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Strategic Marketing Management
Notes
Lecture 1 - Introduction & Planning Process
Marketing Management consists of 4 Stages:
Analysis - of the market, competitors, company and customers
Planning - marketing objectives, segments, target consumers, strategies and marketing mix
Implementation - allocation of staff and resources, time-scales, responsibilities and delegation
Control - Accountability of activities, profitability and return on investment, customer feedback

Strategic Marketing Planning begins with
Corporate objectives -> Marketing Audit -> Marketing Objectives -> Marketing Strategies ->
Marketing Programmes -> Budgets -> finally Control and Evaluation

There are three levels of strategy which follow a hierarchy of development
Corporate Strategy describes a company’s overall direction in terms of its general attitude toward
growth and the management of its various businesses and product lines to achieve a balanced
portfolio of products and services
...

Business Strategy, sometimes called competitive strategy, is developed at divisional level and
emphasises improvement of the competitive position of a corporation’s products or services in the
specific industry or market segment served by that division
...

Functional Strategy is concerned with maximising resources productivity
...

Their functional strategy is to align all the departments in order to improve customer
service, delivery time and order accuracy
...
Where are we now?
2
...
How might we get there?
4
...
How can we ensure arrival?

Stage one is answered best with a Situational analysis
...
Analysing both the micro and macro
environment
...
Be a leader in environmental
innovation
...

Objectives are SMART as they are specific measurable attainable relevant and time based

- Reduce average tailpipe emissions by 25% by 2015
...

- Reduce waste to landfill from manufacturing operations to 4
...


- Support global communities by offsetting 5m tonnes of CO2 and improve 5m lives
around the world by 2020
...
It forms part of
the micro environment analysis which is defined as what the organisation deals with directly on a
day to day basis
...

SWOT for Jaguar Land Rover
Strengths:
Image of Luxury
History of Culture
Quality
Technological developments
Distribution channels

-

Weaknesses:

- No smaller car range
- Engineering
- R&D disadvantage
Opportunities:
Combination of both Jaguar and Land Rover
Economic growth
Japanese market opening up
New technology available

-

Threats:

- Stiff competition in luxury car market
- Substitutes for luxury cars (reliable cars instead)
- Environmental pressures

PESTEL
Is part of the external macro environment which are uncontrollable factors that influence the
organisations decision making and strategies
...

PESTEL consists of:
Political
Economic
Socio-Cultural
Technological
Environmental
Legal
Coca Cola PESTEL
Political - Government calorie reduction, VAT increase from 17
...

Environmental - Carbon dioxide high, need to reduce footprint
...
PET good lightweight recyclable packaging, glass also and
maintains taste
Legal - Front of pack labelling scheme for nutrition

Lecture 3 - Porter’s Five Forces Competitive Analysis
Porters 5 Forces Model is a good analysis of the current situation in determining the answer to
where are we now? in the planning cycle
The 5 forces are:
Existing Competitors
Threats from New Entrants
Threats of Substitutes
Bargaining power of Suppliers
Bargaining power of buyers

-

The strength of these forces ultimately affects the profitability of the industry and a firms ROI
(Return on investment)
...

First the industry competitors need to be identified, their objectives, strategies, strengths and
weaknesses, their potential reactions
Coca Colas 5 Forces Model
Competitors: Moderate Strength

- Coca cola is market leader at 64%
Substitutes: High Threat

- Any other beverage which may be cheaper and healthier or more accessible
New Entrants: Low Threat
Good distribution
Brand Identity
Market Leader
Capital Requirements

-

Supplier Power: Moderate

- Ingredients
- Packaging
- Distributors

Buyer Power: Low
- Sponsorship deals give exclusivity
- Brand loyalty
- Own many other soft drink brands Fanta and Sprite
Competitors can be placed in clusters of strategic groups, in order to identify and differentiate them
Kotler’s Market Structure States there are Market Leaders, Market Challengers, Market Followers
and Market Nichers
Market Leaders: Tesco
Challengers: ASDA Sainsburys
Followers: Morrisons
Nichers: Iceland

In order to analyse the competitive environment an organisation should devise an impact matrix
displaying the relative opportunity and threat each force provides
...
Low costs let it price lower than its competitors and win a large market
share
...
IBM
an example in information technology products
Focus strategy: Focus strategies can also be implemented by differentiation strategists
and cost strategists
...
For example, Ritz-Carlton focuses on the top
5 percent of corporate and leisure travelers
...

BCG (Boston Consulting Group) Matrix focuses on market share and market growth
Designed to help with long-term strategic planning, to help a business consider growth
opportunities by reviewing its portfolio of products to decide where to invest, to discontinue or
develop products
...

The General Electric Model looks at the industry attractiveness against the business’ position
...
Which determines whether investment for
growth should be the strategy or selectivity or harvesting/divesting
...

Limitations:

- Process is subjective to different businesses, the weight given to a factor by one business may
be different to the weight/importance given to it by another
- The formulation of a G
...
matrix is very expensive and time consuming
- Investment strategies are often not implemented in an accurate and proper manner
...

Quantitative:
Time series analysis
Correlation methods
Leading indicator
Market Tests

-

Qualitative:
Management judgement
Sales force surveys
Panels of experts
Scenario Techniques

-

Strategy development has to be based on systematic procedures and strategic tools
The Delphi Technique is a forecasting method based on expert opinion and expert surveys
...

It is used for long range forecasting and is rapid and efficient way of gaining information from
experts
...

It is a combination of statistical methods and human judgement
...
g Delphi technique)
Iterative method used to lower discrepancies
Scenario Building it is the summary of potential actions and events in a likely order of
development beginning with a set of conditions based on the current situation/environment/
circumstances
...
The 8 factors for success are:
Bias towards action
Simple line and team staff organisation
Continued contact with customers
Productivity improvement via people
Encouragement of autonomy & entrepreneurship
Loose & tight controls
Stress on one key business value
Sticking to what it knows best!

-

Lecture 6 - Building Strong Brands
Building Strong Brands and Branding strategies
Building brand loyalty is the basis of gaining profitable growth
Pareto rule 20/80
...

A "brand" guarantees to the consumer satisfaction of a specific want through products with unique
combinations of attributes
...
They are consistent, so lead to certainty and certainty leads to
trust
...


-

Sustainable Loyalty (Positive attitude/ High repeat purchasing behaviour)
Latent Loyalty (Positive attitude/ Low RPB)
Spurious Loyalty (Negative attitude/ High RPB)
No Loyalty (Negative Attitude/ Low RPB)

Benefits of Branding
To consumer:

- lowers the levels of anxiety, re-assuring effect
- eases the decision process, speeds it up
To brand owner:
regular purchases lead to revenue stream
sustainability - brands are sustainable offerings
create barriers to entry
higher value purchases - improved margins
Intangible assets - boosts share value

-

Brand Loyalty has a positive correlation with market share
...

Brand identity is the meaning and essence of the brand
...

Packaging prevents food waste and makes more products available to consumers
Sustainable packaging is optimising the use of material, water and energy and minimising waste
from both the product and packaging
...
In order to be sustainable there needs to be reuse,
recovery and recycling of materials and components
...


One way of being sustainable and reducing environmental impact is to squeeze more final
product into less single-use packaging by increasing the concentration of a formula
...

Innocent has been working hard to integrate recycled content into its packaging since 2003
as part of its sustainable packaging strategy
...
The smoothie brand is also striking
a balance between FSC sources and recycled content in its paper and cardboard packaging
Lush takes minimising packaging seriously with 46% of products sold 'naked', and many
other products sold in reusable packaging or refillable pots
...

When classifying a service one must look at the:
Type of market (consumer/ industrial)
Degree of labour intensiveness (labour/ equipment)
Degree of customer contact (high/ low)
Skill of service provider (Professional/ non)
Goal of service provider (profit/ non-profit)

-

Characteristics of services are that they are:
Intangible - before point of purchase they cannot be touched or felt but experienced
This therefore increases perceived risk
...
Use of marketing mix to help facilitate decision making
Perishable - cannot be stored
Essential to get cost and differentiation strategies right as service cant be stocked
Inseparable - cant have service without provider
Customers are co-producers/ designers
Service must be brought to consumer
Hard to lower price and hold image of quality
Heterogeneous - quality of service is dependant on provider
Difficult to differentiate as it is dependent on provider
...
Consistency must be established, but should also be
flexible to changes
Unowned - you cant own a service only provided
Increasingly firms are outsourcing many of the activities allowing them to focus on core
competences

Examples Banks such as Barclays outsource their customer support services from
overseas call centres for a cheaper cost
The extended marketing mix applies to only services:

- People

British Airways: Extensive recruitment procedure tests, Undergo training, International
cabin crew with knowledge of language and culture
- Process
Structured process which attempts to make traveling procedure easy and efficient as well
as safe
- Physical evidence (sensoral appearance of environment)
Uniform standards and appearance, logos, pleasant internal appearance of aircraft, different
classes of travel
Servqual measures the scale of quality in services through 10 elements
1
...
Responsiveness
3
...
Access
5
...
Communication
7
...
Security
9
...
Tangibles
Service sector is fastest growing sector world wide
Operational Excellence
Is a way in which services can achieve strategic success
...
Streamlining
2
...
Creative Strategic Alliances
4
...
By becoming a:
- Cost leader
- Cheap convenience
- Dedicated service
- Premium service
Creative strategic alliances involves partnering between different service providers in order to
strengthen brands and cut costs
...
Make them feel valued and important
The service experience
Strategists must know the experience consumers want from the service
Five dimensions of quality are (Zeithaml et al 1990):
Reliability
Responsiveness
Empathy
Assurance
Tangibles
Perception of service quality leads to customer satisfaction, which leads to positive purchase
intentions, in turn leads to sales and profits
...

Internal factors consist of:
- Marketing objectives
- Costs, brand image
- Target market
- Marketing mix

External factors would be the
nature of the market,
price elasticity of demand,
competition and
other environmental factors
...
Used to attract clients and new
customers
Price elasticity of demand is a measure of the degree of change in demand for a good when its
price changes
...

2
...

4
...


Encoding of the message by Sender
Method of communication
Transmission of message
Decoding of message by Receiver
Feedback of communication

Marketing communications mix
Public relations
Direct selling
Advertising
Sales Promotions
Personal selling
Online marketing

-

Integrated Marketing Communications (IMC) is the use of several of the marketing communications
tool as a way of developing a comprehensive plan that uses all the added values each tool brings
for strategic gain

Lecture 10 - Distribution & Logistics Strategies
Distribution and logistics
Marketing channels are structures linking groups of individuals or organisations through which a
product or service is made available to the consumer or industrial user (Brassington & Pettitt 2000)
Intermediaries consist of wholesalers, retailers, distributors and dealers, agents and broker,
franchises and the internet

Distribution system design
Factors influencing channel structure are:
Choice of outlets
Consumer concentration: where the consumers will be
Product characteristics: perishable/ industrial
Economic and legal restrictions

-

Strategic channel choices
- Intensive distribution

- Selective distribution
- Exclusive distribution
There are different types of channels

- Physical flow - the physical movement of goods
- Title flow - the passage of ownership, such as car
- Information flow - feedback and exchange of information
Vertical marketing systems
Corporate marketing systems
Franchise systems
Co-operative and voluntary groups
Strategic Issues in channels can be caused by management conflicts such as:
- Goal incompatibility
- Position, role and domain incongruence
- Communication breakdown
- Ideological differences
Other issues can be growth of multi-channels and E-commerce
Buyer’s perspective of distribution
- Availability
- Speed
- Reliable
- Range of choice
- Empathy when supply is interrupted
- Convenience
- Service and support
- Good price
The primary concerns of buyers are access, search, possession and transaction
Channel design decisions are based on
- Analysis of customer service needs - identifying the market channels that can deliver
appropriate value to customer
- Defining channel objectives and constraints - which segments should we serve and which
channel to use for each
- Identifying key channel alternatives - direct marketing, brokers, agents, whole sellers, retailers,
e-commerce
- Evaluate alternatives - economic, control, level of flexibility

The integrated marketing effort model looks are both the marketing aspect and physical
distribution efforts of marketing as a whole
...

It can act as a competitive advantage if the system is efficient and customer service is valued
...
It is the concept that staff are internal
customers
Employees must buy in to strategy in order for consumers to buy in as the end goal
Internal marketing in practice involves
Gaining an implementation champion
identifying supporters, neutrals and opponents to implementation
gain the support of key decision makers
change the attitude and behaviour of front line personnel
manage changes in culture

-

Control
The measuring, observation and reassessment of strategy
It is a process by which the desired end is achieved
Control can either be closed-looped where once commitment is made, adjustments cannot be
made and then open-looped is where errors can be corrected even after implementation has
occurred

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