1. Session 1 Strategic Marketing – Introduction & Scope group3

2. 2 Market-Driven Strategy

3. 3  Market-Driven Strategy  Becoming Market Oriented  Distinctive Capabilities  Creating Value for Customers  Becoming Market Driven  Challenges of a New Era for Strategic Marketing Market-driven Strategy

4. 4  Starting point for business strategy: market and customers  Must have: clear understanding of markets, customers, and competitors.

5. 5 Achieving Superior Performance Determining Distinctive Capabilities Customer Value/ Capabilities Match Becoming Market- Orientation Characteristics of a Market- Driven Strategy

6. 6 Why Pursue a Market- Driven Strategy?  Strong supporting logic  Achievements of companies displaying market-driven characteristics are impressive  Example: Zara Boutique (Spain) – Cross Functional Feature

7. 7 Becoming Market Oriented  Customer is the focal point of the organization  Commitment to continuous creation of superior customer value  Superior skills in understanding and satisfying customers  Requires involvement and support of the entire workforce  Monitor rapidly changing customer needs and wants

8. 8  Determine the impact of changes on customer satisfaction  Increase the rate of product innovation  Pursue strategies to create competitive advantage

9. 9 Characteristics of Market Orientation  Customer Focus What are the customer’s value requirements?  Competitor Intelligence Importance of understanding the competition as well as the customer  Cross-Functional Coordination Remove the walls between business functions  Performance Consequences Market orientation leads to superior organizational performances

10. 10 Information Acquisition Cross-Functional Analysis of Information Shared Diagnosis and Coordinated Action Delivery of Superior Customer Value Becoming a Market-Oriented Organization

11. 11 Distinctive Capabilities “Capabilities are complex bundles of skills and accumulated knowledge, exercised through organizational processes, that enable firms to coordinate activities and make use of their assets.” Example: Southwest Airline

12. 12 Capabilities Desirable Capabilities Desirable Capabilities Applicable to Multiple Competition Situations Difficult to Duplicate Superior to the Competition

13. 13 Types of Capabilities Outside-In Processes Inside-Out Processes Spanning Processes

14. 14 Organization’s Process Spanning Processes Outside-In Processes Inside-Out Processes EXTERNAL EMPHASIS INTERNAL EMPHASIS  Market sensing  Customer linking  Channel bonding  Technology monitoring  Customer order fulfillment  Pricing  Purchasing  Customer service delivery  New product/service development  Strategy development  Financial management  Cost control  Technology development  Integrated logistics  Manufacturing/ transformation processes  Human resources management  Environment health and safety

15. 15 Value Requirements Distinctive Capabilities Matching Customer Value and Distinctive Capabilities

16. 16 Creating Value For Customers Customer Value:  Value for buyers consists of the benefits less the costs resulting from the purchase of products.  Superior value: positive net benefits Creating Value:  “Customer value is the outcome of a process that begins with a business strategy anchored in a deep understanding of customer needs.”

17. 17 Creating Value for Customers Benefits Costs Customer Value

18. 18 Value Composition Monetary costs Time Psychic and physic costs Product Services Employees Image Benefits Costs (sacrifices) Value (gain/loss)

19. 19 Becoming Market Driven Market Sensing Capabilities Customer Linking Capabilities MARKET-DRIVEN STRATEGIES

20. 20 Market Driven Initiatives Market Sensing Capabilities –Effective processes for learning about markets –Sensing:  Collected information needs to be shared across functions and interpreted to determine proper actions. Customer Linking Capabilities –Create and maintain close customer relationships

21. 21 Aligning Structure and Processes –Potential change of organizational design  Improve existing processes  Process redesign –Cross-functional coordination and involvement –Primary targets for reengineering:  Sales and marketing, customer relations, order fulfillment, and distribution

22. 22 Challenges Of A New Era For Strategic Marketing  Strategic marketing faces unprecedented challenges and opportunities: Turbulent markets Intense competition Disruptive innovations Escalating customer demands  Escalating Globalization  Technology Diversity & Uncertainty ( Example: eBay )  Ethical Behavior and Social Responsiveness of Organizations

23. 23 Corporate, Business and Marketing Strategy

24. 24 Corporate, Business And Marketing Strategy  Corporate strategy  Business and marketing strategy  Marketing strategy process  Internet strategy  Preparing the marketing plan

25. 25 Corporate, Business And Marketing Strategy

26. 26 Corporate Strategy Deciding the Scope and Purpose of the Business Business Objectives Actions and Resources for Achieving Objectives

27. 27 Characteristics Of Successful Strategy  Unique competitive position for the company.  Activities tailored to strategy.  Clear trade-offs and choices vis-à-vis competitors.  Competitive advantage arises from fit across activities.  Sustainability comes from the activity system not the parts.  Operational effectiveness a given.

28. 28 Organizational Change Vertical Disaggregation Internal Redesign New Organizational Forms

29. 29 Corporate Strategy Components  Management’s long-term vision for the corporation  Objectives  Assets, skills, and capabilities  Businesses in which the corporation competes  Structure, systems, and processes  Creation of value (competitive edge)

30. 30 Business And Marketing Strategy  Developing the strategic plan for each business  Business and marketing strategy relationships  Strategic marketing: –Developing a vision about the markets of interest to the organization, select market target strategies, setting objectives, and developing, implementing and managing the marketing program positioning strategies designed to meet the value requirements of customers in each market target

31. 31 Marketing Strategy Process Situation Analysis Marketing Program Development Implementing and Managing Marketing Strategy Designing Marketing Strategy

32. 32  Strategic situation analysis  Market vision, structure and analysis  Segmenting markets  Continuous learning about markets Example: Google Case Marketing Strategy Process

33. 33 Situation Analysis Market Vision, Structure, and Analysis Continuous Learning About Markets Segmenting Markets

34. 34 Designing Market- Driven Strategies Relationship Strategies Market Targeting and Strategic Positioning Planning for New Products Market-driven Strategies

35. 35 Positioning Strategy Development Product strategy Distribution strategy Promotion strategy Price strategy Market target Positioning strategy

36. 36 Implementing and Managing Market-Driven Strategy Designing Effective Market-Driven Organizations Strategy Implementation and Control Implementing And Managing Market-driven Strategy

37. 37 Marketing Plan Outline I. Strategic Situation Summary I. Market-Targets and Objectives I. Positioning Statements I. Market Mix Strategy for Each Market Target I. Forecasting & Budgeting I. Contingency Planning

38. 38 International Planning Process