… the pressure for globalization is driven not so much by diversification or competition as by the needs and preferences of customers.
Kenichi Ohmae, professor, organizational theorist, management consultant, author.
‘The Borderless World’.
In this chapter, we explore the nature and meaning of strategic marketing in driving profitable growth and contributing towards stakeholder value, including consumers, channel partners, employees, suppliers and investors.
The rise of global competition, the emergence of new technologies and the prevalence of continuous innovation have combined to redefine the external business environment for most companies. These market dynamics have given customers unprecedented value and choice, both in terms of competing companies offering similar value propositions and alternative (‘disruptive’) solutions to meet their needs and preferences.
In such conditions of consumer sovereignty companies must develop a sharp strategic focus and bring marketing to the fore in their organisations. Furthermore, it has been proven that an approach built upon the creation and implementation of effective marketing strategies can considerably improve business performance and profitability.
When combined with a structured and systematic strategic marketing planning system, organisations can proactively shape the business environment in which they compete, despite the complexities and turbulence of this increasingly ‘hostile’ external world.
In recent years there has been a slow but inexorable trend towards customer choice and power in public sectors such as health and education. Management in these areas are increasingly looking towards marketing and strategic management principles, particularly regarding efficient and effective resource allocation decisions and also communications strategies.
Financial and economic theory argues that it is impossible for investors or companies to continuously outperform the market average rate of return since any advantages they build will eventually be ‘competed away’. In this strategic marketing chapter, we demonstrate how capabilities in Market Analysis, Knowledge Management, Customer Focus and the building of sustainable differential advantages enable companies to break this fundamental economic rule.
Any organisation can master the development of these capabilities, utilising their associated frameworks, methodologies, processes and tools to make effective and efficient strategic marketing management decisions. These, in turn, underpin long term competitive success in global and domestic markets.
Finally, the theories and practice of market analysis, marketing strategy and marketing management that we explore in this chapter apply equally to large and medium-sized companies in consumer and business sectors, to manufacturing and service industries, to not-for-profit organisations such as charities and even to the smallest of firms.
- The five central principles of strategic marketing:
- Customer value: rational, emotional, experiential.
- Business environment sensitivity (aligns with Chapter One and Appendix One).
- Market segmentation.
- Sustainable differential advantage.
- The strategic marketing mix.
- Services marketing management.
- Marketing planning.
- Marketing assets and liabilities analysis (aligns with Chapter Eight).
- Company analysis: capabilities, competencies & competitive advantage (aligns with Chapter Eight and Appendix One).
- Buyer behaviour & motivations.
- Dimensions of international marketing management (aligns with Chapter Seven).
- Directional policy frameworks & portfolio planning.
- Innovation strategies (aligns with Chapter Three).
- Branding strategy & competitive positioning (aligns with Chapter Five).
- Aligning marketing strategy (where to compete) & marketing operations (how to compete).
- Building the value proposition.
- A brief overview of integrated marketing communications (aligns with Chapter Six).
- Distribution channel strategy & management.
- Pricing strategy & management.
- Organisation & implementation of marketing strategies (aligns with Chapters Seven and Eight).
After studying this chapter, readers will have the competencies to:
- Develop a thorough marketing plan based on detailed external market analysis and the creation of a strategically derived, effective, targeted, flexible and well-balanced marketing mix.
- Exploit marketing strategies as a route to driving long-term profitable organisational growth.
- Understand the role of each marketing mix element in marketing strategy creation and implementation.
- Gather and process appropriate information sources to guide strategic marketing management decisions (aligns with Chapter Two).
- Effectively blend and apply each element of the marketing mix to carefully selected target market segments.
- Assess the role of strategic marketing thinking and practice in enabling companies to outperform the market and create maximum stakeholder value.
- Justify marketing investments using traditional and innovative investment appraisal techniques.
- Apply internal marketing methods to enhance external marketing effectiveness (aligns with Chapter Eight).
- Address issues associated with the effective implementation of strategic marketing management programmes (aligns with Chapter Eight).
- Apply the principles of strategic marketing to undertake comprehensive marketing audits, to create competitive marketing strategies and to take effective and efficient marketing management decisions using proven practical frameworks, methodologies, processes and tools.
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All content © Colin Edward Egan, 2021