Princinples of Strategic Marketing Management

8/4/2019 Princinples of Strategic Marketing Management

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MOHAMMED ZAIN LAKDAWALA

ML7461IN DMS AND MBA WILLIAMS COLLEGE

TABLE OF CONTENT:

INTRODUCTION.................................................................................................................1

1.1ROLE OF STRATEGIC MARKETING......................................................................11.2PROCESSES INVOLVED IN MARKETING.............................................................31.3LINKS BETWEEN STRATEGIC PLANNING &CORPORATE STRATEGY.....32.1 VALUE OF MODELS IN STRATEGC MARKETING.............................................4

2.2 MARKETING TACTIC AND STRATEGIC POSITIONING..................................8

2.3 MERITS OF RELATIONSHIP MARKETING..........................................................9

3.1 MARKETING TECHNIQUES....................................................................................10

3.2 MARKETINH STRATEGY OPTIONS......................................................................12

3.3 MARKETING OBJECTIVES.....................................................................................14

4.1 CHANGES IN EXTERNAL ENVIRONMENT........................................................15

4.2 INTERNAL ANALYSIS..............................................................................................15

4.3 MARKETING RESPONSES.......................................................................................15

REFERENCING .................................................................................................................19


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AIMS AND OBJECTIVES: To understand and develop the skills to support activeengagement in the process of strategic marketing management.

Introduction:

Marks & Spencer, founded in 1884 by Michael Marks and Thomas Spencer, is one of the

UK's foremost retailers of clothing, foods, homeware and financial services, boasting a

weekly customer base of 10 million in over 300 UK stores. Marks & Spencer operate in 30

countries worldwide, and has a group turnover in excess of lb8 billion. It has specific values,

missions and visions. It's main vision is 'to be the standard against which all others are

measured', it's main mission is 'to make aspirational quality accessible to all', and it's main

values are quality, service, innovation and trust. (www.marksandspencer.co.uk).

The purpose of this assignment is to construct a SWOT analysis, highlighting each of the

strengths, weaknesses, opportunities and threats that were highlighted in the internal audit.

Conclusions will be drawn from the SWOT analysis, which will attempt to review the

company's position and identify the marketing priorities. Also, Marks & Spencer's recent

marketing activities will be critically analysed in order to ascertain what improvements have

been made since 1998.This assignment will attempt to determine why Marks & Spencer

nearly collapsed and what they have achieved in terms of success and failure as part of their

recovery programme. Marks & Spencer is a perfect example of a company that had a

successful strategy but failed to adapt to the changing environment and have therefore

suffered from 'strategic wear-out.


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PRINCINPLES OF STRATEGIC MARKETING MANAGEMENT.

1.1 Role of strategic marketing:In the fast-moving world of business, definitions rarely stay the same. Marketing has beendescribed as

The management process responsible for identifying, anticipating and satisfying customer

requirements profitably.

The Chartered Institute of Marketing (CIM) proposed new definition of marketing, which is:

'The strategic business function that creates value by stimulating, facilitating and fulfilling

customer demand.

"Good companies will meet needs; great companies will create markets," says Philip Kotler.

The role of strategic marketing is to develop a strategy to cope with competitors, identify

market opportunities, develop and commercialize new products and services, allocate

resources among marketing activities and design an appropriate organizational structure to

ensure the performance desired is achieved.

(http://www.staffs.ac.uk/courses_and_study/courses/cim-professional-postgraduate-diploma-

in-marketing-tcm4231875.jsp)

A marketing plan provides you with an in-depth perspective of your industry and your

business and gives you insight on developing targeted market strategies while also serving as

a barometer of your performance. Moreover, a marketing plan allows you to examine and

reexamine your marketing objectives and provides the basis for your marketing decisions.


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A marketing plan is useful to many people in a business. It can help to:

Identify sources of competitive advantage

Gain commitment to a strategy

Get resources needed to invest in and build the business

Inform stakeholders in the business

Set objectives and strategies

Measure performance

1.2 Processes involved in strategic planning:

The process involves thinking about every step the company takes to sell, service and manage

the customers. The following points are the key to this process:

1. The knowledge of the market and the strategy to penetrate it.

2. The distribution channels that the company uses to connect with the customers .

3. The pricing strategy of the company is also a key element.

4. The messages that the company delivers to its market.

5. The look and feel ofthe companys marketing materials

6. The experience that the company delivers to its market and customers

7. The actions ofthe companys sales and service representatives.

8. All of the planning, preparation, forecasting and measurement ofthe companys

investments.

1.3 Links between strategic marketing and corporate strategy:


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Porter devised seven steps to tackle this:

1. As competition takes place at the business unit level, identify the interrelationshipsbetween the existing business unit levels.

2. Identify the core business which is to be foundation of the business strategy.3. Create horizontal organizational mechanism to facilitate interrelationships among core

businesses.

4. Pursue diversification opportunities that allow shared activities and pass all threecrucial steps.

5. Pursue diversification through transfer of skills if opportunities for sharing activitiesare limited or exhausted.

6. Pursue a strategy of restructuring if this fits the skills of management or if no goodopportunities exist for forgoing business partnerships.

7. Pay dividends so that shareholders can become portfolio managers.


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2.1 Assess the value of models used in strategic marketing planning:SWOT analysis of Marks and Spencer

Strengths Weaknesses

Sales of clothes have stabilised, andfood sales have increased

New chief executive with freshideas and sales led growth

Good advertising Used iconic models to attract core

target group.

George Davies Product diversificationhome and

furniture

Turnaround in sales and growth

Resignation of three key membersof staff: George Davies, finance

director; Andrea White and Melanie

Davieshead of merchandising

Previous poor performance, sevenstraight quarters of falling sales

More expensive than other highstreet storeslimited market.

Focusing on older generation maylose younger market.


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Opportunities Threats

Rebuild the companys image withcontinued advertising such as the

successful M & S food adverts

Focus on core market UK has an ageing population Introducing wider ranges such as

Per Una, Autograph and Classic

collection to stores

Use younger more contemporarymodels to attract younger

generation.

Internet food shopping butopportunities may be limited

Other serviceseg banking,insurance, savings etc.

Previously tarnished reputation andimage

Competitor product ranges whichdirectly compete with M & S food

such as Tesco finest

Decline of the high street May lose youth market General increase in internet

shopping

Social tastes Branding

2.2 Link between strategic positioning and marketing tactic:

Marketing 4 Ps:

1. Product - The product aspects of marketing deal with the specifications of the actual goods

or services, plus how it relates to the end users needs and wants. The range of a product

normally includes supporting elements such as warranties, guarantees, and support.


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2. Pricing -This refers to the process of setting a price for a product, together with discounts.

The price need not be monetary; it can plainly be what is exchanged for the product or

services, e.g. time, energy, or attention. Methods of setting prices optimally are in the domain

of pricing art

3. Placementthis refers to how the product gets to the buyer; for instance, point-of-sale

assignment or retailing. This third P has furthermore at times been called Place, referring to

the channel by which a product or service is sold (e.g. online vs. retail), which geographic

region or industry, to which division (young adults, families, business citizens), etc. also

referring to how the surroundings in which the product is sold in can influence sales.

4. Promotion - This includes advertising, sales promotion, including promotional education,

publicity, and individual selling. Branding refers to the assorted strategies of promoting the

product, brand, or company.

2.3MERITS OF RELATIONSHIP MARKETING:A key aspect of customer relationship marketing (CRM) is building up a strong sense of trust

and respect between the business and, the most important stakeholder, the customerand

aims to increase sales from retaining customers rather than constantly penetrating the same

market over and over again. This is an approach that has worked well for Marks and Spencer

(M&S), the retailer. According to a YouGov survey, commissioned by the marketing agency

Baber Smith, M&S continues to be Britains most trusted retailer for the second year in a

row; what generates such trust has been identified as having a good reputation.


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So how has M&S gained such success in their CRM? Much of it is down to a consistent own-

label product rangeand not an older, middle-class market segment. M&S has become a

market leader in semi-prepared, own-brand dishes that have been supported through high-

profile above the line TV advertisements. This means the ill-conceived perception that

own-brand equals inferior has been broken down, increasing their reputation and thus

boosting trust. Moreover, all retailers have direct contact with their customers and can use

management information systems, using data from loyalty cards and direct feedback, to

match their new product development to consumer needs. Consequently, own-brand labels

have become differentiated by tapping into unfulfilled niches.

Ultimately, the fundamental goal is achieved: increased sales revenue.

(http://manifestedmarketing.wordpress.com/2010/07/23/marks-and-spencers-customer-

relationship-marketing/)

3.1 STRATEGIC MARKETING TECHNIQUES:Here are 5 successful marketing techniques to increase sales. All of them are simple to use.

And they're effective for building any businesses


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1. Keep Adding Something New

Every time the company adds something new to the business, it creates an opportunity to get

more sales.

The added product increases the sales in 3 different ways:

It attracts new customers who were not interested in your current products andservices.

It generates repeat sales from existing customers who also want to have the newproduct.

It enables the company to get bigger sales by combining 2 or more items into specialpackage offers.

2. Become a Valuable Resource

The company should look for ways it can be a resource for the companys prospects and

customers. The company should provide the customers with free information. Help them do

things faster, easier, less expensively. The company gets another opportunity to sell

something every time they come back to the company for help.

3. Separate from Competition

The company must find or create a reason for customers to do business with it instead of with

someone else offering the same or similar products.

The company must determine the unique advantage it offers to customers that its

competitors do not offer. Promote that advantage in all of its advertising. The company must

give its prospects a reason to do business with itslef instead of with its competition and the

company will automatically get more sales.

4. Promote the End Result

The customers don't really want the comanys product or service. They want the benefit


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produced by using it. The company must make sure its web pages, sales letters and other

sales messages are promoting the end result its customers want.

5. Anticipate Change

Change is the biggest challenge to the success of the business. The days are gone when a

business could constantly grow by simply repeating what it did successfully in the past or

even recently. Aggressive, innovative competitors and rapidly changing technology make it

impossible.

The company should expect change and be prepared for it. It should not wait until its income

declines to take action. The company must develop the habit of looking for early signs that

something is changing. Then it should confront it before it starts to lose business.

3.2 Strategy Options:(http://en.wikipedia.org/wiki/Porter_generic_strategies)

Porters Generic strategy:

Porter has described a category scheme consisting of three general types

of strategies that are commonly used by businesses to achieve and

maintain competitive advantage. These three generic strategies are defined along two

dimensions: strategic scope and strategic strength.

He originally ranked each of the three dimensions as either low, medium, or high,

and juxtaposed them in a three dimensional matrix. That is, the category scheme was

displayed as a 3 by 3 by 3 cube. But most of the 27 combinations were not viable.


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Cost Leadership Strategy

This strategy involves the firm winning market share by appealing to cost-conscious or price-

sensitive customers.

Differentiation Strategy

Differentiate the products in some way in order to compete successfully.

Shell Directional Policy Matrix:

The Shell Directional Policy Matrix is another refinement upon the Boston Matrix. Along the

horizontal axis areprospects for sector profitability, and along the vertical axis is a company's

competitive capability. As with the GE Business Screen the location of a Strategic Business

Unit (SBU) in any cell of the matrix implies different strategic decisions. However decisions

often span options and in practice thezones are an irregular shape and do not tend to be

accommodated by box shapes. Instead they blend into each other.
http://en.wikipedia.org/wiki/File:PorterGenericStrategies.png


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(http://marketingteacher.com/lesson-store/lesson-shell-directional-policy-matrix.html)

Each of thezones is described as follows:

Leader - major resources are focused upon the SBU. Try harder - could be vulnerable over a longer period of time, but fine

for now.

Double or quit - gamble on potential major SBU's for the future. Growth - grow the market by focusing just enough resources here. Custodial - just like a cash cow, milk it and do not commit any more

resources.

Cash Generator - Even more like a cash cow, milk here for expansionelsewhere.

Phased withdrawal - move cash to SBU's with greater potential. Divest - liquidate or move these assets on a fast as you can.

3.3 Strategic marketing objectives:Marketing mix-7 ps:
http://marketingteacher.com/lesson-store/lesson-shell-directional-policy-matrix.htmlhttp://marketingteacher.com/lesson-store/lesson-shell-directional-policy-matrix.html


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(http://marketingteacher.com/lesson-store/lesson-marketing-mix.html)

The marketer mixes the prime colours (mix elements) in different quantities to deliver a

particular final colour. Every hand painted picture is original in some way, as is every

marketing mix.

Some commentators will increase the marketing mix to the Five P's, to include people.

Others will increase the mix toSeven P's, to include physical evidence (such as uniforms,

facilities, or livery) and process .

Price

There are many ways to price a product. The beat price would be the one that gives the best

value to the customer.

Place

Another element of Neil H.Borden's Marketing Mix is Place. Place is also known as channel,

distribution, or intermediary. It is the mechanism through which goods and/or services are

moved from the manufacturer/ service provider to the user or consumer.

Product

For many a product is simply the tangible, phsysical entity that they may be buying or

selling.

Promotion

Another one of the 4P's is promotion. This includes all of the tools available to the marketer

for 'marketing communication'. As with Neil H.Borden's marketing mix, marketing


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communications has its own 'promotions mix.' Think of it like a cake mix, the basic

ingredients are always the same.

Physical Evidence

Physical Evidence is the material part of a service. Strictly speaking there are no physical

attributes to a service, so a consumer tends to rely on material cues.

People

People are the most important element of any service or experience. Services tend to be

produced and consumed at the same moment, and aspects of the customer experience are

altered to meet the 'individual needs' of the person consuming it.

Process

Process is another element of the extended marketing mix, or 7P's.There are a number of

perceptions of the concept of process within the business and marketing literature.

Task 4: 4.1 Changes in external environment:

All of those (political, economic, social, technical, legal and environmental) factors

will to some extent apply to the retail industry UK.

POLITICALFollowing the European Integration and Free Trade Agreements, the

market has opened up for British Companies to invest in Eastern Europe.

ECONOMIC - the Retail sector is fairly recession prawn and also very sensitive to

changes in interest rates. Since the events of September 11th the world economies

have suffered heavily, stocks plummeted and prices are at all time lows. The world

economy is however, now on the up post September 11th. Consumers are optimisticand the retail industry is once again booming.

SOCIALchanges in consumer taste and lifestyle represent both opportunities and

threats for the industry. Opportunities in terms of new market and consumers,

however, there are added threats in terms of social acceptance to alcohol

TECHNICALChanges in retailing methods as such clothes sales via the Internet is

now a common place in retailing. Paperless operation, the management and

administration of the company are undertaken on IT systems, which are accessed

through secure servers; provide flexibility in the running of the business.


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LEGALNational legislation for health and safety both in terms of consumer rights

and also in terms of production of own natural renewable resources for making

clothes.

ENVIRONMENTALThe renewable source of resources used in production,namely cotton and wool are environmentally friendly. The threats are in terms of legal

consequences for livestocks in terms of health and safety.

4.2 and An internal analysis:M&S has a very strong corporate identity.

Well-known retail brand nameclear image and style Protective corporate principles and cultureTheory Z Self esteem and pride.

In some situations, however, M&S has been forced to renege on its principles. For example,

when it closed some stores in France, it was apparently unable to provide the level of job

protection and benefits that M&S employees have come to expect. M&S did not even

manage to comply with French law in the way they consulted staff about the closures, leaving

them open to accusations of corporate irresponsibility. These charges wounded a companythat prides itself on going beyond the letter of the law.

4.3 Strategic Marketing Responses:

a) Total focus on UK retail

The Company will only own brand products and brands exclusive to M&S so it can guarantee

customers the quality, value and service they have come to expect.

Recovery plan for Clothing

The Company has plans to regain the confidence of its customers in the quality and fit of its

clothing. It will sharpen pricing by rebalancing the price architecture, extending the range of

entry-price merchandise and communicating this clearly to customers.


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Expansion in growing product areas such as Food, Home and Beauty

M&S Foods continues to perform well and has earned customers' trust for providingquality, innovation and convenience. The business is a key platform for future growth

and the Company is considering opportunities to expand its reach through new

locations and selling channels.

The Home business is growing strongly, with home furnishings and gifts the fastest

growing product areas. Beauty, albeit relatively small, is also growing rapidly. Both

of these areas offer promising opportunities for development and will be expanded.

Accelerate Store Renewal Programme: M&S will accelerate the rollout of thesuccessful elements of its new concept format under a plan to refurbish more stores

faster and at lower cost.

More intensive use of space

Selling space will be reallocated to higher growth product areas to maximise returns

per square foot.

Being closer to the customer

In order to be more customer oriented, some stores in big cities will be opened 24

hours per day.


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b) Value realisation, cost cutting measures and closure of loss-making businessesIn order to focus all its efforts on the recovery of the UK business, Marks & Spencer

intends to divest or close non-core businesses and assets, subject to consultation with

its employees.

Conclusion

A competitive market system creates incentives for firms to vie for large market

shares. Sometimes one firm is so successful in this fight, it acquires a dominant position in a

market. From the firm's point of view, a large market share is good. After all, dominanceimplies power and control. It creates a real potential to increase profits. From society's point

of view, however, dominance may not be quite so desirable. For the power that goes with

dominance can be acquired and used in a number of ways.. In the case of Marks & Spencer, it

has successfully gained the upper hand on the race for global dominance. By utilizing the

many factors and the pros and cons of the theory, Marks & Spencer is effectively making a

good marketing strategy.

Recommendations

Marks and Spencer has become extra selling space and opening out-of-town stores to

shift surplus stock. It is a tough time for the company and also the right time for a new

broom. Marks and Spencer should get lessons from past and look at more about what is

happening in the market place and change itself from the old way of doing things to a brand-

new image in order to sustain its competitive advantage and regain its leading position in

terms of management effectiveness.


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REFERNCING:

http://en.wikipedia.org/wiki/Marketing_strategy(accessed on 25th

December 2010)

http://en.wikipedia.org/wiki/Marks_%26_Spencer#Marketing (accessed on 26th

December

2010)

http://manifestedmarketing.wordpress.com (accessed on 25th

December 2010)

http://www.marksandspencer.com (accessed on 24th

December 2010)

www.businessballs.com (accessed on 25th

December 2010)

Hasting H- Improve your marketing to grow your business: insights and innovation that drive

business and brand ( Wharton school pub, 2008)pages 12-36

Kotler P- Principles of marketing, International edition(edition 2008)pages 23-67

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Princinples of Strategic Marketing Management