STRATEGIC MARKETING MANAGEMENT
In this assignment there is a discussion of strategic marketing management that how it plays an important role. Strategic marketing tools are essential to play game; there are different strategies and techniques of marketing. There is a best fit relation between corporate strategy and marketing strategy. There is a discussion of different analysis model for the positioning and growth. Nestle has been used an example of strategic marketing management because of its standard and leadership in food industry.
Marketing is a game and there are strategic tools which are needed for playing the game between buyers and sellers where they exchange values for the satisfaction which results in profitability.
- STRATEGIC MARKETING IN AN ORGANIZATION:
There are four traditional strategic P’s (product, price, place and promotion) and three extensions strategic P’s (people, process and physical evidence). In strategic marketing the traditional P’s are used for Goods and extensions are Service P’s. To manage these P’s marketers use four strategic C’s (customer solution, customer cost, convenience and communication). Strategic marketing is a holistic marketing concept where four P’s and four C’s are integrated. It focuses on customer, core competencies and collaborative network. Strategic marketing is a long term and pre-nurtured plan for contingency process (Kotler & Keller, 2006).
For example, NESTLE believes in long term marketing planning and it heavily emphasize on four P’s. In Product, they are offering it as a safe and healthy product which is known for its quality. In Price, it has a single price and it follows non price competition strategy. In Place, timely supply is important and it delivers its products on time. In promotion, it uses various sources like magazines, billboards, newspapers, radio and TV to ensure that every consumer has an image of Nestle in his mind (Etzel, Walker & Stanton, 2000).
- STRATEGIC MARKETING PROCESS:
For the development of marketing strategies and plan, an organization goes through the following process;
- VMV: First, an organization defines its V-values, M-mission and V-vision (Kotler & Keller, 2009). Nestle values are to create long term values for its customers and shareholders means creating a shared value. Nestle mission is to become a leader in food industry by continuous innovative discoveries which promotes better health. Nestle vision is to serve its customers with nutritious and tasty food which fulfill their needs and are according to their preferences (Nestle, 2010).
- GOALS AND OBJECTIVES: Secondly, an organization defines its goals and objectives clearly. Nestle goals are to rule the market as a food leader, to make people more demanding for its products which will create a competitive advantage and profitability and also it want to make its remark in financial performance (Nestle, 2010).
- EXTERNAL ANALYSIS: Now organization carries out PEST (political, economical, social and technological) and EL (ecological and legal), it is an industrial analysis. These are known as externalities. These are for defining the organization (Kotler & Keller, 20069).
- INTERNAL ANALYSIS: Internal analysis is carried out by SWOT (strength, weakness, opportunity and threat) analysis. Its basic rule is to convert T into O and then into S and in same way convert W into O and then into S (Peter, & Donnelly, 2007).
Nestle strengths are its diversified portfolio, strong brand equity, great market share and high quality. Its weaknesses are fragile distribution channels and communication. Its opportunities are to more diversify its product line, converting weaknesses into strengths and more enhanced promotional strategies. Its threats are its competitors and uncertainty (Robbins & Coulter, 2001).
- TOOLS: Organization makes strategies for seven P’s .
- STRATEGIC ANALYSIS: Nestle uses different strategies for improving the quality of its products. It uses BCG matrix, SMART analysis, porter model etc for strategic analysis of its position in market (Webster,2009).
- MEDIA PLAN: Now an organization promotes its products through media. Segmentation Targeting and Positioning plays an important role. Media plan must be according to AIDA (Kotler & Keller, 2009).
- DISTRIBUTION CHANNELS: Nestle channel of distribution is as follows;
- FINANCIAL PLAN: This is the last step here organizations make financial statements to measure its growth (Kotler & Keller, 2009).
- LINK BETWEEN STRATEGIC MARKETING AND CORPORATE STRATEGY:
There is a strong and positive connection between corporate strategy and marketing strategy. Corporate strategy is the main business plan whereas marketing strategy is the plan how to achieve this target. The main business objective can be achieved by creating the awareness and desire of a product through its promotion and marketing. Nestle corporate strategy is to attain a top position in business and rule the market as a leader through creation of long term values for its customers and shareholders (Nestle, 2010). Nestle marketing goal is to create the long term value of products (Wetswood 2002).
3.1 VALUE OF STRATEGIC MARKETING PLANNING MODELS:
- ANSOFF MATRIX: While targeting, an organization select a segment to whom it will cater. It is done by Ansoff matrix and it is an important model. When the market and product both exist, it is expansion penetration. When the market exists and product is new, it is product development. When markets is new and product is existing, it is market development and when both market and product is new, it is diversification (Kotler & Keller, 2009).
- PORTER MODEL: This model helps in analyzing the threat of new entrance and substitutes, bargaining power of buyer and seller and rivalry. Rivalry is connected with the effects of PEST. With the help of this model organization can increase its core competencies before its competitor take over (Hill & Jones, 2009).
- SMART ANALYSIS: Nestle promote their product by creating awareness, which is their main objective and its main objective is to become a leader of food industry therefore it analyzes that there goals must be specific, measurable, actionable, realistic and time frame (Khandelwal, 2009).
3.2 LINK BETWEEN MARKETING TACTICS AND STRATEGIC POSITIONING:
Positioning (P) is managed by strategic Convenience (C). It helps in where product is to be placed so that it is conveniently available. For convenience the customer has to pay its cost. If positioning is right so it results in long term profitability and customer loyalty. Strategic marketing focuses on Segmentation Targeting and Positioning. Nestle has placed its products everywhere and it is using every kind of advertisements. The advertisement which it uses is unique and shows purity. The purity is the Unique Selling Point. Nestle has also done Personal Selling, this was the most innovative marketing idea. It also emphasize on Publicity for creating the awareness. Nestle has a competitive positioning which can be measure by its stand in the market (Gilligan and Wilson, 2003).
3.3 MERITS OF RELATIONSHIP MARKETING IN A STRATEGIC MARKETING
Relationship marketing is a long term process, it emphasize on customer relationship, communication, customer solution, convenience and satisfaction. It is of great advantage as it helps in the projection of sales and it is widely practiced. It helps in attracting the customers and guiding them. It immensely nurtures the consumers through innovative ideas, keep them up to date and reduce the losses. It emphasizes on internal marketing that is to invest on human resource, for the satisfaction of employees because if the employees are satisfied so he customers are satisfied (Friedman, 1999).
4.1 MARETING TECHNIQUES TO ASCERTAIN GROWTH OPPORTUNITIES IN
There are several techniques to increase the growth opportunities in the market, which are as follows considering the views of Isha, (2009) and Subhash (2009).
- BRANDING: It is a technique in which customers differentiate the products from its competitor products.
- PACKAGING AND DESIGN: It also enhances the growth opportunities; packaging is the first thing that attracts the customers because of its color scheme.
- OFFERINGS: Greater the offerings the greater the solutions for customer problems
- LABELLING: The quality of a product is exposed by the use of words or phrases.
- VALUE ADD ON: Adding the value on a product increases it demand and the product penetrates in the market.
- ENVIRONMENTAL SCANNING: Gathering information is data collection. Scanning is a thorough search. Due to better scanning, an organization absorbs the growth opportunities by marketing the product.
4.2 USE OF MARKETING STRATEGY IN A MARKET:
Marketing strategy is the best fit of the organizational resources and strategies and the opportunities of growth in the marketplace. Marketing strategy maintains the profitability and strength of the products in the market; it maintains the standard and also shapes the organization. Four P’s are the tools for playing the marketing game which results in satisfaction for the customers and thus increases customer loyalty and profitability. .Nestle markets their products by showing the purity of products which are for better health and fitness of consumers. It continuously brings innovations in its products for maintaining its standard in the market and delivering the value to the share holders and customers (Gilligan, and Wilson, 2003)
Four P’s are as follows;
- Product: Product is the offering and it main focuses on how you are marketing its attributes and benefits which tends consumer to buy it. Nestle defines its products quality, purity and healthiness
- Price: Pricing is another factor. A product should be priced which is easy for customer to bail. It depends on the purchasing power. Nestle follows the non price competition strategy
- Placement: Placement is how conveniently the product is located at right time.
- Promotion: Promotion is how the organization is advertising its product. Nestle uses different sources to make customers aware of the product and create an image of its product in the consumer mind.
4.3 STRATEGIC MARKETING OBJECTIVES FOR A MARKET:
Nestle main objectives are to create the long term need of its product through strategically marketing it, creating the long term value for its customers, share holders and other associated people.
Nestle maintains the standard in the market which is due to the trust of its own people and customers. This trust is the main reason for its existence. Nestle emphasizes on long term and strong business development (Webster, 2006).
5.1 IMPACT OF CHANGES IN THE EXTERAL ENVIRONMENT ON MARKETING
External environment affects the organizational plans for achieving their targets. PEST analysis are the externalities which affects on the organization, if political situation is not good so the organization can suffer, if the economy is going down and risk is increasing and technological standards are not maintained by the organization so organization will face losses (Westwood, 2006).
According to five forces model, if there is a new entrance in market with better products or any substitute which is more reliable so it can affect the business development. And if bargaining power of buyer increases so there will be decrease in bargaining power of seller (Peter& Donnelly, 2007).
5.2 CURRENT STRENGTH ANS WEAKNESS IN MARKETING STRATEGY:
Strength in marketing strategy is how well the organizations are benefiting themselves through promotional mix; placement etc. due to marketing the organization can attain competitive advantage and can create its financial standard in the market.
Nestle strengths in marketing strategy are as follows;
- Strong brand equity, logo and labeling
- Marketing of pure water
- High quality (Healthy and nutritious)
- Variety of offerings
Weakness in marketing strategy is the unawareness of the organization threats, inability of converting weakness into opportunity and then into strength, unawareness innovations and technology (Kotler & Keller, 2006).
Nestle weaknesses are as follows;
- Weak communication
- Fragile distribution channels.
5.3 STRATEGIC MARKETING RESPONSES TO KEY EMERGING MARKETING
Marketing plays an important role in profitability, business development and achievement of objectives and goals. Companies with innovative marketing strategies will not face failures. If any organization lacks marketing knowledge so its product cannot build a standard in the market. Through proper marketing techniques the product can become a center of attention and can convert its weakness and threats into strengths and can rule the market as a leader (Jain, 2009).
Strategic marketing management plays an important role in the development of business and profitability. With the use of proper techniques and strategy an organization can build its standard. Marketing strategy involves a process for its development. Nestle is a great example which s a food industry leader and through its thorough marketing it product awareness is increasing and consumers have a positive image due to its quality and purity.
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