The role of marketing within strategy - Marketing Strategy

As noted earlier, all organizations need to make strategic decisions relating to their external environment. Strategy must address issues such as customers, competitors and market trends. It needs to be proactive as opposed to simply reacting to events. In this way, strategy can detect and influence changes in the business environment. By its nature, marketing defines how the organization interacts with its market place. Consequently, all strategic planning, to a greater or lesser degree, requires an element of marketing. Only in this way can organizations become strategically responsive to customer need and commercial pressures. Indeed, it is possible to view marketing as more than a functional activity. It can be adopted as a business philosophy. Here the organization adopts a marketing orientation – success by a process of understanding and meeting customer need. Basically, the company’s orientation defines its fundamental business philosophy, highlighting what is perceived as the primary route to success. Market orientations are now widely established with in the business world (and often seen as the ‘holy grail’ of marketers) but other business orientations are equally common.

  • Production orientation : Here business success is attributed to efficient production. The emphasis is on mass production, economy of scale and cost control. Management’s key concern is with achieving volume and meeting production schedules. This philosophy has its place, but risks limiting operations to low added-value assembly work.
  • Product orientation :The belief is that product innovation and design will have buyers beating a path to the door. Management’s perception is that their products are so good they will, in effect, sell themselves. Little or no effort is put into establishing what the customer actually wants – a dangerous route! Naturally, product innovation is important but it needs to appeal to the market place, otherwise it risks being innovation for the sake of innovation.
  • Sales orientation :This views sales volume as the key determinant of success. The focus is on aggressive selling that persuades the customer to buy. Given that the process is driven by sales targets, a short-term perspective dominates, with little regard to building longer-term relationships. Often, this follows on from a production orientation, as management tries to create a demand for unwanted products.
  • Market orientation:As previously stated, success is derived from understanding and meeting customer needs. This process starts with the customer and uses actual customer demand as a means to focus resources. In simple terms, we provide what the market wants. Additionally, the importance of building long-term relationships with customers is recognized. We seek to build loyalty and consistently offer superior value. An awareness of competitors’proficiency and strategy is required in order to optimize this process.

It is not our intention to decry production, product innovation or selling – indeed they are vital. However, the truly ‘world-class’ organization understands how to marshal these factors into a coherent market-led orientation. Creating such focus will facilitate the sustainable competitive advantage required to prosper.

How do we go about achieving a market orientation? The answer to this question can be summarized as follows:

  1. Customer focused : Understand your customer base and be responsive to their needs.Teat loyal customers as assets and strive to build ongoing and long term relationships. Regularly monitor levels of customer satisfaction and retention. To achieve this we must:
    1. define our markets;
    2. effectively segment/target customers, and
    3. listen to customers.
  2. Competitor focused : In terms of competitors, be watchful and assess their objectives, strategies and capabilities. There is the need to ‘benchmark’ their products, processes and operations against our own.
  3. Integrate marketing into the business : Marketing should not be confined to the marketing department. Every function and person within the organization has a role to play in creating value and achieving the goal of being a market-led organization. This may require fundamental changes in culture and organization structure.
  4. Strategic vision : Develop a long-term, market-orientated strategic vision by viewing marketing as more than a series of promotional tools and techniques. It must be on the agenda of senior management, who should develop and implement market-led strategy and define the future in terms of creating long-term value for stakeholders.
  5. Realistic expectations :Wecannot be all things to all people. Expectations have to be realistic and matched to capabilities, resources and external conditions.We may well need to make ‘trade-offs’to ensure we focus on activities that add value.

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