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. 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 PROVIDER’S Goals Survival Financial Social Spiritual Ecological etc OFFERS Products, services etc CUSTOMER’S Goals Customer & Provider Satisfaction Purchases, support RESPONSES Solutions Benefits Altruism Well being etc 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 Competitor Orientation Market-led Organisational Culture Focus on the Long Term Inter-functional Co-ordination 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 MarketOriented Culture Assets Capabilities Market Performance Customer Satisfaction & Loyalty Sales Volume & Market share Financial Performance 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. Strategic Fit 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 Market Definition Mission Company Values Objectives and Strategy Customer Targets Guiding Principles Competitive Positioning Distinctive Competencies Differential Advantage Core skills The Marketing Strategy Process Business Purpose Industry Analysis Market Target Control Core Strategy Competitive Positioning Implementation Marketing Mix Company Analysis Competitive Advantage Organisation Establishing the Core Strategy Analysis of organizational resources. Analysis of the markets served. Analysis of SWOT constituents. SWOT Analysis Good Points Danger Points Internal External Strengths Opportunities What are we good at relative to competitors? What changes are creating new options for us? Weaknesses Threats What are we bad at relative to competitors? What emerging dangers must we avoid or counter? SWOT Strategic Implications Opportunities Strengths Weaknesses Exploit existing strengths in areas of opportunity Build new strengths first to take advantage of opportunities Threats Use existing strengths to counter threats Build new strengths to counter threats Core Strategy Improve Performance Improve Productivity Increase Sales Expand Market Increase Share Increase Margins Reduce Costs New uses Win share Increase price Capital costs New users Acquire share Add value Fixed costs Increase use frequency Create alliances Change product mix Variable costs New products 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.