Strategic marketing involves the differentiation of an organization by identifying its competitive advantages and focusing its resources on exploiting them. The intense competition in the market place which has been occasioned by the advancement of technology and the internet has made it impossible for organizations to remain relevant in business without use of strategic marketing. Therefore, there is increased demand for strategic marketing personnel who collaborate with the existing marketing staff to identify and develop the competitive advantages of an organization. However at Total Marketing Solutions (TMS) we have come up with a complete package that will have instantaneous impact. We have developed a pool of highly qualified strategic marketers who are well versed with all sectors of the economy and are therefore able to conduct a company analysis, identify the competitive advantages and recommend suitable strategies in record time. However, this does not mean that strategic marketing is an easy task but with the right information and resources it’s less complex.
THE INFORMATION PACK
Role of Strategic Marketing
Success in the current highly competitive markets can only be guaranteed by only one thing, strategic marketing. The market reaction however seems to change year after year making strategic marketing all more tricky and difficult. However, there are a set of guidelines which guide the strategist in coming up with the most appropriate approach; these are the principles of strategic marketing. An article in Forbes magazine outlined four main principles which will be in use for quite some time since they are addressed to solve the digital age problems. The first principle is clarification of business objectives which aim is to have an objective and specific goal which the organization should achieve rather than just making as many sales as possible. It is guided by three pillars which are awareness, sales and advocacy (Satell, 2013).
The second principle is the use of innovation teams to identify, evaluate and activate emerging opportunities which are actually the trend of the digital era. Information is moving really fast, and no organization can afford to be left behind, there is a need to keep tab with the trends. However, the innovation team has a duty of running test-and-learn programs so as to evaluate the true potential of the opportunities and trends (Satell, 2013). Separation of strategy and innovation is another principle whose aim is to make the two processes successful. Innovation is a process through which an organization develops a completely new product which may succeed or fail. Strategy, on the other hand, is a process of achieving a specific objective or goal and failure is not an option. Finally, the fourth principle is building of open assets in the marketplace whose aim is to create awareness about the organization’s products.
The principles are just guidelines to the actual importance of strategic marketing which are its roles. The primary role is identification and creation of value for the organization through strongly differentiated positioning (Ranchhod & Marandi, 2005). This is achieved by not only market research but also influencing an organization’s culture to create a customer focused environment. Strategic marketing involves the creation of a specific competitive position using marketing tools such as brands, innovation and pricing among others. It is also entitled with the role of ensuring coordination between various departments and ensuring that the entire organization is at par during strategy implementation (Ranchhod & Marandi, 2005).
Strategic marketing is not only focused towards selling the end product but is also involved in the innovation process whereby it streamlines the product development (Edmunds, 2014). Through marketplace research, target market analysis and competitors’ strategies analysis, the marketers are able to furnish the production department with the specifications of the new product. Prices which play a very important part in sales are also determined by the marketers who come up with optimal prices for each product. Strategic marketing is crucial for the long-term success or market position of the organization since it is the process through which the organization creates its brand image (Edmunds, 2014). Through effective marketing and distribution strategies an organization can make strides in the market as well as create a loyal customer base which is very crucial for any organization. Strategic marketing is, therefore, not only important in driving sales, but it’s at the core of the operations and success of any organization.
Value of Strategic Marketing Models
Strategic marketing is a complex process and, therefore, uses various models in its application. These processes are aimed at simplifying the application of the process as well as making the process more effective. The main models include porters five forces model, SWOT analysis, PESTLE analysis, Ansoff Matrix and product life cycle model among others. Each of these models has its unique characteristics and is most effective in a specific scenario. For instance, the SWOT analysis is most effective when used as an internal analysis tool while the PESTLE analysis is more effective in external environment analysis. Therefore, these processes posses various values which make their use important in strategic marketing.
SWOT analysis is a tool that is used to analyze the overview of an organization’s strategic situation. It’s a tool that is self-oriented as it focuses on the opportunities, strengths, threats and weaknesses of the organization. Through the analysis, an organization may discover new opportunities such as untapped markets or identify and solve threats such as shifts in customer preference and take the necessary measures. PESTLE, on the other hand, focuses on the external environment and its probable impact on the analysis. It entails the study of the political, economic, social, technological, leadership and environmental factors affecting the business. The model provides a summary of the driving forces of the macro environment, and an organization can use the information to position itself strategically for future market trends (Recklies, 2006).
Porters five forces model is an analysis of the competitive forces affecting an organization and is useful in day to day running of the business. This model is used to diagnose the principal competitive pressures in the market and assess their strength. It involves the identification of the powers of the stakeholders namely the suppliers, consumers, competitors, new entrants and substitutes. The five forces model is also a useful tool in the analysis of a specific industry since the pressures are shared among the players in the industry. The final crucial model is the Ansoff matrix which is specifically marketing oriented. The model indicates various approaches that are applicable to a product in relation to the market and the market relating to the product. The model is very useful in developing a marketing plan as it gives a guideline on which approach is more appropriate.
Relationship between Corporate and Marketing Strategy
A strategic plan generally gives direction to the efforts of the organization and facilitates the understanding of marketing research, product distribution and promotion, consumer analysis and price planning dimensions. Corporate strategy, therefore, is the central scheme which utilizes and integrates resources in areas of finance, production, research and development, human resources and marketing so as to achieve the desired goals and objectives (Ferrel and Hartline, 2011). It’s the facilitator of the strategic plan. This implies that marketing strategy is a subsidiary of the corporate strategy. This is further emphasized by the fact that the marketing sstrategy is subject to the organization’s mission and vision statement which are part of the corporate strategy. Moreover, the corporate strategy defines the capabilities and powers of the organization which limit the extent of the marketing strategy (Ferrel and Hartline, 2011).
The fact that marketing strategy is subsidiary to the corporate strategy however does not mean that it’s less important. The formulation of the corporate strategy is dependent on market research which is used in the setting of goals and objectives for the organization. It also contributes to the definition of the corporate strategy through the analysis of consumer practices and the environment. Competitive advantage which is a crucial aspect of the corporate strategy is also a product of market analysis (Viardot, 2004). The two strategies are, therefore, interdependent, and their success anchored upon each other. An intelligently crafted marketing strategy can be ruined by absence of vision or underestimation of the resources available while a visionary and objective corporate strategy maybe unsuccessful if utilized with a poor marketing strategy (Viardot, 2004). Therefore, the two strategies can be said to be inseparable if they are to be effective.
The relationship between the two strategies brings up the concept of relationship marketing which essentially involves marketing efforts which main aim is to establish a close and trusting relationship between the organization and its customers. The concept goes beyond the customers and involves the employees, distributors and suppliers. It’s a symbolic concept in strategic marketing as it symbolizes the shift from traditional transaction marketing (TM) which focused solely on competition and conflict to a strategic approach which focuses on mutual interdependence and cooperation between organizations. Relationship marketing mainly focuses on partners and customers rather than the products, puts more emphasis on customer retention and relies on cross-functional teams rather than departmental level work. Relationship marketing has also been referred to as the ability of a brand to create an emotional connection with a customer (Olenski, 2013) introducing emotions which is a new concept in marketing.
Development of Marketing Strategies
Having analyzed the various aspects and components of a marketing strategy, developing of a marketing strategy is not a complex process. It involves the identification of the various factors affecting the organization through one or several models and then developing a strategy that focuses on the set goals. The first step involves identification of the target market which involves various techniques such as positioning and segmentation (McLoughlin & Aaker, 2010). The next step is the analysis of the market and the marketing environment in which the target customers exist. One of the most used models is porters five forces model which involves the analysis or profiling of the competitors and suppliers so as to determine which position the organization should take in the market. It also involves identification of the purchasing power of the consumers and the threat of new entries. All these factors culminate in the determination of the competitive rivalry in the target market. This process may also involve the application of the Ansoff matrix which is useful in determining which marketing approach to use in the market.
The final process is the identification of which marketing tools the strategy will use in the actual marketing. Though marketing has an endless number of approaches an organization should single out two key approaches for the target market. This is useful because it helps in determining the cost of the marketing process and the returns it should make. The 7 Ps model is useful in determining which approach to use since it identifies the product, the price, place, promotion process, physical evidence and people who will be used in the marketing process. Once the strategy has been finalized its advisable to carry out a pilot strategy so as to determine the effectiveness of the strategy and probable flaws which should be addressed before the main strategy is rolled out.
APPLICATION OF STRATEGIC MARKETING
Marketing Techniques and Objectives
The market usually offers a very unique challenge for an entrepreneur because however much research you carry out a business cannot anticipate all the surprises of the market. Therefore for an entrepreneur what is of great essence is preparedness which is gained by an analysis of the market. Analysis of the market helps the entrepreneur determine which specific part of the market has the highest potential for sales. There are two main techniques which are involved in market analysis; there is target marketing and market segmentation. Market segmentation involves the subdivision of the market into several groupings with each group being identified for its unique preferences. Targeting on the other hand involves choosing of one of the market segments and using techniques that are most effective in the specific segment.
Market segmentation is useful to any business since the strategic marketing tool makes marketing a lot easier. There are various bases for segmentation in any particular market which is influenced by the type of product being sold and the organization’s objectives (Moschis, 1994). This technique uses four main approaches namely demographics, psychographics, behavior and geographical location each of which produces different results when applied.. Once the segments have been identified the prospective seller identifies a segment of his choice and uses the appropriate marketing techniques such as promotions, advertising or personal selling. The segments are, therefore, very important in determining which marketing technique the firm applies (McLoughlin & Aaker, 2010).
Targeting involves three strategies which are useful in determining which segment to choose. Undifferentiated targeting views the market as a single group and, therefore, uses a single-marketing strategy for the entire markets. This approach can only be successful in a market where there is little or no competition. The second strategy is the concentrated targeting which focuses on a particular segment of the market, therefore, having exclusive information and characteristics of the market which is crucial for successful marketing in the segment. This is a technique that is usually used by small businesses since they have limited resources, but can compete comfortably against big firms in the segment. Multi-segment targeting is the third approach and usually involves the organization targeting various segments of the market and using various marketing techniques for the segments. This is the most effective approach however it’s quite expensive and only large firms are able to use this approach. The trends have however considerably changed with the emergence of real-time consumption pattern analysis which is facilitated by advances in technology (Ferrel and Hartline, 2011).
An analysis of the market determines which technique to use among the many available. Once a business is well established in the market and is achieving its objectives and sales target, the next step is adopting a growth strategy or growth oriented marketing strategy. There are various growth strategies which an organization can adopt depending with the executive approach. An organization can adopt a market penetration approach, a market expansion, diversification or an acquisition strategy all which contribute to the growth of the organization.
When developing a marketing strategy, there is always a specific goal that the strategy aims to achieve after a specific period, this is known as the objective. It is defined as a statement of what is to be accomplished through marketing objectives (Lamb, hair and McDaniel, 2003). It is usually guided by the mission, vision and values of the organization. Objectives can be developed using the top-down approach where senior managers develop objectives and strategy or a bottom up strategy whereby the duty is devolved (Drummond and Ensor, 2008). However, for an objective to be useful it must be specific, measurable, achievable, realistic and time bound (SMART). The objectives must also show consistency with the organizations priorities.
Approaches to External and Internal Environment Analysis
The environment in which an organization operates is very influential on the outcome of the organization’s activities. This is because it forms part of the organization’s market, and part of its suppliers thus weigh heavily on its operations. Owing to the fact that the environment is made up of various constituents, there are several approaches to analyzing the environment and each of the approaches should not be considered wrong or right but rather more or less useful in reference to a particular setting (Rabin & Miller, 2000).
In order to develop a competitive advantage, organizations have to analyze both the internal and external environment and there are no better tools than the SWOT and PESTLE analysis. The first two components of SWOT analysis i.e. Strength and Weakness form the internal environment. The strength of the business is crucial in formulating the marketing strategies as it identifies the potential of the organization in terms of finances, product and staff quality and market position among other factors while the weaknesses identify just how far the organization can stretch its resources in terms of finances, production rate and staff members among other factors.
PESTLE analysis on the other hand involves the analysis of the external environment and is also as important to the operations since it helps in determining which strategy to apply in the internal operations of an organization. The P represents political factors such as stability, levies and legislation; E represents the Economic factors such as a recession or a flourishing economy which favorable for business; Social factors represent social trends and practices which a business might exploit such as the social media or smartphone market; T represents technology which is very important in developing a competitive advantage; L represents Leadership, which has become an integral part in the success of any organization and finally E represents the Environment which the business need to be responsible to.
How Internal and External Analyses are Integrated
Analysis of the impact and the importance of both the internal and external factors and how the two integrate is the simplified definition of strategic management. However in our case we are analyzing strategic marketing whose interest is vested on the impact of the two factors. Combination of the two aspects constitutes a method of analyzing the environment in which a business operates which is known as the context analysis. The SWOT model is an integral part of the process since it’s an integration of the two environments and is very useful in analysis of the relationship of the business with the market. The concept of context analysis which we identified earlier is the tool used in collaboration with external and internal inputs to create strategies which use the information at the disposal of an organization to pursue a competitive advantage.
Integration however can either be within the two factors or between the two factors. The goals are however similar in that its main aim is to unify functions into a seamless process that aims at achieving the objective strategies of the organization (Mattioda, 2007). In the SWOT model this involves the understanding of the opportunities and threats in the external markets and comparing them with the organization’s strengths and weaknesses a process that develops the efficiency of the organization. Integration of the two factors is a continuous evolution of the organization and the implementation of an integrated strategy leads to the achievement of dynamic capabilities. These are idiosyncratic to an organization and rooted in the organization’s history and are defined as the ‘capacity of an organization to purposefully create, extend or modify its resource base’ (Helfat et al, 2007). This capability is a competitive advantage by itself ensures effective running of the organization’s activities
Strategic Marketing Response to Emerging Themes
The marketing environment has been changing and is still changing and the trend doesn’t seem as if it will abate anytime soon. Therefore an effective strategic marketing plan should be flexible enough to accommodate and adapt to the emerging issues and themes. One of the most influential themes has been globalization; the world is now a village. Finances, trends, technology and environmental issues make impact throughout the world in such a short timeframe. Organizations therefore have to be flexible and ever ready to take advantages of opportunities if and when they emerge. This means that an effective strategic need to be proactive not reactionary such the Starbucks closure of shops and striping of the workforce before the recession hit. An effective strategic marketing strategy should have technology as one of its key components since technological advancements are the trend setters of today’s market.
Threat of competition is another emerging theme in the modern market; companies are growing overnight making the environment all more unpredictably competitive. The increased number of takeovers and mergers has made financing of new companies quite easy therefore increasing the number of companies with competitive financial ability. A strategic marketing plan therefore should be in a position of identifying emerging niches which are left by the expanding companies as well as developing a lasting competitive advantage. Environmental concern is another issue that’s emerging in the market. The threat of global warming is ever so real and the continued melting of the glaciers is enough of the dire situation.. Strategic marketing should consider the issue of global warming in choosing the amount of finances that will be used in marketing and what share should be sacrificed to address the issue at hand.
The value of marketing as the most valuable processes in business has been slowly rising and TMS is just an example of how important it has become. The development of strategic marketing has brought about a new face to marketing and a new tweak to its feel as it involves more complex processes and more influence on the decision making process. The involvement of various models, new techniques and environmental analysis has meant that organizations can depend on the marketing staff to assess the organization’s position and base their production processes on the information given. Strategic marketing may not be the only influential activity that organizations depend on but it’s surely the most effective.
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