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Strategic Marketing

Imperatives for Market

Driven Strategy

-It is a corporate
Strategy
- It is based on
understanding market
trends & customers
- Company wide
perspective
organizational
Integration

Becoming MarketOrientation

Achieving Superior
Performance
Customer
Value/
Capabilities
Match

Determining
Distinctive
Capabilities

Market Orientation represents Superior skills

in understanding and satisfying customers
Its principle Features :
-A set of beliefs that puts the
customer interest first
-The ability of the organization
to generate, disseminate and
use of superior information
about customer & competitor
-The coordinated application
of inter functional resources
to the creation of superior
customer value

Customer Focus
>> What are the customers value requirements?
o

Competitive Intelligence

Cross-Functional
Coordination
Remove the walls between business
functions. Cross functional teamwork guides
the entire organization toward providing
superior customer value.

Performance Implications
Market orientation leads to superior
organizational performances by starting
strategic analysis of market and competition .
Companies that are market oriented display
favorable organizational performances
compared to those who are not market
oriented.

Becoming a Market-Oriented
Organization
Information
Acquisition
Cross-Functional
Analysis of Information
Shared Diagnosis and Coordinated Action

Delivery of Superior Customer Value

Determining Distinctive
Capabilities
Capabilities
are complex bundles of skills and
accumulated knowledge, exercised through
organizational processes, that enable firms to
coordinate activities and make use of their assets
Disproportionate
(higher)
contribution to
superior
customer value

Compelling
Logic of Distinctive
Capabilities

Provides value to
customers on a more
cost-effective basis

Outside-In
Processes
Spanning
Processes

Inside-Out Processes

EXTERNAL
EMPHASIS
Outside-In
Processes
Market sensing
Customer
linking
Channel
bonding
Technology
monitoring

INTERNAL
EMPHASIS

Spanning
Processes

Customer order
fulfillment
Pricing

Purchasing
Customer service
delivery
New product/service
development
Strategy development

Inside-Out
Processes

Financial
management

Cost control

Technology
development

Integrated logistics

Manufacturing/
transformation
processes

Human resources
management

Environment health
and safety

Organizational Processes
Southwest uses a point-to-point route system rather than the hub-andspoke design used by many airlines. The airline offers services to 57
cities in 29 states, with an average trip about 500 miles. The carriers
value proposition consists of low fares and limited services (no meals).
Nonetheless, major emphasis throughout the organization is placed on
building a loyal customer base. Operating costs are kept low by using
only Boeing 737 aircraft, minimizing the time span from landing to
departure, and developing strong customer loyalty. The company
continues to grow by expanding its point-to-point route network.

Skills and Accumulated Knowledge

The airline has developed impressive skills in operating its business
model at very low cost levels. Accumulated knowledge has guided
management in improving the business design over time.

Coordination of Activities
Coordination of activities across business functions is facilitated by the
point-to-point business model. The high aircraft utilization,
simplification of functions, and limited passenger services enable the
airline to manage the activities very efficiently and to provide on-time
point-to-point services offered on a frequent basis.

Assets
Southwests key assets are very low operating costs, loyal customer
base, and high employee esprit de corps

Customer Value:

Value for buyers consists of the benefits less the

costs resulting from the purchase of products.
Superior value: positive net benefits

Creating Value:
Customer value is the outcome of a process that
begins with a business strategy anchored in a deep
understanding of customer needs.

Value
Requirements

Matched with
Distinctive
Capabilities and
value
requirements.

Distinctive
Capabilities

Buyers form
value
expectations and
decide to
purchase goods
and services
based on their
perceptions of
product's
benefits less than
the cost

Customer
Value

Benefits

Costs

Market Sensing
Capabilities

Market Driven
Strategies

Customer Linking
Capabilities

Market Sensing Capabilities

Effective processes for learning about markets

Sensing: Collected information needs to be

shared across functions and interpreted to
determine proper actions.

Customer Linking Capabilities

Create and maintain close customer

relationships and customer linking also
reduces the possibility of a customer shifting
to another supplier and it offers advantages to
both buyer and sellers

Aligning Structure and Processes

Potential change of organizational design
Improve existing processes
Process redesign
Cross-functional coordination and involvement
Primary targets for reengineering:
Sales and marketing, customer relations, order
fulfillment, and distribution

In 3rd quarter of FY11-12 it sold

17.1 million i Phones

27 million

Smart Phones

What happened??
40 different variety
Cheap handsets
Aggressive promotional campaign
Business and Marketing strategy
Shift from Infotainment to Life Care
One Strategy

Deciding the Scope

and Purpose of
the Business
Business
Objectives
Actions and Resources
for Achieving
Objectives

Useful basis for examining corporate strategy consists

of:
Managements long-term vision for the corporation
Objectives
Assets, skills, and capabilities
Businesses in which the corporation competes
Structure, systems, and processes
Corporate Advantage through Multimarket Activity

Managements vision defines what the corporation is and what it does and
provides important guidelines for managing and improving the corporation

Microsoft: "Empower people through great software anytime, anyplace, and

on any device."

Objectives must be founded in the area of interests

which influence on the performance of the
enterprise :
Marketing,
Innovation,
Recourses ,
Social Responsibility,
Finance,
Productivity

Objectives of Intel

Extend our silicon technology and

manufacturing leadership

Deliver unrivaled microprocessors and platforms

Grow profitability worldwide

Excel in customer orientation

Three kind of Resources : Assets, skills, and Capabilities

These resources may offer the organization The potential to compete in different market
Provide significant value to end-user customers
Create barriers to competitor duplication
A key strategies issue is matching capabilities to market
opportunities.

Resources of DHL:
Speedy service around 220 countries and territories
More than 275,000 employees
Fleet of 83,400 vehicles

In single-product firms, such as Coca-Cola (Drinks), it is easy to

determine the composition of the business.

When firms are serving multiple markets with different products,

(Pran-RFL Group) grouping similar business areas together aids
decision making.

This aspect of strategy considers how the

organization controls and coordinates the
activities of its various business and stuff
functions.
Structure Determine the composition of the
corporation.
Process considers the informal aspects of the
organizational activities.
Systems are the formal policies and procedures
enabling the organization to operate .
A business design provides a spotlight on more
than the product and technology, instead
looking at the processes and relationship that
comprises the design .

The Marketing Strategy Process

Markets,
Segments
and Value
Implementing and
Managing Market-Driven
Strategy
Market-Driven
Program
Development

Designing
Market-Driven
Strategies

The Marketing Strategy Process (Contd)

Markets, Segments and Customer Value
Marketing management evaluates market and customers
on a regular basis to guide the design of a new strategy
or to change the existing one.
Activities Include:

Markets and competitive space

Markets needs to be identified for analyzing
buyers and competitors.

Markets, Segments and Customer

Value

Markets, Segments and Customer

Value

Strategic market
segmentation

Market segmentation is the process of partitioning markets

into groups of potential customers with similar needs or
characteristics who are likely to exhibit similar purchase
behavior.
Market segmentation is the foundation on which all other
marketing actions can be based. Some specific objectives may
include increased sales, improved market share and enhanced
image.

Markets, Segments and Customer

Value

Markets, Segments and Customer

Value

Strategic customer relationship

management
Ensuring superior customer value by
personalizing the interaction between the
customer and the company. This provides a
positive association and long term loyalty of the
customer.

Markets, Segments and Customer

Value

Markets, Segments and Customer

Value

Sensing what is happening and is likely to occur

in the future is complicated by competitive
threats beyond traditional industry boundaries.
everyone in the organization must be wired into
customers and competition. There are several
market-sensing methods available to guide the
collection and analysis of information.

Markets, Segments and Customer

Value

Designing market-driven strategies

Market targeting and strategic
positioning
Company need to decide how when and where to compete.
Market targeting strategy define the people management wishes
to serve. The market target is usually one or more segments of
the product market.
The objective is to find the best match between the value
requirement of each segment and organization distinctive
capabilities.
Examples market target objects are desired level of sales,
market share, customer retention, profit contribution and
customer satisfaction.

Designing market-driven
Positioning
refers to the strategies and tactics used to
strategies
gain a favorable position in the mind of the targeted
segment decided to serve.

Designing market-driven
strategies
Building long-term relationships with customers
and value chain partners offers companies a way
to provide superior customer value.

Designing market-driven
strategies
Old products are need to
replace by new products when
sales and profit growth.
Innovation and new product
strategy help organizations
achieve business
breakthroughs

New product Development process

Market-driven program development

Brand management is the application of

marketing techniques to a specific product,
product line, or brand. it includes:
1 . Developing plan for new products .
2. Managing programs for successful products .
3. Decision about problem products.
Branding or Brand is considered important
not only for companies but they carry equal
importance for customers or consumers also.

A value chain is a chain of activities for

a firm operating in a specific industry.
Products pass through all activities of
the chain in order, and at each activity
the product gains some value. The
chain of activities gives the products
more added value than the sum of the
independent activities' values. The
"primary activities" include: inbound
logistics, operations (production),
outbound, marketing & sales, service .
The value chain framework quickly
made its way to the forefront of
management thought as a powerful
analysis tool for strategic planning.

Pricing is an important strategic issue

because it is related to product
positioning. Furthermore, pricing affects
other marketing mix elements such as
product features, channel decisions, and
promotion. The pricing objective depends
on many factors including production
cost, existence of economies of scale,
barriers to entry, product differentiation,
rate of product diffusion, the firm's
resources, and the product's anticipated
price elasticity of demand.

There are many different types of promotional

strategies a company can implement, and
promotional products are just one of them. You need
to have complete campaign and strategy in place.
Here are a few strategies that can be employed.
1. Media releases
Media releases are a great way to get information about your
product, service or company out to a large amount of potential
customers.

2.
3.
4.
5.
6.

Events
Networking
Sales Pitches
Follow-up with clients
Promotional products

The Marketing Strategy Process

(contd)

Implementing and Managing Marketdriven Strategy

Designing

market-driven organizations

Organizational structures and processes must

be matched with business and marketing
strategies that are developed and
implemented .
Marketing

strategy implementation and

control
Marketing Plan and budget
II. Implementation of plan
III.Managing and controlling the strategy
I.

Escalating Globalization

Technology diversity and uncertainty

The Internet or Web 2.0

Ethical Behaviour And Corporate Social

Responsiveness

Escalating Globalization
The global marketplace is dynamic and changing
in complex ways with fundamental effects in the
competitiveness and viability of companies in
many sectors. The internationalization of
business is well recognized in terms of the
importance of export-import trade and growth of
international corporations .

Technology diversity and

uncertainty
The skills and vision required to decide
which radical innovation opportunities can
be successfully commercialized will be
extremely demanded and the risks of failure
will be high . Innovations have the potential
to revolutionize a range of different
industries. They demand a strategic
perspective that accepts the potential for
revolution but balances this with commercial
imperatives.

The Internet or Web 2.0

File sharing , blogs , social networking have

already spread out many new services including
the online encyclopedia , Wikipedia and the free
internet telephone network such as Skype.
The web 2.0 had been started since early 2000s.

Competitive boundaries are

likely to be altered and
competition have intended
more than previous.
Virtual reality second life is
interesting example of web
2.0 innovations.

Ethical Behaviour And Corporate

Social Responsiveness

The demands in individuals to display high levels of

personal integrity will increase in the future where
growing emphasis is placed on corporate citizenship and
the establishing and protection of secure corporate
reputation as an assets with a financial profit is
associated. Business students trust that companies
should work more aggressively toward the betterment of
society and want to search socially responsible
employment in their careers .