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STRATEGIC MARKETING STRATEGY IS THE PROCESS OF CONVERTING A FIRMS VISION INTO LONG TERM GOALS FOR SUSTAINABLE COMPETITIVE ADVANTAGE MARKETING IS THE PROCESS OF CREATING, SERVICING AND RETAINING CUSTOMERS WITHIN A FIRMS BUSINESS ENVIRONMENT MARKETING STRATEGY INVOLVES ACHIEVING A SUPERIOR COMPETITIVE POSITION WITHIN A DEFINED MARKET(SEGMENTATION, POSITIONING, AND SUPERIOR DELIVERY MARKETING STRATEGY FOCUSES ON ONE STAKEHOLDER VIZ. THE CUSTOMER WHEREAS ORGANIZATIONAL STRATEGY FOCUSES ON ALL THE EIGHT STAKEHOLDERS STRATEGIC MARKETING IS FOCUSING ON LONG TERM MARKETING OBJECTIVES AS PART OF OVERALL STRATEGY AND SUBSUMES SHORT AND MEDIUM TERM MARKETING

EXPLAINING S.M. AND M.S. M.S IS PART OF S.M. THE DISTINGUISHING ELEMENT IS THE TIME FRAME IN STRATEGIC MANAGEMENT WE DISTINGUISH BETWEEN, SHORT TERM, MEDIUM TERM AND LONG TERM CORRESPONDINGLY THE ACTION TERMS ARE OPERATIONAL, TACTICAL AND STRATEGIC OPERATIONAL TIME FRAME IS 1 YEAR, TACTICAL IS 3 YEARS TO 5 YEARS, STRATEGIC IS 25 YEARS THE EMPHASIS THEN HAS TO BE ON THOROUGH THOUGHTFUL PLANNING WITHIN THE ABOVE LIMITS.

TWO EXAMPLES DELL COMPUTERS: STRATEGY TO GAIN AND RETAIN LEADERSHIP IN THE GLOBAL P.C. MARKET STRATEGIC MARKETING TO EMPLOY DIRECT MARKETING AND MASS CUSTOMIZATION TO ACHIEVE ITS STRATEGIC ENDS TACTICS: TO WORK OUT OF LOWEST COST MANUFACTURING AREAS AND TO EMPLOY SUPERB LOGISTICS BACKED BY OUTSTANDING INFORMATION SUPPORT. PROVIDE VARIETY ON STANDARD BASE OPERATIONAL PLANS INCLUDE Y.O.Y. INCREASE IN SALES, COST REDUCTION, IMPROVED MARKET SHARE OVER BRANDED RIVALS BOTH TACTICAL AND OPERATIONAL PLANS ARE PART OF MARKETING STRATEGY.

TOYOTA THE WORLDS LARGEST CAR COMPANY STRATEGY TO ACHIEVE GLOBAL LEADERSHIP IN AUTOMOBILE INDUSTRY STRATEGIC MARKETING FOCUS ON PASSENGER VEHICLES THROUGH PROGRESSIVE ENTRY INTO NEW SEGMENTS AND NEW COUNTRY MARKETS. TACTICS FIRST ACHIEVE CREDIBILITY AND STRENGTH IN LOW PRICED SEGMENTS(COROLLA AND CAMRY) THEN ENTER PREMIUM MARKET(LEXUS) AND OTHER SEGMENTS(S.U.V.S) FINALLY BECOME THE TECHNOLOGY LEADER(CLEAN EFFICIENT FUEL USE, SAFETY AND CONVENIENCE) OPERATIONAL TARGETS INCLUDE SALES AND MARKET SHARE INCREASE, REDUCED COSTS, IMPROVING MARGINS Y.O.Y. TACTICS AND OPERATIONAL PLANS ARE PART OF MARKETING STRATEGY.

SOME THOUGHTS ON STRATEGIC MARKETING STRATEGIC MARKETING WOULD DEVELOP PLANS FOR NEW PRODUCTS AND UNEXPLORED MARKET SEGMENTS AND SEGMENT-REGIONS A GOOD EXAMPLE IS THE INDIAN RURAL MARKET. MUCH TALK AND LITTLE ACTION CONSIDERING THE TIME SINCE TALK BEGAN THE CONVENTIONAL APPROACH IS TO TREAT THE RURAL CUSTOMER THE SAME AS THE URBAN CUSTOMER WITH A LOCATIONAL DIFFERENCE THE REALITY IS THAT THE RURAL CUSTOMER HAS DIFFERENT EXPECTATIONS DEPENDING PARTLY ON HER SOCIO ECONOMIC IDENTITY ONLY COMPANIES LIKE ASIAN PAINTS HAVE UNDERSTOOD THIS TO THEIR LONG STANDING ADVANTAGE

SOME CRITICAL DIFFERENCE BETWEEN STRATEGIC MARKETING AND SHORTER TERM MARKETING SHORT TERM MARKETING INVOLVES NEW PRODUCTS FOR A COMPANY S.M. INVOLVES NEW PRODUCTS FOR THE INDUSTRY E.G. APPLES P.C, IPOD, ITV, AND FINALLY MICROSOFTS WINDOWS WHICH WAS A CONFIGURATION DIFFERENCE. SHORT TERM MARKETING INVOLVES AD CAMPAIGNS, SALES PROMOTIONS, PRICE DISCOUNTS WHILE S.M. INVOLVES POSITIONING OF A PRODUCT OFFERING AS IN REEBOK STRESSING DESIGN AND FASHION AGAINST NIKES PERFORMANCE IN SPORTS WEAR SHORT TERM MARKETING STRESSES TAKING MARKET SHARE FROM COMPETITORS, S.M. STRESSES EXPANSION OF EXISTING MARKETS AND CREATION OF NEW ONES. FINALLY SHORT TERM MARKETING STRIVES TO FIND DIFFERENCES, S.M. STRIVES TO EXPLORE AND THEN EXPLOIT THE SAMENESS IN A BUSINESS AND IN THE UNIVERSAL MARKET.

strategy - portfolio analysis - ge matrix The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities. The company must: (1) Analyse its current business portfolio and decide which businesses should receive more or less investment, and (2) Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained. The two best-known portfolio planning methods are the Boston Consulting Group Portfolio Matrix and the McKinsey / General Electric Matrix (discussed in this revision note). In both methods, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organised. The McKinsey / General Electric Matrix The McKinsey/GE Matrix overcomes a number of the disadvantages of the BCG Box. Firstly, market attractiveness replaces market growth as the dimension of industry attractiveness, and includes a broader range of factors other than just the market growth rate. Secondly, competitive strength replaces market share as the dimension by which the competitive position of each SBU is assessed. The diagram below illustrates some of the possible elements that determine market attractiveness and competitive strength by applying the McKinsey/GE Matrix to the UK retailing market:

Factors that Affect Market Attractiveness Whilst any assessment of market attractiveness is necessarily subjective, there are several factors which can help determine attractiveness. These are listed below: Market Market growth Market profitability Pricing trends Competitive intensity / rivalry Overall risk of returns in the industry Opportunity to differentiate products and services Segmentation - Distribution structure (e.g. retail, direct, wholesale Factors that Affect Competitive Strength Factors to consider include: Strength Relative cost Record - Access to financial and of assets and competencies strength share loyalty competitors) strength innovation Size

Market Customer position (cost structure Distribution of technological other investment resources

Relative

brand

compared or

with other

Other Strategy Revision Notes:

PROFIT IMPACT OF MARKETING STRATEGY(PIMS)

HISTORY: SIDNEY SCHOEFFLER AT G.E. IN THE 1960S COMMENCED THE MOVEMENT TO STUDY WHY SOME G.E. S.B.US PERFORMED BETTER HARVARD MANAGEMENT SCIENCE INSTITUTE TOOK OVER THE MOVEMENT IN THE LATE 60S. SINCE THE 1970S THE MOVEMENT HAS BEEN LED BY AMERICAN STRATEGIC PLANNING INSTITUTE BETWEEN 1970 AND 1983 DATA FROM 200 FIRMS WITH OVER 3000 S.B.US WERE COLLECTED AND ANALYSED INFORMATION SOUGHT INCLUDED MARKETS, PRODUCTS SERVING THESE MARKETS, AND EFFFICACIES OF STRATEGIES IMPLEMENTED

AREAS ADDRESSED BY PIMS WHAT IS THE TYPICAL PROFIT RATE OF A BUSINESS? GIVEN CURRENT STRATEGIES WHAT ARE THE FUTURE OPERATING RESULTS LIKELY TO BE? WHAT STRATEGIES ARE LIKELY TO IMPROVE FUTURE OPERATING RESULTS THIS SUMMARY FOLLOWS THE WORK OF LANCASTER, MANNINGHAM AND ASHFORD SEVERAL OTHERS HAVE COMMENTED AND EVEN PRAISED PIMS INCLUDING THE NOTORIOUS TOM PETERS. WE EXCLUDE THEM

VARIABLES FOUND TO ACCOUNT FOR BUSINESS SUCCESS MARKET SHARE, INVESTMENT INTENSITY, MARKET GROWTH, PRODUCT QUALITY, COSTS MARKETING EXPENSES TO SALES RATIO AND LOW REQUIREMENT FOR CAPITAL INVESTMENT SOME OF THESE AS THE INVESTMENT VARIABLES ARE CONTRADICTORY, SOME ARE RELATED BUT NOT COMPLEMENTARY AS IN MARKET SHARE AND MARKET GROWTH IN BRIEF WHILE EACH OF THE VARIABLES ARE RELEVANT, IT IS THE RELATIONSHIP TO THE MARKET AND THE CONTEXT THAT WOULD DETERMINE THE VALIDITY OF CONCLUSIONS

OFFICIAL CRITIQUE ELEMENTS OF P.I.M.S. 1. THE STUDIES WERE BIASED TOWARDS METAL WORKING COMPANIES SPEC. AUTO COMPANIES 2. THE STUDIES WERE BIASED LARGER MORE BUREAUCRATIC COMPANIES SMALLER MORE ENTREPRENEURIAL ONES LESS WEIGHTAGE 3. MISTAKING CORRELATION FOR CAUSATION E.G. MARKET SHARE AND PROFITABILITY 4. RESPONDENTS DEFINING MARKETS CONVENIENTLY TO MAKE THEIR COS LOOK GOOD IN THE STUDIES OVERALL THIS IS ONE MORE FLAVOUR OF THE DECADE MANAGEMENT TALISMAN. NOT ENTIRELY USELESS BUT OF LIMITED USE AT BEST AND DANGEROUSLY MISLEADING AT WORST

PGDM PROGRAMME COURSE OUTLINE I.T.S Institute of Management 46, Knowledge Park-III, Greater Noida
Course Title : Strategic Marketing PGDM : 2007-2008 Term : III Trimester Objectives: 1.To develop an appreciation for the macro view of the emerging marketing opportunities & difficulties, and also to develop a broader marketing decision -making orientation to recast tactical day-to-day operations in line with macro environmental changes. 2. To inculcate the art of developing competitive marketing strategy in the real life business situation. Evaluation Quizes/ Class Activity Group Presentation/ Assignments Mid-Term Examination End Term Examination Text Books: 1. Strategic Marketing Graeme Drummond, John Ensor Butterworth Heinemann Reference Books: 1. Peter Schmaars; Marketing Strategies; Free Press, New York 2. M.J. Xavier; Strategic Marketing; Response 10% 20% 25% 45%

Serial No. 1

Session 1&2

Unit Unit I

Topic Introduction to Strategy as the process of converting a firms vision into Long term goals to enable a firm to compete with sustained advantage in its business environment. The concept of marketing as the creation, servicing and retention of Customers and Markets Basic concepts of marketing. Needs, wants, demand. The concept of the Universal customer and her expectations. Understanding technology as the driver to meeting these universal expectations. The stakeholder concept.

3&4

Unit I

5&6

Unit II

Understanding what Strategic marketing is in relation to overall company strategy. The critical importance of knowing the difference between Long term, medium term and short term. Illustrations of strategic, tactical and operational marketing with two firms viz. Dell Computers and Toyota Motors. Introduction of the framework of the Diffusion of technology in strategic marketing vis a vis the 4 Ps of Marketing. Use of the Competitive Landscape model linking Customers and Markets with Products and Services and Technology.

7&8

Unit II

Some thoughts on Strategic Marketing. SM would explore new products for yet to be accessed markets in terms of regions as well as segments. The extremely misunderstood Indian rural market. The one firm who has understood and successfully accessed the Indian rural Market Asian Paints. The practical experience of Timex in India. The reality of the rural market and what conditions are needed macro economically and for individual firms to succeed here. Major differences between Strategic Marketing and Shorter term marketing. Products for the company meet shorter term marketing objectives while products for the industry meet strategic marketing objectives. Apple the strategic marketer. Sony and Matsushita tactical marketers. Sony Walkman and VCR examples of Strategic marketing, Imitators of these including Matsushita have achieved better results. Analysis of the causes. Need to marry Strategic and Tactical Marketing objectives and efforts Analysing the role of the other 3 Marketing Ps in Strategic Marketing viz Distribution(Place). Examples of Titan and Tata Motors establishing unbeatable advantages through building excellent widespread distribution infrastructure that Global companies are unable to replicate at competitive costs The role of Promotion including Advertising in furthering the competitive cause in Strategic Marketing. The need for Communication to be relevant and credible and to reflect the real competitive proposition. The danger of making claims which are neither relevant nor credible. Examples of Indian telecom Vodaphone, Airtel. The illustration of credibility for Timex in the U.S. watch market The tragic case of Pepsi and Coke in India Pricing the Critical variable in Marketing. Discussing Porters maxim of either one of Differential i.e. Premium Pricing or Cost Leadership. Strategic Pricing has to follow the Technology curve

9 & 10

Unit III

11 & 12

Unit III

13 & 14

Unit IV

15 & 16

Unit IV

logic. Tactical pricing depends on the relative position of the market player viz. Market leader or new entrant follower. The inevitability of Lowering prices progressively in a competitive market. The difference between pro active pricing as a competitive weapon and reactive/responsive pricing. Examples of Honda versus Yamaha and Apple versus itself. 9 17 & 18 Unit V Integration of the Marketing mix variables to sustain competitive advantage. The relative power of Place and Price over the other two variables. How technology is the final enabler and the understanding of its role is most significant in taking Pricing as well as product decisions to beat and stay ahead of the competition. Toyota the great Marketing company who has leveraged its Manufacturing, Technical, Marketing and Financial skills to become the worlds No.1. Car company Global Marketing requires the vision to think Universally but act and think locally to get the best advantages of successful expansion into other country markets. The example of Kellog misunderstanding the Indian breakfast food market and MacDonalds paying respect to it and making a strong abiding presence in the worlds most difficult market. Discussion of GE and BCG matrices and PIMS.

10

19 & 20 Unit V

Prof. R.J. Masilamani