Marketing

1. Chapter 1
Overview of Strategic
Marketing Management

2. 1.1 Defining Marketing &
Marketing Strategy
 “ Marketing is the management process
for identifying, anticipating and satisfying
customer requirements profitably.”
 “Marketing is a management process
whereby the resources of the whole
organization are utilized to satisfy the
needs of selected customer groups in
order to achieve the objectives of both
parties. Marketing, then, is first and
foremost an attitude of mind rather than a
series of functional activities.”

3. Marketing strategy …
 It is an organization's strategy that
combines all of its marketing goals
into one comprehensive plan.
 A good marketing strategy should be
drawn from market research and focus
on the right product mix in order to
achieve the maximum profit potential
and sustain the business.

6. 1.2 Critical Tasks of Strategic
Management
Strategic management comprises nine
critical tasks.
1. Formulate the company’s mission, including
broad statements about its purpose ,philosophy,
and goals.
2. Develop a company’s profile that reflects its
internal conditions and capabilities.
3. Assess the company’s external environment
,including both competitive and general
contextual factors.

7. ..
4. Analyze the company’s options by
matching its resources with external
environment
5. Identify the most desirable options by
evaluating each options in light of the
company’s options.
6. Select a set of long-term objectives and
grand strategies that will achieve the most
desirable options.

8. …
7. Develop annual objectives and short-term
strategies that are compatible with the
selected set of long-term objectives and
grand strategies.
8. Implement the strategic choices by means
of budgeted resource allocations in which the
matching of tasks , people , structure
,technologies, and reward systems is
emphasized.
9. Evaluate the success of the strategic
process as an input for future decisions

9. 1.3 Development of Strategic
Marketing Management
i)Budgeting
The development of budgeting management
systems can be roughly associated with the early
1900s. Can be considered to be contributing for
the development of strategic management
ii)Long-Range Planning
The second management system is long
range planning, the development of which
Igor Ansoff, long a leading strategy theorist,
has associated with the 1950s and 1960s. its
focus is on anticipating growth and managing
complexity.
The basic assumption is that past trends
will continue into the future.

10. …
iii)Strategic Planning
Strategic planning, the emergence of which is
associated with the 1960s, 1970’s is concerned
with changing strategic thrusts and capabilities.
The basic assumption is that past extrapolations
are inadequate since the future is dynamic and
that discontinuities for past projections and new
trends will require strategic adjustments.

11. …
iv)Strategic Marketing Management
Strategic market management, or simply, strategic
management, is motivated by the assumption that the
planning cycle is inadequate to deal with the rapid rate of
change that can occur in a firm’s external environment.
To cope with strategic surprises and fast-developing
threats and opportunities, strategic decisions need to be
precipitated and made outside the planning cycle.
In particular, it suggests a need for
continuous, real-time information systems
rather than, or in addition to, periodic analysis.

12. …
More sensitive environmental scanning,
the identification and continuous
monitoring of information need areas, efforts
to develop strategic flexibility, and the
enhancement of the entrepreneurial thrust of
the organization may be helpful.
Strategic flexibility involves strategic options
that allow quick and appropriate responses to
sudden changes in the environment.
Strategic market management is proactive
and future oriented.

13. 1.4 Characteristics and
Trends
i. External Market Orientation
Organizations need to be oriented externally toward customers,
competitors, the market, and the market’s environment.
In a sharp contrast to the projection-based, internally oriented,
long-range planning systems, the goal is to develop market-
driven strategies that are sensitive to the customer.
ii. Proactive Strategies
A proactive strategy attempts to influence events in the
environment rather than simply react to environmental
changes is to participate in their creation.
Second, because environmental changes can be significant,
it may be important to be able to influence them.
For example, it may be beneficial for an insurance firm to be
involved in to safety reform strategy.

14. …
iii. Importance of the Information System
An external orientation puts demands on
the supporting information system.
The determination of
What information is needed,
How it can be obtained efficiently
and effectively, and
How it should best be analyzed,
processed, and stored can be key
to an effective strategy development
process.

15. …
iv. Knowledge Management
Knowledge Management is becoming critical as they key
asset of companies increasingly is knowledge, whether it is
knowledge of technology, marketing, processes, or other
ingredient of success
v. Entrepreneurial Thrust
There is a need for the development of organizational forms
and strategic market management support systems that
allow the firm to be responsive to opportunities.
The entrepreneurial skill is particularly important to large,
diversified firms and to firm’s involved in extremely
fast-moving industries.
Such as high-tech firms or industries that produce “hit”
products such as video games, soft wares, or movies.
The strategy in such contexts must include providing an
environment in which entrepreneurs can flourish.

16. …
vi. Online Analysis and Decision Making
Organizations are moving away from relying
only on the annual planning cycle and toward
a more continuous, on-line system of
information gathering, analysis, and strategic
decision making.
The system must be structured enough to
provide assistance in an inherently complex
decision context, sensitive enough to detect
the need to precipitate a strategic choice, and
flexible enough to be applied in a dynamic set
of situations.

17. …
vii. Implementation
Implementation of strategy is critical.
There needs to be concern about
Whether the strategy fits the organization its
structure, systems, people, and culture or
Whether the organization can be changed to
make the strategy fit.
The strategy needs to be linked to the
functional area policies and the operating
plans

18. …
viii. Global Realities
Increasingly, the global dimension is affecting
strategy.
Global markets are extremely relevant to
many businesses, be it Ethiopian Airlines,
Anbesa Shoe or CBE, and it is a rare firm that is
not affected competitors either based in or with
operations in other countries.
The global element represents both direct
and indirect opportunities and threats.
The financial difficulty of a major country or a
worldwide shortage of some raw material may
have a dramatic impact on an organization’s
strategy.

19. …
ix. Longer Time Horizon
A longer time horizon is needed for most
businesses in order to create and implement
strategic initiatives need to develop assets and
competences that are needed for ultimate
success.
This requires the ability to balance discipline
and patience and the need for real time
analysis and strategy flexibility and the
pressures for short-term results.

20. …
x. Empirical Research
Historically, the field of strategy has been
dominated by conceptual contributions based on
personal experience and insights,
More recently, an empirical research tradition has begun.
The qualitative case-study approach provides useful
hypotheses and insights.
In addition, a host of quantitative research
streams compare and study the performance and
characteristics of samples of business units over
time.
These research streams can now be found in
most of the basic disciplines and in the field of
strategy itself.

21. …
xi. Interdisciplinary Developments
One purpose of this course is to draw on and
integrate a variety of disciplines that are making
important conceptual and methodological
contributions to strategic market management.
Among these disciplines, which have been
remarkably isolated from strategic market
management and each other, are the following.
◦ Marketing
◦ Organizational Behavior
◦ Finance
◦ Economics
◦ IT