Organizational assets - Marketing Strategy

Organizational assets are the accumulated capital,both financial and non-financial, that a company has at its disposal. These assets are both tangible and intangible (Hooley et al., 1998) and include:

  • Financial assets :such as working capital, or access/availability of investment finance, and creditworthiness.
  • Physical assets :ownership or control of facilities and property. In the retail sector ownership of an outlet in a prime location could be a significant asset.
  • Operational assets :production plant, machinery and process technologies.
  • People assets:the quantity of human resources available to the organization and the quality of this resource in terms of their background and abilities.
  • Legally enforceable assets :ownership of copyrights and patents, franchise and licensing agreements.
  • Systems :management information systems and databases and the general infrastructure for supporting decision-making activities.
  • Marketing assets :of particular concern in the development of marketing strategy are of course marketing assets.

Matching organizational capabilities to market needs through competitive positioning

Matching organizational capabilities to market needs through competitive positioning

These marketing assets fall into four main categories:

  • Customer-based assets :
    These are assets that the customer perceives as being important such as:
    • Image and reputation :These relate to the company and the recognition of its corporate identity.
    • Brand franchises :These are important because of the time and investment required in building them. Once established effective brands have high levels of customer loyalty, create competitive positions that are defendable and obtain higher margins because customers feel a higher price is merited by the added value that the brand provides for them. Weak brands of course show the opposite characteristics.
    • Market leadership :A strong brand may not bethe market leader but a brand leader enjoys distinct advantages such as excellent market coverage, widespread distribution and beneficial shelf positions in retail outlets.
    • Country of origin :Consumers associate particular attributes with different countries; these then become associated with an organization or a brand that derives from that particular state. So for instance Germany is associated with efficiency and quality. Products like Mercedes and BMW benefit from this perception of their country of origin and it reinforces their quality positioning in the market.
    • Unique products and services :These are key assets. Their distinctiveness in the market can be built on a number of attributes such as price, quality,design or level of innovation.
  • Distribution-based assets :

    Distributing a product or service successfully into the market is a critical marketing activity. Therefore a number of potential assets lie in this area such as:

    • The size and quality of the distribution network :The size of the distribution network should be seen in terms not only of geographic spread but also of the intensity of that coverage on the ground.An organization may only distribute over a specific geographic region of national market, but has built up a strong presence in that area and is locally dominant. Quality should be seen in terms of fitness for purpose. There are arrange of factors that could be used to judge quality, such as ability to guarantee supply, lead times, or ability to react quickly.
    • Level of control over distribution channels :An organization that can exert control over the main channels of distribution in a market is at a huge advantage, making control a key marketing asset. For example, Inborn is the market leader in the soft drinks market in Scotland. However Coca-Cola successfully stopped Iran Bru being distributed through McDonald’s fast food restaurants in favour of Coca-Cola. Coke were able to apply control over that channel of distribution due to their global relationship with McDonald’s.
  • Internally-based assets :

    There are a number of internal organizational assets that lie outside the marketing function but can be deployed to give advantages to marketing activities. It is important to identify the underlying asset rather than just the activity. It is the asset that has the potential to be deployed in new ways to create additional advantages. There is a range of organizational assets that may give advantages to marketing activities:

    • Cost structure :The organization may be able to achieve lower costs than competitors through higher capacity utilization,better economies of scale, or by applying newer or more innovatory technology.This could allow marketing to set lower prices for their products and services than the competition. The asset is the manufacturing cost base; this can be deployed to give advantage to the marketing activity of pricing.
    • Information systems :These can be applied to marketing research activities to collect and analyse customer, competitor and market information. These systems could also be used to create customer databases,a marketing asset that can be exploited. There are also some organizational competencies that lie outside the marketing function that can be used to create advantages in marketing activities such as:
    • Innovatory culture :The ability to be able to create and maintain a culture for innovation is an important competence. This competence facilitates activities such as new product development, customer service through empowering front-line staff to develop creative solutions to customers’ problems, and advertising through a willingness to adopt creative ideas.
    • Production skills :These may allow an organization’s production to have more flexibility, higher quality or shorter lead times, all of which can be used to advantage by the marketing function.
  • Alliance-based assets :

    There are a number of areas where the asset is linked to a formal, or informal, external relationship. These agreements with third parties can allow an organization to gain:

    • Access to markets :through local distributors that the organization could not cover with its existing resource base.
    • Management expertise :from outside agencies not available within the company.
    • Access to technological developments or processes :through licensing or joint ventures.
    • Exclusive agreements :with third parties, such as Coca-Cola and McDonald’s already mentioned above, that effectively exclude competitors.

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