Foundations of Strategic Marketing Management

“Marketing” Defined

AMA Definition

The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that will satisfy individual and organizational

objectives.

Needs, Wants, & Demands

• Needs – involve a state of felt deprivation of some

basic satisfaction.

• Wants – are desires for specific satisfiers of needs.

• Demands – are wants for specific products that are

backed by an ability, willingness, & authorization to buy.

Product

• Anything offered for sale that that satisfies a need or want.

• Can consist of goods, services, and/or ideas.

Exchanges

Exchange means obtaining a desired product by offering something desirable in return.

Conditions Necessary for Exchanges to Occur

• At least 2 parties.

• Each has something valued by the other.

• Each is capable of communication & delivery.

• Each is free to accept or reject offer.

• Each feels it is desirable/appropriate to deal with the other party.

Markets

A market consists of

• all the potential customers

• sharing a particular need or want,

• who might be willing, able & authorized

• to engage in exchanges.

Company Orientations Toward the Marketplace

• Production Concept

• Product Concept

• Sales (or Selling) Concept

• Marketing Concept

• Societal Marketing Concept

Customers’ Viewpoint:Customers’ Viewpoint:What Does Marketing Provide?What Does Marketing Provide?

Utilities

Possession UtilityPossession Utility

Minimum risk and shopping time.

Place UtilityPlace Utility

Convenient Locations

Time UtilityTime Utility

Product is available when the customer needs it.

Strategic Marketing Management Strategic Marketing Management ProcessesProcesses

1. Defining the organization’s business, mission, and goals

2. Identifying & framing organizational growth opportunities

3. Formulating product-market strategies4. Budgeting marketing, financial, &

production resources5. Developing reformulation & recovery

strategies

StrategyStrategy

• A fundamental pattern of–present and planned–objectives, resource deployments,

and interactions of an organization with

–markets, competitors, and other environmental factors.

Business Definition, Mission & GoalsBusiness Definition, Mission & Goals• Business DefinitionBusiness Definition

– Essentially, determining what business an organization is inEssentially, determining what business an organization is in

– MUST be defined from a customer or market perspectiveMUST be defined from a customer or market perspective

• Business MissionBusiness Mission– Defines scope of operations and reflects management’s

vision of what the organization seeks to do.

• Business GoalsBusiness Goals– Desired levels of performance over specified time periods

– Should be problem- or future-oriented.

Identifying & Framing Growth Identifying & Framing Growth OpportunitiesOpportunities

3 Basic Questions:3 Basic Questions:1. What might we do?

• Environmental opportunities

2. What do we do best?• Distinctive/core competencies

3. What must we do?• Basic requirements to compete successfully

The SWOT Analysis

INTERNAL Strengths Weaknesses

EXTERNAL Opportunities Threats

Hierarchy of StrategiesHierarchy of Strategies

Corporate StrategyCorporate Strategy

Definition of the firm’s mission

Business-Level StrategyBusiness-Level Strategy

Competencies & Number of Mkts

Marketing (functional) StrategyMarketing (functional) Strategy

Target Markets & Mktg Mix

Types of Corporate Strategy

Growth for Current Markets

Growth for New Markets

Consolidation Strategies

Growth Strategies

Current MarketsCurrent Markets• Market

Penetration

• Product Development

• Vertical Integration

New MarketsNew Markets• Market

Development

• Market Expansion

• Diversification

• Strategic Alliances

Consolidation Strategies

Retrenchment

Pruning

Divestment

The Marketing Mix

1. Product Strategy• Kind of good, service, or idea

2. Communication Strategy• Promoting the product

3. Channel Strategy• Distributing the product

4. Price Strategy• Determining amount buyer will/should

pay for the product