Chapter 1: Introduction to

Strategic Marketing
Management
Market1 Page 1

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What is Marketing?
Marketing is a societal process by
which individuals and groups
obtain what they need and want
through creating, offering, and
freely exchanging products and
services of value with others.
- Philip Kotler

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Simple Marketing System

Communication

Industry
(a collection
of sellers)

Goods/services
Money

Information
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Market
(a collection
of Buyers)

Company Orientations
Towards the Marketplace
Production
Production Concept
Concept

Consumers prefer products that are

widely available and inexpensive

Product
Product Concept
Concept

Consumers favor products that

offer the most quality, performance,
or innovative features

Selling
Selling Concept
Concept

Consumers will buy products only if

the company aggressively
promotes/sells these products

Marketing
Marketing Concept
Concept

Focuses on needs/ wants of target

markets & delivering value
better than competitors

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Marketing Concept
Need

to Focus on Marketing Concept

Focuses on needs/ wants of target

markets & delivering value better
than competitors

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Evolving Views of Marketings

Role

Production
Marketing

Finance
Human
resources

Production

Finance
Human
resources

Marketing

a. Marketing as an
b. Marketing as a more
equal function MKT1 - Slide 1important
function 6
to 24

Evolving Views of Marketings

Role
Production
Marketing
n
ma ces
Hu ur
so
re

Customer

e
c
n
a
n
i
F

e. The customer as the controlling

function and marketing as the
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1 to 24
integrative
function

Overlap Between Strategic

Planning & Marketing
There

is some overlap between the

two, in terms what you are going to
learn
We will emphasise marketing concepts
and approach here rather than
strategic concepts
However, there will be some inevitable
overlap here and there
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MKT1 - Slide 1 to 24

Marketing Plan
This

is a document that puts together the

process that the organisation will undergo in
order to achieve its marketing objectives
It spells out the following activities that
marketing managers need to do:

Set marketing objectives

Evaluate opportunities
Create marketing strategies
Prepare marketing programmes
Specify expected results
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10

The Marketing Plan Possible

Outline
Executive Summary & Table of Contents
Current Marketing Situation
Opportunity & Issue Analysis
Objectives
Marketing Strategy
Action Programs
Projected Profit-and-loss
Controls
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The Goal of Strategic Marketing

Management
To

select reality-based desired

accomplishments (e.g., goals &
objectives)
To effectively develop or alter business
strategies
To set priorities for operational change
To improve the organisations
performance
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Strategic Marketing
Management Model
The

above, discussed in this chapter,

is divided as follows:

External/self analysis
Strategic posture
Market planning

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External Analysis
This

comprise:

Customer analysis (segmentation,

motivations & unmet needs)
Competitor analysis (their performance,
image, culture, strengths/weaknesses)
Industry analysis (major market trends,
key success factors, opportunities/threats,
analysis of competitive/change forces)
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Competitor Forces Analysis

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Self-Analysis
Strengths

& Weaknesses
Together Opportunities & Threats
identified in the external
environmental analysis, can do a
SWOT analysis

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Strategic Posture
Based

on the SWOT, the organisation

can decide how it will achieve its long
term mission/goals
Basically zero in on the strengths to
take on opportunities, and
downplaying the weaknesses,
especially in respect to threats.

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Hence: Strategies
Based

on Porters and Aakers work:

Price advantage (cost leadership)

Quality/features advantage (broad
differentiation)
Marker focused advantage (focused low
cost & focused differentiation)
TQM advantage (value-driven strategy
based on continual innovation in price,
product & process)
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Competitor Role Strategy

After

organisation has decided on primary

competitive strategy, it must position itself
by choosing a competitive role strategy:
Leader: largest market share/initiator (e.g.,
McDonalds)
Follower: adopter of successful strategies (A&W
Restaurant)
Challenger: An innovator who challenges the
norm
Loner: Feels in the gap in the market place
(mom & pop stores)

Dont

try all!

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Strategic Initiatives
Next

step in developing effective

posture, priority strategic initiatives:
Grow: e.g., Subway sandwiches
Maintain/defend: Mc Donald has been
doing this
Reposition: maintain size, but change key
elements, e.g., IBM)
Retrench: Spin-off some businesses, e.g.,
Nabisco spun off cigarette manufacturing
Exit
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Vertical Coordination
Strategies
Selling (distribution of) product thru:
Contracts
Relation-based alliance: loose, n
contracts, but understanding no
separate company
Equity-base alliance may be a separate
company
Vertically integrated
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Need to keep in mind

Three

critical marketing concepts:

TLC: Thinking like customers see things

from customer viewpoint
CMSQ: Critical marketing strategy
question why should customers
purchase our products over competitors?
STP: Segment, target & position

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Segment, Target & Position

STP

strategies should complement

organisations overall generic strategy,
competitive role strategy, strategic initiative
& vertical coordination strategy:
Market segmentation every market made up of
distinguishable segments with different needs,
buying styles, responses
Target market selection selecting market
segments which you want to serve
Positioning choosing the 4 Ps for that
segment(s)
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Strategic Marketing

Company Orientations Towards the Marketplace

Marketing Concept

Evolving Views of Marketings Role

Evolving Views of Marketings Role

Overlap Between Strategic Planning & Marketing

Marketing Plan

The Marketing Plan Possible Outline

The Goal of Strategic Marketing Management

Strategic Marketing Management Model

External Analysis

Competitor Forces Analysis

Self-Analysis

Strategic Posture

Hence: Strategies

Competitor Role Strategy

Strategic Initiatives

Vertical Coordination Strategies

Need to keep in mind

Segment, Target & Position

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