1. Define strategy and define marketing strategy. Is strategy important for marketers? Support with examples and references. Due 5 August (10%)
The term strategy has been succinctly defined by Walker, Boyd, Mullins, Lareche 2003 as a pattern of planned objectives, resources deployments and interactions in an organization with markets, competitors and other environmental factors. Mike Rukstad 2008, identified three critical components of a good strategy statement which are objective, scope, and advantage. Two other important factors covering strategy are resource deployments and synergy (Walker, Boyd, Mullins, Lareche 2003).
The scope of a strategy covers its domain namely the type and number of industries, product lines and market segments. The strategy objectives detail levels of accomplishment or performance such as volume growth, profit contribution or return on investment over a period of time. The competitive advantage strategy must be sustainable and must examine market opportunities in each business and product for competencies and strength (Collins and Rukstad 2008). Resources be it financial or human, must be deployed across businesses, product markets, functional departments, and activities. Synergy exist when a firms business, product markets and resources and competencies reinforce one another (Walker, Boyd, Mullins, Lareche 2003).
Markides 2004 Page 8, illustrated that a company’s strategy should be distinctive, everyone in the company should participate in developing it, it should be flexible to change and create an environment that supports it. Strategy can also be classified into blue ocean ( a market that exist without competitors ) or red ocean ( a market full of competitors ) (Čirjevskis, Homenko, Lačinova 2010, Pg 162).
There is a hierarchy of strategies that exist at 3 major levels which are corporate strategy, business-level strategy and functional strategy ( Rajan, Clark 1994, Pg 94) . At corporate level the manager must coordinate the activities of multiple business units and decide what business they should be in, how much resources to allocate to each business and the objectives of each business. As a business strategy level the main issue would be sustainable competitive advantage, which competencies meet the need of the consumer and the scope in which to compete. At the marketing strategy level the aim is to effectively allocate and coordinate the resources to accomplish the firms objectives within the segment. Figure 1 shows the 3 different levels of Strategy.
Webster (1992, p. 10) states: “In addition to the three levels of strategy, we can identify three distinct dimensions of marketing—marketing as culture, marketing as strategy and marketing as tactics.... Marketing as strategy is the emphasis at the SBU level, where the focus is on market segmentation, targeting, and positioning in defining how to compete in its chosen field.”
Figure 2 explain the relationship between strategy in its effect in the various levels of decision making.
In the marketing discipline, the terms strategic marketing and marketing strategy are used interchangeably in reference to the field of study, and marketing strategy is also used in reference to the organizational strategy construct that is the principal focus of the field. In 2007, the AMA adopted the following as its new official definition of marketing: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” (Marketing News 2008, p. 28) . American Marketing Association (AMA) Marketing Strategy Special Interest Group (SIG) states the domain of marketing strategy as follows: “The domain of marketing strategy research is broadly defined to include all firm-level strategic marketing issues, decisions, and problems” (ELMAR 2009). Cunningham and Robertson (1983, p. 5) stated...
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