MK3002

Introduction to Strategic Thinking: Marketing Orientation & Levels of Strategy

Strategic Management is both a philosophy of management and a set of practical tools which offer managers the possibility of making better decisions Kotler 2008

The Philosophy
The subject area is Holistic The keystone of many subject areas Its about decision making and change and adapting to the

environmental trends About the company:-products/services, -markets & competitors. Must be able to manage this process effectively and understand various models Numerous approaches-no single prescriptive answer

Four key concerns of Strategy

Concerned with the whole organisation Strategy seeks to integrate functional aspects How the organisation fits into its environment and

creates value How the organisation competes for customers and other resources Considers performance relative to competitors ie benchmarking

Prius creates customer value

What are strategic decisions?

Can be pro-active (intended and planned) Can be reactive (adaptive) Requires planning and awareness (formal or

informal) concerned with the long term direction they try to achieve competitive advantage and superior positioning they are concerned with the scope and direction of the organisation they link and affect the operational decisions.

Continued..
they identify the extent to which resources can be

obtained and developed to create a strategy for the future they involve a high degree of uncertainty and yet demand an integrated approach to managing the organisation. they use the companies existing resources to create opportunities they match the activities of an organisation to its environment

Yet more..
Can be perceived as being outside-in or inside-

out Involves change management? All of the models of SM imply that firms must accept, adapt to, and manage change

Two main views of Strategic Management:

The Systematic approach Theory driven, ideal models and often quite prescriptive The Emergent approach Reality, what firms do We will use a combination of both approaches

Strategy and Marketing

3 Basic Propositions:
Customer orientation

Organisational Integration
Mutually Beneficial Exchange

Customer Orientation
Finding out what customers want Fulfilling the perceived needs of customers Monitoring Progress towards satisfying customers

Improving customer satisfaction

Customer Orientation: Long Term Relationships

Costs more to attract new customers than retain

existing ones A satisfied customer recruits other ones Relationships discourage switching

SUSTAINABLE MARKETING
Environmentalism Corporate & Social Responsibility Ethics

Social criticisms of marketing

Impact on consumers
High prices Deceptive practices High-pressure selling Low quality and unsafe

Impact on society False wants Too much materialism Too few social goods Cultural pollution Excessive political power

goods Poor service to the disadvantaged

Organisational Integration
Marketing involves the whole organisation Structures Culture

Interaction between marketing and corporate strategy

Corporate versus marketing strategy Corporate strategy: Marketing strategy:

Allocation of resources within an organisation to achieve the business direction and scope specified within corporate objectives.
Helps to control and co-ordinate the different areas of the organisation.

Defines target markets, direction and requirements in order to create a defensible position compatible with the overall corporate strategy.

Competitive Strategies
Differentiation

Cost leadership

Competitive strategies

Cost focus

Differentiation focus

11

Influences on marketing strategy

Marketing plans and programmes Marketing plan: Turning strategies into implementable actions. A detailed written statement specifying target markets, marketing programmes, responsibilities, time scales and resources to be used within the defined budgets. Actions, often tactical, using marketing mix variables to gain advantage within target market.

Marketing programmes:

Means of implementing the marketing strategy.

Normally detailed in the marketing plan.

Strategic Direction Identifying an Organisations purpose, aims, objectives and

goals:

Where are we going? Strategies are means to ends; this..is about these ends adapted from Thompson, 2001

4 stages: 1. Where are we now 2. Where are we going /want to be 3. How do we get there 4. How do we ensure arrival

The Traditional Strategic Management Process

Evaluation

Strategic Analysis

Strategy Creation & Choice

Strategy Implementation

The Marketing Planning Process

Business mission Re-definition Marketing audit SWOT analysis Marketing objectives Core strategy Marketing mix decisions Organization and implementation Control
2

Marketing planning at the business level

Marketing planning at the product level