Discussion Board. Study Guide attached

MBA 5841, Strategic Marketing 1

Course Learning Outcomes for Unit I Upon completion of this unit, students should be able to:

1. Analyze an organization’s strategic marketing goals that align with its mission. 1.1 Determine a company’s profitability analysis for its business strategy based on a case scenario. 1.2 Analyze a company’s business strategy to accomplish its marketing goal.

Course/Unit Learning Outcomes

Learning Activity

1.1 Unit I Lesson Chapters 1 and 4 Unit I Case Study

1.2 Unit I Lesson Chapters 1 and 4 Unit I Case Study

Reading Assignment Chapter 1: Strategic Market Management—An Introduction and Overview Chapter 4: Market/Submarket Analysis

Unit Lesson Companies create plans to determine how they may create offerings to customers. The result of an effective business strategy is one where there is strong alignment between customers’ satisfied needs and wants, the capabilities of the firm to provide offerings addressed to its customers’ needs and wants, and the firm’s developed strategic competitive advantages (SCAs) to address its targeted customers’ needs and wants better than its competition. This strategy is found within a dynamic, ever-changing, and competitive marketplace. In other words, the firm’s business strategy centers on its ability to create customer value, which is the difference between the benefits customers perceive they are getting from an offering minus the perceived cost of obtaining these benefits (Aaker & Moorman, 2018). For their offerings to effectively compete in an ever-changing marketplace, companies must provide superior perceived benefits while demonstrating minimal perceived costs and perceived risks to their customers. This is, in part, how customers determine an offering’s level of value to them. The Value of Planning and Creating a Superior Business Strategy A company’s mission statement is the first step in creating this alignment. It is the company’s statement that informs the public of its purpose and what it represents—a statement it wishes to be known by. Its vision statement demonstrates the kind of company it wishes to be in the future. A critical examination that the company conducts on itself and its competitive marketplace is called a SWOT analysis. SWOT stands for strengths (internal), weaknesses (internal), opportunities (external), and threats (external). The results of this important, self-revealing analysis, which is usually conducted across the organization and across its market environment, provide the firm with the business strategy for where it may compete and how it may compete. An example of a company that maximized its strengths to take advantage of opportunities in a new, early 20th-century technology was that of a very old 19th-century button manufacturer in Scranton, Pennsylvania. The factory retained its competitive advantage with its shellac button coating technology, which was developed in the 19th century, but adapted it to the then-new industry opportunity requirements for pressing phonograph records. As its traditional button markets shifted and became more competitive, it used its

UNIT I STUDY GUIDE

Creating Marketing Strategies That Align with the Company’s Mission and the Market

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sustained competitive advantage developed in the making and coating of buttons to press and coat a newly developed recording industry technology required in the manufacture of phonograph records. This shift in strategy enabled the company to continue prospering for many decades (“In The Lurch,” 2017).

Strategic market management is a process designed to help management create, change, or retain a business strategy and to create new strategies for the future. A marketing strategy is a subset of business strategy that involves the same four strategy components, although, the scope is restricted to marketing. It includes decision and budgets related to product market activities, customer value proposition, marketing assets and competencies, and different functional areas within marketing. (Aaker & Moorman, 2018, p. 10)

Creating Marketing Strategies Traditionally, most of a firm’s key functional departments were focused internally in managing and controlling its production and manufacturing efforts. Marketing was one of the few departments that spent more time and effort focused externally—first on customers and then on industry competition. Now, however, with ever- changing markets driven by rapid technological changes, no department in the firm has the luxury of only focusing inward. Marketing is more important than ever, maintaining its focus on what the customer needs or wants. The following illustration is an overview of strategic management as shown in Figure 1.3 in the textbook.

Finally, the firm engages in implementing the strategy and producing a firm value (Aaker, & Moorman, 2018). In order to be competitive, the company must develop and create the following five management task competencies: strategic analysis, innovation, getting control of multiple business units, developing SCAs, and developing growth platforms (Aaker & Moorman, 2018). Implementing Strategy One of the most difficult aspects of the strategic market strategy planning process is implementing the strategy itself. It is at this point that the implemented strategy takes on a life of its own. One of the greatest reasons most strategic plans fail is that the planners underestimate challenges, perceiving them as insignificant challenges that ultimately end up being major implementation stumbling blocks.

(Aaker & Moorman, 2018)

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An example might be a firm producing a much-needed and helpful product that is shown through its market research to be ideally suited for and desired by its target market. The product fulfilment and customer service departments need to work harmoniously with the marketing department to ensure that the newly launched product’s promise and its performance attributes are perceived and enjoyed at the same levels by customers. This way, the implemented marketing strategy will achieve the initial success that the planners had expected. Companies all too often assume other key internal departments tasked with supporting the marketing strategy implementation effort automatically know what is required of them in their role of achieving implementation success. It is up to the marketing department during its planning stages to ensure these key internal departments are all aware and trained to the levels necessary in order to reach or surpass the marketing strategy planners’ set goals. The customer service and product fulfillment departments, for example, must convey the same levels of confidence and enthusiasm about the newly launched products to their customers as the marketing department did in selling the products in the first place. The promise versus performance gap perceived by the customer must remain positively aligned. If it does not, customers can be left with high expectations that cannot be met. This can cause needless customer frustration. In the end, not only does the marketing strategy suffer, but the potential for the brand to suffer is a real possibility. There are ways to avoid marketing strategy implementation failure. One way is for firms, during the market planning process, to coordinate better internally. The marketing department has the responsibility to take the lead in reaching out to support departments in order to make them more aware of how the marketing value proposition is intended to be communicated to potential customers. It is through this interaction that these internal support departments can visualize how they will contribute to the market strategy success. It also provides an opportunity for challenges to be raised that might impede plan implementation. Something that the marketing department believes should be simple for a functional internal department to achieve may not be simple at all. The level of automation that may be a key customer service requirement may not be working as well as previously thought by the market strategy planners. This would have a negative effect on how well the company could respond to its customers during the product strategy implementation phase. At this point, a short-term fix could be addressed, such as adding and training additional customer service representatives with the long-term goal of better developing the necessary automation initially required by the plan. Product launch schedules and expected plan revenue targets could still be met. The additional short-term labor costs that were not planned would have a much lower overall impact as a result. To the customer, it would be met as a desired product that would now be available to them. The customers’ experience with the product would create an experience that would be supported, uniformly, by the company in order for the buyers to receive the best value at the best price. The targeted customers’ experience with the company and its support for its product and brand would be a seamless and positive event. Market Analysis In a highly competitive environment, it is good to assume that all markets are dynamic. Firms must be able to differentiate between competitive market activity and potential emerging submarkets as discussed in Chapter 4 of the textbook. Figure 4.1 shows the six criteria by which markets and submarkets can be evaluated: submarkets, size and growth, profitability, cost structure, distribution systems, market trends, and key success factors (KSFs) (Aaker & Moorman, 2018). When analyzing emerging submarkets, firms’ activities during the planning stage need to determine the potential size and profitability of the identified market. The goal for the firm, using its SCAs, is to effectively compete and earn above-standard industry profits on its products offered in the emerging submarket. This can be achieved through implementing Porter’s five-factor model of market profitability. In this model, which was developed by Harvard professor Michael Porter, firms can measure the long-term return on investment by comparing it against five factors, which are listed below:

 the intensity of competition among existing competitors,

 the existence of potential competitors who will enter if profits are high,

 substitute products that will attract customers if prices become high,

 the bargaining power of customers,

 the bargaining power of suppliers (as cited in Aaker & Moorman, 2018).

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During a firm’s strategy planning analysis of an emerging submarket, KSFs are considered and identified. A KSF is either a strategic necessity or a strategic strength. Interestingly, if the former is missing, it can be a sign of significant weakness. Its presence, though, does not indicate a significant strength. It may not be readily recognized, but it can negatively impact a company’s market strategy success if overlooked. Strategic strengths are distinctive competencies that a company does much better than its competitors, enabling the firm to compete better. During a firm’s planning process, the evidence of emerging markets can create opportunities or demonstrate the current relevance of the firm’s current strategic market plan.

References

Aaker, D. A., & Moorman, C. (2018). Strategic market management (11th ed.). Hoboken, NJ: Wiley. In the lurch; left-behind places. (2017, October 21). The Economist, 425, 19. Retrieved from https://search-

proquest-com.libraryresources.columbiasouthern.edu/docview/1953984747?accountid=33337

Suggested Reading In order to access the following resource, click the link below. The following article offers interesting information on online retailers using specific business strategies for customers. Rowley, J. (2009). Online branding strategies of UK fashion retailers. Internet Research, 19(3), 348–369.

Retrieved from https://search-proquest- com.libraryresources.columbiasouthern.edu/abicomplete/docview/219845414/F6E45664556D4946P Q/9?accountid=33337

Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information. Chapter 1 Knowledge Check Complete the Chapter 1 Knowledge Check below to gain a better understanding of the lesson. Click here to access the Chapter 1 Knowledge Check. Chapter 4 Flash Cards The following interactive presentation on Chapter 4 will assist you in better understanding the lesson. Click here to access the Chapter 4 Flash Cards presentation. (Click here to access a PDF version.) Chapter 4 “For Discussion” Questions Review the Chapter 4 “For Discussion” questions on page 75 in your textbook, and answer one to two questions. Submit your responses to your instructor for relevant feedback.