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Chapter 2

Review Of Related Literature

Foreign Literature
Business organizations are constantly seeking ways to
enhance their performances in order to compete actively and
aggressively in the market. Profit-seeking organizations
have long recognised the importance of creating value in the
products and services they offer to the customers, all in
the common objective to deliver commercial goods efficiently
in order to keep the current customer-base satisfied.

Aside from inculcating loyalty among the members of the


clients and customers of a business organization, companies
are likewise aware of the need to widen and extend the reach
of the companys products and services to new markets in
order to increase its share on clients and customers.
Strategies, plans and techniques in the areas of operations,
communication and marketing,sales, supply chain, logistics,
research and development, performance measurements as well
as social and corporate obligations and responsibility are
continuously improved all for the benefit of the target
market. Once companies become successful in these
organizational and managerial areas, sustained economic
development is envisioned. This literature review aims to
present a critique of existing,published literatures that
analyze the relationship between marketing strategies and
the firms performance.

Historically, marketing strategy formulation is viewed as an


antecedent to performance outcomes (Lages 2000). It is the
modus operand that allows an organization to concentrate its
limited resources on the best available opportunities to
increase sales and achieve a sustainable competitive
advantage(Michael Baker 2008).

Marketing strategy has been a salient focus of academic


inquiry since the 1980s, according to(Mavondo 2000). There
are numerous definitions of marketing strategy in the
literature and such definitions reflect different
perspectives (Li et al 2000). A traditional definition of
marketing strategy is a plan for pursuing the firms
objectives or how the company is going to obtain its
marketing goals with a specific market segment (Orville and
Walker 2008; Theodosio, Leonidus, 2003; Kotler,Armstrong,
2009) while Brodrechtova (2008) explains that marketing
strategy is a roadmap of how a firm assigns its resource and
relates to its environment and achieves corporate objective
in order to generate economic value and keep the firm ahead
of its competitors. In laymen terms it is to determine the
nature, strength, direction, and interaction between the
marketing mix-elements and the environmental factors in a
particular situation (Li et al 2000). According to Levie
(2006), the aim of the development of an organizations
marketing strategy development is to establish, build,
defend and maintain its competitive advantage.

A thorough analysis of the newest scientific articles on


strategic management and organizational behaviour indicates
that 71% of them analyze company performance as a dependent
variable, 12% of them analyze it as an independent variable
while 11% of the studies analyze performance as a dependent
as well as an independent variable (March and Sutton1997).

Local Literature
Thinking about all the elements in your business, no matter how small they may seem, can
help you position your business and therefore your products and services inthe market.The 5 Ps are key
marketing elements designed to help you think about your business strategically.

Product. anything that can be offered to a market to satisfy a need or want. Products, which can
be marketed, include physica l goods, services, persons, places, organi1ations, and ideas.
0n the deeper sense, the product is not a physical item but a perception of the consumer/user. Product
means the s a t i s f a c t i o n o f t h e c u s t o m e r r a t h e r t h a n a p h y s i c a l g o o d . G o o d s a r e
i n g r e d i e n t s o f customer satisfaction.

Price. According to Kotler Philip (1997) is a flexible and influential element,which determines the
revenue/profitability/ market share for the organi zation. on the customers point price is a
determinant factor because most customers depending on their income level consider the price
before they purchase the product. Price attributes different names.

Promotion. According to J.J Garusing Arachchige (1994) it


involves the function that marketer communicates with
customers in order to acknowledge the product. Marketer
needs to plan strategies to attract the present and
potential customers to the product. Product awareness with
wholesalers, retailers, suppliers and others is made through
various communication tools. The purpose of promotion is to
get people to understand what your product is, what they can
use it for,and why they should want it. You want the
customers who are looking for a product to know that your
product satisfies their needs.

Place. Organizations provide their product to customers


through an effective position. Place mix represents the
distribution channels that the organi1ation utili1es to
convey their physical products or services to the end user.
Distribution channel designer must understand the service
output levels that are expected by target customers. It is
necessary to have a clear understanding of what, how, why,
where, and when customers purchase, his waiting time for the
purchase, the convenience that facilities the customer when
buying is completed, product variety for the choice and the
service backup which represents additional services
associated with the product. Distribution can be performed
through single channel or multiplicity of channels. (Kotler
Philip, 1997)

People. According to MarketMyBiz (2014) the people element


refers to yourself,your staff and your customers. This
covers customer service levels, as well as effective
communication and training for your staff. Youll need to
consider both your staff and customers if you are thinking
of growing your business. For example, if you are thinking
of expanding your business online, youll need to think
about how your customers use the internet, if they would
feel comfortable purchasing your goods online and if they
would be willing to pay shipping costs for your products.
Youll also need to consider staffing elements. Like
knowledgeable staffs or has a skills and a need to provide
further training for them.

REVIEW OF RELATED STUDY

Foreign Study
Marketing strategy has been a salient focus of academic inquiry since the 1980s, according to(Mavondo
2000). There are numerous definitions of marketing strategy in the literature and such definitions reflect
different perspectives (Li et al 2000).

Theoretical Framework. Strategy here refers to the


competitive methods used by firms to establish their
positions in a particular market. It reflects the firms
short-term and long-term responses to challenges and
opportunities posed by the business environment. Company
strategy determines how a firm attracts its customers and
deals with its competitors, suppliers and other institutions
for survival and growth. The most dominant strategy
frameworks in strategic management literature are those
developed by Porter (1980; 1985; 1990), and that of Miles
and Snow (1978).

Porters major contributions to strategy lie in identifying


the generic competitive strategies to superior performance
in an industry. Generic strategies have been distinguished
as cost leadership, cost focus differentiation and focus
differentiation strategies.

Cost leadership strategies are mainly based on a firms


capacity to compete by offering lower prices than
competitors. For the low cost strategy to succeed a firm has
to have lower operating costs such as those arising from
economies of scales. Firms with cost structures that enable
them to produce below average cost compete by selling at
prices lower than market average prices. Differentiation
strategy is based on the ability to offer distinct products
or services at a premium price.

Based on the breadth of market segments cost focus and focus


differentiation strategies are distinguished. Cost focused
strategy is that of competing in very narrow market segments
at lower costs (and prices). On the other hand focus
differentiated strategy is that of concentrating on
specialized types of strategy at a premium price.

Local Study
The Philippine retail market is a growing market. Tremendous
evolutions of retailing have given way to the hypermarkets
and giant shopping centers that have a dramatic impact on
the retail structure of almost every nation.
Marketing concept is the marketing management philosophy
that holds that achieving organizational goals depend on
determining the needs and wants of target markets and
delivering the desired satisfaction more effectively and
efficiently than the competitors ( Kotler and Armstrong,
2004).

Marketing planning is the systematic application of current


marketing resources carefully allocated overtime in order to
promptly achieve desired marketing objectives.

Marketing planning continuously monitors, evaluates and


measures the many external and internal influences in the
market place on its ability to achieve acceptable profitable
sales expectations.

Furthermore, marketing planning provides an understanding


and sense of involvement throughout the organization to the
smallest sections of the particular competitive instance
that an organization intends to take in the short term and
long term prospects of achieving objectives. In preparing
the strategic marketing plan, a companys marketing mix of
activities cannot be isolated from other business functional
areas as production, finance, purchasing, research and
development, human resource; legal and other units, because
the marketing planning process should be based on corporate
planning system. These are five steps in the marketing
planning process: (1) the marketing audit, analytical aid in
planning, (2) SWOT analysis, (3) formulation of planning
assumption, (4) setting of objectives and strategies, and
(5) development of desire programs of actions (Lao, 2001).

Product development is a more limited term encompassing the


technical activities of product research, engineering and
design. This is distribution of new or improved products for
present market. It is conceived with innovative product
ideas based on market needs. Product features and
modification like introduction of new sizes, colors, shape,
flavors or creating several quality levels to better satisfy
the present market. Product development is undertakes to
achieve stability in sales and profits, and to deprive an
existing product from possible maturity by receiving
interest of the consumers on new features (Mutza, 2000).

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