Session 1Session 1

Strategic Marketing – Introduction &

Scope

group3

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Market-Driven Strategy

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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

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Market-driven Strategy

Starting point for business strategy: market and customers

Must have: clear understanding of markets, customers, and competitors.

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Achieving Superior

Performance

DeterminingDistinctive

Capabilities

CustomerValue/

CapabilitiesMatch

Becoming Market-

Orientation

Characteristics of a Market-Driven Strategy

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Why Pursue a Market-Driven

Strategy? Strong supporting logic

Achievements of companies displaying market-driven characteristics are impressive

Example: Zara Boutique (Spain) – Cross Functional Feature

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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

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Determine the impact of changes on customer satisfaction

Increase the rate of product innovation

Pursue strategies to create competitive advantage

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Characteristics of Market Orientation

Customer FocusWhat are the customer’s value

requirements? Competitor Intelligence

Importance ofunderstanding the competition as well as thecustomer

Cross-Functional CoordinationRemove the walls betweenbusiness functions

Performance ConsequencesMarket orientation leads tosuperior organizational performances

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Information Acquisition

Cross-Functional Analysis of Information

Shared Diagnosis and Coordinated Action

Delivery of Superior Customer Value

Becoming a Market-Oriented Organization

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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

DesirableCapabilitiesDesirable

Capabilities

Applicable to Multiple

Competition Situations

Difficult toDuplicate

Superior to the

Competition

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Types of Capabilities

Outside-InProcesses

Inside-OutProcesses

SpanningProcesses

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Organization’s Process

Spanning Processes

Outside-In Processes

Inside-Out Processes

EXTERNAL EMPHASIS

INTERNAL EMPHASIS

Market sensing

Customer linking

Channel bonding

Technology monitoring

Customer order fulfillment

Pricing Purchasing Customer service

delivery New

product/service development

Strategy development

Financial management

Cost control Technology

development Integrated

logistics Manufacturing/

transformation processes

Human resources management

Environment health and safety

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Value Requirements

Distinctive Capabilities

Matching Customer Value and 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

Benefits Costs

CustomerValue

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Value Composition

Monetary costs

Time

Psychic and

physic costs

Product

Services

Employees

Image

Benefits

Costs(sacrifices)

Value(gain/loss)

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Becoming Market Driven

Market Sensing Capabilities

Customer LinkingCapabilities

MARKET-DRIVEN

STRATEGIES

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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 designImprove existing processesProcess 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 Scopeand Purpose ofthe 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-à-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 StrategyComponents

Management’s 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)

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Business And Marketing Strategy

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

SituationAnalysis

MarketingProgram

Development

Implementingand Managing

MarketingStrategy

DesigningMarketingStrategy

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Strategic situation analysis Market vision, structure and

analysis Segmenting markets Continuous learning about

markets

Example: Google Case

Marketing Strategy Process

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Situation Analysis

MarketVision, Structure,

and Analysis

ContinuousLearning

AboutMarkets

SegmentingMarkets

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Designing Market-Driven Strategies

RelationshipStrategies

Market Targetingand Strategic

Positioning

Planningfor NewProducts

Market-driven Strategies

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Positioning Strategy Development

Productstrategy

Distributionstrategy

Promotionstrategy

Pricestrategy

Markettarget

Positioning strategy

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Implementing andManaging Market-Driven

Strategy

Designing Effective Market-Driven Organizations

Strategy Implementation and Control

Implementing And Managing Market-

driven Strategy

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Marketing Plan Outline

I. Strategic Situation Summary

I. Market-Targets and Objectives

I. Positioning Statements

I. Market Mix Strategy for Each Market Target

I. Forecasting & Budgeting

I. Contingency Planning

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International Planning Process