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Strategic marketing

(Wienclaw, Ruth A. Research Starters Business: Strategic Marketing ,Great Neck Publishing, 2008: 1-1)

Abstract： In order for an organization's marketing effort to be successful, it

needs to be based on a strategic marketing plan to help ensure that the goals and objectives of the effort are appropriate to the needs of the marketplace. Strategic marketing examines the marketplace to determine the needs of potential customers, the strategy and market position of the competitors, and attempts to develop a strategy that will enable the organization to gain or maintain a competitive advantage in the marketplace. There are a number of factors that should impact the development of a strategic marketing plan. These include internal factors such as the assets and skills of the organization and the organizational culture as well as external factors such as various market drivers, market or industry lifestyle, strategic windows, and the nature of the competition. An optimal strategic marketing plan will also follow a contingency approach that allows flexibility in meeting the unique set of factors that govern the marketplace and the organization's viability within.

Keywords： Competitive Advantage; Competitive Strategy; Market Niche; Market Share; Marketing; Marketing Plan; Organizational Culture; Strategic Marketing Strategic Marketing Overview

No matter how good the organization's products or services, unless their value can be communicated to potential customers, the organization will fail in its mission. This communication is the responsibility of the marketing function within the organization. According to the American Marketing Association, marketing is \organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.\Strategic marketing examines the marketplace to determine the needs of potential customers and the nature of the competitors in the market, and

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attempts to develop a strategy that will enable the organization to gain or maintain a competitive advantage in the marketplace. Operational marketing is built upon the foundation set by the strategic marketing function and implements various plans and strategies (including a development of the appropriate marketing mix) to attract customers and foster customer loyalty.

Methods for Product & Service Marketing

There a number of ways to market one's products or services including advertising, direct response, sales promotions, and publicity. However, unless one understands the needs of the customer, the market, and the industry as well as the strengths and weaknesses of the competition, these approaches are unlikely to be successful. Strategic marketing helps an organization sharpen its focus and successfully compete in the marketplace. Strategic marketing is concerned with two components: The target market and the best way to communicate the value of one's product or service to that market. The development of a viable marketing strategy depends on several key dimensions. First, as with any global strategy within the organization, a successful marketing strategy needs to be endorsed by top management within the organization. Marketing strategy is also political in nature: Powerful units within the organization may disagree on the best marketing strategy and an accord may need to be negotiated. Marketing strategies may also be affected by organizational culture and the assumptions that this engenders. For example, if the organization has always marketed its widgets to business executives, it may fail to see the potential for marketing to lower level personnel within the organization or even for personal use to adults or teenagers.

Factors that Implement Strategic Marketing Plan Development

There are a number of factors that should impact the development of a strategic marketing plan for the organization. The first of these comprises the assets and skills that the organization already possesses or that it can readily acquire. For example, if an organization has a significant programming department on the payroll, it would be feasible for it to make and market application software. However, if these personnel are already involved in other work and are not free to work on a new software project and the organization cannot afford to hire additional programmers, starting a new software line

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would be inadvisable at best. The second factor that must be considered when developing a marketing strategy is the market drivers. These are various political, economic, sociocultural, and technological forces that can influence the wants and needs of the consumer base. For example, the need to be able to handle increasing volumes of information and data has led to widespread use of information technology in many industries. Similarly, the need for a college education for an increasing number of jobs has led to a proliferation of for-profit institutions of higher education. Factors Impacting Marketing Strategy

Market drivers, however, are not the only external force that shapes one's market strategy. The nature of the competition in the marketplace is also very important in determining whether or not a marketing effort will be successful. Virtually no business is without competition. When buying a computer, one must choose between Mac and PC. Most soft drinks on the market are manufactured by one of two companies who offer very similar products. There is a variety of choices available when deciding where to fill up one's car, yet most of the fuels available at the pump are virtually the same. Each of these businesses has its own market position and strives to keep its market share through marketing efforts. Part of the strategic marketing effort is to decide how best to differentiate oneself from the competition.

Another external factor that impacts how one can best position oneself in the market is the stage of the market or the industry life cycle. Some organizations excel, for example, at being the first on the market with an innovation or new product. Others excel at taking the innovation and adapting it to the needs of the marketplace (e.g., lower price, different features). In addition, there are various strategic windows that affect an organization's ability to successfully compete in the marketplace. A strategic window is a limited time period during which there is an optimal fit between the needs of the marketplace and the competencies of the organization. For example, as computer storage technology continues to evolve, the methods by which people store data and information change. Punch cards and magnetic tape gave way to 5.25 inch and 3.5 inch disks. Today, more and more people are storing data and information on memory sticks instead, and many computers are not even made with disk drives. The concept of using punch cards is

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as foreign and antiquated in most people's minds as using an abacus. Once the strategic window begins to close, it is typically best that the organization look for another opportunity.

Development of Competitive Strategy

To help meet their goals and objectives, many businesses develop a competitive strategy that will increase their competitive advantage. There are three generic approaches for competitive strategies: (1) the provision of low cost products or services, (2) differentiation of products from those of the competition, and (3) focus on the market niche.

Low Cost Strategy

The goal of the low cost strategy is to gain a larger market share. This is done by offering acceptable quality products or services at prices lower than those of the competition. The expectation in this strategy is that the organization will earn an acceptable return on investment by increasing volume of sales. The basic methods used in low-cost leadership strategies include reduction of overhead, buying or production costs and focused marketing strategies. For example, a restaurant may reduce the price of wine with the intention of making up the shortfall in profits by selling more than they did at the higher price. Similarly, a big box store may use a combination of effective management and information technology practices to reduce operation costs in order to deliver the lowest possible prices on its merchandise.

Product Differentiation

A second generic approach to competitive strategy is product differentiation. In this approach, the business attempts to differentiate itself from its competitors by producing a product or offering a service whose quality is perceived by customers to have unique features or characteristics that set it apart from similar offerings. This strategy attempts to build customer loyalty by offering something of value that is offered by no one else in the marketplace. In this strategy, the necessity of keeping the price of the product or service down becomes less important because customers are frequently willing to pay more to get their favorite brand. However, value can be a subjective quality and brand loyalty is not necessarily sufficient to make this strategy successful.

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There is a point beyond which most customers are no longer willing to pay a premium price. However, if carefully managed, a differentiation strategy can be highly successful. For example, Merrill Lynch was able to differentiate itself from its competitors by offering integrated financial services to attract the most desirable investors. This strategy yielded not only a well recognized and highly valued brand that differentiated Merrill Lynch from its competitors, but also resulted in substantial customer loyalty and a competitive advantage in the marketplace.

Niche Marketing

Another generic approach to competitive strategy is niche marketing. In this approach, the organization seeks to gain a proportion of the total sales of a given type of product or service within the marketplace. This strategy requires a concentration on one or more specific market segments based on characteristics such as buyer group, portion of a product line or market, or geographical area. For example, rather than marketing itself as a generalist, a management consulting firm might specialize in working with the telecommunications industry or only with businesses on the west side of metropolitan Chicago. A niche market strategy is indicated in situations where the business believes that it can better serve a segment of the market rather than the entire market. For example, in the illustration of the management consulting firm, the founding partners may have come out of the telecommunications industry and, therefore are more familiar with the nuances of the industry than they are with other industries. This approach puts the organization in a unique position (through a type of differentiation) to be better able to market to that focused segment than to the market as a whole.

Consideration of Competitors in the Marketplace

To be successful, analysis of the marketplace needs to consider not only the needs of the customer base and the relationship between these needs and the value that can be offered by the organization's product or service, but also the state of the industry as a whole as well as the position of the organization's competition within that industry. As opposed to a market that can be defined as a group of customers with similar buying needs, an industry is a group of organizations (i.e., competitors) that offer similar products or services to the market. Different organizations offering similar products or