Thursday, 24 May 2012

Importance of Strategic Marketing to businesses

Strategic marketing seeks to establish a sustainable competitive advantage for an organization. This can be achieved through allocation of resources to opportunities that are geared towards meeting the organizations objectives. Strategic marketing employs processes beyond the marketing mix scope to ensure the organization differentiates itself effectively through providing superior offerings to customers. It provides the organization with an opportunity to improve on its strengths while seeking out opportunities and avoiding or dealing with threats appropriately.

Strategic marketing and customer value

Strategic marketing plays a major role in delivering added value by increasing consumer satisfaction and the quality of the organization’s offerings. Value from a strategic marketing point of view would include
·         The quality offered being commensurate with the price being charged
·         The value that is attached to the reputation of the brand
·         Value through customer service
·         Value provided by exceeding the customer’s expectations
In order for the above to be achieved strategies need to be implemented to better understand the customer’s needs and how they make their decisions, to incorporate features in the product or service that would meet these needs and cultivating loyalty and trust to ensure long-term engagement with the customer.

Strategic marketing and business portfolio

Strategic marketing enables the organization to determine the businesses that it should engage in. Thus the organization only concentrates its efforts and resources towards developing an attractive business portfolio and understanding the businesses that it engages in. Apart from determining the direction of the businesses the organization should engage in, strategic marketing will also guide the process of developing the organization’s growth policies.

Strategic marketing and understanding of the environment

Strategic marketing provides for the understanding of the environment and situation. A PEST analysis would guide the marketing process in order to gain the highest level of benefits. Political, economic, social-cultural, technological, legal and environmental factors are given high priority to enable the organization to recognize both the opportunities and threats presented by these factors.

Marketing strategies

Strategic marketing provides the approaches that would be used to handle the different strategic business units as they are determined by the organization. These approaches are derived from the different characteristics of a particular unit. For example, using the BCG matrix, different units would be classified in different levels which are stars, cows, question marks and dogs. Stars are high growth products that are stronger than competitors and have the potential of becoming cash cows in future. Cows are low growth products with a considerable high market share. Question marks they operate in high growth markets but are currently in low market share. Dogs are units that operate in low growth markets and have low market share making them unattractive.

For each of these levels different strategies may be employed such as building share to turn a question mark into a star, hold where the organization would invest only enough to keep the unit going in the case of stars, Harvest in the case of stars to turn them into cows and Divest in the case of dogs.

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