What is Strategy?
Strategy is the direction & scope of an organization over the long term, which achieves advantage for the organization- Johnson & Scholes, Exploring Corporate Strategy, 2002
What is Strategic Marketing? (Chartered Institute of Marketing)
“ The management process responsible for identifying, anticipating and satisfying customer requirements profitably”
What is Strategic Marketing? (Peter Drucker)
“Marketing is so basic that it cannot be considered a separate function. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view….Business success is not determined by the producer but by the customer”
What is Strategic Marketing? (Kotler et al)- almost q’s
What customers will we serve?
&
How can we serve these customers best?
Why is Strategic Marketing Important?
- ‘Marketers influence demand by making the product/service appropriate, attractive, affordable, and easily available to target consumers’ e.g. needds, demands, wants
- Megatrends are changing the environment e.g. Uncertain economic environment, Digital Age, Rapid globalisation, Call for more social responsibility, Growth of NFP marketing,Etc
- Changes in Consumers’ Demands, Markets & Competition
e. g. New needs & wants, New ways of communicating, information gathering & purchasing, Market boundaries changing, Strategic groups changing
Losers of Strategic marketing e.g. woolworths, blockbusters, thomas cook
Missed opportunities, Let New Entrants in, Strategic Drift
Winners of Strategic marketing e.g. Amazon
Redefine market, Build strong brands
Why is Strategic Marketing Important? (4 views)
- Precipitate the consideration of strategic choices
- Force a long-range view
- Aids strategic analysis & decision-making
- Helps a business cope with change
Production Orientation
- Belief that consumers will favour products that are available and highly affordable
- Focus on improving production and distribution efficiency
- Henry Ford / Lenovo
- Risk of marketing myopia
Product Orientation
- Belief that consumers will favour products that offer the -most quality, performance and features
- Focus on continuous product improvements with little/no customer input
- Gillette started making crazy products- dollar shave club taking over with affordable simple razors
- Risk of marketing myopia
Selling Orientation
- Belief that consumers will not buy sufficient volumes without large-scale selling and promotional effort
- Focus identifying prospects and aggressive selling
- Double glazing (half price if you buy this week)
- Risk of customer backlash and long term brand damage
Marketing Orientation
- Belief that profits flow from customer satisfaction
- Focus on knowing needs and wants of target markets and delivering desired satisfactions better than competition
- Burger King / Airbnb
- Risk of customer not knowing their needs/wants (Steve Jobs)
Societal Orientation
- Belief that marketing decisions should consider consumers’ wants, company requirements, consumers’ long term interests and society’s long term interests
- Focus on sustainable marketing
- UPS CSR Mission / Unilever
- Risk of getting balance wrong
Marketing Orientation components (5 elements)
- Customer Orientation - Understanding customers well enough continuously to create superior value for them
- Competitor Orientation - Awareness of short and long term capabilities and actions of competitors
- Focus on long term - Profit focus is long term, not short term
- Interfunctional Coordination - Organising all company resources to create value for target customers.
- Market led Organisational Culture - The marketing process is not simply the responsibility of the marketing department
Customer Orientation (MO Elements)
- Customers do not want products, they want to address needs
- Needs, not products, define markets
- Vital to understand customer needs
Competitor Orientation (MO Elements)
- Customers choose suppliers who offer best value
- Companies must monitor level of customer satisfaction with their business against competitors (benchmarking)
Focus on long term (MO Elements)
- Profit is a result of successfully meeting customer needs
- The only true assets are satisfied customers
Interfunctional Coordination (MO Elements)
- Tensions and rivalries take a back seat to serving customers
- Flexibility is key
- Structure must enable customer focus
Market Led Organisational Culture (MO Elements)
Marketing must be a central concern for all people in the organisation
Traditional Hierarchical pyramid (Implications for structure & organisation of Marketing)
Customers-> Front Line People-> Middle Mgt-> Senior Mgt
Traditional Hierarchical pyramid
Excessive overhead costs
Too slow
Demotivation of front-line staff due to lack of discretion & inferior status
Right Side Up (Implications for structure & organisation of Marketing)
Customers all round triangle-> senior mgt-> middle mgt-> front line people-> customers
Take out layers of management
Customer-oriented business – all of hierarchy has a strong understanding of customer
Strategy formulation begins with customer perspective
Front line staff empowered and encouraged to act as owner-operators
Primary role of hierarchy is to support front-line
The role of marketing
- Identify & communicate customer wants & needs throughout the organisation
- Determine the competitive positioning to match the needs of the customers with company capabilities
- Marshall all relevant organisational resources to deliver customer satisfaction
SOSTAC
Situation Objective Strategy Tactics Action Control
