Session 1

Strategic Marketing Introduction & Scope

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Market-Driven Strategy

Market-driven Strategy

Market-Driven Strategy Becoming Market Oriented Distinctive Capabilities Creating Value for Customers Becoming Market Driven Challenges of a New Era for Strategic Marketing

Market-driven Strategy
Starting

point for business strategy: market and customers have: clear understanding of markets, customers, and competitors.

Must

Characteristics of a Market-Driven Strategy

Becoming MarketOrientation

Achieving Superior Performance

Determining Distinctive Capabilities

Customer Value/ Capabilities Match

Why Pursue a MarketDriven Strategy?

Strong supporting logic Achievements of companies displaying market-driven characteristics are impressive Example: Zara Boutique (Spain) Cross Functional Feature

Becoming Market Oriented

Customer is the focal point of the organization Commitment to continuous creation of superior customer value Superior skills in understanding and satisfying customers Requires involvement and support of the entire workforce Monitor rapidly changing customer needs and wants

Determine the impact of changes on customer satisfaction Increase the rate of product innovation Pursue strategies to create competitive advantage

Characteristics of Market Orientation

Customer Focus What are the customers value requirements? Competitor Intelligence Importance of understanding the competition as well as the customer Cross-Functional Coordination Remove the walls between business functions Performance Consequences Market orientation leads to superior organizational performances

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Becoming a MarketOriented Organization

Information Acquisition

Cross-Functional Analysis of Information

Shared Diagnosis and Coordinated Action

Delivery of Superior Customer Value

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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. Example: Southwest Airline

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Capabilities

Desirable Capabilities

Applicable to Multiple Competition Situations

Superior to the Competition

Difficult to Duplicate

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Types of Capabilities
Outside-In Processes

Spanning Processes

Inside-Out Processes

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Organizations Process
EXTERNAL EMPHASIS Outside-In Processes Spanning Processes
Market sensing Customer linking Channel bonding Technology monitoring Customer order fulfillment Pricing Purchasing Financial management Cost control Technology development Integrated logistics Manufacturing/ transformation processes Human resources management Environment health and safety

INTERNAL EMPHASIS
Inside-Out Processes

Customer service delivery

New product/service development Strategy development

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Matching Customer Value and Distinctive Capabilities

Value Requirements

Distinctive Capabilities

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Creating Value For Customers

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.

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Creating Value for Customers

Customer Value

Benefits

Costs

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Value Composition
Product Services
Employees

Benefits

Image

Value (gain/loss)

Monetary costs Time

Psychic and physic costs

Costs (sacrifices)

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Becoming Market Driven

Market Sensing Capabilities

MARKET-DRIVEN STRATEGIES

Customer Linking Capabilities

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Market Driven Initiatives

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

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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

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Challenges Of A New Era For Strategic Marketing

Strategic marketing faces unprecedented challenges and opportunities:

Turbulent markets Intense competition Disruptive innovations Escalating customer demands

Escalating Globalization
Technology Diversity & Uncertainty (Example: eBay)

Ethical Behavior and Social Responsiveness of Organizations

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Corporate, Business and Marketing Strategy

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Corporate, Business And Marketing Strategy

Corporate strategy Business and marketing strategy Marketing strategy process Internet strategy Preparing the marketing plan

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Corporate, Business And Marketing Strategy

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Corporate Strategy
Deciding the Scope and Purpose of the Business

Business Objectives

Actions and Resources for Achieving Objectives

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Characteristics Of Successful Strategy

Unique competitive position for the company. Activities tailored to strategy. Clear trade-offs and choices vis--vis competitors. Competitive advantage arises from fit across activities. Sustainability comes from the activity system not the parts. Operational effectiveness a given.

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Organizational Change

Vertical Disaggregation

Internal Redesign

New Organizational Forms

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Corporate Strategy Components

Managements long-term vision for the corporation Objectives Assets, skills, and capabilities Businesses in which the corporation competes Structure, systems, and processes Creation of value (competitive edge)

Business And Marketing Strategy

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Developing the strategic plan for each business Business and marketing strategy relationships Strategic marketing:
Developing a vision about the markets of interest to the organization, select market target strategies, setting objectives, and developing, implementing and managing the marketing program positioning strategies designed to meet the value requirements of customers in each market target

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Marketing Strategy Process

Situation Analysis

Implementing and Managing Marketing Strategy

Designing Marketing Strategy

Marketing Program Development

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Marketing Strategy Process

Strategic situation analysis Market vision, structure and analysis Segmenting markets Continuous learning about markets

Example: Google Case

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Situation Analysis

Market Vision, Structure, and Analysis

Continuous Learning About Markets

Segmenting Markets

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Market-driven Strategies

Designing MarketDriven Strategies

Market Targeting Relationship and Strategic Strategies Positioning

Planning for New Products

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Positioning Strategy Development

Product strategy

Positioning strategy Promotion strategy Market target Distribution strategy

Price strategy

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Implementing And Managing Market-driven Strategy Designing Effective

Market-Driven Organizations

Implementing and Managing Market-Driven Strategy

Strategy Implementation and Control

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Marketing Plan Outline

I.

Strategic Situation Summary

Market-Targets and Objectives Positioning Statements Market Mix Strategy for Each Market Target Forecasting & Budgeting Contingency Planning

I.

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International Planning Process