Foundations of Strategic
Marketing Management
“Marketing” Defined
AMA Definition
The process of planning and executing
the conception, pricing, promotion,
and distribution of ideas, goods, and
services to create exchanges that will
satisfy individual and organizational
objectives.
Needs, Wants, & Demands
• Needs
– involve a state of felt deprivation of some
basic satisfaction.
• Wants
– are desires for specific satisfiers of needs.
• Demands
– are wants for specific products that are
backed by an ability, willingness, &
authorization to buy.
Product
• Anything offered for sale that that
satisfies a need or want.
• Can consist of goods, services,
and/or ideas.
Exchanges
Exchange means
obtaining a
desired product
by offering
something
desirable in
return.
Conditions Necessary for Exchanges
to Occur
• At least 2 parties.
• Each has something valued by the other.
• Each is capable of communication &
delivery.
• Each is free to accept or reject offer.
• Each feels it is desirable/appropriate to
deal with the other party.
Markets
A market consists of
• all the potential customers
• sharing a particular need or want,
• who might be willing, able &
authorized
• to engage in exchanges.
Company Orientations Toward the
Marketplace
• Production Concept
• Product Concept
• Sales (or Selling) Concept
• Marketing Concept
• Societal Marketing Concept
Customers’ Viewpoint:
What Does Marketing Provide?
Utilities
Possession Utility
Minimum risk and shopping time.
Place Utility
Convenient Locations
Time Utility
Product is available when the customer
needs it.
Strategic Marketing Management
Processes
1. Defining the organization’s business,
mission, and goals
2. Identifying & framing organizational
growth opportunities
3. Formulating product-market strategies
4. Budgeting marketing, financial, &
production resources
5. Developing reformulation & recovery
strategies
Strategy
• A fundamental pattern of
–present and planned
–objectives, resource
deployments, and interactions
of an organization with
–markets, competitors, and other
environmental factors.
Business Definition, Mission & Goals
• Business Definition
– Essentially, determining what business an organization is in
– MUST be defined from a customer or market perspective
• Business Mission
– Defines scope of operations and reflects management’s
vision of what the organization seeks to do.
• Business Goals
– Desired levels of performance over specified time periods
– Should be problem- or future-oriented.
Identifying & Framing Growth
Opportunities
3 Basic Questions:
1. What might we do?
•
Environmental opportunities
2. What do we do best?
•
Distinctive/core competencies
3. What must we do?
•
Basic requirements to compete successfully
The SWOT Analysis
INTERNAL
Strengths
Weaknesses
EXTERNAL
Opportunities
Threats
Hierarchy of Strategies
Corporate Strategy
Definition of the firm’s mission
Business-Level Strategy
Competencies & Number of Mkts
Marketing (functional) Strategy
Target Markets & Mktg Mix
Types of Corporate Strategy
Growth for Current Markets
Growth for New Markets
Consolidation Strategies
Growth Strategies
Current Markets
• Market
Penetration
• Product
Development
• Vertical
Integration
New Markets
• Market
Development
• Market
Expansion
• Diversification
• Strategic
Alliances
Consolidation Strategies
Retrenchment
Pruning
Divestment
The Marketing Mix
1. Product Strategy
• Kind of good, service, or idea
2. Communication Strategy
• Promoting the product
3. Channel Strategy
• Distributing the product
4. Price Strategy
• Determining amount buyer will/should
pay for the product