introduction to marketing strategy04.01.10

8/9/2019 Introduction to Marketing Strategy04.01.10

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Introduction

MARKETING STRATEGY


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FOCUS on MARKETING ORIENTATION


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Evolution of the Marketing Concept

ProductProductOrientationOrientation

SalesSalesOrientationOrientation

MarketingMarketingOrientationOrientation

Late 19th century: efficient production of goodsallowed firms to meet strong customer demand.

Mid-1920searly 1950s: weakened demandrequired that products would have to be sold.(personal selling, advertising, and distribution

was the focus)

Early 1950s2000s: adopting a customer focusmeans a commitment to researching andresponding to customer needs.


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Important Terms

MarketingThe process of creating, distributing,

promoting,and pricing goods, services, and ideas to

facilitate satisfying exchange relationshipswith customersin a dynamic environment

CustomersThe purchasers of organizations products; the

focal point of all marketing activities

Target Market

A specific group of customers on whom anorganization focuses its marketing efforts


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Marketing Management

Marketing ManagementThe process of planning, organizing,

implementing, and controlling marketingactivities to facilitate exchanges effectively

and efficiently

EffectivenessThe degree to which an exchange

helps an organization achieve its

objectives Efficiency

The process of minimizing theresources an organization mustspend to achieve a specific levelof desired exchanges


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Marketing Management (contd)

Implementation Coordinating marketing activities

Motivating marketing personnel

Developing effective internal communications

within the unit

Control Establishing performance standards

Comparing actual performance to establishedstandards

Reducing the difference between desired andactual performance


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Important Terms

The Marketing Mix Four marketing activitiesproduct, distribution,

promotion, and pricingthat a firm cancontrol to meet the needs of customerswithin its target market

Product

Goods, services, or ideas that satisfy customerneeds

DistributionThe ready, convenient, and timely availabilityof products

Promotion

Activities that inform customers about theorganization and its products


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Important Terms

Pricing : Decisions and actions that establishpricing objectives and policies and set productprices

Exchange : The provision or transfer of goods,

services, or ideas in return for something ofvalue

Customer Value : The ratio between thecustomers perceived benefits and the resources

used to obtain those benefits.

Customer RetentionCustomer Retention: The overall objective ofproviding value to customers continuously andmore effectively than the competition, to have

highly satisfied customers.


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Important Terms

Relationship Marketing Establishing long-term, mutually satisfying

buyer-seller relationships allowing forcooperation and mutual dependency

Customer Relationship Management (CRM) Using information about customers to create

marketing strategies that develop and sustaindesirable customer relationships


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Firms Marketing Efforts

1. Product

2. Promotion

3. Price

4. Channels ofdistribution

Socio-cultural Environment

1. Family

2. Informal sources

3. Other noncommercial

sources

4. Social class

5. Subculture and culture

Output

Process

Input

E

xterna

l

In

fluen

ce

ConsumerDecision

Making

Post-

Decision

Behavio

r

Post-purchase

Evaluation

Purchase

1. Trial

2. Repeat purchase

Need

Recognition

Pre-purchase

Search

Evaluation of

Alternatives

Psychological Field

1. Motivation

2. Perception

3. Learning

4. Personality

5. Attitudes

Experience

O

N

S

U

M

E

R

D

E

CI

S

I

O

N

P

R

O

C

ES


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STRATEGY......

The word Strategywas initially introduced anddefined in the ancient military dictionaries

It comes from the Greek word strategos,

strictly meaning a general in command of anarmy; it is formed from stratos, meaningarmy and ag, meaning to lead

First time in business literature by William

Newman (1951)


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THE CONCEPT OF STRATEGY

Generic

a plan of attack for winning

a plan for beating the opposition

Organisational

a plan for achieving organisational goals

a plan for securing a competitive advantage in agiven market


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Case Study: Marriage made in heavenhas become a nightmare

With rambus in 1996, - memory chip technology

6% in micron technology, 100m $ in samsung,

Intel tried to push the overall market towardsRambuswith plans for microprocessors that wouldonly work with that type of memory.

Recently, recall of 1m PC motherboards due to severalhigh-profile chip problems.

Withdrawn low-cost PC microprocessor (Timma) bcoz, itrequired expensive rambus memory chips


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Retrospect view:

We made a big bet on Rambus and it did notwork out Craig Barrett, CEO- Intel

Depending on a third party for a technologythat gates your performance.


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THE CONCEPT OF STRATEGY

The direction and scope of anorganisation over the long(er) term,

which ideally matches its resources toits changing environment and, inparticular its markets, customers orclients so as to meet stakeholder

expectations

Johnson & Scholes (1999)


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PURPOSE OF STRATEGY

To set the future direction for theorganisation.

To state how it is to create value tocustomers.

To identify what product/s and in whichmarkets the firm will invest its resources.

To describe how it is to perform better thancompetition.


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hierarchy of strategy


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What is sbu

An SBU is an operating unit focus that groupsa distinct set of products or services, whichare sold to a uniform set of customers,

facing a well-defined set of competitors.

the phrase "Strategic Business Unit" came intouse in the 1960s, largely as a result of

General Electric's many units.


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3 LEVELS OF STRATEGY Corporate

This describes a companys overall direction in termsof growth and the management of its various businessesto achieve a balanced portfolio of products and services.

Competitive/Business (SBU)

which emphasizes improvement of the competitiveposition of a corporations products or services in thespecific industry or market segment served by thatdivision.

How to compete in individual product-markets andsupport the corporate strategy

Functional Functional strategies for the organisations functional

areas in support of SBUs and corporate strategies


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Marketing strategy

In the early 1980s, marketing strategy wasdefined as an indication of how eachelement of the marketing mix will be used toachieve the marketing objectives.

The broad conception of how product, price,promotion and distribution are to function ina coordinated way to overcome resistance to

meet marketing goals


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THE INTER-RELATIONSHIP BETWEENMARKETING AND CORPORATE STRATEGY

INFORMSDIRECTSGUIDES CONTROLS

ACHIEVES SUPPORTS

Corporate StrategySpecifying the

organisations missionAllocating resourcesDefining Organisational

objectives

Marketing StrategyIdentifying product market/s to

compete inSelecting market segments to

targetDeveloping the marketing mix


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Marketing strategy development..

The development of marketing strategy canbe seen at three main levels.

First, the core strategy of the company isselected and the marketing objectives andthe broad focus for achieving them areidentified.

Second, market segments and targets betterthan the competition is identified.


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Third level, a marketing department capableof putting the strategy into practice must becreated.

The marketing department, at this stage isresponsible for developing the marketingmix programs that can convey both thepositioning and the products/services to the

target market.


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Marketing strategy development toBritish Airways (BA)

First level, the companys core strategy andmarketing objectives have been set to ensure thatBA is the customers first choice through thedelivery of an unbeatable travel experience.

Second level, BA has elected to provide overallsuperior service and good value for money in everymarket segment in which it competes.

At third level, BAs marketing program includingadvertising, pricing, distribution and customerservices have been designed to support its

product/services.


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Marketing Strategy Orientation

Should the development of marketing strategybe oriented by

Consideration of customers or

Consideration of competitors


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Does organisation having amarket orientation make

sense? What are theadvantages?


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Advantages

Promotes listening to the customer

Happier customers more likely to be retainedeasily good for long term profitability

More customer and competitive information islikely to be obtained and used good forprofitability

More likely to identify changes in market andcompetitive conditions avoid beingblindsided

Helps employees focus on profit, not salesvolume


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WORK OUT ?

State your career strategy and your

stakeholders


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Organization stakeholders

SHARE HOLDERS

EMPLOYEE

CUSTOMERS

SUPPLIERS &

DISTRIBUTORS

WEBSTERS MARKETING PRINCIPLES


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WEBSTERS MARKETING PRINCIPLES

that serve to guide marketing thought and action inmarketing strategy development

Principle 1: Focus on customers

Principles 2: only compete in markets where you can

establish a competitive advantage

Principle 3: customers do not buy products

Principle 4: Marketing is too important to leave to the

marketing department

Principle 5: Markets are heterogeneous

Principle 6: Markets and customers are constantly

changing


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Recent developments affecting thestrategic role of marketing

Globalization

Increased Importance of Service

Information Technology

Relationships across functions and firms


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Corporate growth strategies

Market penetrationstrategies

Product developmentstrategies

Market developmentstrategies

Diversification

strategies

Current Products New products

Curren

tMa

rkets

NewMarke

ts


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DISCUSSION QUESTION

Which should come first thecustomer need or the productidea?

Pl i f k f t t ki


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Planning framework for strategy making process


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4 main ways of approaching marketing strategy bydouglas west & John ford


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What is competitive marketing strategy

A market-oriented strategy that establishes aprofitable & sustainable market position for thefirm against all forces that determine industrycompetition by continuously creating &

developing a competitive advantage from thepotential sources that exist in a firms valuechain.

Some advantages are sustainable over a longperiod of time while others can be duplicated bycompetitors almost immediately. Establishing acompetitive advantage means that a firm builds awall around its position in the competitive market.


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Strategic planning is an organization'sprocess of defining its strategy, or direction,and making decisions on allocating itsresources to pursue this strategy, including

its capital and people


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Components of Strategic Marketing

introduction to marketing strategy04.01.10

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