Chapter 1: Introduction to
Strategic Marketing
Management
Market1 – Page 1
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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
Information
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Market
(a collection
of Buyers)
3
Company Orientations Towards
the Marketplace
Production Concept
Consumers prefer products that are
widely available and inexpensive
Product Concept
Consumers favor products that
offer the most quality, performance,
or innovative features
Selling Concept
Consumers will buy products only if
the company aggressively
promotes/sells these products
Marketing Concept
Focuses on needs/ wants of target
markets & delivering value
better than competitors
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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 Marketing’s
Role
Finance
Production
Marketing
Production
Finance
Human
resources
Human
resources
a. Marketing as an
equal function
Marketing
b. Marketing as a more
important function
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Evolving Views of Marketing’s
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
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 organisation’s 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 Porter’s and Aaker’s 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)
► Don’t
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 organisation’s
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 Marketing’s Role
►
Evolving Views of Marketing’s 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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