Welcome to Strategic Marketing
UN211988
Semester 2, 2017
[email protected]
Office – Rm 208.
www.perth.uhi.ac.uk
Perth College is a registered Scottish charity, number SC021209.
Objectives of the marketing plan
• Acts as a roadmap
• assist in management control and monitoring
the implementation of strategy
• informs new participants in the plan of their
role and function
• to obtain resources for implementation
• to stimulate thinking and make better use of
resources
Objectives of the marketing plan
• Assignment of responsibilities, tasks and
timing
• Awareness of problems, opportunities and
threats
• Essential marketing information may have
been missing
• if implementation is not carefully controlled by
managers, the plan is worthless!
The contents and structure of the marketing
plan
• The executive summary
• table of contents
• situational analysis and target market
• marketing objectives
• marketing strategies
• marketing tactics – with resources, timescales & responsibilities
• budgets/financial data
• and control/feedback loop
Marketing Plan: Analysis, Planning, Implementation & Control
Our Definitions:
Three main levels of planning:
1. Objectives
Specific statement/s of where the company intends
to be. These must be SMART. (Corporate)
2. Strategy
How we plan to get there and deliver the
company’s objectives. (Managerial)
3. Tactics
Detailed activity plan with; resources, budgets,
timescales & responsibilities. (Operational)
Setting Objectives
• Marketing strategies and
tactics are directed at
achieving your objectives.
• Objectives are:
– S – Specific
Be precise about what you want to
achieve
– M – Measurable
Quantify
– A – Achievable
Are you attempting too much?
– R – Realistic
Do you have the resources to make this
happen?
– T – Timed
By when will you achieve the objective?
http://www.marketingteacher.com/Lessons/lesson_objectives.htm
Examples of SMART objectives
• Growth • Profitability
– To increase the number of – To achieve a 20% return on capital
outlets in Hanoi from 2 in 2009 employed by August 2011
to 5 by December 2010
• Market Share
• Branding – To gain 25% of the market for male
– To make X brand Bia Hoi the sports shoes by January 2012
preferred brand of 21 – 28 year
old females in Hanoi by July • Promotional
2011. – To increase trial of Kleen-n-Brite
washing powder from 2% to 5% of
• Survival our target customers by June 2010
– To survive the current recession
by reducing the production
expenses ratio from 15% to 10%
by December 2009 and maintain
a positive cash balance of at least
$10,000 at the end of each
month in 2010.
Adapted from: http://www.marketingteacher.com/Lessons/lesson_objectives.htm
Timescales:
“A week is a long time in politics” – Harold Wilson
Long run:
Objectives: 3 to 5 yrs
Medium run:
Strategy: 1 to 3 yrs
Short run:
Tactics: up to 1 yr
The above are typical and rough estimates and are always context
dependent. Mining and water companies for example, will plan
decades ahead but many tech companies can’t look beyond the
next year. In economics, the “short run” is defined as the period
when at least one factor of production is fixed and the “long run” is
the period when all factors are variable.
Strategic Marketing Planning
Porter’s Generic Strategies
The Context of Strategy (Collis & Rukstad, 2008. p85)
Mission Why we exist &
who we serve
What we believe in &
Values
how we will behave
Vision What we want to be (5+ years)
What is our objective,
Strategy scope, & advantage
Balanced Implement & monitor that plan
Scorecard
Strategy Components (Collis & Rukstad, 2008. p84)
Strategy How, where, & what to compete for?
Objective= What for: specific, measurable,
Ends/Goals time-bound objectives
Scope= Where: offerings, segment, time,
Domain/Boundaries geographic, vertical integration
How: superior internal conditions/
Advantage= activties enabling superior external
Means
positions/perceptions, synergies
Why we need a strategy… (Collis & Rukstad 2008)
means/advantage objectives/goals
= how? = what for?
A B
planned
scope/boundaries:
reality = where?
The Content of a Strategy Statement…
• Objective: the goal should not be framed in terms of maximising shareholder
returns over the medium to long term because this is assumed. A strategic
objective should identify the best way to maximise shareholder value, eg
through a measurable and time-bound growth rate, or an emphasis on
profitability.
• Scope
– Customer or offering, eg Merrill Lynch bank targeting only customers with
over $250K in liquid assets
– Geographic location: not all companies are global players and resources
will be limited. Setting geographic boundaries will be important.
– Vertical integration
• Advantage
– Clear statement of the company’s value proposition (see the Wal-Mart
Value Proposition).
– Description of the activities that allow the company to deliver the value
proposition (see Southwest activity system map or Edward Jones’s map
in Collis & Rukstad 2008, p88)
Wal-Mart Value Proposition (Collis & Rukstad 2008)
Now your turn…
• Develop a customer value
proposition diagram to compare:
– Aldi
– Sainsburys
– Spar
Edward Jones’ Strategy Statement
Collis & Rukstad 2008, p90)
Hierarchy of Strategies (p12 textbook)
Three major levels of strategy (Hofer and Schendel, 1978. p27)
1. Corporate goals/priorities
– What the organisation tries to achieve across its divisions
or businesses
– e.g. P&G
2. Business-level/unit goals/priorities
– What a business tries to achieve
– e.g. Gillette
3. Marketing goals/priorities (functional)
– What the marketing department tries to achieve
“Different authorities have defined strategy in lots of
different ways: there is no standard definition” (p13)
Operational Effectiveness
• Cost is generated by performing
activities, and cost advantage is
arises from performing particular
activities more efficiently than
competitors.
• Differentiation arises from the
choice of activities and how they
are performed
• In this way activities are the
basic units of competitive
advantage
• However… OE simply moves
the Productivity Frontier
outwards in a zero sum game… ref: “What is Strategy” Michael Porter
Organisational Fit
“While operational effectiveness is about
achieving excellence in individual activities or
functions, strategy is about combining activities”
Southwest Airlines
What about Strategy?
“Competitive Strategy is about being different.
It means deliberately choosing a different set
of activities to deliver a unique mix of
value…” Michael Porter.
Activities: Strategic Fit & Sustainability What is Strategy, Porter, 1996.
“Competitive Strategy is about being different. It means
deliberately choosing a different set of activities to deliver
a unique mix of value…” Michael Porter.
An alternative way of saying the same thing …
Durability of an Advantage
• General barriers to imitation:
• How quickly competitors can copy/develop similar resources/ capabilities
• How quickly competitors can acquire similar resources/capabilities in the
market
• How well we protect our comparative resource/capabilities advantage (e.g.
patents)
• How successful we are at delivering on our value proposition
• Barriers for competitors:
How difficult is it for competitors to change their priorities due to prior investments?
How agile/flexible are our competitors in absorbing change?
• Barriers due to industry dynamism
How rapidly can transformational change/disruptive innovation occur in our
industry?
How is the development of our product life cycles in our industry?
Examples of Superior Internal Conditions
• Social media advertising skills superior market penetration
• Research & development skills superior innovations
• Supplier relationships superior knowledge exchange
• Quality management system less product failures
• Customer relationship management system superior data analyses and
individual customer support
• Order management system automated orders and superior just-in-time
deliveries for higher cost-effectiveness
• Firm reputation higher potential for trust-generation
• Website better digital solutions for customers/ employees
• Human resource management skills better attraction, recruitment, and
development of skilled employees
• Service culture more motivated and engaged employees
What are Resources…?
…the tangible and intangible entities available to the firm
that enable it to produce efficiently and/or effectively a
market offering for some market segment(s)…
What are Resources?
Tangible Intangible
resources resources
Human:
Physical: - employee skills
- land Organisational:
- raw materials
- reputation, culture, technology
- buildings/plants
Informational:
-equipment - competitive knowledge
Relational:
Financial: - supplier & customer relations
- cash Legal:
trademarks, licences
Madhavaram and Hunt, 2008
When are resources/capabilities particularly
valuable for a firm: the Resource Audit
• An audit of resources would be likely to include an evaluation of resources in terms of :
• Leveragability (into customer benefit)
• Availability/immobility (difficult for competitors to get)
• Efficiency (extent of employment/performance)
• Non-substitutability (dependence on these)
• Adaptability (speedy, flexible changes)
• Legitimacy (legality, socially accepted)
• Ambiguity (difficulty for competitors to understand)
• Preclusitivity (enable you to exclude competitors)
What are Capabilities/Competencies…
“…socially complex, interconnected combinations of tangible
basic resources (e.g., specific machinery, computer software
and hardware) and intangible basic resources (e.g., specific
organisational policies and procedures and the skills,
knowledge, and experience of specific employees) that fit
together coherently in a synergistic manner to enable firms to
produce efficiently and/or effectively valued market
offerings…”
Key Capabilities
• Identifying key capabilities is one of the biggest challenges for
modern management but it is crucial for success
• Key capabilities should be nurtured and developed; however, a
firm needs to prioritise specific competencies and divest others
(Strategic priorities matrix)
• Skills that do not qualify as key capabilities should be outsourced
(comparative advantage)
• Given their importance for competitive advantage, every firm
should be sure what its key capabilities are now and should be in
the future
Requires strategic analysis of current
situation and investment in future situation
But will it last…?
Strategic Positioning (Porter, “What is Strategy” p 66-67)
• Variety-based positioning: based on producing a subset of an industry’s products or services.
– Eg Vanguard: sells indexed funds rather than high performing funds. Targeting?
– Toyota’s launch of the new Lexus brand producing only luxury cars
– Intel’s focus on microprocessors (see market share graph on next slide)
• Needs-based positioning
– Aims to fulfil all the needs of a particular market segment. Eg, Citibank private banking provides a full range of services to
customers with a minimum of $250k to invest.
• Access-based positioning
– Generally based on geography, eg Carmike cinemas operating only in towns with fewer than 200,000 inhabitants
Strategic Positioning Requires Trade-offs
(Porter, “What is Strategy” p 68-70)
• A company known for delivering one kind of value may lack
credibility if it attempts to deliver inconsistent propositions
• Different positions require different product configurations,
equipment, skills and management systems., eg Ikea
• Where a company is positioned on the Productivity Frontier there is
a very real trade-off between cost and differentiation
Task
• Choose a company or product you are familiar with and analyse that company briefly
based on the definition of Strategy given. So:
• Identify its Strategic Position
• What is its Competitive Advantage and what makes it sustainable?
• What products or services does it offer?
• How does it allocate its Corporate Resources, i.e. what activities is it involved in?
• What value is produced for Stakeholders and customers?
Air Asia
Air Asia’s Vision, Mission and Values…
Importance-Performance-Matrix
Martilla, J. A., & James, J. C. (1977). Importance – performance analyses. Journal of Marketing, 41(1), 77 – 79.
low Performance high
high
The focus for greater Continue with the
managerial effort in current effort to ensure
order to improve that performance does
performance not decline
Importance
Areas of low priority Re-think the current effort.
Is it worth spending in
these areas?
low
E.g. of Importance Performance – Costa Coffee
Costa Coffee Importance/Performance Results
4.00
Quality of food
Cleanliness
Efficiency of staff
Value Freshness
Efficiency of ordering
Range of food
Friendliness
Importance
Quantity
Opening hours
3.00
Range of drinks
2.00
1.00 2.00 3.00 4.00
Performance
low Performance high
high
Importance
low
The Process…
Step 1: Step 2: Step 3:
Identify key Rate Rate
performance importance performance
drivers thereof among rivals
These differ by
context and
represent a
critical choice
for
benchmarking
… … … … …
Performance-Importance-Matrix:
An alternative view
Competitor 1 Competitor 2 Competitor 3
Performance Importance Performance Performance Performance
factors
Experience quality Extremely Excellent Above average Below average
important
Dealer network Somewhat Poor Average Below average
cooperation Important
Web-sales-channel Very Above Above average Average
integration important average
Product features Very Important Below average Average Excellent
Brand strength Extremely Excellent Average Average
important
Advertising skills Somewhat Average Below average Excellent
important
Performance scale: Excellent, above average, average, below average, poor
Etc. Etc Etc Etc Etc
Importance scale: Extremely important, very important, somewhat important, somewhat unimportant, not at all important
Performance-Importance-Matrix:
The same principle, but an alternative view
based on allocated numbers…
to easily understand and express who are
overall or specifically the most significant
rivals
Performance-Importance-Matrix:
An alternative view
Competitor 1 Competitor 2 Competitor 3
Performance Importance Performance Performance Performance
factors
Experience quality 5 1 5 4
Dealer network 5 2 5 3
cooperation
Web-sales-channel 5 1 5 3
integration
Product features 3 3 4 2
Brand strength 4 5 3 1
Advertising skills 3 3 4 2
Total Points 58 111 66
Aldi
Sainsbury
Spar
Your turn now…
Performance factors Importance
Insurance Rival1 Rival2 Rival3
…
…
…
…
…
…
…
…
Total Points
