MODULE BUSINESS POLICY AND STRATEGY
CHAPTER 8
STRATEGIC MARKETING ISSUES
Objectives:
1. Define Strategic marketing
2. Discuss the marketing concept
Marketing fundamentals are key elements necessary for firms to compete in
the current complex and dynamic market situations. Technological advances and the
global economy have changed the firm’s business practices. The Internet and
increasing global competition in domestic and foreign markets have reshaped the
way firms conduct businesses for markets and consumers. Consumers shop online,
have access information on prices, features, or quality of products or services, and
enjoy a large selection of products and services. These circumstances inevitably
neces- sitate the firms understand current strategic marketing concepts and issues
and develop new ways of strategic
thinking and planning in marketing to be successful.
THE MARKETING CONCEPT
Over the decades, the concept of marketing has changed and evolved from the
selling and delivery process of products and services between buyers and sellers to an
exchange process that satisfies the needs of individuals and organizations.
MARKETING MIX AND STRATEGIES
These can be itemized as follows:
Product and Marketing Strategies
Firms manufacture products or services to satisfy customers’ needs. A product is
a physical item that customers can see, touch, and feel; an automobile, a notebook
computer, and a toothbrush are product examples. Product strategies
MODULE BUSINESS POLICY AND STRATEGY
include not only the development of a tangible item but also the creation and
maintenance of branding and packaging of the item to stimulate its purchase.
Branding involves the building of the image or perception of the product on the
customer, by creating a name, trademark, logo, or other unique symbol of the product.
Branding gen- erates value, recognition, and quality of the product that can differentiate
it from competitors’ products.
Packaging involves designing and producing a container and a graphic design
for a product (e.g., color, texture, shape, and graphics). Packaging
Product transactions usually occur in industrial or consumer markets. Industrial markets
exist in a business to business (B2B) environment. The transactions of products in this
environment take place between businesses, including government.
The product life cycle (PLC) has four stages; introduction, growth, maturity, and
decline. The PLC begins with the introduction stage whereby a new product is
introduced into the market. The introduction stage is generally characterized by low
sales that are unlikely to reap profits. Firms are in a position to cover the large expenses
associated with the promotion and distribution of the new product.
Pricing and Marketing Strategies
Firms receive a certain value, usually expressed as money, from customers in
return for their offerings. Price strongly influences the purchase of a product or
service and is considered as a surrogate measure of quality for many consumers —
if it costs more, then it is of higher quality. Pricing decisions, therefore, require careful
consideration of many factors. Firms should clearly consider the following pricing
objectives: what is the goal of pricing strategies for firms? Is the goal penetrating the
market, increasing market share, or maintaining the status quo? Firms should also
consider fixed and variable costs when they manufacture the product. Other con-
siderations can include the demand for offerings given the price level, the purchasing
power of potential customers, and competitors’ pricing strategies for similar offerings.
MODULE BUSINESS POLICY AND STRATEGY
Promotion and Marketing Strategies
Marketers communicate with customers to determine how to find target
customers, how to reach them, what they want, how to effectively provide information
on products or services for them, and how to develop and maintain a long-term
relationship with them. Marketers use various pro- motional tools such as advertising,
sales promotion, personal selling, and public relations to communicate with customers
and stimulate the cus- tomers’ demand for products or services. Depending on their
marketing strategies, firms choose different promotional tools, such as advertising,
personal selling, sales promotion, or public relations (PR). Even firms in the same
industry often use different types of promotional tools.
Distribution (Place) and Marketing Strategies
The last marketing-mix variable involves distribution (place) or marketing
channels through which products or services become available for end users. Many
industrial products are sold through direct channels (i.e., the manufacturer
→ the end user) whereas most consumer products or services are distributed or sold
through marketing intermediaries (e.g., wholesalers or retailers).
CURRENT STRATEGIC MARKETING OUTLOOKS
Different marketing outlooks include:
International Marketing
Technological developments (e.g., the Internet) and global media, such as MTV,
The Wall Street Journal, Business Week, The Economist, the growth of the World Trade
Organization, new emerging markets (e.g., China, Russia, and Brazil), and the
increasing acceptance of free market systems, have provided opportunities for firms to
market their products or services on a limitless basis in foreign countries.
Services Marketing
Services industries account for almost 80 percent of the U.S. gross domestic
product (GDP) and about 80 percent of employment. The importance of service
industries in the U.S. economy is expected to continue to grow in
MODULE BUSINESS POLICY AND STRATEGY
the future. Services industries include transportation and public utilities, education,
finance, insurance, real estate, hotels, airlines, health care, and Internet-based
services.
Electronic (E) or Internet Marketing
The development and expansion of Internet-related technologies have offered
new opportunities for many firms. The increasing number of Internet users provides
potential opportunities for marketers domestically and internationally. For example,
approximately 186 million Americans used the Internet in 2004 and the number is
expected to rise to 247 million in 2009
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
One of the key activities that marketers should understand is how to effectively
manage positive relationships with customers. Firms focus on CRM to have quality
relationships with customers. CRM consists of the firm’s activities to build, retain, and
sustain long-term relationships with customers, whereby it tries to improve profitability in
the long run.
SOCIAL MARKETING: LEGAL AND ETHICAL ISSUES IN MARKETING
A firm’s primary task is to determine the needs, wants, and interests of target
customers and to deliver their desired needs to them, but the firm must ensure that its
marketing activities are socially responsible, within the law, and ethically acceptable by
the general society.
For further discussion please refer to the link provided: STRATEGIC MARKETING ISSUES
https://www.youtube.com/watch?v=dZBahQnydkc
For further discussion please refer to the link provided International Marketing
https://www.youtube.com/watch?v=yjQvcMcw_WE
Reference:
Business Policy And Strategy 7th Edition
