Introduction to
Strategic Marketing Management
Faisal K. Qureishi
Agenda
1. Marketing and its Strategic Role
2. Competitive Advantage and its
sources
3. Processes of Strategic Marketing
Management
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.
Corporate
Planning
Strategic Planning
Operational Planning
Marketing
Planning
Short Range or
Tactical
Planning
Long Range
Planning
Marketing Strategy
Adapted from Greenley
(1989)
Expanding Responsibilities
of Marketing Managers
They no longer function solely to direct
day-to-day operations. They must make
strategic decisions as well.
Expanded responsibilities include:
Charting the direction of the
organization
Contributing to decisions that will
create and sustain a competitive
advantage and affect long-term
organizational performance
The Marketing Manager Is the most
significant Functional contributor to the
strategic planning process, with leadership
roles in defining the business mission,
analysis of the environmental, competitive,
and business situations; developing
objectives, goals, and strategies; and
defining product, market distribution, and
quality plans to implement the business
strategies. This involvement extends to the
development of programs and operational
plans that are fully linked with the strategic
plan.
Processes in Strategic
Marketing Management
1. Defining the organizations
business, mission, and goals
2. Identifying and framing
organizational growth opportunities
3. Formulating product-market
strategies
4. Budgeting marketing, financial,
and production resources
5. Developing reformulation and
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 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
Sources of Competitive Advantage
Core Competencies
Value Chain
COMPETITIVE ADVANTAGE
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
VALUE TO SUPPLIERS
WILLINGNESS
TO SUPPLY
The Value Chain
The value chain provides a map of firms capabilities
and allows systematic search for core competencies
Infrastructure
Activities
Support
Human Resources
Research and Development (Innovation)
Materials Procurement
Operations
Outbound
Marketing
Logistics
Inbound
Logistics
& Sales
Service
Primary Activities
Strategy and Coherence
Strategy
(Positioning)
Resources
Organization
and
Design
Capabilities
Tools for Building Competitive Advantage
Resources are inputs into a firms production processes:
Tangible Resources Intangible Resources
Financial resources Technological
resources
Physical resources Innovative
resources
Human resources Reputation
Organizational resources
Capabilities are the capacity for a set of resources to
perform a task or activity in an integrative manner
Organizational Design consists of the organization
structure, technology, policies and procedures
CRITICAL FACTORS FOR COMPETITIVE
ADVANTAGE
ORGANIZATIONAL
DESIGN
COMPETITIVE
RARENESS
VALUE ADVANTAGE
NON-SUBSTITUTABLE INIMITABILITY
Core Competencies Require VRIS-O
Value do a firms resources and capabilities allow a firm
to respond to its environment?
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?
Organization is the firm organized to exploit the full
potential of its resources/capabilities?
A Competitive Advantage enables a firm to:
Outperform competitors
Grow despite competitors
Competitive Advantage is found in:
Products that are different than competitors
Alternative distribution channels
Selective pricing and different cost structures
A Competitive Advantage should be:
Sustainable
Unique
Market responsive
Superior
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
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 Alliance, 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 Training/Developing
a quality-focused culture
R&D Manufacturing
Process & product innovation
Materials management
(supply Chain ). 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 Customization
Marketing Micro-marketing/Personalization
Infrastructure Suited to customer responsiveness
Information systems for feedback
Human Resources Customer focused training
Employee incentives/Job security
R&D Involving Customers in innovation
process (Customerization)
Materials management Build responsive logistics/delivery
systems
