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Summary Strategic Marketing Management - All lectures and mandatory papers
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Summary of the course Strategic Marketing Management. All lecture material and mandatory papers are included in this summary
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WEEK 1 – LECTURE 1: INTRODUCTION (01/02)Literature
Varadarajan, R. (2010). Strategic marketing and marketing strategy: domain, definition, fundamental
issues, and foundational premises. Journal of the Academy of Marketing Science, 38(2), 119-140.
Lecture notes.
Varadarajan, R. (2010). Strategic marketing and marketing strategy: domain, definition, fundamental
issues, and foundational premises. Journal of the Academy of Marketing Science, 38(2), 119-140.
The professor said this was a shitty article to read, but it is the best article that summarizes all of
strategic marketing, though a quick read would’ve been enough according to him. Virtually nothing from
this paper was included in the lecture, so this is the only paper that has been omitted from this summary
entirely.
Lecture Notes
Firms like Lidl, Rolex, and Apple stand out from their competitors because of their good, long-term,
coherent and distinct marketing strategy. According to Kotler, a marketing strategy is “a thoughtful plan
by a company to produce desired outcomes in the marketplace vis-à-vis customers, channel members,
and competitors.”
The best marketing strategies are:
• Distinctive. Their marketing strategies are different from competitors. Ideally, these marketing
strategies are different from competitors in such a way that makes them hard to copy.
• Coherent. The marketing strategy consists of a lot of different ‘pieces’ that fit together.
• Dynamic. You need to change over time and be able to keep up with modern trends.
All in all, a marketing strategy that fulfills the above requirements may create a sustainable, competitive
advantage.
An example of how marketing strategies may differ across cultures, countries, or continents is the
introduction of Harley-Davidson in Europe. Whereas products that are “made in America” are highly
valued by Americans, this same characteristic did not resonate with Europeans. As a consequence,
Harley-Davidson moved the production for their European motorcycles from America to Asia.
There is a notable difference between strategic marketing decisions and tactical marketing decisions:
• Strategic marketing decisions are long-term holistic decisions concerning the future directions for
the organizations. According to Varadarajan, these decisions have the following features:
o They entail major resources commitments spread over long periods.
o They impact over longer time periods.
o They result in a distinguishable competitive advantage.
o They are irreversible, or difficult to reverse.
o They entail tradeoffs (if you go for strategy A, strategy B and C are foregone).
o They are made in the context of other strategic decisions (they are interdependencies).
o They are made at a higher level of the organization.
• Tactical marketing decisions are short-term (usually annually or quarterly) decisions to execute
the strategic directions within the firm.
Examples on strategic marketing decisions are setting up a loyalty program for a specific airline (for
example, the loyalty programs of British Airways and RyanAir would look different due to their different
customer base), or MasterCard establishing a strategic partnership with Apple for their rollout of Apple
Pay.
,WEEK 1 – LECTURE 2: STRATEGIC SOCIAL RESPONSIBILITY, PART 1 (03/02)
Literature
Kramer, M.R., & Pfitzer, M.W. (2016). The Ecosystem of Shared Value. Harvard Business Review.
Pless, N.M., & Maak, T. (2011). Responsible Leadership: Pathways to the Future. Journal of Business Ethics,
98, 3-13.
Lecture notes.
Kramer, M.R., & Pfitzer, M.W. (2016). The Ecosystem of Shared Value. Harvard Business Review.
Introduction
In the past, companies rarely perceived themselves as agents of social change. Yet, the connection
between social progress and business success is increasingly clear. In recent years, creating shared value –
pursuing financial success in a way that also yields societal benefits – has become an imperative for
corporations, for two reasons. First, the legitimacy of business has been sharply called into question, with
companies seen as prospering at the expense of the broader community. Second, many of the world’s
problems, from income inequality to climate change, are so far-reaching that solutions require the
expertise and scalable business models of the private sector.
To advance shared value efforts, businesses must foster and participate in multisector coalitions.
Governments, NGOs, companies, and community members all have essential roles to play, yet they work
more often in opposition than in alignment. A movement known as collective impact has facilitated
successful collaborations in the social sector, and it can guide companies’ efforts to bring together the
various actors in their ecosystems to catalyze change. Companies that turn to collective impact will not
only advance social progress but also find economic opportunities that their competitors miss.
Reshaping the Ecosystem
This section of the paper discusses two examples of how companies used collective-impact principles to
improve their ecosystems for all concerned.
First, Norway-based manufacturer Yara brought together 68 organizations in the Southern Agricultural
Growth Corridor of Tanzania (SAGCOT), to build a $3.4 billion fully developed agricultural corridor from
the Indian Ocean to Tanzania’s western border. The project involved, among other things, investing in
infrastructure, including the port, a fertilizer terminal, roads, rail, and electricity; fostering better-
managed farmer cooperatives; bringing in agro dealers and financial service providers; and supporting
agro-processing facilities and transport services. Even though Yara ‘only’ invested $60 million in the
project (not a major part of the $3.4 billion funding), the project has boosted Yara’s sales in the region by
50% and increased the company’s EBITDA by 42%.
Second, Walmart convened a cross-sector coalition of NGOs, city managers, recyclers, major consumer
brand companies (including direct competitors like Unilever and P&G), and financing experts from
Goldman Sachs. Together, 10 companies invested in the $100 million Closed Loop fund, whose purpose
is to catalyze investments in recycling infrastructure across the United States. To date, the fund has
financed 10 projects with a total of $80 million, of which $20 million of its own capital and $60 million
from co-investors. As a result of these projects, annual waste to landfill is reduced by more than 800,000
tons, and greenhouse gas emissions have been cut by more than 250,000 tons. The benefits for Walmart
include an increased availability of recycled materials, which strengthens its supply chain and reduces
the cost of packaging.
Both Yara and Walmart did not lead or control its cross-sector effort, but it provided the necessary
impetus.
What Is Collective Impact?
Collective impact is based on the idea that social problems arise from and persist because of a complex
combination of actions and omissions by players in all sectors – and therefore can be solved only by the
coordinated efforts of those players, from businesses to government agencies, charitable organizations,
and members of affected populations.
Before engaging in a collective-impact effort, each participant has typically viewed the problem at hand
solely from its own perspective. By bringing together all the relevant parties and ensuring rigorous data
,collection and careful facilitation, collective-impact initiatives foster a shared understanding of the
problem – the first step toward solving it.
Businesses whose growth and resilience are constrained by societal problems have a powerful motive to
kickstart social change.
The Elements of Collective Impact
Five elements must be in place for a collective-impact effort to achieve its aim of large-scale social
change:
• A common agenda. Participants must reach a shared vision for change and a joint approach to a
solution. This not only helps align their efforts but also determines each organization’s
commitment and determines how much data will be shared within and outside the group. The
agenda must take each participant’s perspective and interests into consideration.
• A shared measurement system. Participants must agree on a single short list of indicators that
determine how success will be measured and reported. This helps formalize the common
agenda, establishes a basis for understanding as a group what is or isn’t working as each
organization implements its activities, and sets the stage for ongoing course adjustments.
• Mutually reinforcing activities. Collective impact does not, of course, require that all participants
do the same things. Instead, diverse stakeholders engage in mutually reinforcing activities. Each
organization focuses on what it can do best. Typically, initiatives form multiple working groups,
each addressing a different aspect of the problem. Through their supply and distribution chains,
businesses are deeply practiced in coordinating hundreds of organizations with different
specialties. They can clearly evaluate participants’ strengths and weaknesses while offering their
own functional expertise.
• Constant communication. All players must engage in frequent and structured communication to
build trust and coordinate mutual objectives. Building trust among NGOs, governments, and
competing businesses is not easy; however, constant communication and consistent follow-
through on commitments can overcome even long-standing suspicions.
• Dedicated “backbone” support. A separate, independently funded staff dedicated to the initiative –
the “backbone” of the project – is needed to guide vision and strategy, support activities,
establish shared measurement practices, build public will, advance policy, and mobilize
resources. These activities can be managed by a single organization or divided among several
with differing competencies. The backbone function ensures that all the working groups remain
aligned and informed. Companies cannot be the backbone – they are not neutral players.
Together these five elements – simple to describe, immensely challenging to implement – can ensure
that the hundreds of organizations spanning the populations affected by a given social issue work
together constructively despite vastly different perspectives, cultures, and ideologies. To realize that
potential, collective impact requires a new kind of leadership, sometimes called system leadership. There
is never just one system leader; multiple individuals, representing different constituencies, lead together.
Why Business Misses the Opportunity
Despite their powerful incentives and unique capacity to support large-scale social change, companies
rarely step up. The authors suggest that they encounter three obstacles:
• Questions of legitimacy. Trust is a precondition for successful collaboration. And although
companies are often respected, they are more likely to be feared than trusted. After all, they are
in the self-interested pursuit of profit. So they may be viewed as not having the legitimacy to
initiate social progress. However, companies that pursue shared value and engage in collective-
impact efforts recognize that their long-term profitability depends on a healthy society.
• Competitive free riders. When one company improves the market ecosystem, it almost always
improves conditions for its competitors. Many companies are understandably reluctant to bear
the costs when rivals will share the benefits. But despite the free-ride opportunity, companies
that create shared value often enjoy a sustained advantage. For example, Novo Nordisk
collaborating with China on treating diabetes: their actions unquestionably improved conditions
in China for any insulin supplier; yet in initiating the change and building close relationships with
suppliers, distributors, the government, and others, the company established a $1.3 billion
market for itself and gained a commanding advantage that later entrants have been unable to
weaken.
• Investment justification. Most companies relegate social issues to their philanthropy, citizenship,
or CSR departments, thus perpetuating the separation of social problems from core operations
, and strategy. They rarely examine changing ecosystem conditions through the rigorous business
lens that would reveal their significance to a company’s financial prospects. Shared value
creation is a strategy that requires expertise in both societal and business issues; projects must
be subject to the same analysis as any other capital investment. If companies do not accurately
assess the business case for such projects, they will miss the justification for investing the
required funding and management attention, which may greatly exceed those of normal
philanthropic or CSR projects.
Pless, N.M., & Maak, T. (2011). Responsible Leadership: Pathways to the Future. Journal of Business
Ethics, 98, 3-13.
Why Responsible Leadership?
Responsible leadership is a multilevel response to deficiencies in existing leadership frameworks and
theories; to high-profile scandals on individual, organizational, and systematic levels; and to new and
emerging social, ethical, and environmental challenges in an increasingly connected world. The scope and
complexity of these challenges calls for responsible leadership and responsible leaders who
acknowledge their shared, significant responsibility in tackling problems and challenges.
Business practice has a notable interest in developing responsible leadership in organizations and in
encouraging new generations of responsible leaders and academics to understand the origins and
outcomes of responsible leadership as a multilevel theory and construct.
What is Responsible Leadership?
Responsible leadership responds to both existing gaps in leadership theory and the practical challenges
facing leadership:
• First, it centers attention firmly on matters of responsibility, including accountability,
appropriate moral decision-making, and trust. In other words, responsible leadership seeks to
define what “responsible” means in the context of leadership.
• Second, being accountable for actions, answerable for decisions, and reliable and trusted are not
just semantic variations on the term “responsibility” but rather constitute inherently relational
concepts. By definition then, responsible leadership is geared toward the concerns of others and
asks for what and to whom leaders are responsible.
Maak and Pless define responsible leadership as “a relational and ethical phenomenon, which occurs in
social processes of interaction with those who affect or are affected by leadership and have a stake in the
purpose and vision of the leadership relationship,” thereby broadening the view from a traditional
leader-subordinate relationship to leader-stakeholder relationships.
How Does Responsible Leadership Differ from Related Theories?
We understand responsible leadership as a “values-based and thorough ethical principles-driven
relationship between leaders and stakeholders who are connected through a sheared sense of meaning
and purpose through which they raise one another to higher levels of motivation and commitment for
achieving sustainable values creation and social change.” Concomitantly, we define a responsible leader as
a person who reconciles “the idea of effectiveness with the idea of corporate responsibility by being an
active citizen and promoting active citizenship inside and outside the organization.” As such, responsible
leadership is an inherently normative approach to leadership.
The rest of the article compares responsible leadership to other leadership theories, and discusses other papers
on responsible leadership published in the same journal edition. I have skipped these in this summary as they are
(likely) not exam-relevant, as this was not discussed at all during the lecture.
Lecture Notes
Introduction
The first part of strategic social responsibility was a guest lecture by Ronald de Jong.
Global Challenges
Currently, we are facing a lot of different global challenges. One main catalyst of these global challenges
is the rapid-increasing world population, which is expected to exceed 10 billion inhabitants in 2050.
Resulting global challenges include, among others, the highest amount of carbon dioxide in our
atmosphere ever, a record number of species facing extinction, extreme weather-conditions influenced
by humans, increasing wealth gaps, and loss of tropical forests. These are all difficult challenges to
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