Strategic Marketing

Lecture 1
The Changing World of Marketing &
Strategic Thinking and Strategic Decision-Making

Michael Baird

Text

Reed, P., Jain, S.C., Haley, G.T., Voola, R., Wickham, M.,
Ferrell, O.C. & Hartline, M. (2015). Strategic Marketing.
South Melbourne, Victoria: Cengage Learning.
eBook available - https://
www.cengagebrain.com.au/shop/isbn/9780170367455
This text is a combination of three other text books:

Jain, S.C., Haley, G.T., Voola, R. & Wickham, M. (2012).

Marketing Planning and Strategy. South Melbourne,
Victoria: Cengage Learning.
Reed, P. (2015). Strategic Marketing: Decision Making and
Planning. South Melbourne, Victoria: Cengage Learning.
Ferrell, O.C. & Hartline, M. (2014). Marketing Strategy: Text
and Cases. Mason, Ohio: Cengage Learning.

The Changing World of Marketing

No organization can avoid coming to grips with the rapidly

evolving behaviour of consumers and business customers.
They check prices at a keystroke and are increasingly
selective about which brands share their lives. They form
impressions from every encounter and post withering
online reviews these changes present significant
organizational challenges, as well as opportunities. The
biggest is that all of us have become marketers: the
critical moments of interaction, or touch points, between
companies and customers are increasingly spread across
different parts of the organization, so customer
engagement is now everyones responsibility.

Tom French, Laura LaBerge and Paul Magill

Five no regrets moves for superior customer engagement,
McKinsey Quarterly, July 2012, p. 1

The Evolution of Marketing Thought

and Practice

Marketing Thought and Practice

- The formative years (Late 1700s-1950s)

The notion of satisfaction of consumer needs

the idea that consumer needs and wants

should be the starting point for business
thinking is certainly not revolutionary. For a
century or more, economists have made
assertions that the aim of our economic and
business structure and its functioning was the
satisfaction of consumer needs.

H.R. Tosdal, Some recent changes in the

marketing of consumer goods, Harvard Business
Review, X1, no. 2, January, 1933, p. 157.

Marketing Thought and Practice

- The marketing management school of thought

(1950s-late 1980s)

The marketing
concept

New concepts
Marketing mix 4Ps
(1960>)
Consumer behaviour

Drucker (1954),
McKitterick (1957), Levitt
(1960), Keith (1960),
McCarthy (1960>), Kotler
(1967>) The practice of marketing
Establishment of marketing
departments
Marketing responsible for
advertising, sales and market
research
Marketing as a general
management responsibility

Marketing Thought and Practice

- The marketing management school of thought

(1950s-late 1980s)

Prevailing definitions of
marketing

Marketing is the
performance of business
activities which direct the
flow of goods and
services from producer to
consumer or user in order
to satisfy customers and
accomplish the
companys objectives.

E.J. McCarthy & W.D. Perreault,

1960

Marketing is human
activity directed at
satisfying needs and
wants through
exchange processes.
Kotler, 1967

Marketing Thought and Practice

- Marketing as an integrated organisational process

(late 1980s-2000s)
Organisation-wide
Marketing concepts and
concepts and practices
practices
Total quality management
Customer service
(TQM)
Customer satisfaction
Just-in-time (JIT)
measurement (CSM)
Strategic alliances and
Services marketing
networks
Relationship management
Organisational culture
Customer relationship
Organisational change
management (CRM)
Strategic planning
Brand equity
management
Customer lifetime value (CLV)
Concept of competitive
Customer equity
advantage
Marketing accountability
Concept of the value chain
Market orientation
Corporate social responsibility
Stakeholder theory

Marketing Thought and Practice

- Marketing as an integrated organisational process

(late 1980s-2000s)

The prevailing definition of marketing

Marketing

is the process of planning and

executing the conception, pricing,
promotion, and distribution of goods,
services, and ideas to create exchange
processes with target groups that satisfy
customer and organizational objectives.
American Marketing Association, 1984

The digital era (2000s current)

From Web-as-an-information source (Web 1.0)

to Web-as-a participatory platform (Web 2.0)

A catalyst for disruptive innovation

Shift from customer satisfaction to enhancing

the customer experience and customer
engagement

Recognition of importance of identifying

customer touchpoints

A shift from desktops to mobile devices and

cloud storage

The new marketing paradigm customer

value creation, communication and delivery

A call for change in marketing thinking: A shift

from the exchange/marketing mix paradigm to
customer value creation. Driven by:
Thought leaders
New
For example:
concepts/paradigms
Webster 1992
Relationship marketing
Woodruff 1997
1980s>
Slater 1997
Services marketing 1980>
Market orientation 1990s>
Co-creation 2000s>
The digital revolution
Web 1.0
Web 2.0
Customer engagement
Customer touchpoints

AMAs Definitions of Marketing

The transformation in marketing thinking can be

seen in the AMAs definitions of marketing 2004 and
2007
Marketing is an organisational function and a set of
processes for creating, communicating and delivering value
to customers and for managing customer relationships in
ways that benefit the organisation and its stakeholders.

September 2004

Marketing is the activity, set of institutions, and processes

for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners
and society at large.

October 2007

What is Strategic Marketing?

There are many definitions of strategic

marketing

Definition 1:

The process of developing and maintaining a

strategic fit between the organisations goals and
capabilities and its changing marketing
opportunities.
It relies on developing a clear company mission,
supporting objectives, a sound business portfolio
and coordinated functional strategies.
(Kotler et al. 2010)

What is Strategic Marketing? (contd)

Definition 2

A market-driven process of strategy development

that takes into account a constantly changing
business environment and the need to deliver
superior customer value.
(Cravens and Piercy 2003)

What is Strategic Marketing? (contd)

Definition 3

Using its relative corporate strengths to achieve

maximum positive differentiation over competition
in meeting customer needs
(Jain and Haley 2009)

What is Strategic Marketing? (contd)

1. Its about MARKETING

How to go about providing superior value to

your target market

2. Its about STRATEGIES

Developing specialised tools to proactively

generate targeted change.

3. And its about PLANNING

Making decisions today about being effective

and successful tomorrow.

 Strategic

thinking . . . is about
synthesis. It involves intuition
and creativity.
Henry Mintzberg

H.

Mintzberg, The fall and rise of

strategic planning, Harvard Business
Review, JanuaryFebruary 1994, p. 108.

Ultimately Strategic Marketing

is all about being smarter than
your competition
(and learning how to do this)

Strategy Planning

Strategy planning is a process that embraces

two separate, but related, activities:

strategy formation deciding what to do

planning deciding how to do it

That is, planning is all about programming

strategies and then elaborating and
operationalising their consequences

Strategy is the starting point of planning.

Planning helps to translate intended
strategies into realised strategies

Marketing Decision Making

Marketing strategies may be developed as:

a part of a broader based formal strategic

planning process

a part of a broader based set of strategy

deliberations made outside of formal strategy
planning processes

a formal strategic marketing planning process

marketing strategy recommendations made

outside of formal processes

What does Strategic Marketing involve?

Collecting information

Analysing information

Deep understanding

Identifying opportunities and issues

Primary, secondary about 3Cs as well as PESTEL

environment

Using analytical models and tools

Applying creativity

Desirable, Differentiated and Defensible

What does Strategic Marketing involve?

Applying planning skills and informational inputs

Assessing industry and competitive trends

Applying foresight and creativity

Projecting market niches and market share

possibilities

Using analytical models and tools to evaluate

The internal and external situation

Alternative potential strategies to achieve desired
market positioning

Characteristics of Strategic Marketing

Emphasis on long-term implications / big picture

Competing for corporate resources to achieve

corporate objectives by the operations of a
particular business unit

Varying roles for different products and markets

NOT all trying to make buckets of money or
maximise sales

Sustainable competitive advantage

Marketings role in the organisation

Strategic Marketing is focused at the
SBU level
Organisational Level

Formal Name

Focus

Corporate
e.g. QANTAS

Corporate Marketing

Corporate issues
Why are we here
What do we want
How do we do this

Strategic Business
Unit
(e.g. In-flight
catering)

Strategic Marketing

Ensuring ongoing
overall success of an
SBU in meeting the
goals of the
corporation

Product/market
(e.g. Economy class
meals, First class
meals)

Marketing
Management

Formulate marketing
programs for specific
products

Focus of Strategic Marketing

1. Corporate Level

Management of the entire spectrum of businesses

Resource allocation, acquisitions, mergers

2. Strategic Business Unit Level

Focus on 3Cs: customer, competition,

corporation
Where to compete
How to compete
When to compete

3. Functional (individual product) level

Marketing management
Specific design of product, ad campaign etc
1 year plan

The Strategic Business Unit (SBU)

Definition:

A unit comprising one or more products having a

common market base who manager has complete
responsibility for integrating all functions into a
strategy against an identifiable competitor.

Example: QANTAS started out as an Outback airline

servicing Queensland and Northern Territory.

Expanded into a national and then an international airline.

Expanded into other areas where they believed they could operate
successfully.

Why break up a company into SBUs?

Major problems arise when trying to treat distinct businesses

in the same way.

What is required for success in one business is very different

to what is required for success in another business.

Businesses need to expand into new areas to keep growing.

Different critical success factors, different strategies required

for success, so need to be treated differently.

Unreasonable to expect any one person to have this in-depth

knowledge, and to keep up to date in all areas yet this is
what is required unless you split a business up into SBUs.

By focussing on one area, you can do it well. Try and do too

much, and you dont end up doing anything well.

How do we identify SBUs?

Breaking an organisation down into

its SBUs
1.
2.
3.
4.

Unique business mission why it exists is

different to other SBUs
Clearly definable set of competitors
SBU Manager has autonomy / authority over
resources in other areas
Competes with other SBUs within the
organisation for resources based on their
respective abilities to achieve the
corporations objectives

Summary: Strategic Marketing differs from

Marketing Management

3Cs not 4Ps

Timeframe - longer term

Ceteris Paribus (all things being equal or held

constant) assumption abandoned

Organisational behaviour / integration is the key

Creativity and originality NOT experience / control

Proactive and forward-focussed

Working on the business NOT in the business

Overview of the Unit

Strategic Marketing is all about looking out from the company at

its environment

A company should maximise the strategic fit between its own

strengths and resources and the environment in which it exists.
Its strategies need to flow directly from this if they are to succeed.

The company needs to manage ongoing change in its

environment - whether reactively or proactively

Section One (Week 1 - 6) focuses on

1) establishing exactly where the company is currently
and:
2) where it wants to be in 3-5 years.

Section Two (Week 7 - 11) focuses on how to get from

where it is now to where it wants to be what strategies
to use and issues to be aware of to generate this change.

Unit Assessment Structure

Value %

Date Due (BENTLEY Campus)

Unit Learning Outcome(s)

Assessed

Case Study Analysis

(Individual)

20

5:00pm Friday, 1 May 2015

3, 5

Strategic Marketing Plan

(Group)

30

5:00pm Friday, 15 May 2015

2, 4, 5

Strategic Marketing Plan

Presentation (Individual)

10

Within Tutorial

1, 4, 5

Final Examination
(Individual)

40

Examination Period

1, 3, 5

Task

To develop an effective Strategic Marketing Plan, you must:

1) Be able to search for and locate the necessary information
(i.e. conduct secondary research)
2) Obtain this information and communicate it to others
3) Analyse this information and present it so that others can
also see the key patterns and exceptions within the
information what the information actually means for the
client.
4) Based on this come up with the key changes (i.e.
strategies) that your client must make to be successful in
the future.

Other matters

Lecture notes on Blackboard

Unit Outline on Blackboard

Good Luck!

The End