Monroe Community College Strategic Management Summary Please do a separate summary for each Chapter: 3, 4, 7, 9,10, & 12 . I have attached the document STR

Monroe Community College Strategic Management Summary Please do a separate summary for each Chapter: 3, 4, 7, 9,10, & 12 . I have attached the document STRATEGIC
MARKETING
This exciting new introductory text examines the nature of competitive
marketing strategy and points to the need to adopt new marketing practices
in order to meet the demands of business opportunities in the twenty-first
century. By taking a fresh approach to a previously covered subject area, this
work will not only be of assistance to students of marketing but also practising
managers. Subjects covered include:
•
•
•
•
•
marketing strategy
analysing the business environment
the customer in the market place
targeting and positioning
marketing mix strategy
Using case studies, case histories and thought-provoking questions, Strategic
Marketing. An Introduction is a valuable resource for all those involved in this
important area.
Tony Proctor is Visiting Professor in Marketing at Chester Business School
and also contributes to postgraduate programmes at Lancaster University
and The Queen’s University, Belfast, as well as to courses run by Hull
University and Lincoln Business School in conjunction with CIM and MDC
consultants.
STRATEGIC
MARKETING
AN INTRODUCTION
Tony Proctor
LONDON & NEW YORK
First published 2000 by Routledge
11 New Fetter Lane, London EC4P 4EE
Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
Routledge is an imprint of the Taylor & Francis Group
This edition published in the Taylor & Francis e-Library, 2002.
© 2000 Tony Proctor
All rights reserved. No part of this book may be reprinted or
reproduced or utilized in any form or by any electronic, mechanical,
or other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or
retrieval system, without permission in writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Proctor, Tony.
Strategic marketing: an introduction/Tony Proctor.
p. cm.
Includes index.
1. Marketing—Decision making. 2. Marketing—Management. I. Title.
HF5415.135 .P76 2000
658.8´02—dc21
ISBN 0-203-46005-7 Master e-book ISBN
ISBN 0-203-76829-9 (Adobe eReader Format)
ISBN 0-415-20810-6 (hbk)
ISBN 0-415-20811-4 (pbk)
99–087270
Contents
List of figures
List of exhibits
Preface
xi
xiii
xv
1 Marketing strategy: introduction and overview
Introduction
Market drivers
Impact of competition
Strategic windows
Evolving markets and strategic windows
Opportunities and threats presented by the opening and
closing of strategic windows
Nature of competitive strategy
The classic approach to the formulation of strategy
Process for formulating a competitive strategy
Strategy identification and selection
Strategic market management
Questions
Case studies: Mirela Fashions
Koji
1
1
3
3
6
8
9
11
12
14
15
16
17
17
19
2 Portfolio analysis
Introduction
The product life cycle
21
21
22
vi
CONTENTS
Product life cycle stages
The product/service portfolio
Portfolio models
Questions
Case studies: Acme (A)
Acme (B)
24
26
26
36
36
38
3
Analysis of the business enterprise
Introduction
Marketing competencies
Resource-based view of the firm
Value chain analysis
Shareholder value analysis
Financial performance—sales and profitability
Other kinds of performance measurement
Customer satisfaction and brand loyalty
Product and service quality
Brand or firm associations
Relative cost
Manager/employee capability and performance
Other performance factors
Determinants of strategic options
Creativity
How creative thinking may be used in marketing
The need to be ready for change
Mindset
Barriers to individual’s creativity
Blocks to creative thinking in organizations
Elements of creative organizations
Questions
Case studies: Barrington Breweries
Avila Batteries
41
41
42
43
44
45
46
46
47
47
47
49
49
50
50
51
53
54
54
55
57
58
59
59
60
4
Industry analysis
Introduction
Industry life cycles
Analysis of emerging and developing industries
Analysis of maturing industries
Implications of the transition to maturity
Analysis of declining markets
Hostile markets
Analysis of fragmented industries
Strategic groups
SPACE analysis
The competitive advantage matrix
Questions
62
62
63
63
65
67
68
72
72
75
75
77
78
vii
CONTENTS
Case studies:
DACO
Agribus
78
80
5
Market analysis
Introduction
Dimensions of market analysis
Actual and potential market size
Market growth
Forecasting methods
Longer-term forecasting
Market profitability analysis
Cost structure
Distribution systems
Key success factors—bases of competition
Risks in high growth markets
Questions
Case studies: Cometex
Ecoprods
82
82
83
84
84
87
92
94
96
96
97
97
99
99
100
6
Analysing competition
Introduction
Nature of competition and identification of an
organization’s competitors
Strategy typologies
Competition research
Understanding competitors’ strategies
Identifying competitors
Sources of information about competitors
Benchmarking
Market signals
Types of market signals
Questions
Case studes: Cyproswim Ltd
Cartech
102
102
7
Analysing the business environment
Introduction
Changing patterns and changing strategies
The changing nature of social and cultural aspects of
consumers
The influence of political, fiscal and economic policies
The influence of technology
Changes in distribution patterns
How firms are responding to environmental change
Green marketing
The legal environment and its influence on marketing
activities
103
107
109
109
110
110
111
112
112
115
116
119
121
121
122
123
126
129
130
130
131
132
viii
CONTENTS
Ethics and code of practice
Pressure groups, watch-dogs and consumerism
Predicting environmental trends and events
Questions
Case studies: Union Assurance Company
The Foldaway Company
132
133
134
139
139
142
8 Analysing the customer in the market place
Introduction
Models of consumer behaviour
Psychological factors influencing the buying decision process
Social factors influencing the buying decision process
Postmodernism in consumer behaviour
Societal marketing and consumer behaviour
Organizational buying decisions
Similarities of organizational buyer behaviour with consumer
behaviour
Role for market research
Nature of marketing research
Information sources
The process of research
Analysing information
Questions
Case studies: Choosing a holiday
Office Improvements
162
162
163
163
164
166
166
167
168
9 Sustainable competitive advantage and generic strategies
Introduction
Competitive advantage should be market led
Core competencies and competitive advantage
Strategic intent
Generic strategies
Focus strategies
The pre-emptive move
Questions
Case studies: Barney Malone
Singapore Stan
170
170
170
171
174
175
183
184
185
185
187
10 Segmentation, targeting and positioning
Introduction
Segmentation
Market segmentation research
Cartographying geographic segmentation
Segmentation, targeting and product positioning
Segmentation strategy
Segment synergies
Segment invasion strategy
144
144
145
151
153
156
158
159
188
188
189
190
192
192
194
195
195
ix
CONTENTS
Market targeting and positioning
Factors influencing choice of targeting strategy
Positioning
Qualitative approaches to positioning research
Quantitative approaches to positioning research
Multi-dimensional scaling and perceptual mapping
Questions
Case studies: Home Baker
Columbus
196
197
199
201
202
204
210
210
211
11 Marketing mix strategy
Introduction
The product as a complex entity
Product mix
Distribution strategy
Evolving channels
Pricing decisions
Other dimensions to pricing
Price leadership strategy
Price wars
Marketing communications
Advertising strategy
Media decisions
Selling
Sales promotion
Using the Internet
Marketing research on the Internet
Marketing mix and the Internet
Questions
Case studies: Eau de Nuit
Longevity bulbs
212
212
213
214
216
218
219
221
224
225
225
228
229
230
232
233
234
234
235
235
236
12 Growth strategies: product-market expansion
Introduction
Growth strategies
Market penetration strategy of existing markets
Market development strategy
Product development strategy
New product failures
Diversification
Vertical integration
Further developments of the Ansoff matrix
Questions
Case studies: Remote Applications
Business travel agents into hotels
238
238
239
239
240
241
243
253
258
260
261
261
262
x
CONTENTS
13 Facilitating the implementation of strategies
Introduction
Strategic collaboration
Reasons behind collaborative strategies
Alliances and partnerships
Types of network
Strategic alliances as a competitive force
Strategic alliances: management issues
Customer service and relationship marketing
The goods and service spectrum
Relationship marketing
Building relationships with customers
Characteristics of a marketing relationship
Requirements for successful relationship marketing
The search for consumer focus
Customer service—strategy, systems and staff
Providing superior service
Evaluations
Measuring and monitoring customer satisfaction
Satisfaction gap analysis
Service quality measurement
Internal marketing
Questions
Case studies: ACI
Wan Mart
264
264
265
266
266
267
267
268
269
269
270
271
272
272
273
273
274
275
275
277
277
278
281
281
283
14 Marketing planning and implementing marketing
strategy
Introduction
Corporate strategy and the corporate plan
The marketing plan
The nature and contents of a marketing plan
Plans are not readily implemented
Role of communication in getting plans adopted
Putting strategies into practice
Questions
Case studies: Folix
Maturity to decline
286
286
287
290
292
297
297
298
300
300
301
Bibliography
Further reading
Index
303
309
313
Figures
1.1
1.2
2.1
2.2
2.3
2.4
2.5
2.6
3.1
3.2
4.1
4.2
4.3
4.4
4.5
5.1
6.1
7.1
7.2
7.3
8.1
8.2
8.3
8.4
9.1
Factors impacting on marketing strategy
Elements of Porter’s wheel of competitive strategy
The product life cycle
The BCG product portfolio matrix
Illustration of the BCG product portfolio matrix
The product life cycle portfolio matrix
The GE/McKinsey matrix
The Directional Policy matrix
Matching strategy with resources
Strategy selection and marketing competencies
Industry life cycle
Ways of revitalizing markets
Strategies for declining or stagnant industries
Formulating strategy
SPACE analysis
Market analysis
Forces of competition
The marketing environment
Effects of booms and slumps in the economy
Rate of technological change
Complex buying decision
Factors influencing consumer behaviour
Roles in the purchase decision-making process
Stages in the marketing research process
Sources of competitive advantage
2
13
23
27
29
31
32
34
42
44
64
69
71
74
77
83
104
123
128
129
147
150
154
165
175
xii
FIGURES
10.1
11.1
12.1
12.2
12.3
13.1
13.2
14.1
Requirements of a market segment
Types of sales promotions
Ansoff matrix
Six phases of the new product development programme
Conceptualizing new product development
Reasons for customer defection
The ladder leading to customer relationship profitability
Classical gap analysis
190
233
239
244
248
269
272
290
Exhibits
1.1
1.2
1.3
2.1
2.2
3.1
3.2
3.3
3.4
3.5
3.6
4.1
4.2
4.3
6.1
7.1
7.2
7.3
7.4
8.1
8.2
8.3
PEST factors relating to the personal computer market
PEST factors at work in the insurance industry
Market orientation versus product orientation
Swansea Engineering—difficulties in using the product
life cycle concept
The cherub and the devil and their competitors
Product and service quality
Reverse engineering
Ronex Industries: overcoming mindset
Ford Model ‘T’—the mindset of Henry Ford
Blocks to creativity in organizations
Quietsleep Corporation: creativity in action
Characteristics of emerging industries
Characteristics of maturing industries
SPACE analysis
Customer power in the aerospace industry
Cross impact matrix
The TOWS matrix
SWOT analysis and the TOWS matrix
The TOWS matrix
Why it is important to understand the major factors
influencing consumer behaviour
Stages in the family life cycle and associated behavioural
buying patterns
Customer market research
4
5
7
23
28
48
49
54
56
57
59
65
67
76
105
136
137
138
139
145
155
163
xiv
EXHIBITS
9.1
9.2
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
12.1
12.2
12.3
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11
12.12
13.1
13.2
13.3
13.4
14.1
14.2
14.3
NEC’s use of core competencies
Sources of competitive advantage
Geographical information systems
Generic positioning
Semantic differential
Semantic differential profile
Correspondence analysis method
MDPREF method
Rank ordered data method
Average rankings: PREFMAP method
Attribute rating: PROFIT method
Generic strategies based on Ansoff matrix
What is a new product?
Strategic planning
Dual drivers
Concept generation: problem-based ideation
Creativity techniques for obtaining new product ideas
Scenario analysis
A-T-R model
Concept testing
Entry strategies
Integrative growth strategies
Egan’s extension of the Ansoff matrix
Conditions which facilitate partnership
Building relationships with the customer in the NHS
Ormsby Motors
Internal marketing in practice: an overview of some of
the methods that can be adopted
Hierarchy of planning objectives
Marketing and corporate strategies
Marketing plan outline
173
174
193
200
203
203
204
207
208
209
209
240
242
245
245
246
246
247
251
252
258
259
260
268
275
276
280
288
290
296
Preface
I was spurred on to write a book about strategic marketing in the belief that
it was somehow a different subject to that one normally reads about in most
textbooks on marketing management. I was fascinated by such metaphors
as the strategic window, the boiled frog company and future shock. I thought
that it represented a new dimension to marketing. I have not been too
disappointed by my endeavours. The book contains a lot of material that
one does not usually find in a book on marketing management but at the
same time some of the old familiar terms still appear.
There are many definitions of strategy but in business it refers to how a
firm sets about both setting and achieving organizational objectives. In this
book we look specifically at marketing strategy and in particular the strategy
concerning the formulation and implementation of the marketing mix. The
successful implementation of the marketing mix leads to satisfaction of
customer wants and needs and increases the likelihood of achieving an
organization’s objectives in the market place. In recent years, relationship
marketing has come to the fore as strategic alliances and networks involving
firms working together towards shared goals has become more fashionable.
The strategic management of such relationships is at the core of relationship
marketing.
The argument put forward in this book is that when changes in the market
and the marketing environment are incremental in nature, firms can
successfully adapt themselves to the new situation by modifying current
marketing and other functional programmes. Such changes can be introduced
through technological innovations, changes in customer tastes, changes in
legal regulations, economic and financial constraints or any changes in
xvi
PREFACE
environmental conditions. The nature of competition may also change and
in particular the elements which make up the five forces of Porter’s
competition model. New entrants to the industry may appear; substitute
products may become more attractive propositions to customers; both
suppliers and customers may find their bargaining powers strengthened;
and the balance of competition power between the incumbent firms in the
industry may change as one firm develops a competitive advantage.
However, if the cumulative changes in the economic, technological, social,
political and cultural environments remain unnoticed by a company’s
managers until it is too late to respond, the problems which they create for
the firm may be overwhelmingly difficult to overcome. Similarly, when the
degree of market change is of such magnitude that the competence of a firm
to continue to compete effectively is questioned, then the firm may be
experiencing the closure of an important strategic window. Where change,
leading eventually to the closure of a strategic window, is either very rapid or
very slow the consequences may well be disastrous. In the first case, the
window closes before an organization can respond and, in the second instance,
it does not even notice that the window is about to close until it is too late to
respond.
It is important to examine not only where the firm is today, but how well
equipped it is to deal with tomorrow. In particular, the task of predicting
non-incremental changes in the market is of critical importance. Existing
firms and their competitors can sometimes be replaced in a comparatively
short space of time by a whole new range of competitors. Firms which are
oblivious to the opening and closing of strategic window or firms which fail
to utilize overlapping strategic windows to best advantage, or firms which
are unable to divest when a window closes, risk disaster.
Organizations need to:
1 Identify the opportunities and threats posed by the opening and closing
of strategic windows.
2 Analyse all the relevant internal and external environmental factors acting
upon the firm in the context of the strategic windows.
3 Determine the best strategy or set of strategies that are likely to enable
the firm to take best advantage of the strategic window while it is open.
4 Ensure that adequate resources are available to implement the chosen
strategies.
5 Implement the chosen strategy to take best advantage of the opportunities
presented by the strategic window and to minimize the risks posed by the
threats.
In this book we will be systematically working through the process. It is the
opening and shutting of strategic windows and how the firm might react to
this that is the topic of interest. We discuss the nature and formulation of
business and marketing strategy and point to the need for strategic marketing
management in order to carry it out. We also outline the nature of the
marketing management process that is involved.
PREFACE
The organization has to keep abreast of developments in its external
and internal environments. It also has to ensure that a matching process
between skills and resources is available to take best advantage of
developments and opportunities in the environment and to avoid any threats
that are posed. We look at the resources that the firm has available and at
the developments in the environment that can take place that lead to
opportunities and threats with which the firm has to get to grips. An analysis
of the relevant factors which impinge on the opening and shutting of
strategic windows needs to be undertaken by an organization prior to
making strategic decisions.
Tony Proctor
November 1999
xvii
chapter
one
MARKETING
STRATEGY:
INTRODUCTION
AND OVERVIEW
INTRODUCTION
A strategy is a plan that integrates an organization’s major goals, policies,
decisions and sequences of action into a cohesive whole. It can apply at
all levels in an organization and pertain to any of the functional areas of
management. Thus there may be production, financial, marketing, personnel
and corporate strategies, just to name a few. If we look specifically at
marketing then there may be pricing, product, promotion, distribution,
marketing research, sales, advertising, merchandising, etc. strategies. Strategy
is concerned with effectiveness rather than efficiency and is the process of
analysing the environment and designing the fit between the organization,
its resources and objectives and the environment.
The strategic process refers to the manner in which strategy is formulated.
There are several approaches. First, the rational approach, making use of
tools such as SWOT analysis and portfolio models. Second, the flexible
approach, which employs multiple scenario planning. The creative approach
reflects the use of imagination in planning. The behavioural approach reflects
the influence of power, politics and personalities. An…
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