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LSM521: Essentials of Marketing Strategy


This course includes

One self-check quiz

Two discussions

One Ask the Expert interactive

One scored project in multiple parts

Completing all of the coursework should take

about five to seven hours.

What you'll learn

Use systematic processes to define a

market strategy

Analyze the marketing mentality of

your firm

Evaluate the ethical implications of

marketing decisions

Evaluate the use of frameworks in

formulating a market strategy

Consider the strategic considerations

that inform the development of a

brand

Course Description

In this course, you will learn about the role marketing plays within an organization, some ethical questions that surround

marketing practices, the impact that a strategic approach can have on marketing within your organization, and the

components of a well-defined marketing strategy and overall business strategy. In defining how the organization will

successfully engage customers, prospects and competitors in the market arena, you will discover how to think strategically

about the market you're in, why you're in that market, and what you're trying to accomplish in that market. You'll also gain

a strategic view of your organization's "brand."


Douglas Stayman Associate Professor of Marketing, Samuel Curtis Johnson Graduate School ofManagement, Cornell University

teaching and research interests are in the areas of advertising andProfessor Stayman's

consumer decision making. He came to Johnson from the University of Texas at Austin.

His research has focused on the study of emotional responses to advertising and the role

of affect in decision making. His work has involved methodological and measurement

issues in studying emotions. He is also interested in theoretical accounts of the effects of

emotions on people's preferences. His research has been supported by grants from the

Ogilvy Center for Research and Development, the Marketing Science Institute, and the

American Academy of Advertising.

Start Your Course


Module Introduction: Market Orientation and Marketing Mentality

Marketing is a very important part of any business; it contributes greatly to the success of the organization. Companies

without a marketing mindset-firms that center around their products rather than their customers-are at a disadvantage in

today's business world. Marketing is not only about customers, advertising, price, and channels, but is also about

corporate strategy and what the company is trying to accomplish. To tie marketing strategy to corporate strategy we use

the concept of a and distinguish that from a or .market orientation marketing mentality marketing orientation

This course is based on the content of Cornell's Johnson Graduate School of Management's Marketing course. It is

designed to broaden your perspective of marketing and to help you learn the strategic role of marketing in a business.

Within the course you will have the opportunity to apply concepts by evaluating some of the marketing practices within

your own firm.

After completing this module, you will be able to:

Refine your own definition of marketing, market mentality, and market orientation. Evaluate your level of market

mentality

Identify the functions in the organization who "own" the responsibility for marketing

Evaluate the market orientation of your company

Examine the company versus customer viewpoints in relation to marketing ethics

Articulate your own view on the ethical aspects of a marketing issue


Watch: What's a Marketing Mentality?

The better an organization understands its customers, the better job it will do in developing goods and services that meet

market demands. While that seems like an obvious statement, many businesses fail to understand that their marketing

efforts must start with the end-user, not the product, and therefore fail to develop products suited to their potential

customers. Marketers, and the businesses they work for, need to develop a "marketing mentality".


Watch: Defining Marketing and Market Orientation

If you're overwhelmed with all the marketing terms and concepts that are circulating about what marketing entails, you're

not alone. Many people view marketing as a series of tactics, while others treat the words "marketing" and "sales" or

"marketing" and "advertising" as synonymous. How is "marketing" adequately conveyed?

In the following video, Professor Stayman discusses different market-related orientations: market, marketing, and

customer.


Read: Marketing Myopia

Key Points

"In order to produce these customers [loyal followers], the entire organization must be viewed as a customer-creating and

customer-satisfying organism."

is an inward-looking approach to marketing that focuses on the needs of the firm instead of defining theMarketing myopia

firm and its products in terms of the customers' needs and wants. It is a common marketing term as well as the title of an

article by Theodore Levitt. Some scholars have suggested that Levitt's "Marketing Myopia" marked the beginning of the

modern marketing movement. Its theme is that the vision of most organizations is constricted by a narrow understanding

of what business they are in. It argues that organizations have been missing marketing opportunities, which are easy to

see once a wider view is adopted.

Levitt contends that, at some point in their development, most industries can be considered growth industries. Usually

selling, not marketing, gets emphasized. Why is this a mistake? Selling focuses on the needs of the seller, whereas

marketing concentrates on the needs of the buyer. The railroad industry, for example, is a business whose failure to grow

has often been due to a limited market view. Railroads are struggling not because the need for passenger transportation

has declined or even because cars, airplanes, and other modes of transport fill that need. Rather, the industry is suffering

because management assumed they were in the railroad business rather than the transportation business. They were

railroad oriented instead of transportation oriented, product oriented instead of customer oriented. For companies to

ensure continued success, they must determine and act on their customers' needs and desires, not rely on the presumed

durability of their products or services.

An organization must think of itself not as producing goods or services but as a company with which people want to do

business. Levitt's article challenges managers to look beyond their current business activities and think "outside the

box"-to focus on marketing strategy, various predictive techniques, and the customer's lifetime value.

Note: To review the entire Levitt article, refer to the site for purchase: Harvard Business Review "Marketing Myopia" by

Theodore Levitt; Harvard Business Review; July-Aug. 2004

http://hbr.org/product/marketing-myopia-harvard-business-review/an/R0407L-PDF-ENG


Read: Everyone Is on the Marketing Team

Many people and organizations may think of marketing as an independent function, but we propose that marketing should

be defined more in terms of being the epicenter of the business. Simply stated, marketing is an essential and vital element

of any organization because it helps to increase a firm's profitability.

Whose responsibility is marketing? Does the responsibility belong to the marketing department, the sales force, to

operations, or is it advertising's responsibility? Advertising is an important part of marketing, and you may say,

"Advertising makes me buy products or services." But if you ask a group of 19-year-olds what kind of toothpaste they use,

about 90 percent of them use the same toothpaste they did when they were 6 years old. In this case, what determined the

brand of toothpaste a 19-year-old uses? It's whatever their parents bought, rather than advertising. Their parents might

have thought about the purchase partially based on advertising, but it's about a lot of other things. Likewise marketing and

how it impacts consumers is much more than just advertising.

The may know what people want, but they alone can't develop a product to meet people's needs.marketing department

They don't have the technical expertise. The group might have the technical expertise to design a product thatR&D

people need, but they don't have the information to determine if it will match the customers' needs in a cost-effective way.

Here we need the people and the people to give us some idea of the cost of the product.finance manufacturing

So whose responsibility is marketing? It's the responsibility of everyone in the organization, not just marketing, or

advertising, or R&D. All of the groups of an organization need to be involved in the development of a product in order to

meet customers' needs.


Watch: What Sales People Know

It is important for all members of an organization to work to meet the needs of customers in the marketplace better than

the competition. This is especially true of marketing and sales.


Read: Internal Versus Market Orientation

Internal orientation or market orientation? This is not an either/or situation but rather a continuum for each company. A

company on the internal-orientation end of the continuum tries to persuade customers to want what the company has to

offer. Ideas are generated internally with little research into what the customer wants. The company tends to look mainly

at the short-term reactive cost and volume side.

A market-oriented company strives to make and offer what the customers want, focusing more on the long-term strategic

customer value side.

This does not mean that the orientation should be all market oriented; we can't ignore internal orientation. A company that

ignores delivery cost, profit margins, volume, and production processes will go out of business. But a company that has

only an internal orientation and not a market orientation will also go out of business in the long term.

Here are some indicators of whether you have an internal orientation or a market orientation:

You know your company's competitive advantage (market)

You strive to lower the company's costs (internal)

Your goal is to have high volume and profit margins (internal)

You provide superior customer value and customer satisfaction (market)


Watch: Potato Chip Case Study

Case Study Pringles

In the 1960s, Proctor and Gamble (P&G) came out with a potato chip that wasn't peeled and cut; it was instead made from

potato flakes and reconstituted into the shape of a chip, and thus Pringles were born. The trademark container used to

package Pringles chips had to be specially designed. Pringles chips are quite fragile, unlike regular potato chips that can

be stored in paper or plastic bags; Pringles will crush and break easily. The tubular container developed for Pringles

wasn't about looking different or appealing to the customer; it was about delivering a snack that wasn't broken by the time

it reached the consumer. Proctor & Gamble thought they had two real advantages: One, in storing and shipping, which

would be great to the channels, and two, the product could be mass produced and distributed widely because it would not

degrade or break apart like regular bagged potato chips.

Proctor & Gamble determined that they could, on a national scale, advertise, manufacture, and distribute their product,

taking advantage of that scale to beat the little guys-the makers of potato chips who were in a fragmented market. P&G

did their product testing and launched Pringles as a premium-priced product. They started with a 25 percent share of the

market, and customers in blind taste tests thought they were okay. But once customers knew that the product was

reconstituted potato flakes, they thought the taste was artificial. Soon the Pringles share dropped off and P&G withdrew

the product for a time.

Professor Stayman discusses this case in the video below.


Watch: Marketing Ethics Continuum

What constitutes ethical marketing practices? Whatever your business, you will want to maintain your firm's credibility by

building high ethical standards into your market strategy.

In this video presentation, Professor Stayman proposes a framework that is useful when considering ethical implications

around marketing.


Watch: Consumer Sovereignty

Do different products and the customers to whom that product is being marketed, place added responsibility on the

marketer to do more than just provide truthful information and sell the product in an honest way?


Module Introduction: Market Strategy Overview

Strategic marketing plans answer the questions: (1) Where are we now? (2) Where do we want to go? (3) How do we get

there?

In many ways a good marketing plan is a good business plan. Unfortunately, the reality is that very little time is spent on

strategic planning; most of the time spent on marketing is tactical. In this module, you will learn what a market strategy

includes and about paradigms and frameworks that are helpful in developing the strategy.

After completing this module, you will be able to:

Identify the scope of a marketing strategy

Explain a market strategy used by your company

Describe how frameworks are useful in developing a market strategy

Evaluate your company in terms of the market strategy map

Identify the basic elements that create a brand

Discuss the importance of a product or service brand from a strategic point of view

Explore the characteristics that result in a brand


Watch: What Is a Marketing Strategy?

A well-defined marketing strategy is most effective when it is an integral component of overall firm strategy, defining how

the organization will successfully engage customers, prospects, and competitors in the market arena. It includes a

definition of your business, a description of your products or services, a profile of target customers, and defines your

company's role in relationship to the competition.


Watch: Levels of Strategy

Market decisions and strategy can be defined at various levels, depending on the goals of the organization. As markets

and consumer expectations evolve, brand-savvy businesses will think strategically at multiple levels about how to meet

and manage change.


Read: Importance of Paradigms and Frameworks

How important are frameworks to firms and in particular to marketers? Imagine building a factory without architectural

drawings or installing an IT infrastructure without using a detailed plan to map out the costs, benefits, users, and so on.

Frameworks or paradigms are just as important to marketing. They help you think strategically about the market you are

in, why you are in it, and what you are trying to accomplish in that market.

Business leaders solve problems all the time-quite often under tight time constraints. These constraints tend to make the

leaders very focused on making quick, immediate decisions. They may not take the time to use a systematic approach to

analyze the problems. Business leaders may find immense benefit in taking the time to use a strategic approach to

examine market decisions. A strategy will help leaders pose key questions to arrive at better decisions. This is where

frameworks come into play. Frameworks help business leaders take into account all of the relevant factors of a decision.

They help leaders scrutinize different views of the issues that they might not have thought of otherwise. The purpose of

strategic market frameworks is to expand the tools available to help resolve marketing problems.

In this module we provide the context for these frameworks. Each framework is applicable to different kinds of decisions

depending on the situation. For example, the choice of a framework will be influenced by whether the market issue is

primarily a short-term problem or a long-term one, or if it a multi-product issue or a one product issue? Frameworks are

context dependent, but they are all about making decisions.


Watch: Overview of Frameworks

In this video presentation Professor Stayman describes an organizational view of the paradigms and frameworks that are

used in building and executing a market strategy.


Read: Summing Up the Marketing Frameworks

The 3 C's

The frameworks at the 3 C's level are used to appraise the situation (the Customer, Competition, Company). Using these

frameworks, you determine:

The you're really in.business

The overarching related to the 3 C's.problems

Marketing Strategy

In the middle of the map is the more strategic aspect. You'll use what's called an for thinking aboutSTP framework

marketing strategy.

You don't just go after a market of consumers; you break that market up into segments based on a varietySegment:

of relevant factors.

When you go out into the marketplace, you divide the market up into segments, but you don't actually, as aTarget:

company, emphasize all segments, you target some specific segments that have a competitive advantage -- where

you can make money.

You've done your segmentation and identified the correct target market; now you position your product toPosition:

that target market. And it's positioned to emphasize that you offer more value than the competition. When you clearly

and persuasively express your segmentation, target, and position, you articulate a clear marketing strategy.

Execution

Now you have to actually go to the marketplace with that marketing strategy. This is when you use the 4-P's product, price,-

promotion and place.


You have products or services to which you set prices which the customers are willing to pay.

You have to communicate and promote to sell that product to the customers.

And you need a distribution channel -- a way of getting the products to the right place at the right time. Making sure

that the products arrive when and where they are wanted.

The Arrow

The arrow indicates that this is not a linear process. As you more clearly define one aspect of the strategy or begin to

execute it, you may determine that a different price point, position, etc., may result in a better market strategy. At this point

you'll rework your plans to better align the strategy with your objectives before continuing.


Watch: What Is a Brand?

Like most consumers, you probably have strong opinions regarding your favorite brands. Are these opinions more

emotional or more rational? You may form an emotional attachment to a brand and disregard other products and services

for the one with higher brand recognition. Some brands even become synonymous with the product, and the consumer

refers to the product by its brand name (such as Kleenex). It is important for your company to have a strong brand identity

with unique identifiable characteristics.

Learn more about what a brand is in this video presentation


Watch: Brands Are in the Mind of the Consumer

So the answer to our question about who is in control of the brand is: the consumer. Note, however, that although you

can't control the brand, you can have a great deal of influence over customers' perceptions of the brand. Strategic

marketing efforts, and all brand contacts, need to present a consistent, clear message about the brand promise to the

consumer.


Watch: Brand Contacts

When it comes to brands, everything you do and everyone in the organization must deliver a consistent message. A

company cannot control all the messages a consumer receives. However, if the company communicates the importance

of brand consistency to the workforce, you may find that the employee talking to a friend in the supermarket provides the

same brand message as the sales representative when he or she meets with a potential customer.


Watch: Thank You and Farewell

To learn more about the concepts presented in this course, you may want to consult, on your own, the following

supplemental resources:

Levitt, Theodore. "Marketing Myopia." Harvard Business Review (July 1, 2004). Prod. #: R0407L-PDF-ENG.

Smith, N. Craig and Quelch, John. Ethics in Marketing, New York: McGraw-Hill/Irwin, 1996.


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