Lecture 1: Strategic Marketing and The Marketing Planning Process Taufique Hossain Marketing Strategy MKT 460

Learning Objectives Be able to conceptualise marketing strategy. Appraise the nature and processes of strategic marketing planning. Assess the importance of marketing strategy/planning to a business and identify the kinds of things that can go wrong!

Marketing Defined Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchange and satisfy individual and organizational objectives (AMA 1985). Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably (CIM 2001). Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (AMA 2008).

Mutually Beneficial Exchanges PROVIDER’S Goals CUSTOMER’S Goals Survival Financial Social Spiritual Ecological etc Solutions Benefits Altruism Well being etc Customer & Provider Satisfaction OFFERS Products, services etc Purchases, support RESPONSES

The Concept of Market Orientation Organization wide generation, dissemination, and responsiveness to market intelligence (Kohli and Jaworski 1990). The organizational culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and thus, continuous superior performance for the business (Narver and Slater 1990).

Components and Context of Market Orientation Market-led Organisational Culture Customer Orientation Competitor Orientation Inter-functional Co-ordination Focus on the Long Term

Fabric of the New Marketing Concept Create customer focus throughout the business. Listen to the customer. Define and nurture the organization’s distinct competencies. Target customers precisely. Manage for profitability, not sales volume. Make customer value guiding star. Let the customer define loyalty.

Fabric of the New Marketing Concept Measure and manage customer expectations. Build customer relationships and loyalty. Define the business as a service business. Commit to continuous improvement and innovation. Manage culture along with strategy and structure. Grow with partners and alliances. Destroy marketing bureaucracy.

Resource-Based View of Marketing Follows from work on the resource based view of the firm in strategic management: The locus of interest concerns resources and capabilities possessed by the firm, which can be deployed by its strategy to achieve competitive advantage and superior performance. The source of superior performance lies in the possession and deployment of distinctive, hard to imitate or protected resources.

Marketing Approaches Product Push Marketing Customer-Led Marketing Resource-Based Marketing Market Needs Organisational Capabilities

Organisational Stakeholders Focal Organisation Customers Shareholders Managers Employees Suppliers Distributors

Marketing and Performance Outcomes Market- Oriented Culture Marketing Resources Market Performance Financial Performance Assets Capabilities Customer Satisfaction & Loyalty Sales Volume & Market share

Summary of Marketing Fundamentals Focus on the customer. Only compete in markets where you can establish a competitive advantage. Customers do not buy products. Marketing is too important to leave to the marketing department. Markets are heterogeneous. Markets and customers are constantly changing.

The Role of Marketing in Strategic Management Identify and communicate customer wants and needs throughout the organisation. Determine the competitive positioning to match the needs of the customers with company capabilities. Marshal all relevant organisational resources to deliver customer satisfaction.

Strategic Fit

Marketing Planning First step is to define the business purpose or mission: What business are we in? What business do we want to be in? Mission statement—A statement of the organization’s purpose and what it wants to accomplish in the wider environment.

Components of Mission Mission Objectives and Strategy Strategic Intent Vision of what you want to be Market Definition Customer Targets Company Values Guiding Principles Competitive Positioning Differential Advantage Distinctive Competencies Core skills

The Marketing Strategy Process Industry Analysis Market Target Competitive Advantage OrganisationControl Competitive Positioning Implementation Core Strategy Marketing Mix Company Analysis Business Purpose

Establishing the Core Strategy Analysis of organizational resources. Analysis of the markets served. Analysis of SWOT constituents.

SWOT Analysis InternalExternal Strengths What are we good at relative to competitors? Opportunities What changes are creating new options for us? Weaknesses What are we bad at relative to competitors? Threats What emerging dangers must we avoid or counter? Good Points Danger Points

SWOT Strategic Implications OpportunitiesThreats Strengths Weaknesses Exploit existing strengths in areas of opportunity Use existing strengths to counter threats Build new strengths first to take advantage of opportunities Build new strengths to counter threats

Core Strategy Improve Performance Increase Sales Improve Productivity Expand Market Increase Share Increase Margins Reduce Costs New uses New users Increase use frequency New products Win share Acquire share Create alliances Increase price Add value Change product mix Capital costs Fixed costs Variable costs

Creation of Competitive Positioning Market targets Differential advantage: Cost leadership Differentiation Focus

Reading Hooley et al. Chapters1 and 2. Nohria, Joyce, and Robertson (2003), ‘What Really Works’, Harvard Business Review, July, pp Piercy and Morgan (1994), ‘The Marketing Planning Process: Behavioral Problems Compared to Analytical Techniques in Explaining Marketing Plan Credibility’ Journal of Business Research, 3, pp