Chapter 1: Introduction to Strategic Marketing Management

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What is Marketing?
Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. - Philip Kotler

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Simple Marketing System

Communication

Industry (a collection of sellers)

Goods/services Money

Market (a collection of Buyers)

Information
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Company Orientations Towards the Marketplace

Production Concept Product Concept
Consumers prefer products that are widely available and inexpensive Consumers favor products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products

Selling Concept
Marketing Concept

Focuses on needs/ wants of target markets & delivering value better than competitors MKT1 - Slide 1 to 24 4

Marketing Concept
Need

to Focus on Marketing Concept

Focuses on needs/ wants of target markets & delivering value better than competitors

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Evolving Views of Marketings Role

Finance

Production

Finance
Human resources

Production Human resources Marketing

Marketing

a. Marketing as an equal function

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b. Marketing as a more important function

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Evolving Views of Marketings Role

Production Marketing
Customer

e. The customer as the controlling function and marketing as the integrative function
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Overlap Between Strategic Planning & Marketing

There

is some overlap between the two, in terms what you are going to learn We will emphasise marketing concepts and approach here rather than strategic concepts However, there will be some inevitable overlap here and there

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Marketing Plan
This

is a document that puts together the process that the organisation will undergo in order to achieve its marketing objectives It spells out the following activities that marketing managers need to do:
Set marketing objectives Evaluate opportunities Create marketing strategies Prepare marketing programmes Specify expected results
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The Marketing Plan Possible Outline

Executive Summary & Table of Contents Current Marketing Situation Opportunity & Issue Analysis Objectives

Marketing Strategy Action Programs

Projected Profit-and-loss
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Controls

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The Goal of Strategic Marketing Management

To

select reality-based desired accomplishments (e.g., goals & objectives) To effectively develop or alter business strategies To set priorities for operational change To improve the organisations performance

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Strategic Marketing Management Model

The

above, discussed in this chapter, is divided as follows:

External/self analysis Strategic posture Market planning

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External Analysis
This

comprise:

Customer analysis (segmentation, motivations & unmet needs) Competitor analysis (their performance, image, culture, strengths/weaknesses) Industry analysis (major market trends, key success factors, opportunities/threats, analysis of competitive/change forces)

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Competitor Forces Analysis

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Self-Analysis
Strengths

& Weaknesses Together Opportunities & Threats identified in the external environmental analysis, can do a SWOT analysis

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Strategic Posture
Based

on the SWOT, the organisation can decide how it will achieve its long term mission/goals Basically zero in on the strengths to take on opportunities, and downplaying the weaknesses, especially in respect to threats.

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Hence: Strategies
Based

on Porters and Aakers work:

Price advantage (cost leadership) Quality/features advantage (broad differentiation) Marker focused advantage (focused low cost & focused differentiation) TQM advantage (value-driven strategy based on continual innovation in price, product & process)
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Competitor Role Strategy

After

organisation has decided on primary competitive strategy, it must position itself by choosing a competitive role strategy:
Leader: largest market share/initiator (e.g., McDonalds) Follower: adopter of successful strategies (A&W Restaurant) Challenger: An innovator who challenges the norm Loner: Feels in the gap in the market place (mom & pop stores)

Dont

try all!
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Strategic Initiatives
Next

step in developing effective posture, priority strategic initiatives:

Grow: e.g., Subway sandwiches Maintain/defend: Mc Donald has been doing this Reposition: maintain size, but change key elements, e.g., IBM) Retrench: Spin-off some businesses, e.g., Nabisco spun off cigarette manufacturing Exit
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Vertical Coordination Strategies

Selling (distribution of) product thru:
Contracts Relation-based alliance: loose, n contracts, but understanding no separate company Equity-base alliance may be a separate company Vertically integrated

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Need to keep in mind

Three

critical marketing concepts:

TLC: Thinking like customers see things from customer viewpoint CMSQ: Critical marketing strategy question why should customers purchase our products over competitors? STP: Segment, target & position

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Segment, Target & Position

STP

strategies should complement organisations overall generic strategy, competitive role strategy, strategic initiative & vertical coordination strategy:
Market segmentation every market made up of distinguishable segments with different needs, buying styles, responses Target market selection selecting market segments which you want to serve Positioning choosing the 4 Ps for that segment(s)

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Strategic Marketing

Company Orientations Towards the Marketplace Marketing Concept Evolving Views of Marketings Role Evolving Views of Marketings Role

Overlap Between Strategic Planning & Marketing

Marketing Plan The Marketing Plan Possible Outline The Goal of Strategic Marketing Management Strategic Marketing Management Model

External Analysis
Competitor Forces Analysis Self-Analysis Strategic Posture Hence: Strategies

Competitor Role Strategy

Strategic Initiatives Vertical Coordination Strategies Need to keep in mind Segment, Target & Position
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