Lesson 1

• Unit 7: Strategic Marketing Management

– Unit code: Y/602/2065
– QCF Level 7: BTEC Professional
– Credit value: 10
 Learning Outcomes
• Task 1:
• Understand the principles of Strategic Marketing
Management.
• Give a brief outline of your organization in terms of its
background, products and markets.
• (A.C.1.1) Discuss the role of strategic and tactical marketing
in an organisation.
• (A.C.1.2) Explain the processes involved in strategic
marketing.
• (A.C.1.3) Evaluate the links between strategic marketing
and corporate strategy.
 What Is Marketing?
Simple definition:
Marketing is the management process responsible
for identifying, anticipating, and satisfying
customer requirements profitably.” (CIM,2001)
Goals:
1. Attract new customers by promising superior
value
2. Keep and grow current customers by delivering
satisfaction.
 Marketing Defined
• Marketing is the activity, set of instructions,
and processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and
society at large.

OLD view of marketing: NEW view of marketing:

Making a sale Satisfying

“telling and selling” customer needs

Why is Marketing Important?
 Strategic Marketing
• Strategic marketing focuses on how to develop
competitive advantage through the drivers of
shareholder value.
• Delivering value to your business requires
insight into your changing marketplace and
decisions regarding how to match your
organisation’s distinctive capabilities with
promising value opportunities through cost
minimization, differentiation or niche strategy.
 The Marketing Process
• A simple model of the marketing process:
• Understand the marketplace and customer needs and
wants.
• Design a customer-driven marketing strategy.
• Construct an integrated marketing program that
delivers superior value.
• Build profitable relationships and create customer
delight.
• Capture value from customers to create profits and
customer quality.
 Needs, Wants, and Demands
Need: State of felt deprivation including physical,
social, and individual needs.
– Physical needs: Food, clothing, shelter, safety
– Social needs: Belonging, affection
– Individual needs: Learning, knowledge, self-
expression
Want: Form that a human need takes, as shaped
by culture and individual personality.
Wants + Buying Power = Demand
 Need/ Want Fulfillment
Needs & wants are fulfilled through a Marketing
Offering:
• Products:
– Persons, places, organizations, information, ideas.
• Services:
– Activity or benefit offered for sale that is essentially
intangible and does not result in ownership.
• Experiences:
• Consumers live the offering.
 Customer Value and Satisfaction
• Dependent on the product’s perceived performance
relative to a buyer’s expectations.
• Care must be taken when setting expectations:
• If performance is lower than expectations, satisfaction
is low.
• If performance is higher than expectations, satisfaction
is high.
• Customer satisfaction often leads to consumer loyalty.
Some firms seek to DELIGHT customers by exceeding
expectations.
 Marketing Management
• The art and science of choosing target markets
and building profitable relationships with
them.
• Requires that consumers and the marketplace
be fully understood.
• Aim is to find, attract, keep, and grow
customers by creating, delivering, and
communicating superior value.
 Marketing Management
• Marketing managers must consider the
following, to ensure a successful marketing
strategy:
• What customers will we serve?
— What is our target market?
• How can we best serve these customers?
— What is our value proposition?
 Choosing a Value Proposition
The set of benefits or values a company
promises to deliver to consumers to satisfy
their needs.
• Value propositions dictate how firms will
differentiate and position their brands in the
marketplace.
 The Marketing Concept
• The marketing concept:
• • A marketing management philosophy that
holds that achieving organizational goals
depends on knowing the needs and wants of
target markets and delivering the desired
satisfaction better than competitors.
 Customer Perceived Value
• Customer perceived value:
• “Customer’s evaluation of the difference between
all of the benefits and all of the costs of a marketing
offer relative to those of competing offers.”
(Armstrong & Kotler)
• Perceptions may be subjective
• Consumers often do not objectively judge values
and costs.
• Customer value = perceived benefits – perceived
sacrifice.
 The Marketing Mix
• The set of controllable, tactical marketing tools that the
firm blends to produce the response it wants in the target
market.
• Product: Variety, features, brand name, quality, design,
packaging, and services.
• Price: List price, discounts, allowances, payment period,
and credit terms.
• Place: Distribution channels, coverage, logistics, locations,
transportation, assortments, and inventory.
• Promotion: Advertising, sales promotion, public relations,
and personal selling.
 Marketing Strategy Process
Requires careful customer analysis.
– To be successful, firms must engage in:
– Market segmentation
– Market targeting
– Differentiation
– Positioning
 Market Segmentation and Targeting

Segmentation:
– The process of dividing a market into distinct
groups of buyers with different needs,
characteristics, or behavior who might require
separate products of marketing programs.
Targeting:
– Involves evaluating each market segment’s
attractiveness and selecting one or more
segments to enter.
 Differentiation and Positioning
Differentiation:
– Creating superior customer value by actually
differentiating the market offering.
Positioning:
– Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers.
 Market Segmentation
• Key segmenting variables:
– Geographic
– Demographic
– Psychographic
– Behavioral

Different segments desire different benefits from

products. Best to use multivariable segmentation
bases in order to identify smaller, better defined
target groups.
 Market Segmentation
Why Segment?:
– Meet consumer needs more precisely
– Increase profits
– Segment leadership
– Retain customers
– Focus marketing
– communications
 Evaluating Market Segments
Segment size and growth:
– Analyze current segment sales, growth rates, and expected
profitability.
Segment structural attractiveness:
– Consider competition, existence of substitute products,
and the power of buyers and suppliers.
Company objectives and resources:
– Examine company skills and resources needed to succeed
in that segment.
– Offer superior value and gain advantages over competitors.
 Market Targeting
• Market targeting involves:
• Evaluating marketing segments.
– Segment size, segment structural attractiveness,
and company objectives and resources are
considered.
• Selecting target market segments.
– Alternatives range from undifferentiated
marketing to micromarketing.
• Being socially responsible.
 Differentiation and Positioning
A product’s position is:
• The way the product is defined by consumers
on important attributes—the place the
product occupies in consumers’ minds relative
to competing products.
• Perceptual positioning maps can help define a
brand’s position relative to competitors.
 Differentiation and Positioning
Identifying possible value differences and
competitive advantages:
– Key to winning target customers is to understand
their needs better than competitors do and to
deliver more value.
Competitive advantage:
– Extent to which a company can position itself as
providing superior value.
– Achieved via differentiation.
Marketing strategy and corporate Strategy

• Strategy is the direction and scope of an

organization over the long term, which
achieves advantage in a changing environment
through its configuration of resources and
competences with the aim of fulfilling
stakeholder expectations.
 Corporate Strategic Decisions
• The long-term direction of the organization
• The scope of an organization's activities
• Gaining advantage over competitors
• Addressing changes in the business
environment
• Building on resources and competences
• Values and expectations of stakeholders
The Strategy Hierarchy
 Strategy Hierarchy
• Corporate strategy – concerned with expansion, contraction
or stability strategy and related or unrelated growth
• Business strategy – strategy crafted to produce successful
performance in one specific line of business-cost
minimization-differentiation-focus
• Functional strategy – concerned with strategic action to be
taken by the various functional departments within the
company – marketing, production, distribution, finance and so
on
• Operating strategy – concerned with weekly and daily
decisions e.g. opening times and allocating staff to different
tasks
 Corporate strategy
• Specifies actions a firm takes to gain a
competitive advantage by selecting and
managing a group of different businesses
competing in different product markets
Corporate growth strategies
Marketing strategy supports the corporate
strategy
• Corporate strategy needs to be aligned with
the marketing strategy so that organizational
goals can be achieved.
Example. A diversification strategy at the corporate
level requires innovation at the marketing level in
terms of researching and developing a new
marketing mix
Learning Outcomes
 Task 1: Example Only
• Give a brief outline of your organization in terms
of its background, products and markets (50
words)
– Westomatic Vending Services Limited was established
in 1966 in the United Kingdom as a private company to
manufacture beverage and snacks vending and
dispensing machines. Twice winner of the prestigious
AVS ‘Equipment Supplier of the Year’, the company has
developed a reputation for producing precision
engineered, innovative and reliable machines
conforming to CE and ISO9001:2000 certification.
 Task 1:
• Evaluate the links between strategic marketing and
corporate strategy. (A.C.1.3)
• Corporate strategy –expansion, contraction, stability
• Marketing strategy supports corporate strategy:
– Research
– Analysis
– Segmenting Targeting
– Positioning-
– Mix design
– Implementation Evaluation