Relationship to other areas of strategic marketing planning - Marketing Management

We have seen that the assessment of an organization’s strengths and weaknesses, together with the analysis of environmental trends and changes, is a key input to the identification of strategic windows and the development of a strategic fit. It is important to recognize that in achieving this, appraisal of strengths and weaknesses is an essential input to the whole of the strategic marketing process, including for example:

  • business definition and objective setting;
  • the selection of appropriate target markets;
  • the formulation and implementation of marketing mix strategies.

In particular, we must remember that a strengths and weaknesses assessment enables the planner to determine what might be wanted or needed to change the company’s profile of strengths and weaknesses. In contrast to environmental opportunities and threats, over which the company may have little or no control, with strengths and weaknesses it can implement action programmes to alter its profile.

For example, if an assessment indicates areas of relative weakness that are important to competitive success in the markets in which a company operates, then steps can be taken to correct these weaknesses. Similarly, a company need not limit itself to future strategies and opportunities which make use only of its existing strengths. If the opportunity is potentially substantial then a company can seek to develop or acquire the strengths required to take advantage of the situation.

Assessing core competencies

Closely related to the notion of distinctive competencies and key factors for success discussed earlier, Prahalad and Hamel19 suggested that a sustainable competitive advantage for a company is often based on a set of central strengths which together form what they term a ‘core competence’. This is what can be used to develop successful strategies against competitors, e.g. it is suggested that 3M’s core competence is based on their knowledge and applications of sticky-tape technology. Canon, on the other hand, has core competencies in precision mechanics, optical technologies and microelectronics.

The Black and Decker Company’s core competencies are in the design and manufacture of small motors. Central to the notion of core competencies is the fact that they underpin the company as a whole and can be used to support a number of different markets and businesses in the organization. For this reason core competencies are likened to the root system of a tree which supports the rest of the structure; core products of the company stem from the core competencies represented by the trunk of a tree and its major limbs, whereas the smaller branches are business units and the leaves and flowers are specific end products. A company must identify the core competencies around which its current and possibly future success will be built and seek to ensure that these are nurtured, protected and enhanced. As with all strengths, core competencies will only develop a sustainable competitive advantage where they can be used to generate customer value and where they are defendable and superior to competitors.

The notion of marketing assets

First used by Davidson20–22 in a series of three articles in Marketing magazine, the notion of marketing assets is a valuable contribution to our knowledge of how to utilize an internal appraisal of strengths and weaknesses in competitive marketing. Essentially, Davidson contends that marketing assets are strengths that can be used to advantage in the marketplace (which is after all the reason for assessing a company’s strengths and weaknesses in the first place). He contrasts asset-based marketing with more traditional market-based marketing. Market-based marketing is the notion of identifying customer needs and seeking ways to satisfy these needs profitably.

Asset-based marketing, somewhat controversially, starts with a company and its assets and asks how the company can use these assets more effectively in the marketplace. It involves considering, for example, how any identified skills and resources from an internal appraisal can be converted into better value for the customer. In practice there needs to be a combination of both market-based and asset-based marketing. This makes sense because strategic market plans essentially match company resources and strengths to the needs of the environment and the marketplace.

The starting point of developing an asset-based approach to marketing is essentially the same as in a conventional strengths and weaknesses assessment, inasmuch as it commences with the identification and appraisal of all the resources, skills and assets of a company. Davidson suggests a checklist to identify key areas of assets. This checklist encompasses the following examples of asset types: people; working capital; capital equipment; customer franchises e.g. brand names, unique products or processes, patents, superior service skills; access to third-party resources such as joint ventures or agreements; sales distribution and service networks and scale advantages due to market share and size.

Analysing the environment: SWOT 427

Having established an inventory of assets, the marketing manager should then establish key exploitable assets for future strategy. This involves asking a number of key questions about identified assets such as: ‘How can the brand name be exploited further, and how far can the brand be stretched without weakening the franchise?’ Overall, we are seeking to establish how the assets of the company can be exploited more effectively in marketing terms. It is important to note that throughout the exercise, assets are examined from a marketer’s point of view and not from an accountant’s stance.

An example of how this can lead to more effective marketing, which exemplifies this notion of asset-based marketing, is the strategy of brand extension. Davidson gives the example of Johnson & Johnson’s baby shampoo which until the early 1970s was positioned exclusively for babies. Research showed that it was also being used by mothers and the company decided that by repositioning the brand to extend product usage, much more effective use could be made of the powerful asset of the brand name. A similar example is the move by many of the food companies to extend their brand franchises, e.g. when Mars extended the brand to include ice cream and food products.

Marketing assets has proved to be a useful perspective on the assessment and uses of an analysis of strengths and weaknesses. However, both market brand and asset-based marketing are necessary to achieve a balance between satisfying consumers and the effective utilization of a company’s resources.

All rights reserved © 2018 Wisdom IT Services India Pvt. Ltd Protection Status

Marketing Management Topics