Strategic Marketing: Market Vision,

Structure and Analysis

Week 3: Lecture A

Strategic Marketing

Agenda

Corporate, Business and Marketing Strategy

Corporate Strategy Business and Marketing Strategy Marketing Strategy Process Preparing the Marketing Plan

Reading. Ch2 from Strategic Marketing by David Cravens, 8/e.

Strategic Marketing

Corporate Strategy

Corporate Strategy

Unique Competitive Position for the company Activities tailored to strategy Clear Trade-offs and choices Competitive advantage arising from fit across activities Sustainability coming from the whole system Operational effectiveness is a given

Its a way a company creates value through the configuration and coordination of its multi-market activities

Strategic Marketing

Strategic Marketing

Corporate Strategy

Corporate Strategy

it is decided in the context of defining the companys mission and vision, i.e, saying what the company does, why and how it exists, and what it is intended to become.

Lays down corporate mission, vision and overall objectives Design effective organization structures and processes Creating organizational culture and philosophies Deciding on attaining distinctive competencies by generating superior human, financial and technological resources and seeking synergy among the firms various businesses

Strategic Marketing

Corporate Strategy
Strategy Component Key Issues

Scope, mission, vision

what business should we be in? what customers needs, target segments, and/or technologies should be focused on?

Objectives (SMART)

what performance dimensions? what are the benchmarks? what is the time frame?

Resource Allocation

what financial and non-financial resources are required?

Sources of competitive advantage

what are businesses sources of competitive advantage? how do we do things differently and favorably w.r.t the competition?

Synergy

when activities and departments reinforce and complement each other The whole becomes greater than the parts

Strategic Marketing

Corporate Strategy

Components of Corporate Strategy

Corporate Vision and the Vision Statement:

An overall direction of the company in the long run.

The reason for companys existence The firms customers and the needs to be met The extent of specialization within each product market and geographical area to be covered The amount and type of diversification The stage in the value chain Managements performance expectation Other guidelines: overall business strategy, technologies to be used and R&D

Strategic Marketing

Corporate Strategy

Components of Corporate Strategy

Objectives: Why do we need them?

These are required so that performance can be gauged Objectives are set at several levels in an organization; marketing, finance, HR, operations
be able to measure whether you are meeting the objectives or not.

what they want to achieve

Are they attainable?

When do you want to achieve the set objectives

Do u have the resources?

Strategic Marketing

Corporate Strategy

Components of Corporate Strategy

Objectives:

Generally its more than the financial numbers that you want to achieve

Handout: The Balanced Scorecard

Strategic Marketing

Corporate Strategy

The Hierarchy of Strategies

Strategic Marketing

Business and Market Strategies

Corporate Strategy (Some insights)

Horizontal Integration

The process of acquiring or merging with industry competitors

Vertical Integration

Expanding operations backward or forward

Strategic Outsourcing or Partnering

Letting some value creation activities within a business be performed by an independent entity or performing a strategic alliance or mergers

Strategic Marketing

Corporate Strategy

Components of Strategy

Business Level Strategy (SBU)

a single product or brand a line of products or a mix of related products

meeting a common market need or a group of related needs

The strategy of each business unit is mutually exclusive and each businesses act as a separate entity

Strategic Marketing

Corporate Strategy

Components of Strategy
Rationale
Enhances a coherent and focus strategy No duplication or cannibalization Empowering to determine how its share of resource will be used effectively Autonomy leads to accountability

Characteristic
Serves a homogenous market Serves a unique set of product markets Autonomy and control over production, marketing, distribution Has responsibility for its own profitability

Strategic Marketing

Corporate Strategy

Components of Strategy
Jaffer Group of Companies Murshid Builders Shoa

JBS

JBL

Strategic Marketing

Corporate Strategy

Components of Strategy

Business Level Strategy (SBU)

Corporate management must first decide what business areas to pursue and set priorities allocating resources to each SBU Corporate strategy and resources should help SBUs to compete more effectively:

low cost capital smart professionals R&D Marketing Etc.

Strategic Marketing

Corporate Strategy

Functional Level Strategies

Finance
Eg. Capital acquisitions Resource allocation Dividends, stocks or reinvestments Production & Operations Eg. Manufacture or outsource develop or attain technology location and workshopsequipment and supplies Human Resource Eg. Talent Acquisition work arrangements and training Motivation and Appraisal

Marketing
Eg. Penetration strategy Product development strategy Diversificatio n strategy Marketing Mix

Handout: Exhibit 2.5, Ch. 2, Marketing Management-A Strategic Decision Making Approach, Boyd, 4/e, McGraw Hill.

Strategic Marketing

Corporate Strategy

Components of a Corporate Strategy

Structure, Systems and Processes (Business Model)

Structure determines the composition of the business Systems are formal policies and procedures Processes are functions or activities

Strategic Marketing

Corporate Strategy

Components of a Corporate Strategy

Structure, Systems and Processes (Business Model) U-form

Unitary form / Functional form (U Form) Decomposed into specialized/functional units where similar tasks are group together (such as production and sales)

Coordination of specialized units is centralized by top managers so that economies of scale are obtained, but the coordination problem is harder to solve, as the top managers have to rely on imperfect information transmitted by local managers

Executive Human Resource Recruitment

Training

Finnance Accounting
Investment

Marketing Product
Sales

MIS Website
Database

Strategic Marketing

Business and Market Strategies

Components of a Corporate Strategy Structure, Systems and Processes (Business Model) U-form

M-Form

Headquarter AmericaDivision Asia Division Marketing Marketing

HR HR

Headquarter

Headquarter

Asia Division Marketing HR

Business Division Global Division Global Se America Consulting Business Consulting Asia Division AmericaService Busines CRM Marketing Marketing
HRHR B2B

Technical SupportTechnica CRM Marketing

B2B HR Maintenance

Maint

operating authority is assigned to divisions organized along either product or geographic lines Strategic decisions are made at the executive office who

also audits and evaluates the performance of the divisions and allocates capital among the divisions based on the relative performances of the divisions.

Strategic Marketing

Business and Market Strategies

Components of a Corporate Strategy

Structure, Systems and Processes (Business Model) U-form

M-Form
Headquarter
Headquarter

Headquarte

Asia Division Marketing HR

AmericaDivision Asia Division Marketing Marketing

HR HR

Business Division Global Division Global S America Consulting Business Consulting Asia Division AmericaService Busin CRM Marketing Marketing
HRHR B2B

Technical SupportTechn CRM Marketing

B2B HR Maintenance

Ma

local managers can more easily solve the coordination problem by making good use of local information, but then the advantages of specialization are not fully appropriated and there is duplication.

Strategic Marketing

Corporate Strategy

Components of a Corporate Strategy

Structure, Systems and Processes (Business Model)

M-form organization is able to promote innovation or reform through experimentation, that is, it can experiment an innovation or reform program in some part of the organization first before implementing it in the entire organization. serious problems are likely to arise under the U-form between functional departments, such as production and sales, when the firm introduced new products or adopted innovations

Strategic Marketing

Corporate Strategy

Components of a Corporate Strategy

Corporate Competitive Advantage

If the business of businesses are adding value to the overall business of the company? Are the offshoots a good strategic fit? Harvest, Divest or Invest?

Strategic Marketing

Business and Market Strategy

The Connection Between Business/Corporate Strategy and Marketing!

Strategic Marketing

Business and Market Strategy

Business and Marketing Strategy Relationships

Marketing is so basic that it cannot be considered a separate function with in the business. Marketing requires separate work and distinct group of activities. But it is first, a central dimension of the entire business. It is the whole business seen from the point of view of its final result, that is from the customers point of view Peter F. Drucker Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation; rest are costs! Peter F. Drucker

Strategic Marketing

Business and Market Strategy

Defining Strategic Marketing

Strategic Marketing is a market driven process of strategy development, taking into account a constantly changing business environment and the need to deliver customer value

The focus is on organizational performance rather than on increasing sales

It links the organization with the environment and view marketing as a responsibility of entire business rather than a specialized department or person.

Strategic Marketing

Marketing Strategy Process

Strategic Situation Analysis Implementing and Managing Market-Driven Strategy

Designing Market-Driven Strategies

Market-Driven Program Development

Strategic Marketing

Marketing Strategy Process

1. Strategic Situation Analysis

Market Vision, Structure and Analysis

For a market to exist, there must be people with particular needs and wants and buyers must be willing to purchase a product to satisfy their needs Analyzing markets and forecasting their change Evaluating competitors strategy

Segmenting Markets

Identifying distinct buyers with similar needs Evaluating future transformations and transitions

Strategic Marketing

Marketing Strategy Process

2. Designing Market Driven Strategies

Market Targeting and Strategic Positioning

Selecting attractive segments to target Carving out Unique Selling Proposition or differentiation

Marketing Relationship Strategies

collaboration with customers, channel members, suppliers, competitors, and internal teams to achieve greater value strategic partnering is the mainstay as compared to vertical integration

Strategic Marketing

Marketing Strategy Process

2. Designing Market Driven Strategies

Planning for New Products

New product planning starts with identifying gaps in customer satisfaction the differences between available product attributes than the desired provides opportunities

3. Marketing Program Developments

Deciding on the 4Ps that implement the positioning strategy. Product: Developing new products, managing existing ones and deciding what to do with problem ones Pricing Decisions Promotion Distribution

Strategic Marketing

Marketing Strategy Process

4. Strategy Implementation and Control

preparing the market plan and budget using the plan in implementing and controlling the strategy
Activities to implement;

who does what, the dates or milestones, location of implementation and how this implementation will be accomplished

Strategic Marketing

Case: YMCA of London Ontario

1. 1. What are the basic issues faced by Shaun Elliot? What factors have contributed to the recent success of the YMCA in London? Will these factors enable it to reach participation levels in excess of 100,000 by 2010? How do you assess YMCAs corporate strategy in terms of its structure, resources and diversification? What competitive Forces does YMCA face in HFR? What competitive Forces does YMCA face in Child care? What competitive Forces does YMCA face in Camping and Outdoor Education?

2.

3. 4. 5.

7. What should Shaun do about its corporate strategy?