employees
Marketing and Performance Outcomes Marketing Resources Market Performance Assets Market-Oriented Culture Customer Satisfaction & Loyalty Financial Performance Sales Volume & Market share Capabilities
Summary of Marketing Fundamentals • Focus on the customer. • Only compete in markets where you can establish a competitive advantage. • Customers do not buy products. • Marketing is too important to leave to the marketing department. • Markets are heterogeneous. • Markets and customers are constantly changing.
The Role of Marketing in Strategic Management Identify and communicate customer wants and needs throughout the organisation. Determine the competitive positioning to match the needs of the customers with company capabilities. Marshal all relevant organisational resources to deliver customer satisfaction.
Marketing Planning • First step is to define the business purpose or mission: • What business are we in? • What business do we want to be in? • Mission statement—A statement of the organization’s purpose and what it wants to accomplish in the wider environment.
Components of Mission Strategic Intent Vision of what you want to be Mission Objectives and Strategy Market Definition Customer Targets Company Values Guiding Principles Competitive Positioning Differential Advantage Distinctive Competencies Core skills
The Marketing Strategy Process Business Purpose Company Analysis Industry Analysis Core Strategy Competitive Positioning Competitive Advantage Market Target Control Organisation Implementation Marketing Mix
Establishing the Core Strategy • Analysis of organizational resources. • Analysis of the markets served. • Analysis of SWOT constituents.
SWOT Analysis Internal External Strengths What are we good at relative to competitors? Opportunities What changes are creating new options for us? Good Points Weaknesses What are we bad at relative to competitors? Threats What emerging dangers must we avoid or counter? Danger Points
SWOT Strategic Implications Opportunities Threats Exploit existing strengths in areas of opportunity Use existing strengths to counter threats Strengths Build new strengths first to take advantage of opportunities Build new strengths to counter threats Weaknesses
Core Strategy Improve Performance Improve Productivity Increase Sales Expand Market Increase Share Increase Margins Reduce Costs New uses New users Increase use frequency New products Win share Acquire share Create alliances Increase price Add value Change product mix Capital costs Fixed costs Variable costs
Creation of Competitive Positioning • Market targets • Differential advantage: • Cost leadership • Differentiation • Focus
Reading • Hooley et al. Chapters1 and 2. • Nohria, Joyce, and Robertson (2003), ‘What Really Works’, Harvard Business Review, July, pp. 42-53. • Piercy and Morgan (1994), ‘The Marketing Planning Process: Behavioral Problems Compared to Analytical Techniques in Explaining Marketing Plan Credibility’ Journal of Business Research, 3, pp.167-178.