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1
Strategic
Marketing
Management
Dr.Amira El-Deeb 2
1
An Overview of Strategic
Marketing
3
Defining Marketing
Marketing
The process of creating, distributing, promoting,
and pricing goods, services, and ideas to facilitate
satisfying exchange relationships with customers
in a dynamic environment
Customers
The purchasers of organizations’ products; the
focal point of all marketing activities
What is Marketing?
Marketing as a culture characterized by a set of
values and beliefs that highlights the importance of
the customer’s interests
Marketing as a strategy concerned with the choice
of products, markets and competitive attitude
Marketing as the set of tactics (essentially the
seven Ps of the expanded marketing mix) that
provides the basis for the implementation of the
business and competitive strategy.4
Market, Sales, Technology Orientation
5
Components of Market orientation
Figure 1.2 Components of market orientationSource: After Deng and Dart (1994)
How to create a market-
oriented Business?
1. Information Acquisition
Obtaining information about, customers,
competitors, markets
2. Inter functional Assessment
Viewing the information from a total business
perspective
Deciding how to deliver superior customer value
3. Shared Diagnosis & Action
Taking actions to provide value to customers
8
What is the difference between…
Marketing Strategy
&
Strategic Marketing
Marketing Strategy
It’s the analysis, strategy
development and implementation
of activities in :
Targeting strategies
Positioning strategies
Developing ,implementing and
managing the marketing program
positioning strategies designed to
meet the needs of customers.
Strategic Marketing – definition.1
It’s a market-driven
process of strategy
development, taking into
account a constantly
changing business
environment and the
need to achieve high
levels of customer
satisfaction.
12
Strategic Marketing- definition.2
concerned with the direction and
scope of the long-term activities
performed by the organization to
obtain a competitive advantage to
satisfy needs or solving problems
It’s both a philosophy and a set of techniques
which address everything about the product
13
STRATEGIC MARKETING
PROCESS
Strategic Marketing process
15
Why to study strategic Marketing?..
To face the Challenge of .. As a marketer , you should manage:
Cost
Profit
Optimization
16
2
Planning, Implementing, and
Controlling Marketing Strategies
17
Why some Marketers Fail?
Wrong group targeted
Weak positioning strategy
Marketing environment
assessed inadequately
Misperception about
product or service attributes
and benefits
Wrong pricing strategy
Insufficient level of new
product/new service
awareness from
advertising
Over-optimism about
marketing plan
= Inefficient Marketing planning
18
Understanding the Strategic
Planning Process
Strategic Planning
The process of establishing an organizational
mission and formulating goals, corporate strategy,
marketing objectives, marketing strategy, and a
marketing plan
19
Steps of Strategic Planning
Most large companies consist of 3 organizational levels:
20
1. The Corporate level :
Defining the purpose and mission of the Company.
Designing the business portfolio.
Planning for new business, downsizing older business
2. The Business unit level :
Business unit mission
SWOT analysis
Goal formulation
Designing strategies
Developing detailed marketing plans
Levels of Strategic Planning
21
Assessing Organizational
Resources and Opportunities
Core Competencies
Things a firm does extremely well (strengths),
which sometimes give it an advantage over its
competition
Financial or production sector
Reputation, goodwill, and brand names
22
Assessing Organizational
Resources and Opportunities
Market Opportunity
A combination of circumstances and timing that
permits an organization to reach a target market
Core competencies are matched to opportunities to
give competitive advantages
Strategic windowoptimal fit between market opportunities (the key requirements of a market) and core competencies
(the particular capabilities of a firm)
Mission/Strategy/Tactics
Goals TacticsMission Strategy
Strategy
Mission
The reason for existence for an organization
Mission Statement
Answers the question “What business are we in?”
Goals
Provide detail and scope of mission
Strategies
Plans for achieving organizational goals
Tactics
The methods and actions taken to accomplish strategies
Planning and Decision Making
Mission
Goals
Organizational Strategies
Functional Goals
Finance
Strategies
Marketing
Strategies
Operations
Strategies
Tactics Tactics Tactics
Operating
procedures
Operating
procedures
Operating
procedures
Strategy Example
Rita is a high school student. She would like to have a career in business, have a good job, and earn enough income to live comfortably
Mission: Live a good life
Goal: Successful career, good income
Strategy: Obtain a college education
Tactics: Select a college and a major
Operations: Register, buy books, takecourses, study, graduate, get job
Example 1
DEVELOPING VISION &
MISSION STATEMENT
27
Developing Vision & Mission
Great benefits can be achieved if
an organization
Systematically revisits their vision and
mission statement
Treats them as living documents
Considers them to be an integral part
of the firm’s culture
Developing Vision & Mission
Participation by as many managers as
possible is important in developing the
mission because through involvement
people become committed to an
organization
Vision Statement
- Defines your long-term dream
- It’s inspirational statement
- WHAT TO DO?
Vision & Mission Statement
Mission Statement
- Products and services provided
- Your business –values
- HOW TO DO?
Business vision
Desired future state; the aspiration of
the Organization
What are our Dreams?
What do we want to look like in 5, 10,
15 years?
Where do we want to go?
Vision Statement Examples
Tyson Foods’ vision is to be the
world’s first choice for protein
solutions while maximizing
shareholder value.
General Motors’ vision is to be the world leader in transportation products and related services.
Vision Statement Examples
Dell’s vision is to create a company culture where environmental excellence is second nature.
Vision Statement Examples
Comprehensive
Mission Statement
Vision
Clear Business
Vision
A statement of purpose that distinguishes
one organization from other enterprises
A declaration of an organization’s “reason
for being”= “What is our business?”, “what
the organization does”,” whom we want to
serve.”
Mission Statement
Mission Statements are also called
Statement of purpose
Statement of philosophy
Statement of beliefs
Statement of business principles
A statement “defining our business”
Mission
Components
Customers
Markets
Employees
Public
ImageSelf-Concept Philosophy
Survival,
Growth,
Profits
Products or
Services
Technology
Fleetwood Enterprises will lead the recreational vehicle and manufactured housing industries in providing quality products with a passion for customer-driven innovation.
We will emphasize training, embrace diversity and provide growth opportunities for our associates and our dealers. We will lead our industry in the application of appropriate technologies.
We will operate at the highest levels of ethics and compliance with a focus on exemplary corporate governance. We will deliver value to our shareholders, positive operating results and industry-leading earnings.
Mission Statement Examples
We aspire to make PepsiCo the world’s premier
consumer products company, focused on
convenient foods and beverages.
We seek to produce healthy financial rewards for
investors as we provide opportunities for growth
and enrichment to our employees, our business
partners and the communities in which we
operate. And in everything we do, we strive to act
with honesty, openness, fairness and integrity.
Mission Statement Examples
42
Mission Statement examples
SINGAPORE AIRLINES is engaged in air
transportation and related businesses. It
operates world-wide as the flag carrier of
the Republic of Singapore, aiming to
provide services of the highest quality at
reasonable prices for customers and a profit
for the company
43
Mission Statement examples
MARRIOTT’S Mission Statement:
We are committed to being the best lodging
and food service company in the world, by
treating employees in ways that create
extraordinary customer service and
shareholder value
Dell’s mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet consumer expectations of highest quality; leading technology; competitive pricing; individual and company accountability; best-in-class service and support; flexible customization capability; superior corporate citizenship; financial stability.
Mission Statement Examples
Proctor & Gamble will provide branded
products and services of superior quality and
value that improve the lives of the world’s
consumers. As a result, consumers will reward
us with industry leadership in sales, profit, and
value creation, allowing our people, our
shareholders, and the communities in which
we live and work to prosper.
Mission Statement Examples
L’Oreal, we believe that lasting
business success is built upon ethical
standards which guide growth and on
a genuine sense of responsibility to
our employees, our consumers, our
environment and to the communities in
which we operate.
Mission Statement Examples
Principles of Marketing A.U.C - Amira EL-Deeb47
Nokia
Vision :
Our vision is a world where everyone can be connected
Mission :
Nokia helps people to fulfill this need and we help people
feel close to what matters to them. We focus on
providing consumers with very recent technology that is
a joy to use, and beautiful.
Principles of Marketing A.U.C - Amira EL-Deeb48
Otsuka Pharmaceutical Co.
Vision The creation of products to serve the better health of
people around the world.
Mission Clinical studies are carried in research centers in the USA
,Germany, UK and Japan aiming for products of universal value.
With a collaboration among marketing, research sectors so that
customers' real needs may be feedback for further product
development.
49
Examples – Good and Bad
Mission Statements
To Make People Happy
To Explore the
Universe and Search
for Life and to
Inspire the Next
Generation of
Explorers
NASA
Walt Disney
Could be good example since it
express the core values of the
organization. Also conveys unique
qualities about the organization.
Too vague and unclear. Need more
descriptive information about what
makes the organization special.
Benefits of Mission Statements
Better financial results
agreement on purpose
Resource allocation
Establishment of culture
Focal point for individuals
Establishment of work structure
Basis of assessment and control
Resolution of different views
1-51
Market-Oriented Mission
• A mission statement should be:
– An “invisible hand” to guide & control everything in the organization.
– Not too narrow nor too broad
– Fitting of market environment
– Based on distinctive competencies
– Motivating
Market-oriented &
Product-oriented Mission
Do not offer me things. offer me solutions
Do not offer me clothes. Offer me attractive looks.
Do not offer me shoes. Offer me comfort for my feet and the pleasure of walking.
Do not offer me a house. Offer me security, comfort, and a place that is clean and happy.
Do not offer me books. Offer me hours of pleasure and the benefit of knowledge.
Principles of Marketing A.U.C - Amira EL-Deeb53
Carrier :
We make air conditioners
(Product oriented )
We provide climate control
( Market Oriented )
Market-oriented &
Product-oriented Mission
1-54
Business Goals
Goals convert the organization’s
mission into tangible actions and
results that are to be achieved, often
within a specified time frame.
Three major categories of goals:
1. Production
2. Financial
3. Marketing
1-55
Production Goals
Apply to the use of
manufacturing and service
capacity and to product
and service quality.Financial Goals
Focus on profit, cash
flow, and shareholder
wealth.
Marketing Goals
market share
sales volume
profit
customer satisfaction
customer value creation
56
Marketing objectives
A statement of what is to be accomplished
through marketing activities, it should be
SMART Should be stated in clear & Specific words
Should be accurately measurable
Should be ambitious, achievable, attainable to motivate
the others
Should be realistic according to market needs
Should specify a time frame for accomplishment
e.g.
To increase sales of product globally by 30% within 5yrs.
GOAL OBJECTIVE STRATEGY
To be
No. 1
in the
market
Increase
market
share by
15% in
three
years
i) Increase product
promotion
ii) Design product
pricing
iii) Penetration
iv) New market
development
v) Quality
improvement
58
B. Designing the Business Portfolio
By classifying Strategic Business unit ( SBU )into one of four categories using the:
Market growth rate
SBU’s relative market share within the market.
Through a technique called … BCG
“ Boston Consulting Group matrix ”
1. The Corporate Strategic Planning
•Step 1: Analyze the current business portfolio
59
B. Designing the Business Portfolio
Market Growth rate % =
Total Market Sales this year – Total Market Sales last year
Total Market Sales last Year
Relative Market Share =
The Company Sales
The Leader Sales
1. The Corporate Strategic Planning
•Step 1: Analyze the current business portfolio
60
Source: “The BCG Portfolio Matrix” from the Product Portfolio Matrix, © 1970, The Boston Consulting
Group. Reproduced by permission. FIGURE 2.4
61
1. Question mark: (high growth market but with low market share),
question mark units or products require lots of money
2. Stars a market leader unit (or product) in a high growth market, the
company must spend money to keep up with the high market growth.
3. Cash cow a product still has the largest relative market share
although the market annual growth rate is less than 10 %. Although a
cash cow business produces a lot of cash for the company, it doesn’t
have to finance expansion because the market growth rate has
slowed down.
4. Dogs are products that have weak market share in a low growth
markets.
BCG MATRIX
62
After the analysis, the company determines which
strategy and budget are to assign to each SBU, and a
one of four strategies can be applied:
Build where the objective is to increase market share.
Hold: here the objective is to preserve market share. More
investment should be done to keep that level.
Harvest: harvesting involves “milk the business” e.g.
eliminating R&D, not replacing the physical plants as it
wears out, not replacing sales people, and reducing
promotional expenditure.
Divest: here is the objective is to sell or liquidate the business
because resources can be better used else where.
63
Case: SMART
Your company “smart” is working in the
manufacturing and marketing of entertainment
products producing four products:
DVD, Notebook, videos, and radios,
as a marketing manager you should determine what
objective and which strategy and budget is to assign
to each product, Before deciding on a strategy, you
should explain the reason for adopting such strategy
to such product
64
20082007
11.800.00010.000.000Total DVD market
800.000700.000Product A Sales
200.0000SMART DVD
20.700.00018.000.000Total Notebook market
2.200.0001.800.000SMART Notebook
1.200.0001.000.000Product B sales
7.500.0007.000.000Total Videos market
600.000500.000SMART Videos
300.000250.000Product B sales
5.590.000 5.500.000Total Radio Market
800.000700.000Product A sales
300.000400.000SMART radio
65
The GE Matrix
Invest or
Grow
Earn
selectively
Harvest or
Divest
Business Strength
Strong
Medium
Weak
StrongMediumWeak
66
GE Matrix
The size of each represents the size of each
market.
Within each circle is a clearly defined
segment which represents the business’s
market share within that market.
The larger the circle, the larger the market,
and the larger the segment, the larger the
market share.
67
Market attractiveness:
Size of market.
Market rate of growth.
The nature of competition and its diversity.
Profit margin.
Impact of technology, the law, and energy
efficiency.
Environmental impact.
68
Competitive position:
Market share.
Management profile.
R & D.
Quality of products and services.
Branding and promotions success.
Place (or distribution).
Efficiency.
Cost reduction.69
70
a. Intensive growth
1. The Corporate Strategic Planning
•Planning for new Businesses
Product
Development
Market
Development
Market
Penetration
Diversification
Current Product
Current
Market
New
Market
New Product
71
Market penetration
where a company would attempt to make more
sales to current customers without changing its
products.
Market development
a situation where a company would identify and
develop new markets for its current products.
Product development = a company would modify or
create new products and offer them to current markets.
Diversification = companies start up or buy
businesses outside of its current products and markets.
72
b. Integrative Growth
Backward integration:
acquiring supplier
Forward integration:
acquiring distributor
1. The Corporate Strategic Planning :
•Planning for new Businesses
73
2. Business unit strategic planning
A. Business unit mission
We redefine the mission of our business but for each
SBU
B. SWOT analysis
Analyze the environment around us, externally &
internally
C. Setting the goals & objectives
D. Developing Marketing strategy & plan
E. Implementation & Feedback
74
SWOT Analysis
An assessment of the organization’s strengths, weaknesses, opportunities, and threats
Strengths
competitive advantages or core competencies
Weaknesses
limitations on competitive capability
Opportunities
favorable conditions in the environment
Threats
conditions or barriers to reaching objectives
75
The Four-Cell SWOT Matrix
Source: Reproduced from Nigel F. Piercy, Market-Led Strategic Change. Copyright © 1992, p. 371, with
permission from Elsevier Science.FIGURE 2.2