Chapter 1 Overview of Marketing Strategy and the Strategic Marketing Process

What is a Marketing Strategy? A marketing strategy can refer to a process or to its outcome A comprehensive marketing strategy specifies the who, what, when, where, why, and how of the business A sound strategy must reduce to meeting some specific needs of some specific customers better than the competition within profitable relationships

What is a Marketing Strategy? Three high-level decisions Target Segments Competitive Advantages Singularity

The Marketing Concept and a Customer Focus Essence of the “marketing concept” Strategic marketing is the creation and maintenance of a market oriented strategy Focusing the organization on the customers it serves and the needs it meets According to the marketing concept, if we take good care of our customer, sales and profits, will follow

Table 1-1 - What Is a “Marketing Strategy”?

Figure 1-1 - Generic Strategies—Competitive Advantage and Competitive Scope Competitive advantages or “bases of competition” can be broadly categorized as either some form of differentiation or as cost leadership. Competitive scope includes segment scope and the extent to which value-creating activities are performed by the firm itself versus being outsourced.

Figure 1-2 - Value Frontier Value” is defined as what the customer gets (performance or quality) adjusted for what the customer gives (price). Value = Relative Performance/Relative Price The value-map framework plots performance and price as the axes of the two-dimensional space. These are customer perceptions of performance and price. Price and performance are perceived as high or low relative to other offerings in the marketplace. People are willing to pay more for higher performance (better quality) but the market will punish firms charging more or offering less for the same price. Three potentially effective strategies: Premium High-customer-value Economy One unsustainable strategy: Inferior customer value

Figure 1-3 - Product-Market Growth Strategies The product-market growth framework suggests the concept of “adjacencies” and core competencies—the idea that strategic growth is best found by identifying new markets or new products for which the firm can parlay existing core strengths into growth.

Figure 1-4 - The Strategic Marketing Analysis and Planning Process The model illustrated above should become second nature to successful marketers. Four essential stages to this process are: 1. Situation assessment 2. Strategy formation 3. Implementation (Positioning and the Marketing Mix) 4. Documentation, assessment, and adjustment

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