Kern
,CHAPTER 1: What is Strategy & What is
Marketing?
1.1 What is Strategy?
Definition
A strategy is a medium- to long-term, flexible
plan that connects a company’s goals to actions.
Important clarifications:
● Goals ≠ Strategy.
Goals are normative reference points;
strategies are how to get there.
● Strategies must remain adaptable because no plan survives unchanged (“everyone
has a plan until they get punched in the face”).
Levels of Strategy
1. Corporate strategy
Broad, company-wide, defines the
portfolio and scope.
2. SBU (Strategic Business Unit)
strategy
Where competitive advantage exists;
markets differ per SBU.
3. Functional strategy
Marketing, pricing, production, HR,
supply chain, etc.
Most marketing strategy lives on the SBU level,
because CA is market-specific.
Why “strategy = everything” is wrong
Companies confuse:
● goals with strategies
● tactics with strategies
● advertising with marketing strategy
This is exactly the problem seen in the exam case: “gain market share” is not a
strategy
1.2 What is Marketing?
Incorrect definitions (common misconceptions)
● “Marketing = advertising” → too narrow.
, ● “Marketing = selling people things they don’t need” → wrong; value is
subjective.
● “Marketing = what the marketing department does” → differs per
company.
Definitions can never be wrong, they are just more or less useful. Everybody may define
anything in any way they like. We use definitions so that we know we are talking about the
same thing.
Correct definition
Marketing = management of the competitive
advantage
→ managing the firm around the creation,
communication, and protection of competitive
advantage.
If we define Marketing as „management of CAs“,
strategic marketing takes part primarily on the SBU
level (because competitive advantage is created here), while operative marketing are the
actions that implement this strategy.
Competitive Advantage (CA)
A CA needs to be effective (in driving demand -
"fun for the customer") and efficient (in
generating profits - "fun for the company")
A CA exists only if it is:
1. Important (customers value it)
2. Perceived (recognized by customers)
3. Protectable (difficult to copy)
4. Profitable (generates sustainable
margins)
Why CA is difficult
● Lack of concentration on a few but clear CAs
● Lack of transfer from product advantages to CAs:
● CA-hostile company environment (in firm thread)
● Adjustment to dynamic competition too slow
● Firms don’t understand their competitors
● They try to be good at everything
● They misunderstand customer perceptions
● They confuse product advantages with competitive advantages
Conclusion of Chapter 1
Marketing strategy = the long-term, somewhat flexible plan to create and leverage
competitive advantage (as its core for a specific business unit) - CA - to achieve a unique
market position
,
,CHAPTER 1: What is Strategy & What is
Marketing?
1.1 What is Strategy?
Definition
A strategy is a medium- to long-term, flexible
plan that connects a company’s goals to actions.
Important clarifications:
● Goals ≠ Strategy.
Goals are normative reference points;
strategies are how to get there.
● Strategies must remain adaptable because no plan survives unchanged (“everyone
has a plan until they get punched in the face”).
Levels of Strategy
1. Corporate strategy
Broad, company-wide, defines the
portfolio and scope.
2. SBU (Strategic Business Unit)
strategy
Where competitive advantage exists;
markets differ per SBU.
3. Functional strategy
Marketing, pricing, production, HR,
supply chain, etc.
Most marketing strategy lives on the SBU level,
because CA is market-specific.
Why “strategy = everything” is wrong
Companies confuse:
● goals with strategies
● tactics with strategies
● advertising with marketing strategy
This is exactly the problem seen in the exam case: “gain market share” is not a
strategy
1.2 What is Marketing?
Incorrect definitions (common misconceptions)
● “Marketing = advertising” → too narrow.
, ● “Marketing = selling people things they don’t need” → wrong; value is
subjective.
● “Marketing = what the marketing department does” → differs per
company.
Definitions can never be wrong, they are just more or less useful. Everybody may define
anything in any way they like. We use definitions so that we know we are talking about the
same thing.
Correct definition
Marketing = management of the competitive
advantage
→ managing the firm around the creation,
communication, and protection of competitive
advantage.
If we define Marketing as „management of CAs“,
strategic marketing takes part primarily on the SBU
level (because competitive advantage is created here), while operative marketing are the
actions that implement this strategy.
Competitive Advantage (CA)
A CA needs to be effective (in driving demand -
"fun for the customer") and efficient (in
generating profits - "fun for the company")
A CA exists only if it is:
1. Important (customers value it)
2. Perceived (recognized by customers)
3. Protectable (difficult to copy)
4. Profitable (generates sustainable
margins)
Why CA is difficult
● Lack of concentration on a few but clear CAs
● Lack of transfer from product advantages to CAs:
● CA-hostile company environment (in firm thread)
● Adjustment to dynamic competition too slow
● Firms don’t understand their competitors
● They try to be good at everything
● They misunderstand customer perceptions
● They confuse product advantages with competitive advantages
Conclusion of Chapter 1
Marketing strategy = the long-term, somewhat flexible plan to create and leverage
competitive advantage (as its core for a specific business unit) - CA - to achieve a unique
market position
,
