MK3002

Introduction to Strategic Thinking: Marketing Orientation & Levels of Strategy

“Strategic Management is both a philosophy of management and a set of practical tools which offer managers the possibility of making better decisions”

Kotler 2008

The ‘Philosophy’

The subject area is ‘Holistic’The keystone of many subject areasIts about decision making and change and adapting

to the environmental trendsAbout the company:-products/services, -markets &

competitors.Must be able to manage this process effectively and

understand various modelsNumerous approaches-no single prescriptive

‘answer’

Four key concerns of Strategy

Concerned with the whole organisation Strategy seeks to integrate functional aspects

How the organisation fits into its environment and creates value

How the organisation competes for customers and other resources

Considers performance relative to competitors ie benchmarking

Prius creates customer value

What are strategic decisions?

• Can be pro-active (intended and planned)• Can be reactive (adaptive)• Requires planning and awareness (formal or

informal)• concerned with the long term direction• they try to achieve competitive advantage and

superior positioning• they are concerned with the scope and direction of

the organisation • they link and affect the operational decisions.

Continued…..• they identify the extent to which resources can

be obtained and developed to create a strategy for the future

• they involve a high degree of uncertainty and yet demand an integrated approach to managing the organisation.

• they use the companies existing resources to create opportunities

• they match the activities of an organisation to its environment

Yet more…..

Can be perceived as being ‘outside-in’ or ‘inside-out’

Involves change management?All of the models of SM imply that firms

must accept, adapt to, and manage change

Two main views of Strategic Management:

The Systematic approach Theory driven, ideal models and often quite

prescriptiveThe Emergent approach

Reality, what firms doWe will use a combination of both

approaches

Strategy and Marketing

3 Basic Propositions:

Customer orientationOrganisational IntegrationMutually Beneficial Exchange

Customer Orientation

Finding out what customers wantFulfilling the perceived needs of customersMonitoring Progress towards satisfying

customersImproving customer satisfaction

Customer Orientation: Long Term Relationships

Costs more to attract new customers than retain existing ones

A satisfied customer recruits other onesRelationships discourage switching

SUSTAINABLE MARKETING

Environmentalism

Corporate & Social Responsibility

Ethics

Social criticisms of marketing

Impact on consumers

High pricesDeceptive practicesHigh-pressure sellingLow quality and

unsafe goodsPoor service to the

disadvantaged

Impact on societyFalse wantsToo much materialismToo few social goodsCultural pollutionExcessive political

power

Organisational Integration

Marketing involves the whole organisationStructuresCulture

Interaction between marketingand corporate strategy

Corporate versus marketing strategy

Corporate strategy:

• Allocation of resources within an organisation to achieve the business direction and scope specified within corporate objectives.

• Helps to control and co-ordinate the different areas of the organisation.

Marketing strategy:

• Defines target markets, direction and requirements in order to create a defensible position compatible with the overall corporate strategy.

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Competitive Strategies

Differentiation

Cost leadership Cost focus

Competitive strategies

Differentiation focus

Influences on marketing strategy

Marketing plans and programmesMarketing plan:

• Turning strategies into implementable actions.

• A detailed written statement specifying target markets, marketing programmes, responsibilities, time scales and resources to be used within the defined budgets.

Marketing programmes:

• Actions, often tactical, using marketing mix variables to gain advantage within target market.

• Means of implementing the marketing strategy.

• Normally detailed in the marketing plan.

Strategic Direction Identifying an Organisation’s purpose, aims, objectives and goals:

• Where are we going?• “Strategies are means to ends; this……..is

about these ends” adapted from

Thompson, 2001

4 stages:1. Where are we now2. Where are we going /want to be3. How do we get there4. How do we ensure arrival

The Traditional Strategic Management Process

Strategic Analysis

Strategy Creation & Choice

Strategy Implementation

Evaluation

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Re-definition

The Marketing Planning ProcessBusiness mission

Marketing audit

SWOT analysis

Marketing objectives

Core strategy

Marketing mix decisions

Organization and implementation

Control

Marketing planning at the business level

Marketing planning at the product level