Introduction to

Strategic Marketing
Management
Faisal Qureshi

Agenda

1. Marketing and its

Strategic Role
2. Competencies and Core
Competencies
3. Competitive Advantage
and its Sources

The Primary Purpose of

Marketing
Societal process by which individuals and
groups obtain what they need and want,
by creating, offering and freely
exchanging products and services of
value with others.

What is Marketing
Marketing is the process of planning
and executing the conception,
pricing, promotion, and distribution
of ideas, goods and services to
create exchanges that satisfy
individual and organizational goals.

The Role of Strategy

Difference between:
Vision: Futuristic in intent describes where an
organization would like to be in the next 5 10
years or more
Mission: Typically defines business operations,
focuses on products, markets, customers and
value proposition that distinguish the
organization
Strategy: Describes how the organization will
achieve its vision and continue to sustain and
improve its mission

Levels of Strategy
1. Functional-level strategy: a plan of
action to strengthen an organizations
functional and organizational resources,
as well as its coordination abilities, in
order to create core competencies
2. Business-level strategy: a plan to
combine functional core competences in
order to position the organization so that
it has a competitive advantage in its
domain

Levels of Strategy
3. Corporate-level strategy: a plan to
use and develop core competences so
that the organization can, not only
protect and enlarge its existing domain,
but also expand into new domains

Competencies & Core

Competencies
Competencies are resource based strengths
enjoyed by an organization; may be confined
to specific task and specializations
Core Competency is an organizations most
cherished and important resource-based
strength; mostly cross-functional in nature
Competitive Advantage is gained when an
organizations successfully leverages its core
competency primarily with the help of
effective marketing

Where would you place Marketing

Strategy?

Corporate

Business

Functional
Operational & Tactical

Importance of Marketing Strategy

To develop a competitive
advantage, so that an organization
an organization should:
1. Perform marketing activities at a
cost lower than that of its rivals, or
2. Perform marketing activities in a
way that clearly differentiates its
goods and services from those of
its rivals

Processes in Strategic
Marketing Management
1. Aligning with the organizations
vision, mission, and business
strategy
2. Identifying and framing market
growth opportunities

3. Formulating product-market
strategies
4. Ensuring implementation of
strategy
5. Evaluating, controlling and
developing recovery strategies

Business Definition
By defining a business from a
customer or market perspective
an organization is appropriately
viewed as:
a customer satisfying endeavor

not
a goods-producing or service delivery
enterprise.
Products and services are transient, as is often
the technologies or means used to produce and
deliver them. Basic customer needs are more
enduring. (Encyclopedia Britannica)

What business are we in?

An organization should define a business
by: (Product-Market-Customer Scope)
The type of customers it is currently
serving
The particular needs of those customer
groups it is currently trying to satisfy
The means or technology by which the
organization is satisfying the customer
needs

Competitive Advantage
Hallmark of High Performance
Business
Something of value that your firm
provides to the market in comparison
to the competitors which enables the
firm to substantially improve its
financial performance

VALUE
WILLINGNESS
TO PAY
PRICE

VALUE TO BUYERS

PROFIT MARGIN TO FIRM

COST

WILLINGNESS
TO SUPPLY

VALUE TO SUPPLIERS

The Value Chain

Infrastructure
e
lu
Va

Support
Activities

The value chain provides a map of firms capabilities

and allows systematic search for core competencies

Human Resources
Research and Development (Innovation)
Materials Procurement

Va
l
ue

Service

Marketing
& Sales

Outbound
Logistics

Operations

Inbound
Logistics

Primary Activities

Marketing Strategy and

Coherence
Business
Strategy

Marketing
Strategy

Other
Functional
Strategies

Tools for Building Competitive Advantage

Resources are inputs into a firms production
processes:
Tangible Resources
Intangible Resources
Financial resourcesTechnological resources
Physical resources
Innovative
resources
Human resources
Reputation
Organizational resources

Organizational Resources consist of the

capability, leadership and vision of the topmanagement

CRITICAL FACTORS FOR COMPETITIVE ADVANTAGE

TRANSFERRABLE

PROFITABLE

NON-SUBSTITUTABLE

COMPETITIVE
ADVANTAGE

RARE

INIMITABLE

CRITICAL FACTORS FOR

COMPETITIVE ADVANTAGE
Profitable is the CA profitable for the company
as well as (valuable) to the customer?
Rare how many rival firms already possess this
resource/capability?
Inimitable do firms face a cost disadvantage
in obtaining this resource/capability compared to
firms that already have it?

Non-substitutable are there strategic

alternatives available to other firms and customers?

Transferrable can the competitive advantage

be used to enter new domains?

A Competitive Advantage enables a firm to:

Outperform competitors
Grow despite competitors

Competitive Advantage is
found in:
Products that are different and better
than competitors
Alternative distribution channels
Pricing and cost structures

Imitation
Too often firms make the mistake of
imitating other firms resource
strengths and capabilities to develop
a competitive advantage

Disadvantages of Imitation
Firms trying to imitate another firms
core competence are at a cost
disadvantage relative to rivals due to:
Unique Organizational Design
Human Capital
Cultural Differences
Organizational Design consists of
organization structure, technology and
manner of coordination amongst its
personnel and departments

Building Blocks of Competitive

Advantage
Efficiency
Lower Costs
Innovation

Quality
Higher Prices
Customer
Responsiveness

Competitive Advantage via

Efficiency
Manufacturing
Economies of scale/Learning
curve; Reducing variability

Marketing

Building brand image / customer loyalty

Infrastructure

Multi-purpose
facilities/equipment/cutting-edge technology

Human Resources

Training/Developing
skills; team-work
Performance incentives

R&D

Manufacturing OR
Process innovation

Materials management
(Supply Chain)
JIT, Strategic Alliances, etc.

Competitive Advantage via

Quality
Manufacturing

Trace and eliminate defects

Input from employees

Marketing

Focus on customer
feedback for enhancing quality

Infrastructure

State-of-the-art

Human Resources
culture
R&D

Materials management
(supply Chain ).

Training/Developing
a quality-focused

Manufacturing
Process & product innovation

TQM, 6-Sigma etc.

Competitive Advantage via

Innovation
Manufacturing Flexible
Responsive
Marketing

Customer focus for product innovation

Infrastructure

Invest in R&D tools

Human Resources
Hire talented innovators
Incentives/opportunities for innovation
R&D

Focus on product innovation

Materials management Whatever complements R&D

Competitive Advantage via

Customer Responsiveness
Manufacturing
Marketing

Customization

Micro-marketing/Personalization

Infrastructure Suited to customer responsiveness

Information systems for feedback
Human Resources
Customer focused trainingEmployee
incentives/Job security
R&D Involving Customers in innovation process
(Customerization)
Materials management
systems

Build responsive logistics/delivery