Introduction

MARKETING STRATEGY
FOCUS on MARKETING ORIENTATION
Evolution of the Marketing Concept

Product Late 19th century: efficient production of goods

Orientation allowed firms to meet strong customer demand.

Mid-1920s–early 1950s: weakened demand

Sales required that products would have to be “sold.”
Orientation (personal selling, advertising, and distribution
was the focus)

Early 1950s–2000s: adopting a customer focus

Marketing means a commitment to researching and
Orientation responding to customer needs.
Important Terms

 Marketing
 The process of creating, distributing,
promoting,
and pricing goods, services, and ideas to
facilitate satisfying exchange relationships
with customers
in a dynamic environment

 Customers
 The purchasers of organizations’ products; the
focal point of all marketing activities

 Target Market
A specific group of customers on whom an
organization focuses its marketing efforts
Marketing Management
 Marketing Management
 The process of planning, organizing,
implementing, and controlling marketing
activities to facilitate exchanges effectively
and efficiently

 Effectiveness
 The degree to which an exchange
helps an organization achieve its
objectives
 Efficiency
 The process of minimizing the
resources an organization must
spend to achieve a specific level
of desired exchanges
Marketing Management (cont’d)
 Planning
 Assessingopportunities and resources
 Determining marketing objectives
 Developing a marketing strategy and plans for
implementation and control
 How, when and by whom are marketing activities
performed?


 Organizing
 Developing the internal structure of the
marketing unit
 Functions, products, regions, customer types
Marketing Management (cont’d)
 Implementation
 Coordinating marketing activities
 Motivating marketing personnel
 Developing effective internal communications
within the unit

 Control
 Establishing performance standards
 Comparing actual performance to established
standards
 Reducing the difference between desired and
actual performance
Important Terms

 The Marketing Mix

 Four marketing activities—product, distribution,
promotion, and pricing—that a firm can
control to meet the needs of customers
within its target market

 Product
 Goods, services, or ideas that satisfy customer
needs

 Distribution
 The ready, convenient, and timely availability
of products

 Promotion
 Activities
that inform customers about the
organization and its products
Important Terms

 Pricing : Decisions and actions that establish
pricing objectives and policies and set product
prices


 Exchange : The provision or transfer of goods,

services, or ideas in return for something of
value

 Customer Value : The ratio between the
customer’s perceived benefits and the resources
used to obtain those benefits.

 Customer Retention:
Retention The overall objective of
providing value to customers continuously and
more effectively than the competition, to have
highly satisfied customers.
Important Terms
 Relationship Marketing
 Establishing long-term, mutually satisfying
buyer-seller relationships allowing for
cooperation and mutual dependency

 Customer Relationship Management (CRM)
 Using information about customers to create
marketing strategies that develop and sustain
desirable customer relationships

O
N Firm’s Marketing Efforts Socio­cultural Environment
S 1. Product 1. Family

External 
Influence
U 2. Informal sources
2. Promotion
Input 3. Other noncommercial 
M 3. Price sources
E 4. Channels of  4. Social class
R distribution 5. Subculture and culture

D Psychological Field
Consumer Decision 

Need 
E 1. Motivation
Recognition
C 2. Perception
3. Learning
Making

I Pre­purchase 
Process 4. Personality
S Search
5. Attitudes
I
Evaluation of 
O Experience
Alternatives
N

P Purchase
Decision 
Behavior

R 1. Trial
Post­

O Output 2. Repeat purchase
C Post­purchase 
E Evaluation
S
STRATEGY......
§ The word ‘Strategy’ was initially introduced and
defined in the ancient military dictionaries
§
§ It comes from the Greek word ‘strategos’,
strictly meaning a general in command of an
army; it is formed from ‘stratos’, meaning
army and ‘ag’, meaning to lead


§ First time in business literature by William

Newman (1951)

 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 a
given market
Case Study: “Marriage made in heaven
has become a nightmare”
 With rambus in 1996, - memory chip technology

 6% in micron technology,
 100m $ in samsung,

 Intel tried to push the overall market towards
Rambuswith plans for microprocessors that would
only work with that type of memory.


 Recently, recall of 1m PC motherboards due to several
high-profile chip problems.

 Withdrawn low-cost PC microprocessor (Timma) bcoz, it
required expensive rambus memory chips


 Retrospect view:


“We made a big bet on Rambus and it did not



work out’ – Craig Barrett, CEO- Intel



 Depending on a third party for a technology

that gates your performance.



 THE CONCEPT OF ‘STRATEGY’


 “The direction and scope of an

organisation over the long(er) term,
which ideally matches its resources to
its changing environment and, in
particular its markets, customers or
clients so as to meet stakeholder
expectations”


 Johnson & Scholes (1999)

 PURPOSE OF STRATEGY

§ To set the future direction for the

organisation.


§ To state how it is to create value to

customers.


§ To identify what product/s and in which

markets the firm will invest its resources.


§ To describe how it is to perform better than

competition.
hierarchy of strategy
What is ‘sbu’

 An SBU is an operating unit focus that groups

a distinct set of products or services, which
are sold to a uniform set of customers,
facing a well-defined set of competitors.


 the phrase "Strategic Business Unit" came into

use in the 1960s, largely as a result of
General Electric's many units.
 3 LEVELS OF STRATEGY
 Corporate
 This describes a company’s overall direction in terms
of growth and the management of its various businesses
to achieve a balanced portfolio of products and services.


 Competitive/Business (SBU)
 which emphasizes improvement of the competitive
position of a corporation’s products or services in the
specific industry or market segment served by that
division.


 How to compete in individual product-markets and

support the corporate strategy


 Functional
 Functional strategies for the organisation’s functional
areas in support of SBUs and corporate strategies
Marketing strategy

 In the early 1980s, marketing strategy was

defined as an indication of how each
element of the marketing mix will be used to
achieve the marketing objectives.


 “The broad conception of how product, price,

promotion and distribution are to function in
a coordinated way to overcome resistance to
meet marketing goals”



 THE INTER-RELATIONSHIP BETWEEN
MARKETING AND CORPORATE STRATEGY
Ø INFORMS
Ø DIRECTS
Ø GUIDES
Ø CONTROLS


Corporate Strategy 

 Marketing Strategy
•Specifying the •Identifying product market/s to


organisation’s mission compete in



•Allocating resources


 •Selecting market segments to

•Defining Organisational target


objectives •Developing the marketing mix



Ø ACHIEVES
Ø SUPPORTS

Marketing strategy development…..


 The development of marketing strategy can

be seen at three main levels.


 First, the core strategy of the company is

selected and the marketing objectives and
the broad focus for achieving them are
identified.


 Second, market segments and targets better

than the competition is identified.

 Third level, a marketing department capable
of putting the strategy into practice must be
created.


 The marketing department, at this stage is

responsible for developing the marketing
mix programs that can convey both the
positioning and the products/services to the
target market.

 Marketing strategy development to
British Airways (BA)


 First level, the company’s core strategy and

marketing objectives have been set to ensure that
BA is the “customer’s first choice through the
delivery of an unbeatable travel experience”.


 Second level, BA has elected to provide overall

superior service and good value for money in every
market segment in which it competes.


 At third level, BA’s marketing program including

advertising, pricing, distribution and customer
services have been designed to support its
product/services.
Marketing Strategy Orientation


 Should the development of marketing strategy

be oriented by


Ø Consideration of customers or
Ø
Ø Consideration of competitors


Does organisation having a

market orientation make
sense? What are the
advantages?

 Advantages

• Promotes listening to the customer
•
• Happier customers more likely to be retained
easily – good for long term profitability
•
• More customer and competitive information is
likely to be obtained and used – good for
profitability
•
• More likely to identify changes in market and
competitive conditions – avoid being
blindsided
•
• Helps employees focus on profit, not sales
volume
 WORK OUT ?


ØState your career strategy and your

stakeholders
Organization stakeholders

 SHARE HOLDERS


 EMPLOYEE


 CUSTOMERS


 SUPPLIERS &


 DISTRIBUTORS

 WEBSTER’S MARKETING PRINCIPLES

that serve to guide marketing thought and action in



marketing 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
Recent developments affecting the
strategic role of marketing


 Globalization


 Increased Importance of Service



 Information Technology


 Relationships across functions and firms

 Corporate growth strategies
Current Products New products
Current  Markets

Market penetration Product development

strategies strategies

Market development Diversification

New Markets 

strategies strategies
DISCUSSION QUESTION

Which should come first – the
customer need or the product
idea?

Planning framework for strategy making process
4 main ways of approaching marketing strategy – by
douglas west & John ford
 What is competitive marketing strategy


 A market-oriented strategy that establishes a
profitable & sustainable market position for the
firm against all forces that determine industry
competition by continuously creating &
developing a competitive advantage from the
potential sources that exist in a firm’s value
chain.”

 Some advantages are sustainable over a long
period of time while others can be duplicated by
competitors almost immediately. Establishing a
competitive advantage means that a firm builds a
wall around its position in the competitive market.


 Strategic planning is an organization's
process of defining its strategy, or direction,
and making decisions on allocating its
resources to pursue this strategy, including
its capital and people
Components of Strategic Marketing