Strategic Marketing Process

Lesson 1
Marketing Management
Subject Detail
• Unit 7: Strategic Marketing Management
– Unit code: Y/602/2065
– QCF Level 7: BTEC Professional
– Credit value: 10
– Guided learning hours: 30
Learning Outcome
• Understand the principles of
marketing management
Introduction to Marketing
Miss Mary Lynn Mundell
What Is Marketing?
Simple definition:
Marketing is the management process responsible for
identifying, anticipating, and satisfying customer
requirements profitably.” (CIM,2001)
1. Attract new customers by promising superior value.
2. Keep and grow current customers by delivering satisfaction.
Marketing Defined
• Marketing is the activity, set of instructions, and
processes for creating, communicating, delivering,
and exchanging offerings that have value for
customers, clients, partners, and society at large.
OLD view of
NEW view of
Making a sale—
“telling and selling”
customer needs
Why is Marketing Important?
Shifting Business Paradigms
Buyers’ markets
Sellers’ markets
The Marketing Process
A simple model of the marketing process:
• Understand the marketplace and customer needs
and wants.
• Design a customer-driven marketing strategy.
• Construct an integrated marketing program that
delivers superior value.
• Build profitable relationships and create customer
• Capture value from customers to create profits and
customer quality.
Needs, Wants, and Demands
Need: State of felt deprivation including physical, social, and
individual needs.
• Physical needs: Food, clothing, shelter, safety
• Social needs: Belonging, affection
• Individual needs: Learning, knowledge, self-expression
Want: Form that a human need takes, as shaped by
culture and individual personality.
• Wants + Buying Power = Demand
Need/ Want Fulfillment
Needs & wants are fulfilled through a Marketing
• Products:
– Persons, places, organizations, information, ideas.
• Services:
– Activity or benefit offered for sale that is essentially
intangible and does not result in ownership.
• Experiences:
– Consumers live the offering.
Customer Value and Satisfaction
Dependent on the product’s perceived performance
relative to a buyer’s expectations.
Care must be taken when setting expectations:
• If performance is lower than expectations, satisfaction is low.
• If performance is higher than expectations, satisfaction is
Customer satisfaction often leads to consumer loyalty.
Some firms seek to DELIGHT customers by exceeding
Marketing Management
The art and science of choosing target markets and
building profitable relationships with them.
• Requires that consumers and the marketplace be
fully understood.
• Aim is to find, attract, keep, and grow customers by
creating, delivering, and communicating superior
Marketing Management
Marketing managers must consider the following, to
ensure a successful marketing strategy:
1. What customers will we serve?
— What is our target market?
2. How can we best serve these
— What is our value proposition?
Choosing a Value Proposition
The set of benefits or values a company promises to
deliver to consumers to satisfy their needs.
• Value propositions dictate how firms will
differentiate and position their brands in the
The Marketing Concept
The marketing concept:
• A marketing management philosophy that holds that
achieving organizational goals depends on knowing
the needs and wants of target markets and delivering
the desired satisfaction better than competitors.
Customer Perceived Value
Customer perceived value:
– “Customer’s evaluation of the difference between
all of the benefits and all of the costs of a
marketing offer relative to those of competing
offers.” (Armstrong & Kotler)
– Perceptions may be subjective
– Consumers often do not objectively judge values
and costs.
Customer value = perceived benefits – perceived sacrifice.
The Marketing Mix
The set of controllable, tactical marketing tools that the firm
blends to produce the response it wants in the target market.
• Product: Variety, features, brand name, quality, design,
packaging, and services.
• Price: List price, discounts, allowances, payment period, and
credit terms.
• Place: Distribution channels, coverage, logistics, locations,
transportation, assortments, and inventory.
• Promotion: Advertising, sales promotion, public relations, and
personal selling.
Marketing Strategy
Customer-Driven Marketing Strategy
Requires careful customer analysis.
To be successful, firms must engage in:
• Market segmentation
• Market targeting
• Differentiation
• Positioning
Market Segmentation and Targeting
• The process of dividing a market into distinct groups
of buyers with different needs, characteristics, or
behavior who might require separate products of
marketing programs.
• Involves evaluating each market segment’s
attractiveness and selecting one or more segments
to enter.
Differentiation and Positioning
• Creating superior customer value by actually
differentiating the market offering.
• Arranging for a product to occupy a clear, distinctive,
and desirable place relative to competing products in
the minds of target consumers.
Market Segmentation
Key segmenting variables:
• Geographic
• Demographic
• Psychographic
• Behavioral
Different segments desire different benefits from products.
Best to use multivariable segmentation bases in order to identify
smaller, better-defined target groups.
Market Segmentation
Why Segment?:
• Meet consumer needs more precisely
• Increase profits
• Segment leadership
• Retain customers
• Focus marketing
Evaluating Market Segments
Segment size and growth:
• Analyze current segment sales, growth rates, and expected
Segment structural attractiveness:
• Consider competition, existence of substitute products, and
the power of buyers and suppliers.
Company objectives and resources:
• Examine company skills and resources needed to succeed in
that segment.
• Offer superior value and gain advantages over competitors.
Market Targeting
Market targeting involves:
• Evaluating marketing segments.
– Segment size, segment structural attractiveness, and
company objectives
and resources are considered.
• Selecting target market segments.
– Alternatives range from undifferentiated marketing to
• Being socially responsible.
Differentiation and Positioning
A product’s position is:
• The way the product is defined by consumers on
important attributes—the place the product
occupies in consumers’ minds relative to competing
• Perceptual positioning maps can help define a
brand’s position relative to competitors.
Differentiation and Positioning
Identifying possible value differences and competitive
• Key to winning target customers is to understand
their needs better than competitors do and to deliver
more value.
Competitive advantage:
• Extent to which a company can position itself as
providing superior value.
– Achieved via differentiation.
What's next?
Weekly Program
• 1.1 discuss the role of strategic marketing in
an organisation
• 1.2 explain the processes involved in strategic
• 1.3 evaluate the links between strategic
marketing and corporate Strategy
Today’s Objective
• 1.1 Discuss the role of strategic marketing in
an organisation
Main issues to discuss LO 1
• Role of strategic marketing:
key definitions of strategic marketing from the Chartered
Institute of Marketing and key authors (eg
Davidson; Peter Doyle; Philip Kotler;
• role and importance of strategic marketing
in an organisation; concepts; systematic approach;
sequencing and scheduling of activities; integration of
activities; resource requirements; timescaling; onitoring and
control elements
• Processes:
strategic marketing planning processes (eg Peter Doyle,
Malcolm McDonald) including strategic marketing
marketing strategy objective setting,
perceptual mapping, factor analysis, option evaluation,
• formulation, implementation and control
Links to corporate strategy: the nature of
and marketing links to
corporate strategy eg Michael Porter; links
to mission statement, organisational
structure, corporate responsibility
ethics; dynamic strategy
(Carpenter and
Sanders); knowledge management systems
Focus on Strategic Marketing
Marketing - Definition
• The management process responsible for
identifying, anticipating and satisfying
customer requirements profitably
Strategic Marketing
• Strategic marketing focuses on how to
develop competitive advantage through the
drivers of shareholder value. Delivering value
to your business requires insight into your
changing marketplace and decisions regarding
how to match your organisation’s distinctive
capabilities with promising value
opportunities. Being able to do this is the key
for many marketers to increase their influence
in the organisation
FIGURE 2-1 The three levels of strategy
in organizations: corporate, business unit,
and functional
• Strategy Issues in Organizations
 Goals or Objectives
• Profit
• Customer Satisfaction
• Sales
• Employee Welfare
• Market Share
• Social Responsibility
• Quality
• How do we allocate our resources to get where
we want to go?
• How do we convert our plans to actions?
• How do our results compare with our plans,
and do deviations require new plans?
 Strategic Marketing Process
 Marketing Plan
FIGURE 2-4 The strategic marketing
• Strategic Marketing Process:
The Planning Phase
 Step 1: Situation (SWOT) Analysis
• Situation Analysis
• SWOT Analysis
 Strengths
 Weaknesses
 Opportunities
 Threats
FIGURE 2-5 Ben & Jerry’s: a SWOT analysis
to get it growing again
Ben & Jerry’s One Sweet Whirled Campaign
What is the impact of a SWOT analysis?
• Strategic Marketing Process:
The Planning Phase
 Step 2: Market-Product Focus and Goal Setting
• Market Segmentation
Set Marketing and Product Goals
Select Target Markets
Find Points of Difference
Position the Product
• Strategic Marketing Process:
The Planning Phase
 Step 3: Marketing Program
• Product Strategy
Price Strategy
Promotion Strategy
Place (Distribution) Strategy
FIGURE 2-6 Elements of the marketing mix
that comprise a cohesive marketing program
• Strategic Marketing Process:
The Implementation Phase
 Obtaining Resources
 Designing the Marketing Organization
 Developing Schedules
FIGURE 2-7 Organization of a typical
manufacturing firm showing a breakdown of
the marketing department
• Strategic Marketing Process:
The Implementation Phase
 Executing the Marketing Program
Marketing Strategy
Marketing Tactics
• Strategic Marketing Process:
The Control Phase
 Comparing Results With Plans to Identify
Planning Gap
 Acting on Deviations
Exploiting a Positive Deviation
Correcting a Negative Deviation
FIGURE A-1 Elements in typical marketing
and business plans targeted at different
FIGURE 2-A Results of good and bad
marketing planning and implementation
FIGURE 2-E Gantt chart for scheduling the
term project
Profit is the reward to a business firm for
the risk it undertakes in offering a
product for sale. It is also the money left
over after a firm’s total expenses are
subtracted from its total sales.
Mission is a statement of the
organization’s scope, often identifying its
customers, markets, products, technology,
and values.
Organizational Culture
Organizational culture is a set of values,
ideas, and attitudes that is learned and
shared among the members of an
Goals or Objectives
Goals or objectives convert the mission
into targeted levels of performance to be
achieved, often by a specific time.
Market Share
Market share is the ratio of sales revenue
of the firm to the total sales revenue of all
firms in the industry, including the firm
Strategic Marketing Process
The strategic marketing process is the
approach whereby an organization
allocates its marketing mix resources to
reach its target markets.
Marketing Plan
A marketing plan is a road map for the
marketing activities of an organization for
a specified future period of time, such as
one year or five years.
Situation Analysis
Situation analysis involves taking stock
of where a firm or product has been
recently, where it is now, and where it is
headed in terms of the organization’s
plans and the external factors and trends
affecting it.
SWOT Analysis
SWOT analysis is an acronym describing
an organization’s appraisal of its internal
Strengths and Weaknesses and its
external Opportunities and Threats.
Market Segmentation
Market segmentation involves
aggregating prospective buyers into
groups, or segments, that (1) have
common needs and (2) will respond
similarly to a marketing action.
Points of Difference
Points of difference are those
characteristics of a product that make it
superior to competitive substitutes.
Marketing Strategy
A marketing strategy is the means by
which a marketing goal is to be achieved,
usually characterized by a specific target
market and a marketing program to reach
Marketing Tactics
Marketing tactics are detailed
day-to-day operational decisions essential
to the overall success of marketing
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