1. MKT1 - Slide 1 to 241 Chapter 1: Introduction to Strategic Marketing Management Market1 – Page 1

2. MKT1 - Slide 1 to 242 What is Marketing? Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. - Philip Kotler

3. MKT1 - Slide 1 to 243 Simple Marketing System Industry (a collection of sellers) Market (a collection of Buyers) Goods/services Money Communication Information

4. MKT1 - Slide 1 to 244 Production Concept Product Concept Selling Concept Marketing Concept Consumers prefer products that are widely available and inexpensive Consumers favor products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products Focuses on needs/ wants of target markets & delivering value better than competitors Company Orientations Towards the Marketplace

5. MKT1 - Slide 1 to 245 Marketing Concept ► Need to Focus on Marketing Concept   Focuses on needs/ wants of target markets & delivering value better than competitors

6. MKT1 - Slide 1 to 246 Evolving Views of Marketing’s Role a. Marketing as an equal function Finance Production Marketing Human resources b. Marketing as a more important function Finance Human resources Marketing Production

7. MKT1 - Slide 1 to 247 Evolving Views of Marketing’s Role e. The customer as the controlling function and marketing as the integrative function Customer Marketing Production Human resources Finance

8. MKT1 - Slide 1 to 248 Overlap Between Strategic Planning & Marketing ► There is some overlap between the two, in terms what you are going to learn ► We will emphasise marketing concepts and approach here rather than strategic concepts ► However, there will be some inevitable overlap here and there

9. MKT1 - Slide 1 to 249

10. 10 Marketing Plan ► This is a document that puts together the process that the organisation will undergo in order to achieve its marketing objectives ► It spells out the following activities that marketing managers need to do:  Set marketing objectives  Evaluate opportunities  Create marketing strategies  Prepare marketing programmes  Specify expected results

11. MKT1 - Slide 1 to 2411 The Marketing Plan – Possible Outline Executive Summary & Table of Contents Current Marketing Situation Opportunity & Issue Analysis Objectives Marketing Strategy Action Programs Projected Profit-and-loss Controls

12. MKT1 - Slide 1 to 2412 The Goal of Strategic Marketing Management ► To select reality-based desired accomplishments (e.g., goals & objectives) ► To effectively develop or alter business strategies ► To set priorities for operational change ► To improve the organisation’s performance

13. MKT1 - Slide 1 to 2413 Strategic Marketing Management Model ► The above, discussed in this chapter, is divided as follows:  External/self analysis  Strategic posture  Market planning

14. MKT1 - Slide 1 to 2414 External Analysis ► This comprise:  Customer analysis (segmentation, motivations & unmet needs)  Competitor analysis (their performance, image, culture, strengths/weaknesses)  Industry analysis (major market trends, key success factors, opportunities/threats, analysis of competitive/change forces)

15. MKT1 - Slide 1 to 2415 Competitor Forces Analysis

16. MKT1 - Slide 1 to 2416 Self-Analysis ► Strengths & Weaknesses ► Together Opportunities & Threats identified in the external environmental analysis, can do a SWOT analysis

17. MKT1 - Slide 1 to 2417 Strategic Posture ► Based on the SWOT, the organisation can decide how it will achieve its long term mission/goals ► Basically zero in on the strengths to take on opportunities, and downplaying the weaknesses, especially in respect to threats.

18. MKT1 - Slide 1 to 2418 Hence: Strategies ► Based on Porter’s and Aaker’s work:  Price advantage (cost leadership)  Quality/features advantage (broad differentiation)  Marker focused advantage (focused low cost & focused differentiation)  TQM advantage (value-driven strategy based on continual innovation in price, product & process)

19. MKT1 - Slide 1 to 2419 Competitor Role Strategy ► After organisation has decided on primary competitive strategy, it must position itself by choosing a competitive role strategy:  Leader: largest market share/initiator (e.g., McDonalds)  Follower: adopter of successful strategies (A&W Restaurant)  Challenger: An innovator who challenges the norm  Loner: Feels in the gap in the market place (“mom & pop” stores) ► Don’t try all!

20. MKT1 - Slide 1 to 2420 Strategic Initiatives ► Next step in developing effective posture, priority strategic initiatives:  Grow: e.g., Subway sandwiches  Maintain/defend: Mc Donald has been doing this  Reposition: maintain size, but change key elements, e.g., IBM)  Retrench: Spin-off some businesses, e.g., Nabisco spun off cigarette manufacturing  Exit

21. MKT1 - Slide 1 to 2421 Vertical Coordination Strategies Selling (distribution of) product thru:  Contracts  Relation-based alliance: loose, n contracts, but understanding – no separate company  Equity-base alliance – may be a separate company  Vertically integrated

22. MKT1 - Slide 1 to 2422 Need to keep in mind… ► Three critical marketing concepts:  TLC: Thinking like customers – see things from customer viewpoint  CMSQ: Critical marketing strategy question – why should customers purchase our products over competitors?  STP: Segment, target & position

23. MKT1 - Slide 1 to 2423 Segment, Target & Position ► STP strategies should complement organisation’s overall generic strategy, competitive role strategy, strategic initiative & vertical coordination strategy:  Market segmentation – every market made up of distinguishable segments with different needs, buying styles, responses  Target market selection – selecting market segments which you want to serve  Positioning – choosing the 4 Ps for that segment(s)

24. MKT1 - Slide 1 to 2424 Strategic Marketing ► Company Orientations Towards the Marketplace ► Marketing Concept ► Evolving Views of Marketing’s Role ► Overlap Between Strategic Planning & Marketing ► Marketing Plan ► The Marketing Plan – Possible Outline ► The Goal of Strategic Marketing Management ► Strategic Marketing Management Model ► External Analysis ► Competitor Forces Analysis ► Self-Analysis ► Strategic Posture ► Hence: Strategies ► Competitor Role Strategy ► Strategic Initiatives ► Vertical Coordination Strategies ► Need to keep in mind… ► Segment, Target & Position