Lectures Marketing Strategy
Lecture 1: Marketing strategy: What the Hell is Marketing
Strategy? (part 1)
Marketing strategy is the connection between goals and actions
- It is the flexible game plan that connects where the firm wants to
go (goals) with what the firm actually does (actions/tactics)
1. Goals: desired future state
2. Strategy: medium- to long-term, flexible plan for future actions
3. Actions/tactics = concrete short-term tasks that implement
the strategy in practice.
1) Goals:
- A goal must describe a desired furure outcome
- It must be clear in terms of content and time horizon
- A goal can be absolute (“grow with >30% a year”), or relative (“beat
Telkom’s NPS by 4 points”)
Levels of goals within a firm:
1. Corporate goals: Overall management objective for the
whole company
E.g., shareholder value, overall growth rate, portfolio of
brands.
2. SBU goals (Strategic Busines Unit): objectives for a specific
business area/line.
E.g., “increase market share by 5%”
3. Functional goals: objectives for functions like marketing,
sales, production, finance.
“Sell X units of coffee pads”, “increase newsletter
penetration by 105”
Goals on different levels can conflict, so alignment between these
different levels is crucial.
2) Strategy: strategy serves as the connection between goals and
actions
- “strategy is a game plan for achieving (long-term) goals” – Kotler
and Keller (‘09)
- It is not the goal itself, and not the specific day-to-day task, but it is
the guiding plan in between.
Strategy can also be implimented at different levels of the firm:
1. Corporate strategy
2. Business/SBU strategy
3. Functional strategy
, 1. Corporate strategy: consists of fundammental decisions that
affect the entire company and cannot be decentralizsed.
Synergy between SBUs
Selection of markets and brand identities,
Enabling and cultivating a market-oriented culture
o E.g., Volkswagen group has multipe SBUs (VW, audi, skoda,
scania), the corporate strategy decides the portfolio, positioning,
and synergies between them.
2. Business/SBU strategy: business strategies seek to gain a
competitive advantage in an SBU. (must be in line with corporate
strategies).
o e.g., Netflix; goal to become the best global entertainment
distribution service.
Strategy:
Build on easy access and superior customer experience
Offer the widest catalogue content
Differentiate through high-quality, exclusive series and
movies
Licence entertainment content all over the world
3. Functional strategies: fundemental decisions within functions:
pricing, promotion, distribution, product, procurement, sales,
production ……
o E.g., stay below biggest competitior’s channel price.
It is crucial that the strategy is flexible!
- “Everybody has a plan untill they get punched in the face”
- “No plan, survives contact with the enemy “
Recap:
- A strategy provides a medium- to long-term (flexible) plan
for future actions. Strategy represents the connection
between goals and (operative) actions.
- Goals are therefore not part of the strategey, but its normative
reference point. Actions are taken to translate the strategic
guidelines into concrete results.
- Strategies are not fixed but need to be adaptable to changing
environmental conditions
3) Actions/tactics:
- Concrete, short-term tasks or measures that implement strategies
- Must be: identifiable, monitorable, and evaluable
E.g., netflix:
- Spend $15 billion on in-house content production
- Develop mobile apps, easy account sharing, and switching
- Build superior AI-based recommendation systems
,Marketing strategy: What the Hell is Marketing Strategy? (part 2)
What is marketing strategy?
- Narrow definition: marketing strategy = functional strategy (how
to run the marketing department). this is too limited; marketing is
much more than a ‘function’
- Broad definition: marketing strategy = corporate strategy
(customer-oriented corporate management). this is too vague; it
does not clarify what marketing actually contribures strategically
We need a better definition rooted in what marketing really is
Marketing:
Marketing is multidimensional and cross-functional. It cannot be
reduced to one activity or one department.
Common (incorrect) views on marketing:
- “Marketing = advertising/attracting attention”
- “Marketing = selling people stuff that they don’t need”
- “Marketing = sales/push strategy”
Definition: Marketing is both push and pull, but with a stronger focus on
pull: undetstanding and responding to consumers’ (often latent) needs so
well that they demand the product.
Traditional view: marketing as a function
Modern view: marketing as a leadership philosophy
- Drucker (1973): marketing is so fundamental that it is not a
separate function; it is the entire business seen from the customer’s
point of view. And a businesses success is not determined by the
producer but by the consumer
- Kotler (1977): identified the components of true market orientation:
o Consumer-centric philosophy
o Integrated marketing organization
o Adequate market informatino
o Strategic orientation
o Operational efficiency
Marketing is about identifying and fulfilling customer needs
better than competitors.
Marketing is the management of competitive advantage (CA)!!!
preferred definition
- Marketing manages the firm’s relative perceived value vs.
competitors
- Customers make relative comparisons: value must be higher than
competing offers, not just in absolute terms.
, this leads to the marketing triangle:
The job of a marketer is to
manage this triangle and ensure
a sustained competitive
advantage
You need to be perceived as the best, it is not only about having
something that is important to the customer. You need to be able to push
it to the competitive market.
Elements of a competitive advantage (must meet all 4)
1) Important:
o The advantage must relate to attributes the consumer actually
cares about.
o A firm must outperform competitors on important attributes,
not irrelevant ones.
2) Perceived:
o Perception matters; the way a product is presented has
influence on how it is perceived and how value is determined
Perception drives value
Customers must notice the advantage
3) Protectable:
o Advantage must be defendable against imitation
o Competitors try to copy through innovationor immitation; CA
must be shielded
4) Proditable:
o Advantage musst produce financial returns
o RaRet – production costs = CM1
Lecture 1: Marketing strategy: What the Hell is Marketing
Strategy? (part 1)
Marketing strategy is the connection between goals and actions
- It is the flexible game plan that connects where the firm wants to
go (goals) with what the firm actually does (actions/tactics)
1. Goals: desired future state
2. Strategy: medium- to long-term, flexible plan for future actions
3. Actions/tactics = concrete short-term tasks that implement
the strategy in practice.
1) Goals:
- A goal must describe a desired furure outcome
- It must be clear in terms of content and time horizon
- A goal can be absolute (“grow with >30% a year”), or relative (“beat
Telkom’s NPS by 4 points”)
Levels of goals within a firm:
1. Corporate goals: Overall management objective for the
whole company
E.g., shareholder value, overall growth rate, portfolio of
brands.
2. SBU goals (Strategic Busines Unit): objectives for a specific
business area/line.
E.g., “increase market share by 5%”
3. Functional goals: objectives for functions like marketing,
sales, production, finance.
“Sell X units of coffee pads”, “increase newsletter
penetration by 105”
Goals on different levels can conflict, so alignment between these
different levels is crucial.
2) Strategy: strategy serves as the connection between goals and
actions
- “strategy is a game plan for achieving (long-term) goals” – Kotler
and Keller (‘09)
- It is not the goal itself, and not the specific day-to-day task, but it is
the guiding plan in between.
Strategy can also be implimented at different levels of the firm:
1. Corporate strategy
2. Business/SBU strategy
3. Functional strategy
, 1. Corporate strategy: consists of fundammental decisions that
affect the entire company and cannot be decentralizsed.
Synergy between SBUs
Selection of markets and brand identities,
Enabling and cultivating a market-oriented culture
o E.g., Volkswagen group has multipe SBUs (VW, audi, skoda,
scania), the corporate strategy decides the portfolio, positioning,
and synergies between them.
2. Business/SBU strategy: business strategies seek to gain a
competitive advantage in an SBU. (must be in line with corporate
strategies).
o e.g., Netflix; goal to become the best global entertainment
distribution service.
Strategy:
Build on easy access and superior customer experience
Offer the widest catalogue content
Differentiate through high-quality, exclusive series and
movies
Licence entertainment content all over the world
3. Functional strategies: fundemental decisions within functions:
pricing, promotion, distribution, product, procurement, sales,
production ……
o E.g., stay below biggest competitior’s channel price.
It is crucial that the strategy is flexible!
- “Everybody has a plan untill they get punched in the face”
- “No plan, survives contact with the enemy “
Recap:
- A strategy provides a medium- to long-term (flexible) plan
for future actions. Strategy represents the connection
between goals and (operative) actions.
- Goals are therefore not part of the strategey, but its normative
reference point. Actions are taken to translate the strategic
guidelines into concrete results.
- Strategies are not fixed but need to be adaptable to changing
environmental conditions
3) Actions/tactics:
- Concrete, short-term tasks or measures that implement strategies
- Must be: identifiable, monitorable, and evaluable
E.g., netflix:
- Spend $15 billion on in-house content production
- Develop mobile apps, easy account sharing, and switching
- Build superior AI-based recommendation systems
,Marketing strategy: What the Hell is Marketing Strategy? (part 2)
What is marketing strategy?
- Narrow definition: marketing strategy = functional strategy (how
to run the marketing department). this is too limited; marketing is
much more than a ‘function’
- Broad definition: marketing strategy = corporate strategy
(customer-oriented corporate management). this is too vague; it
does not clarify what marketing actually contribures strategically
We need a better definition rooted in what marketing really is
Marketing:
Marketing is multidimensional and cross-functional. It cannot be
reduced to one activity or one department.
Common (incorrect) views on marketing:
- “Marketing = advertising/attracting attention”
- “Marketing = selling people stuff that they don’t need”
- “Marketing = sales/push strategy”
Definition: Marketing is both push and pull, but with a stronger focus on
pull: undetstanding and responding to consumers’ (often latent) needs so
well that they demand the product.
Traditional view: marketing as a function
Modern view: marketing as a leadership philosophy
- Drucker (1973): marketing is so fundamental that it is not a
separate function; it is the entire business seen from the customer’s
point of view. And a businesses success is not determined by the
producer but by the consumer
- Kotler (1977): identified the components of true market orientation:
o Consumer-centric philosophy
o Integrated marketing organization
o Adequate market informatino
o Strategic orientation
o Operational efficiency
Marketing is about identifying and fulfilling customer needs
better than competitors.
Marketing is the management of competitive advantage (CA)!!!
preferred definition
- Marketing manages the firm’s relative perceived value vs.
competitors
- Customers make relative comparisons: value must be higher than
competing offers, not just in absolute terms.
, this leads to the marketing triangle:
The job of a marketer is to
manage this triangle and ensure
a sustained competitive
advantage
You need to be perceived as the best, it is not only about having
something that is important to the customer. You need to be able to push
it to the competitive market.
Elements of a competitive advantage (must meet all 4)
1) Important:
o The advantage must relate to attributes the consumer actually
cares about.
o A firm must outperform competitors on important attributes,
not irrelevant ones.
2) Perceived:
o Perception matters; the way a product is presented has
influence on how it is perceived and how value is determined
Perception drives value
Customers must notice the advantage
3) Protectable:
o Advantage must be defendable against imitation
o Competitors try to copy through innovationor immitation; CA
must be shielded
4) Proditable:
o Advantage musst produce financial returns
o RaRet – production costs = CM1
