NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT
1 : UNDERSTANDING MARKETING
MANAGEMENT
UNIT 1: UNDERSTANDING MARKETING MANAGEMENT
UNIT INTRODUCTION
This unit introduces the concept of strategic marketing management, and its contribution
to the success of the organisation. The unit begins by explaining what strategic marketing
management is, and thereafter marketing in the new reality is defined. The unit then
describes marketing as a business discipline, and subsequently provides an explanation of
marketing management within a global context. The unit then introduces marketing
strategy and tactics, and the influence this has on an organisation’s success. The unit then
concludes by describing marketing planning and management, and the business growth
strategies an organisation can implement to successfully grow.
UNIT 1: UNDERSTANDING MARKETING MANAGEMENT
UNIT LEARNING OUTCOMES
• Explain the nature of strategic marketing management
• Discuss marketing: its role and definitions
• Identify and discuss the scope of marketing
• Explain marketing management
• Evaluate the role of marketing as a business discipline
• Explain your understanding of management
• Examine marketing management
• Explain global marketing management
• Design and implement marketing strategies
• Develop marketing strategies and tactics and their applications in the business
environment
• Outline the key aspect of the process of marketing planning and management
• Develop clear business strategies that can adapt to a fast-changing marketing
environment
Understanding Marketing Management
What is Strategic Marketing Management?
Marketing Management is about meeting human and social needs
profitably and may be defined as “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” (Kotler
& Keller, 2016).
The advent of new business models, accelerating globalisation, and the
rapid growth of technical innovation have made markets today more
dynamic, unpredictable, and interdependent than ever. The need of
approaching marketing management strategically is emphasised by the fact
that the environment in which businesses operate is becoming more
complex (Chernev, 2019:4).
Understanding Marketing Management
Defining Marketing for the New Reality
Marketing is both an art and a science. It is an art because institution and
creativity can play a major role in the development of a successful marketing
campaign. Marketing is also a science because it captures the generalised
understanding that reflects the experiences of multiple companies across a
diverse set of industries (Chernev, 2019:11). This understanding supplements
managers’ institutions and improves their capability to design successful offerings
that create market value. Kotler, et al., (2019:4) state effective marketing is not a
coincidence. It is both an art and a science, and it comes from meticulous
preparation and execution employing cutting-edge equipment and methods.
Marketing is the process of discovering and profitably addressing social and
human needs. The act of "filling client requirements profitably" is one of the
shortest definitions of marketing (Kotler, et al., 2019:4).
Understanding Marketing Management
Marketing: Its Role and Definitions
Marketing is a set of activities related to creating, communicating, delivering, and
exchanging offerings that have value for others (Kotler, et al., 2019:6).
According to Kotler, et al., (2019:6), the role of marketing is to convey value to
customers, whom the business seeks to identify, satisfy, and retain. In marketing,
the act of obtaining a desired object from someone by offering something of value in
return is called the exchange process.
Understanding Marketing Management
THE ROLE OF MARKETING
IDENTIFY
CUSTOMERS
SATISFY
CUSTOMERS
RETAIN
CUSTOMERS
• Understand customer wants
and needs
• Identify whom to target and how
to reach them
• Make the right product or service
available to the right people at the
right time
• Make everyone feel better off
from the exchange
• Give customers a reason to keep
coming back
• Find new opportunities to win
their business
Understanding Marketing Management
Identifying the Scope of Marketing
•
•
•
•
•
•
•
•
•
•
Goods
Services
Experiences
Events
Persons
Place
Properties
Organisation
Information
Idea
Understanding Marketing Management
Overview of Marketing Management
Understanding Marketing Management
Overview of Marketing Management –continued from previous slide
Understanding Marketing Management
Marketing as a Business Discipline
• Understanding the Role of Marketing as a Business
Discipline
• Essence of Marketing as a Business Discipline
• Common Misconceptions about Marketing
Understanding Marketing Management within a Global
Context
• What is Marketing Management?
• Management and Marketing Management
Understanding Marketing Management
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Understanding Marketing Management
Global Marketing Management
What is Global Marketing?
Lee and Carter (2020:6) state that Global marketing is expansive, extensive, and
complex. It can be seen as both a business strategy and an operation, as a force for
good and/or as the ‘new imperialism’. It can be embodied in companies or perceived
as a phenomenon (e.g. business globalisation, the internet, etc.). One view of global
marketing is as a giant supply chain management system or an added value system.
Understanding Marketing Management
The Nature and Scope of the Strategy
According to Kotler, et al. (2019:65), creating the ideal marketing plan over time calls
for a combination of professionalism, discipline, and adaptability. To succeed in today's
fiercely competitive marketplaces, businesses must develop a strategy and always look for
ways to enhance it. The primary responsibility of marketing is to create tactics that provide
value that customers perceive. Regarding the nature of marketing strategy and marketing
tactics, a marketing strategy can be looked at as an organisation’s integrated pattern of
decisions that specify its crucial choices concerning products, markets, marketing activities,
and marketing resources in the creation, communication, and/or delivery of products that
offer value to customers in exchanges with the organisation and thereby enables the
organisation to achieve specific objectives.
TITLE
The Process of Developing an Action Plan through the G-STIC Framework
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT 2 : DEVELOPING MARKETING
STRATEGIES AND PLANS
UNIT 2: DEVELOPING MARKETING STRATEGIES AND PLANS
UNIT INTRODUCTION
This unit describes how a marketing plans and strategies are developed. The unit begins
with first defining the marketing plan, and thereafter how markets and customers perceive
value is described. The unit then discusses how corporate, divisional, and business unit
strategic planning is executed. The unit then discusses the nature and content of a
marketing plan.
UNIT 2: DEVELOPING MARKETING STRATEGIES AND PLANS
UNIT LEARNING OUTCOMES
• Define the marketing plans and strategies that guide marketing operations and
management procedures
• Discuss how marketing affects the customer-perceived value
• Examine how corporate and divisional strategic planning is conducted
• Explain how strategic business unit (SBU) planning is carried out
• Explain what is involved in developing a marketing plan
• Summarises the topic areas covered in the unit
Marketing Plan Defined
The marketing plan must take into account both South African marketing reality and
shifting customer attitudes. The marketing staff must possess the abilities necessary
to alter the organisation's course and handle a difficult climate both internally and
outside, whether it be regionally within South Africa or globally. Any organisation's
first objective is to determine its possible long-term opportunities in light of its
market expertise and core competencies. Prior to designing its goods to meet those
objectives, the organisation must determine what its consumers' wants are. The
company might build a range of goods based on its primary competencies or by
considering additional client demands. Whatever course an organisation takes, it
must create a detailed marketing plan outlining its future marketing strategy and
techniques (Kotler, Keller, Brady, Goodman, and Hansen, 2019:26).
Marketing and Customer-Perceived Value
According to Kotler, Keller, Brady, Goodman, and Hansen (2019:26), the
management process' main actions include developing marketing strategies and
plans that direct marketing. The correct marketing plan must be developed over
time, and this calls for a combination of professionalism, dedication, and
adaptability. To succeed in today's fiercely competitive marketplaces, businesses
must develop a strategy and always look for ways to enhance it. The basic
responsibility of marketing is to create tactics that offer value that customers
perceive. The marketing strategy is the main tool for guiding and organising a
company's marketing operations, according to Chernev (2019:4).
MEASURING CUSTOMER PERCEIVED VALUE
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Corporate and Divisional Strategic Planning
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Building the Corporate Business Portfolio – Assessing Growth
Opportunities
Intensive Growth
Building the Corporate Business Portfolio – Assessing Growth
Opportunities
Intensive Growth
The Nature and Content of a Marketing Plan
According Zabanga (2020:1), the marketing plan created for each product line or
brand is one of the most important outputs of planning for the marketing process. A
typical marketing plan has eight sections:
1. Executive summary and table of contents:
2. Current marketing situation:
3. Opportunity and issue analysis:
4. Objectives: This section spells out the financial and marketing objectives to be
achieved.
5. Marketing strategy:
6. Action programs:
7. Projected profit-and-loss statement:
8. Controls
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT 3: THE ESSENTIALS OF MARKETING
STRATEGY AND TACTICS
UNIT 3: THE ESSENTIALS OF MARKETING STRATEGY AND TACTICS
UNIT INTRODUCTION
The unit first defines the concept of marketing strategy, and
thereafter explains the tactics, target market, value proposition and
market offering within the value creation process.
UNIT 3: THE ESSENTIALS OF MARKETING STRATEGY AND TACTICS
UNIT LEARNING OUTCOMES
• Define the essentials of marketing strategy and tactics with the associated two
building blocks: strategy and tactics
• Examine marketing strategy and tactics
• Design offerings that deliver benefits to target markets
• Distinguish between the contexts and relationships of strategy and tactics
• Explain marketing strategy within the target market
• Demonstrate and understand marketing strategy as a value proposition
• Analyse how tactics define the company’s specific offering
• Assess marketing tactics as a process of designing, communicating, and
delivering value
Marketing, Strategy and Tactics- The SOSTAC framework
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MARKETING STRATEGY: THE VALUE PROPOSITION
Value proposition is an explicit promise made by a company to its customers that it
will deliver a particular bundle of value creating benefits. MacDonald (2015:3) says
that a value proposition is a positioning statement that explains what benefit you
provide for who and how you do it uniquely well. Value propositions define how your
products, services and solutions are constructed and offered to meet a prospect’s
needs. The key is to define your value based on the prospect you intend to sell (target
market) and your unique strengths (competitive advantage) you bring to them. A
meaningful value proposition allows a company to design an offering that creates
value for all relevant parties in the market exchange-target customers, collaborators,
and the company (Chernev 2019:52).
Marketing Tactics: The Market Offering
The Seven Attributes Defining the Market Offering:
• The product
• The service
• The brand
• The price
• Incentives
• Communication
• Distribution
Marketing Tactics as a Process of Designing, Communicating, and
Delivering Value
It is possible to think of the seven marketing strategies—product, service, brand,
pricing, incentives, communication, and distribution—as a method for creating,
expressing, and delivering value to customers.
Aspects of the providing that determine its value include the good or service,
name recognition, cost, and incentives. Aspects that convey the worth of the
offering include communication and distribution. Customer value is created
across all three dimensions, with different attributes playing distinct roles in the
value-creation.
Communication and distribution are the channels through which the benefits
created by the first five attributes are communicated and delivered to target
customers. The value-creation process can be examined from both the company
and customer perspectives. From a company’s perspective, value creation is a
process of designing, communicating, and delivering value.
IDENTIFY THE MARKET VALUE MAP
For practical purposes, the strategy and tactics delineating a company’s business
model can be represented as a value map that outlines the ways in which an offering
creates value for its target customers, collaborators, and the company. The market
value map is a schematic presentation of the business model, enabling managers to
clearly articulate the key aspects of the company’s strategy and tactics. Thus, the
primary purpose of the value map is to visually outline the key aspects of the
business model and serve as a guide that lays out the company’s strategy and tactics.
THE MARKET VALUE MAP
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NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT 4: CONNECTING WITH CUSTOMERS
UNIT 4: CONNECTING WITH CUSTOMERS
UNIT INTRODUCTION
This unit explains how an organisation can connect with its customers. The unit begins by
exploring how to connect with customers, and thereafter discusses how to engage in
target market differentiation strategies. The unit then discusses how customer value,
satisfaction, and loyalty is created, and subsequently explains how brand equity is
managed. The unit concludes with a discussion on global brand management strategies.
UNIT 4: CONNECTING WITH CUSTOMERS
UNIT LEARNING OUTCOMES
• Explain how organisations are strategically connecting with customers
• Analyse how organisations connect and divide large, broad, or diverse markets
into groups of customers or segments with distinct needs and want
• Evaluate customer values, satisfaction, and loyalty
• Evaluate what is meant by brand management
• Analyse the key strategic brand management decisions
• Outline the management issues for digital branding
• Analyse the core requirements for global brand management strategy
Exploring ways to Connect with Customers
Connecting with customers explores the following key
themes:
1. Segmentation
2. Targeting
3. Positioning
4. The purpose of branding
5. How to create and sustain a strong, well-regarded brand
Seeking and Developing Target Marketing differentiation
Strategies
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Creating and Managing Brands and Brand Equity
• What is a Brand?
• Brand Management
The Roles of Brands
• Functional Role of Brands
• Emotional Role of Brands
Strategic Brand Management Decisions
Digital and Global Brand Management Strategies
• What is a Digital Brand?
• Understanding the Digital Brand Experience
• Understanding the Consumer Decision Journey and Digital Branding
Understanding the Consumer Decision Journey and Digital
Branding
Understanding the Consumer Decision Journey and Digital
Branding
Brand experience functions as a journey that consumers have around the several
points of interaction with the brand. These points of interactions are the touch
points of the brand (Wanick, et al., (2017:1269). In a more thorough decisionmaking process that continues after the sale, the consumer choice journey
considers digital technologies and consumer-to-consumer contact. These journeys
are increasingly being managed by marketers as a key component of the consumer
experience and a source of competitive advantage. The client adds and removes
brands from a group at the beginning of the purchase process and has a lengthy
assessment time. If considering the whole consumer journey, it is possible to
separate this process into three stages: pre-purchase, purchase and postpurchase. Thus, for example, in the pre-purchase stage, consumers interact with
advertising strategies and the company’s website, while in the purchase stage.
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT
5 : CREATING COMPANY VALUE
UNIT 5: CREATING COMPANY VALUE
UNIT INTRODUCTION
This unit focuses on creating company value. The unit covers the
topics of defining company and customer value exchange, the
dimensions of company value, managing monetary value and profits
by increasing sales revenue, lowering costs, managing and
communication strategic value, creating market value through
collaboration, and developing viable positioning strategy between
collaborators and stakeholders
UNIT 5: CREATING COMPANY VALUE
UNIT LEARNING OUTCOMES
• Explain how companies and customers interact to create a mutually beneficial
value exchange
• Critically discuss companies as entities established for the purpose of creating
value for their customers
• Examine how offerings are either directly or indirectly linked to profitability
• Assess the prevalent approach to achieving long-term profitability
• Explain an alternative strategy to grow profits by lowering costs rather than
increasing sales revenues
• Examine the ways in which offerings can create strategic value for the
organisation
• Produce better ways organisations communicate their offerings
• Analyse organisational collaborative activities for the purpose of creating
superior market value
• Demonstrate knowledge of how an organisation could develop a viable
positioning for its collaborators and stakeholders
Company and Customer Value Exchange Defined
Chernev (2019:193) mentions that markets comprise companies and customers that
interact with one another to create a mutually beneficial value exchange. To build a
successful market strategy, a manager must understand not only how to design an
offering that is desired by target customers but also that enables the company to
create value for its stakeholders.
Customer value creation is considered to have a positive impact on satisfaction and
loyalty as relational outcome variables. International Federation of Accountants
(IFAC), (2020:5) mentions that how value is defined is by customers, investors,
employees, suppliers and other stakeholders. Value itself, as well as priorities for
value creation, are defined in the context of meaningful engagement with key
stakeholders, and opportunities and threats facing the organisation. These inform an
organisation’s purpose, values, strategy and measures of success. IFAC (2020:5)
further states that defining value involves establishing and prioritising stakeholders,
understanding how they are relevant to the organisation’s purpose and strategy, and
assessing how to balance their respective needs and expectations.
Dimensions of Company Value
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Managing Monetary Value
To maximise profits, a manager must understand the key drivers of a
company’s bottom line, prioritise their impact, and focus on changes that
will have the greatest impact on profits. The key profit drivers can be
presented in the form of a tree-like diagram that delineates the individual
factors contributing to the company’s bottom line.
Managing Profits by increasing Sales Revenue
According to Chernev (2019:199), boosting sales revenues is a
common strategy for creating long-term profitability. Sales
growth can be attained via expanding internally, a strategy
known as "organic" growth, or by buying or merging with
another business. The organic growth plan, which is likely the
most popular sales growth strategy, is the topic of this section.
Growing sales volume and pricing optimisation are the two key
strategies for boosting sales income in this scenario.
STRATEGIES FOR GROWING SALES VOLUME
C :
Managing Profits by Lowering Costs
0
t
Managing Strategic Value
Chernev (2019:207) argues that not all offerings are designed to generate
profits: Some aim to create brand awareness, promote other offerings in the
company’s product line, enhance the corporate culture, and facilitate talent
recruitment and retention. The ways in which offerings can create strategic
value for the company and strategies for showcasing the financial benefits of
strategic offerings are discussed in the following sections.
Although managing strategic value do not directly generate profits, strategic
offerings contribute to the overall profitability of the company through
synergies with other profit-generating offerings. Thus, even though a
particular offering does not yield profits, it still can be an important
component in creating company value by increasing the desirability of the
other offerings in the company’s product line.
Communicating Strategic Value
The issue of relating strategic value to monetary outcomes is
particularly important for companies that offer functionally
superior offerings at a higher price than their low-price, lowquality competitors. Because buying decisions are often made
by purchasing managers whose primary focus is on monetary
benefits, many of these managers tend to overlook some of the
benefits that do not directly create monetary value. To better
communicate the value of its offerings to financially minded
managers, a company might consider expressing the strategic
benefits of the offering in monetary terms—a process
commonly referred to as economic value analysis. The
economic value analysis is predicated on the idea that the
strategic benefits of an offering can be quantified and
monetised based on the long-term financial impact of these
benefits on the company.
Creating Market Value through Collaboration
Collaboration involves entering into a relationship with another
entity and delegating to it a subset of the company’s activities for
the purpose of creating superior market value. The key aspects of
managing collaborator relationships are discussed in the following
sections.
The Essence of Collaboration
According to Chernev (2019:214), value creation through collaboration
shows a fundamental change away from a business paradigm in which a
firm develops customer value alone to a new paradigm in which the
value is jointly generated by the company and its collaborators. The
trend toward collaborative commercial enterprises is the result of the
idea that more knowledge, more cost efficiency, and a larger scope of
operations may be attained through cooperation. Therefore,
cooperation brings together several parties to establish an efficient and
effective value exchange, including suppliers, manufacturers,
distributors (dealers, wholesalers, and retailers), R&D firms, service
providers, external salesforce, advertising agencies, and market
research firms.
Developing a Viable Positioning Strategy between
Collaborators and Stakeholders
Developing a Collaborator Positioning Statement
An offering must add value for both its target consumers
and the company's partners in order to flourish. As a result,
managers must also create a positioning statement that
describes the value of the service to its partners in addition
to one that is customer-focused. The collaborator-focused
positioning statement is similar to the customer-focused
positioning statement, with the main difference being that
it identifies the company's key collaborators and outlines
the key aspects of the offering's value proposition for them
rather than target customers and their key value drivers.
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT 6 : THE CHANGING MARKETING
ENVIRONMENT AND INFORMATION
MANAGEMENT
UNIT 6: THE CHANGING MARKETING ENVIRONMENT AND INFORMATION
MANAGEMENT
UNIT INTRODUCTION
This unit focuses on the changing marketing environment and information
management. The unit covers the topics of defining environmental factor trends,
the key methods for tracking and identifying opportunities in the environment,
the components of a modern marketing information system, the internal records
of marketing processes the marketing intelligence system, and database
management.
UNIT 6: THE CHANGING MARKETING ENVIRONMENT AND INFORMATION
MANAGEMENT
UNIT LEARNING OUTCOMES
• Explain the broad environmental factors that affect activity in markets
• Discuss how the marketing environment is constantly presenting new
opportunities and threats
• Discuss marketing environment factors and their dynamics
• Analyse managing marketing information system
• Analyse the internal record that can spot important opportunities and
problems. Demonstrate how the marketing intelligence system supplies
happenings data
• Classifying and managing database system
Environmental Factor Trends Defined
According to Kotler et al. (2019:139), the marketing environment is changing more
quickly than ever before as a result of globalisation and technological advancements.
As a result, it is crucial that businesses create and maintain database management
systems that offer a structured understanding of and inspiration for marketing
decision-making, as well as up-to-date information about macro trends as well as
about micro effects specific to their industry. The business can store, edit, and extract
data as needed thanks to a well-designed database management system. The
marketing environment is continually providing new possibilities and risks, and
holistic marketers are aware of the significance of continuously observing and
adjusting to that environment.
According to Kotler et al. (2019:139), environmental responsibility is now a top
concern for the majority of governments, legislators, residents, customers, and
businesses. The competitiveness of a firm may currently be boosted by introducing
more eco-friendly goods, changing the production process, updating outdated
procedures, decreasing waste, minimising energy consumption, and other activities
to conserve energy or resources. This tendency has been recognised by several
businesses, including the food and beverage sector.
The Key Methods for Tracking and Identifying
Opportunities in the Environment
Analysing the Macro Environment
Identifying the Major Forces :
• The Sociocultural and Demographic Environment
• The Economic Environment
• The Social–Cultural Environment
• High Persistence of Core Cultural Values
• Existence of Subcultures
• The Ecological and Physical Environment
• The Technological Environment
• The Political–Legal Environment
• The Increase in Business Legislation
• The Growth of Special Interest Groups
The Components of a Modern Marketing Information
System
A marketing information system consists of people, equipment and
procedures to gather, sort, analyse, evaluate and distribute needed,
timely and accurate information to marketing decision makers. A
marketing information system relies on internal company records,
marketing intelligence activities and marketing research. We will
discuss the first two topics here and the third one in the next chapter.
The marketing information system for the organisation should
include what managers believe they need, what they actually need,
and what is practical financially.
Internal Records
Marketing managers rely on internal reports on orders, sales, pricing,
expenses, inventory levels, receivables, payables, and other data, according to
Kotler et al. (2019:154). They are able to identify significant possibilities and
challenges by analysing this data. Alshura (2018:5) adds that the fundamental
resource of information, which is accessible easily and comprises of all
marketing operations records available within the organisation are obtained
from Internal records system. This system will gather, analyse, interpret, and
distribute needed information from different departments within the
organisation.
The Marketing Intelligence System
A company can take several steps to improve the quality of its
marketing intelligence:
• Train and motivate the sales force to spot and report new
developments.
• Motivate distributors, retailers and other intermediaries to pass
along important intelligence
• Network externally.
• Set up a customer advisory panel.
• Take advantage of government data resources.
• Purchase information from outside suppliers
• Use online customer feedback systems to collect competitive
intelligence.
Database Management
Database marketing, according to Kotler, et al. (2019:157), is
the process of creating, managing, and leveraging customer
and other databases (products, suppliers, resellers) to get in
touch with, conduct business with, and develop
connections with customers.
Database Management
Companies can use their databases in five ways:
1. To identify prospects
2. To decide which customers should receive a particular offer.
3. To deepen customer loyalty
4. To reactivate customer purchases.
5. To avoid serious customer mistakes
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT
7 : IDENTIFYING TARGET CUSTOMERS
UNIT 7: IDENTIFYING TARGET CUSTOMERS
UNIT INTRODUCTION
This unit focuses on identifying target customers. The unit focuses on the topics
of first defining target customers, and thereafter discusses targeting as a
marketing concept. The unit then explains strategic and tactical targeting, and
discusses aligning customer value and customer profile. The unit concludes with a
discussion on how to segment the market.
UNIT 7: IDENTIFYING TARGET CUSTOMERS
UNIT LEARNING OUTCOMES
• Analyse the development of a viable marketing strategy by deciding which customers to target
• Examine the process of identifying target customers that are guided by the organisation’s ability to
develop an offering that fulfils the needs of the customers better than the competition
• Discover targeting as a means of creating a competitive advantage
• Explain the key aspect of tactical targeting
• Identify an effective and cost-efficient approach to communicating and delivering the offering to
already selected target customers
• Aligning Customer Value and Customer Profile
• Reinforce the process of linking value-based and profile-based aspects of the target customer
• Develop argument around the key principles that drive the process of dividing potential buyers
into market segments
Targeting as a Marketing Concept
Targeting is the process of identifying customers for whom
the company will optimise its offering. Simply put,
targeting reflects the company’s choice of which
customers it will prioritise and which customers it will
ignore when designing, communicating, and delivering its
offering. That is, a target market is defined as a set of
buyers sharing common needs/characteristics that the
company decides to serve.
Strategic Targeting
According to Chernev (2019:115), strategic and tactical targeting vary in
their goals. Strategic targeting involves trading off market size for a better
fit between the offering’s benefits and customers’ needs. Instead of trying
to reach the entire market with an offering that attempts to appeal to a
wide variety of customers with diverse needs, strategic targeting calls for a
conscious decision to ignore some potential customers in order to better
serve others by tailoring the offering to their specific needs. Tactical
targeting, on the other hand, does not aim to exclude any potential
customers. Instead, it aims to reach all strategically important customers in
a way that is both effective and cost efficient for the company. Because
they have different goals, strategic and tactical targeting prioritise different
factors. Strategic targeting focuses on the value that the company can
create for and capture from target customers. In contrast, tactical targeting
focuses on the means by which the company can reach these customers.
Strategic Targeting
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Tactical Targeting
• Defining the Customer Profile
• The Customer Identification Problem
Aligning Customer Value and Customer
Profile
Identifying Target Customers by Linking Their Value
and Profile Characteristics
Segmentation as a Marketing Concept
Strategic and Tactical Segmentation
• Strategic segmentation
• Tactical segmentation
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT 8 : MANAGING MARKET RESEARCH AND
FORECASTING
UNIT 8: MANAGING MARKET RESEARCH AND FORECASTING
UNIT INTRODUCTION
This unit focuses on managing marketing research and forecasting. The topics
discussed in this unit include the marketing research defined, what constitutes
good marketing research, the marketing research process, overcoming barriers to
the use of marketing research, forecasting and demand measurement, estimating
current demand, and estimating future demand.
UNIT 8: MANAGING MARKET RESEARCH AND FORECASTING
UNIT LEARNING OUTCOMES
•
Describe marketing research system
•
Analyse effective marketing research process
•
Establish barriers to the use of marketing research
•
Assess forecasting and demand measurement
•
Outline an estimation of current demand
•
Outline an estimation of future demand
What Constitutes Good Marketing
Research?
According to Kotler, et al., (2019:165), a skilled marketer seeks insights
to assess previous success and guide future planning. They require upto-date, accurate, and useful information on customers, rivals, and
their brands. Additionally, they must choose the best tactical and longterm strategic options available while making judgments. Finding a
consumer insight and comprehending the marketing ramifications of
that insight may frequently result in a successful product launch or
accelerate the development of a brand. It's crucial to take the
marketing research system into account in this unit. Additionally, it will
go through the phases that make up the marketing research procedure.
What Constitutes Good Marketing
Research?
Kotler, et al., (2019:166) define marketing research as the systematic
design, collection, analysis and reporting of data and findings relevant to a
specific marketing situation facing the company. Most large companies
have their own marketing research departments, which often play a crucial
role within the organisation. Companies typically allocate 1% to 2% of their
annual revenue for marketing research, according to Kotler et al.
(2019:166).
A significant portion of the money is used to pay outside marketing
research companies, which may be divided into three groups:
1. Syndicated-service research firms.
2. Custom marketing research firms.
3. Speciality-line marketing research firms.
The Marketing Research Process
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Overcoming barriers to the use of
Marketing Research
• A narrow conception of the research.
• Uneven calibre of researchers.
• Poor framing of the problem.
• Late and occasionally erroneous findings.
• Personality and presentational differences.
• Illusions of seeing.
Forecasting and Demand Measurement
Finding market potential is a key justification for conducting
marketing research. Following completion of the study, the
business must gauge and project the size, expansion, and
revenue potential of each market opportunity. Sales forecasts
are used by finance departments to raise the necessary cash for
investment and operations, by the manufacturing department to
establish capacity and output levels, by purchasing to acquire the
right amount of supplies and by human resources to hire the
necessary number of workers. Marketing is responsible for
preparing the sales forecasts. If its forecast is far off the mark,
the company will face excess or inadequate inventory. Sales
forecasts are based on estimates of demand. Managers need to
define what they mean by market demand.
Estimating Current Demand
• Total Market Potential
• Area Market Potential
• Market-Build-Up Method
Estimating Future Demand
The few goods or services that lend themselves to
straightforward forecasting typically benefit from an absolute
level or a fairly steady trend, as well as stable or absent
competition (public utilities) (pure oligopolies). Contrarily,
accurate forecasting is a critical success component in the
majority of markets. A macroeconomic projection is
frequently created first, then an industry forecast, then a
corporate sales forecast. Inflation, unemployment, interest
rates, consumer and corporate spending, government
spending, net exports, and other factors must be projected as
part of the macroeconomic forecast.
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT 9: THE STRATEGIC ROLES OF
DISTRIBUTION CHANNELS IN DELIVERING
CUSTOMER VALUE
UNIT 9: THE STRATEGIC ROLES OF DISTRIBUTION CHANNELS IN
DELIVERING CUSTOMER VALUE
UNIT INTRODUCTION
This unit focuses on the strategic roles of distribution channels in delivering
customer value. The unit discusses the topics of defining a distribution channel,
distribution as a value-creation process, distribution as a tool for creating market
value, selecting and managing channel members online, mobile, and digital
channel management, and future technologies within the distribution channel.
UNIT 9: THE STRATEGIC ROLES OF DISTRIBUTION CHANNELS IN
DELIVERING CUSTOMER VALUE
UNIT LEARNING OUTCOMES
• Define how distribution channel delivers the company’s offerings to its target
customers
• Assess the key aspects of managing distribution channels
• Assess distribution channels that create superior value for target customers in a
way that benefits the company and its collaborators
• Illustrate how to select and manage channel members
• Classify channel power
• Critically determine online, mobile and digital channel management
• Reinforce the online brick-and-click companies
• Break down the future technologies within the distribution
• Classify the Internet of Things (IoT), drones, and smart products
Distribution Channels Defined
Distribution channels deliver the company’s offerings to its target
customers. According to Chernev (2019:462), managing distribution
channels involves designing and streamlining the process of delivering a
company’s offering in a way that creates value for target customers, the
company, and its collaborators. Effective value delivery is a prerequisite for
successful value creation, according to Kotler et al. (2019:625). Holistic
marketers analyse their firms' distribution systems from the perspective of
a value network. Instead of concentrating only on their immediate
distributors, customers, and suppliers, they look at the entire supply chain
that connects raw materials, finished goods, and services to the end
consumers.
Distribution as a Value-Creation Process
Distribution as a Tool for Creating Market Value
Distribution Channel Functions:
• Product delivery
• Service delivery
• Brand building
• Collecting payments
• Delivering incentives
• Delivering information
Distribution as a Tool for Creating Market
Value
Managing Distribution Channels and Value Networks
Distribution Channel Design
• Defining the Channel Structure
• Direct Channels
• Indirect Channels
• Hybrid Channels
Selecting and Managing Channel Members
Selecting Channel Members
Marketers should identify the traits that define the better
intermediaries - years in operation, additional lines carried,
growth and profit record, financial strength, cooperativeness,
and service reputation - to make channel member selection
easier. Producers should assess the quantity and nature of other
lines carried as well as the size and calibre of the sales force if
the intermediaries are sales agents. The intermediaries'
locations, potential for future expansion, and clientele will
important if they are department shops seeking exclusive
distribution
Selecting and Managing Channel Members
Channel Power
• Coercive power.
• Reward power.
• Legitimate power.
• Expert power.
• Referent power.
Evaluating Channel Members
Marketers must frequently assess the performance of intermediaries in relation to
benchmarks including meeting sales quotas, maintaining average inventory levels,
meeting customer delivery deadlines, handling damaged and missing items, and
participating in promotional and training initiatives.
Online, Mobile, and Digital Channel
Management
Online-Only Companies
Kotler, et al., (2019:642) state that there are several kinds of pure-click companies:
search engines sites (such as Google), transaction sites (eBay and Net-a-Porter), content
sites (such as iTunes and Netflix) and enabler sites (such as Booking.com and
Lastminute.com), and support sites. Customer care is essential. Online buyers could decide
on an item to buy but abandon the transaction. Businesses should create a speedy, easy-touse website to increase conversion rates. Enlarging product graphics onscreen can lengthen
client browsing sessions and boost their average order value
Online and Brick-And-Click Companies
Thus, managing a variety of online and physical channels has emerged as a top concern for
many businesses. Although many brick and mortar businesses may have initially questioned
whether to establish an online channel out of concern that it would compete with their
offline merchants, agents, or own store, the majority have now done so in light of how much
revenue is being produced online. By incorporating web technology into the store through
iPads or computer terminals where consumers can check online for an item, many businesses
are offering their customers greater control over their shopping experiences
Exploring Future Technologies within the Distribution
Supply chains are changing due to the Internet of Things, drones, smart goods,
data throughout the channel, and other factors, according to Kotler et al.
(2019:652). Robotics, machine learning, augmented reality, and even
autonomous delivery have had, and will continue to have, an influence on a
variety of sectors and civilisations.
Barcode scanning
Self-scanning or self-checkout
RFID (radio frequency identification devices)
Facial recognition software or other biometric authentication systems
Drones
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT
10: MANAGING GROWTH
UNIT 10: MANAGING GROWTH
UNIT INTRODUCTION
This unit focuses on managing the growth of an
organisation from a marketing perspective. The unit
focuses on the topics of managing a viable growth
strategy, gaining and defending a market position,
developing new offerings, and managing product lines,
and the selection of growth strategy.
UNIT 10: MANAGING GROWTH
UNIT LEARNING OUTCOMES
• Discuss how growth is at the heart of every business
• Establish why a company must constantly seek novel ways to grow its current
markets and capture new ones
• Analyse gaining and defending the market position
• Explain how to develop new offerings
•
Assess growth strategy, the company’s goals, and strategic resources
Introduction to Managing Growth
Growth is at the heart of every business enterprise. Without a viable growth
strategy, a company is in danger of losing its market position and being
engulfed by competitors. Therefore, to sustain and enhance its market
position, a company must constantly seek novel ways to grow its current
markets and capture new ones. To this end, companies seek to foster growth
by exploring new opportunities, identifying new markets, and uncovering new
customer needs (Chernev 2019:499). According to Kotler et al. (2019:80),
evaluating growth potential also include developing new enterprises,
eliminating older ones, and shrinking existing ones. Corporate management
must create or buy new firms to close any gaps between planned future
revenues and forecast sales.
Chernev (2019:499) identifies three aspects of managing growth merit
attention:
1. How to manage a company’s market position
2. How to design and launch new offerings and
3. How to manage the company’s relationship with its customers
Managing a Viable Growth Strategy
u t-
t p n io g id
Gaining and Defending a Market Position, Developing
New Offerings, and Managing Product Lines
• Gaining and defending market position
In today’s competitive business environment, the pressure to grow is unrelenting.
To stay relevant, a company must constantly seek new avenues for growth. If a
company is not growing, it is inevitably declining by relinquishing its market position
to the competition.
• Developing new offerings
The development of new offerings is the engine that fuels the growth of a business
enterprise. New product success is often attributed to intuition. Indeed, some offerings
that stem from intuition do make it big. Yet many others crash and burn. These failures
occur because intuition is only one aspect of new product development. The other key
ingredient of success is having a systematic approach to developing new market offerings.
• Managing product lines
An important aspect of gaining and defending a company’s market position involves
organising and managing the individual offerings as part of a company’s product line.
In this context, product-line management aims to optimise the value delivered by the
individual offerings that are contained in a company’s portfolio.
The Selection of Growth Strategy
According to American Management Association (AMA),
(2019:1), choosing the right growth strategy means that the need
of the company to grow must be tempered by the need to
understand that meaningful, long-term, profitable growth is the
by-product of effective management and planning. A failure to
create this balance will result in vulnerability to attack by
competitors, creditors, hostile employees and creative takeover
specialists. One would observe that companies of all types and
sizes want their companies to grow in one way or another—
whether in terms of growth of revenue, profit, number of
employees or customers, market share or number of locations.
However, given the rapidly moving changes in marketplace, the
challenge for midcap companies is how and when to grow.
Setting the Stage for Growth: Internal Factors
When growing one’s business, it is critical to first establish an understanding of the
foundation that must be put in place to allow a company to begin its growth path.
Before you can prepare your company for growth, you need to analyse its strengths
and weaknesses. Looking for what is working well serves to concentrate your efforts
where you have the best chance of success. Looking for strengths enables you also
to spot the weaknesses. Start with these internal areas:
• Costs and revenue.
• Personnel.
• Operations.
• Philosophy or mission.
Setting the Stage for Growth: External Factors
Once you have sized up your business internally, take a long and careful look at the external
factors that should reveal whether you are in a position to take advantage of current
business trends and cycles. These include the following:
Market. Organisation should know if market share and company’s percentage of estimated
total business are availably increasing or decreasing. Know if organisations’ marketing
strategy based on careful research or on instinct and hunches. Understand if organisations’
customer or client base is shrinking
Competition. Do you know exactly who your competitors are, and where they pose the
largest threat? Which part of your business is most vulnerable to competition and which is
least vulnerable? Are some parts of your market becoming crowded with competitors?
Economic climate. Are changes in economic conditions—interest rates, inflation, housing
starts, industry earnings—likely to affect your company?
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT 1 1 : DESIGNING, DEVELOPING AND
MANAGING MARKET OFFERINGS
UNIT 11: DESIGNING, DEVELOPING AND MANAGING MARKET OFFERINGS
UNIT INTRODUCTION
This unit focuses on designing, developing and managing market
offering. The unit focuses on product life cycle marketing strategies,
product characteristics and classifications, differentiation strategy, and
packaging labelling, warranties and guarantees.
UNIT 11: DESIGNING, DEVELOPING AND MANAGING MARKET OFFERINGS
UNIT LEARNING OUTCOMES
• Describe the designing, developing, and managing of the market offering
• Establish which marketing strategies are appropriate at each stage of the
product life cycle
• Evaluate the characteristics of market products and how marketers classify
products
• Explain how companies differentiate products and manage their product mix
and product lines
• Illustrate how companies use packaging, labelling, warranties, and guarantees
as marketing tools
Design, Develop, and Manage Market
Offering
According to Kotler et al. (2019:439), marketing starts with creating a customer-perceived
value (CPV) market product to satisfy the demands or desires of target clients. The
relative level of client satisfaction that the offering achieves will be used to evaluate the
offer. This lesson looks at the design, development, and management of CPV portfolio
offers by successful businesses. Product life cycles decrease significantly as markets grow
more competitive, according to Linton (2018:1). Thus, an offering in marketing is the total
offer to your customers. An offering is more than the product itself and includes elements
that represent additional value to your customers, such as availability, convenient
delivery, technical support or quality of service.
A strong offering differentiates your products from competitors and creates value by
meeting customers’ wider needs better than other options. The product is a good
designed to create value in a particular market. It is one of the seven attributes defining
the company’s offerings. The product attempts to produce value for the relevant market
entities, including the firm, its consumers, and its collaborators, in conjunction with the
other marketing strategies defining the offering—service, brand, pricing, incentives,
communication, and distribution (Chernev 2019:242).
Product Life Cycle Marketing Strategies
1. Introduction: a period of slow sales growth as the product (market
offering) is introduced into the market. Profits are low or absent
because of heavy expenses associated with market introduction.
2. Growth: a period of rapid market acceptance and substantial profit
improvement.
3. Maturity: a slowdown in sales growth because the product (market
offering) has achieved acceptance by most potential buyers. Profits
stabilise or decline because of increased competition.
4. Decline: sales show a downward drift and profits decline.
Product Life Cycle Marketing Strategies
Product Characteristics and Classifications
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51,
Product Levels: The Customer-Perceived Value
Hierarchy
Differentiation Strategy
Market offering differentiation
Form
• Features
• Customisation
• Performance quality
• Conformance quality
• Durability
• Reliability
• Repairability
• Style
Packaging, Labelling, Warranties, and Guarantees
Various factors have contributed to the growing use of packaging as a marketing tool:
• Self-service. An increasing number of product items are sold on a self-service basis. In
an average supermarket, which stocks 15,000 items, the typical shopper passes by
some 300 items per minute. Given that 50–70 per cent of all purchases are made in
the shop, the effective package must perform many of the sales tasks: attract
attention, describe the product’s features, create consumer confidence and make a
favourable overall impression
• Consumer affluence. Rising consumer affluence means consumers are willing to pay a
little more for the convenience, appearance, dependability and prestige of the
better-packaged items
• Company and brand image. Packages contribute to instant recognition of the
company or brand. In a shop, they can effectively advertise the item
• Innovation opportunity.
Packaging, Labelling, Warranties, and Guarantees
Labelling
The label might be a straightforward tag that is connected to the product or a complex
graphic that is a part of the box. It may contain a lot of information or only the brand
name. Even if the seller chooses a straightforward label, the law may call for more.
Labels perform five functions:
1. The label identifies the product or brand – for instance, the name Jaffa stamped on
oranges. It also states the ingredients.
2. The label might also grade the item.
3. The label might describe the item: who made it, where it was made, when it was
made, what it contains, how it is to be used and how to use it safely. Cigarette packs in
the UK warn buyers that smoking can damage their health.
4. The labels on food items increasingly carry messages about healthy eating.
5. The label might promote the product through attractive graphics
Packaging, Labelling, Warranties, and Guarantees
Even the finest companies occasionally deal with customers who are unhappy
with the products they purchased or who just want their money back. Over the
last 30 years, consumer rights knowledge has grown significantly along with
improvements in consumer protection laws. Concurrently, people's expectations
of the type of redress they may obtain when market products fall short of
accepted standards have also expanded. Anyone in company that offers products
on the market has to be aware of their duties to clients. Legally, all sellers are
obligated to meet a buyer's typical or reasonable expectations. Warranties are
formal representations of the manufacturer's expectations for the performance of
a product or market offering. Products covered by warranties may be returned to
the manufacturer or an authorised location for maintenance, replacement, or
reimbursement. Any warranty, whether explicit or implied, is enforceable in court.
NAME OF MODULE:
STRATEGIC MARKETING MANAGEMENT
UNIT 1 2 : MANAGING MARKETING
IMPLEMENTATION AND CONTROL
UNIT 12: MANAGING MARKETING IMPLEMENTATION AND CONTROL
UNIT INTRODUCTION
This unit focuses on managing marketing implementation and
control. The unit focuses on exploring marketing management,
restructuring marketing practices, building a creative marketing
organisation,
socially
responsible
marketing,
managing
the
marketing metric and measuring marketing performance and
productivity.
UNIT 12: MANAGING MARKETING IMPLEMENTATION AND CONTROL
UNIT LEARNING OUTCOMES
• Discuss managing marketing implementation and control
• Analyse why and how companies are restructuring their marketing
practice
• Examine how a company builds an effective marketing organisation
• Evaluate how companies are responsible for social marketers
• Discuss what fostering a creative marketing culture is
• Restate the need for a marketing metric
• Determine what marketing metrics should do
Exploring Marketing Management
Kotler, et al., (2019:693) reveal that managing marketing implementation and control
explores three important themes:
1. Addressing significant contextual and societal issues.
2. Establishing successful, innovative marketing organisations.
3. Choosing appropriate marketing expenditures and controlling marketing analytics
to assess their efficacy.
According to Kotler, et al. (2019:693), marketing expenses need to be planned and
provide a quantifiable return just like any other business activity. Professional costing
of marketing operations is being done, and efforts are being made to evaluate the
efficacy of various components within the marketing budget. However, because many
of the sub-budgets under a marketing manager's control are working to reach
revenue objectives that are very dynamic, applying management accounting
methodologies to measure the precise contribution of any particular marketing
activity is challenging to accomplish. Marketing management is always a combination
of science, intuition, and creative flair, but it depends critically on the creation and
appropriate application of marketing analytics. A strong sense of ethics, values, and
social responsibility must be the foundation of any good marketing strategy in today's
market.
Restructuring Marketing Practices
Internal Marketing
When it was originally utilised in the 1970s, internal marketing was primarily used
to advertise services. To create market products that consumers appreciate, it has
become more clear that in buyers' markets, a corporation must have a holistic
mindset toward the principles and purposes of marketing. It is no longer thought of
as only a marketing obligation because it requires coordinated management
throughout the entire organisation. According to Kotler, et al. (2019:696), internal
marketing presents a chance to strengthen the bond between the company's brand
and its personnel. Advocates for a brand are created at this point. The strongest
brands are developed when the corporate culture is reflected in the outward marketing
Organising the Marketing Department
Kotler, et al., (2019:698) show that modern marketing departments can be organised in a
number of different, sometimes overlapping ways – functionally, geographically,
by product or brand, by market, or in a matrix form
Restructuring Marketing Practices
. Fun tio I organ· tion
ed o otl t I (201 :
Building a Creative Marketing Organisation
According to Kotler et al. (2019:702), many businesses have come to
the realisation that they are still more product and sales driven than
really market and consumer oriented. For instance, when Shell
made the transition to becoming a truly market-driven organisation,
it was necessary to:
• Cultivate a passion for customers across the entire organisation
• Organise around customer segments rather than product lines
and
• Comprehend customers through qualitative and quantitative
research
Socially Responsible Marketing
Effective marketing must be matched by a strong sense of ethics, values and
social responsibility. A number of forces are driving companies to practice a
higher level of corporate social responsibility. These include rising customer
expectations, evolving employee goals and ambitions, tighter government
legislation and pressure, developing investor interest in social criteria,
relentless media scrutiny and changing business procurement practices.
Corporate Social Responsibility (CSR)
• Key Social Responsibilities
• Legal Responsibility
• Ethical Responsibility
• Social Responsibility
• Sustainability
• Socially Responsible Business Models
Managing Marketing Metrics
The need for marketing metrics
Companies nowadays increasingly gain significant and long-lasting competitive
advantage from intangible assets including brand equity, expertise, networks, and
inventive skill. Managers must now measure the return on both tangible assets
(fixed assets, such as land, buildings, and machinery) and intangible assets (assets
without a physical component, such as brand names, copyrights and patents,
strong channel partnerships, etc.). Marketing and business strategy are useless
without metrics to monitor performance. Marketing metrics are a collection of
measurements that businesses may use to quantify, evaluate, and analyse their
marketing success, according to Kotler et al. (2019:732).
Managing Marketing Metrics
According to Kotler, et al., (2019:732), a number of factors have
elevated the importance of measuring marketing performance:
• Corporate trend for greater accountability of value added.
• Discontent with traditional metrics.
• Availability of ICT and internet infrastructure.
• Identification of new drivers of customer and firm value.
Measuring Marketing Performance and Productivity
Because marketing productivity and success are multifaceted, several measures
should be viewed as allies rather than competitors. Finding, retaining, and
increasing the value of lucrative clients is marketing's primary role for delivering
profitable revenue growth (Kotler, et al., 2019:736). According to this viewpoint,
marketing KPIs must be related to acquiring customers, retaining consumers, and
increasing the value of existing customers (monetisation). This strategy links
marketing to crucial business objectives, customer acquisition to market share,
customer retention to lifetime value, and monetisation to customer/brand equity
and shareholder value, according to Kotler, et al. (2019:736).
Kotler, et al. (2019:736), break down these marketing measures into three
categories: counting-based (or activity) metrics; accounting-based (or operational)
metrics; and outcome-based (or forward-looking) metrics.
Both internal and external firm indicators may be included in all three dimensions