Strategic Marketing Management (328251-M-6)
Lecture 1: Introduction
All watch companies. Many companies are from Switzerland. Why are we all so familiar
with Rolex? How did they build such a strong image? “They must make better products”, is
what we think. But: Most think about Marketing longer, to know: it’s not just that. Rolex is
not just better at keeping time. Determined by what brand means to me or other people. What
emotions pop up? What do they do specifically better? Answer: No perfect route to being
great brand. But: Some characteristics that separate great brands from average brands.
Lidl: Fastest growing brands here. Winning lots of awards. What is Lidl known for? Fairly
low priced, fairly high quality. Simple image, simple branding. High variety, low prices.
What separates Lidl from other brands? Great marketing strategy.
Lidl, Harley Davidson, Apple, Rolex: All took different ways. But all of their pieces fit
together. Balance between cohesive and coherent brand: pricing, promotion and advertising
fits together. But at the same time: Different counties, it is a little bit different. Lidl struggled
in America. Did work in Europe. Wrong emotions and placements for America.
Harley Davidson: motorcycles are regarded as terrible. But the brand is really well known for
ruggedness, etc. “We don’t sell a motorcycle, we sell a way of life…” The shirts sell better
than the motors. Not just manufacturer or motorcycles, they are a coherent set of values.
What makes these firms (brands) different?
• Marketing strategy
- “A thoughtful plan by a company to produce desired outcomes in the marketplace
vis-à-vis customers, channel members and competitors” (Kotter 2012 Handbook of
Marketing strategy)
- “ […] an organization’s integrated pattern of decision that specify its crucial
choices (no “correct” decisions) concerning products, markets, marketing activities
and marketing resources in the creation, communication, and/or delivery of products
that offer value to customers in exchanges with the organization and thereby enables
the organization to achieve specific objectives.” (Varadarajan 2010 JAMS; Morgan
et al 2019 JAMS)
• Marketing strategy
- Distinctive versus similar characteristics or
decisions as competing firms
- Coherent versus set of (uncoordinated) tactics
- Dynamic versus poor implementation of activities
To create a sustainable competitive advantage
,Strategic Marketing Decisions
Long-term holistic decisions concerning the future directions for the organisations
Features (Varadarajan 2010 JAMS):
• Entail major resources commitments spread over long periods
• Impact over longer time periods
• Result in a distinguishable competitive advantage
• Irreversible or difficult to reverse
• Entails trade-offs (e.g., if strategy A → strategy B & C foregone…)
• Made in the context of other strategic decisions (interdependence)
• Made at a higher level of the organization
Versus… Tactical Marketing Decisions
Example 1: Setting up a loyalty program
Airplanes. British Airways: Loyalty programs are for business travellers, little less price
sensitive. How should we set up loyalty program? Customers care more about status, care
less about discounts and low prices. Give things associated with status and saving time.
Some benefits:
• Access to business lounges
• Priority boarding
• Dedicated contact number
• Free seat location at bookings
• Member only offers
Also about messaging around it: Beautiful logo, specially for loyalty members.
Example 2: Establish strategic partnerships
When Apple released the Apple Pay app, the brand effectively changed how people perform
transactions. This app allows people to store their credit or debit card data on their phone, so
they can use them without physically having the card with them. But in order for this app to
succeed, it needs credit card companies to integrate with this technology.
To get out ahead of its competition, MasterCard become the first credit card company that
allow its users to store their credit and debit cards on Apple Pay. MasterCard not only
showed support of a major consumer tech developer in this partnership – it evolved along
with its own customers in how they choose to make purchases at the counter.
,Examples of strategic marketing decisions:
Major decisions for long term.
Not just small ones (tactical).
Within decisions: tactics that
tell you have to do it. More
like pricing, how does
advertising look like, make
new flavour or not. More
tactics that are in line with
strategies.
Strategic Marketing Decisions / STRATEGY
Tactical Marketing Decisions / EXECUTION: Short term (annual or quarterly) decisions
to execute the strategic directions within the firm; filling in the marketing mix of the
individual product or brand to realize the company’s strategic goals. e.g., brand price level,
advertising by brand, sales force allocation.
This course Strategic Marketing Management will cover both.
The Marketing Strategy Domain in 2024…
How to teach (and understand) Marketing Strategy?
Like teaching chess: “In chess, one of the most common mistakes players make is to try an
idea independent of the circumstances, from a narrow point of view.”
• Content:
- Introduce marketing concepts & theory for general areas (innovation, digital,
customer experience, etc.)
- Make you aware of the alternative strategic options
• Process:
- Decision making classes
- Practice your “strategic thinking” and “decision making skills” (Markstrat game)
, Lecture 2: Strategic Decision Making
How to make good strategic decisions?
1. Accumulate organizational knowledge
• Organizational learning
• Enhancing culture and climate
2. Get help
• Compiling opinions: The wisdom of the crowd
• Obtaining and using data
• Marketing Management Support Systems
3. Be responsive
• Business cycles
• To competition (see also game theory knowledge clip / weblecture)
• Implementation intentions
4. Think and decide rationally
• Rational decision making (expected value knowledge clip / weblecture)
• Cognitive biases in decision making
Companies went bankrupt: Bad strategic decision making. What did they do wrong? They did
something in each of these levels bad. Be responsive (3) was a huge thing for V&D. In
recession they did not lower their prices (they were for middle income, so recession, you
should lower price). Also slowest companies to join the internet for selling. Cognitive biases
of overconfidence. Status pull effects. They did not share info on organizational level. These
things matter. Companies who struggled: bad decision making, bias, not responsive to change
of competitors.
1. Organizational Learning & Knowledge Management
Nature of Organizational Knowledge
Example: Hospital surgery team learning to use a new technology to increase operation
efficiency and effectiveness.
Options: Hire someone who is good at it. Educate some people who need to learn how to do
it. That is not the end of the problem. 5/10 doctors who are good with machine. But what
now? What about other doctors? What if other hospital steals them? They should have some
way: that all people benefit from piece of knowledge from some doctors.
“The ability to learn faster than your competitors may be the only sustainable competitive
advantage.” (DeGeus, 1988)
Organizational learning = “the process of improving organizational actions through better
knowledge and understanding or as the outcome of such a process” (Chadwick & Raver)
Key concepts:
A: Individual learning vs. organizational learning
B: Explicit vs. tacit knowledge
C: Single-loop learning vs. double-loop learning
