Strategic Marketing

by: Guenther Klein

I. Introduction Competing for the future

II. Marketing

III. To close the Gap

IV. Ansoff Matrix

V. Other options

a) BCG
b) McKinsey
c) Porter / competitive forces
d) From PEST to SWOT
e) PLC

VI. Implementation

a) TQM
b) BLC

VII. Conclusion

VIII. Reference

I. Introduction - Competing for the future

Today organizations have to find answers to questions that might be asked in near future by both: customers and competitors. In his book On Marketing¹ by Kotler written in 1999, the author is drawing a dramatic picture of the future, for the competitive situation in 2005: Companies are unable to sustain competitive advantages (outside of patents?)².

Although his scenario maybe came not true , the point is interesting: How do companies find the right way to respond to new developments (e-business, globalization etc.). Strategy is about the long term development. Organizations need to collect information of the market, they have to define strategies and difficulty enough, they need to implement the strategies. In order to remain a market leader, Hamel and Pralahad advise their reader in an article from 1994³ to pause for a moment and ask questions like:

-Who are the customers today and who will be the customers in the future?
-Who are presently our competitors and who will compete with us in the future?
-What is our competitive advantage today and what will make us a leader in the future?

Models like Ansoffs matrix or Porters 5 Forces make todays situation visible and allow to formulate strategic options. The task is to find and implement strategic options, that allow the best allocation of recourses in the future.

II. Marketing

According to Kotler, there are two wrong views of Marketing: Marketing is selling and Marketing is mainly a department⁴. For him its the job of Marketing to understand the markets and to formulate strategies how to dominate target markets. According to Stender-Mohemius⁵, Kotler is following here a broader (modern) definition of marketing, which is also promoted by the AMA⁶.

I understand marketing as a corporate function, that deals with two components:

The marketing system (the company itself, resources provided by the firm, suppliers and distributors) and the external environment⁷. Whereas the first part can be controlled and planned to some extend, the external environment (demographic factors, the society and development etc) is hard to control or to predict. Marketing has to understand the external environments and formulate strategies (that are later to be broken down to tactics and operationable goals). There are many definitions out there for marketing, however there is not one correct approach of marketing⁸.

III. To close a gap

In his famous book Corporate Strategy Ansoff offered a new way, to close the gap between the companys objectives and the forecasted performance.⁹ The literature distinguishes between the operative gap (potential basis business ./. basis business) and the strategic gap (development limit ./.expected new business). The strategic gap might be closed by either downsizing the expectation or by using the Ansoff matrix. Or as Kotler puts it: Either the company will have to reduce its sales (and profit) goal or find breakthrough ideas to fill the remaining strategic gap.¹⁰

IV. Ansoff Matrix

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1 Kotler, On Marketing, 1999

2 Kotler, On Marketing, page 16

3 Competing for the future, by Gary Hamel and C.K. Prahalad Harvard business review julyaugust 1994

4 Kotler, On Marketing, page 19

5 Stender-Mohemius, Marketing: Grundlagen mit Fallstudien, page 1

6 The American Marketing Association : Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas ,goods, and services to create exchanges that satisfy individual and organizational objectives, www.bsu.edu/marketing/

7 See also Module MN7002/D, Strategic Marketing, Edition 10, University of Leicester page 2.3

8 Module MN7002/D, Strategic Marketing, page 1.12

9 See also http://www.market-modelling.co.uk/MATRIX/MATRIX_Step11_1.htm

10 Kotler, On Marketing, page 44