Marketing Strategy
Lecture Nr. 1: What the hell is marketing strategy
Goals: need to be clear in content and time horizon. Sometimes goals are formulated in absolute
terms, sometimes relative to a fix point (e.g. competitor) E.g. Netflix: “Become number 1 global
entertainment service”
Goal relationships: complementary, neutral, conflicting
Strategies: provide a medium-to long-term (flexible) plan for future actions. Strategy represents the
connection between goals and actions. Goals are therefore not part of the strategy, but its normative
reference point. Actions are taken to translate the strategic guidelines into concrete results.
Strategies are not fixed but need to be adaptable to changing environmental conditions.
Actions: are tangible, short-term tasks that can be precisely identified, monitored and evaluated
Goals, strategies and actions can be implemented on 3 different levels:
1) Corporate level:
o Goals: overall growth, shareholder value
o Strategies (overall management strategy): selection of markets, growth through acquisition,
market orientation
o Actions: spend $6 billion in 2017 for own series (Netflix)
2) SBU level:
o Goals: increase in market share by 5%;
o Strategies: offer value through exclusive content (Netflix)
o Actions: Enable easy account switching, bill sharing etc. (Netflix)
3) Functional level:
o Goals: increase conversion rate by x%, sell x units of coffee pads
o Strategies (fundamental decisions in areas such as pricing, promotion, distribution, finance,
sales): seek advertisement alliance with competitor
o Actions: Build superior recommendation system based on AI (Netflix)
Marketing Strategy: Broad = functional strategy, i.e. how to lead the marketing function of a
company; Narrow = corporate strategy, i.e. market oriented leadership
Marketing: Way of creating sustainable competitive advantage. From marketing as a function
(Porter) to marketing as market-oriented leadership(consumer-centricity) = cross functional (sales x
marketing)
Marketing is the management of comparative competitive advantages (CCAs same as SCA)
,Elements of a CCA
Effective
▪ Important: scoring model
▪ Perceived: has to be perceived as CCA e.g. blind test Coca-Cola vs. Pepsi
Efficient
▪ Protectable: should prevent competitors from imitating e.g. Claas gathered years of data
about machine breakdown
▪ Profitable: profitability calculation
What is Marketing Strategy?
If we define Marketing as “management of CCAs”, strategic
marketing takes part on the SBU level (because competitive
advantage is created here), while operative marketing are the
actions that implement this strategy.
Marketing strategy is the long term, somewhat flexible plan to
create and leverage comparative competitive advantage (of a
specific business unit) to achieve a unique market position.
“Strategy is the position you want to occupy and the advantage
on which you will compete”
Article: Gebhardt, Carpenter, and Sherry Jr (2006) – “Creating a Market Orientation…”
Aim
In this article, the authors conduct an in-depth, longitudinal, multi-firm investigation of firms that
have successfully created a market orientation. Grounded by this in-depth understanding, they
develop a theoretical model to explain how firms create a market orientation.
,1. Introduction and context
The concept of a market orientation has become increasingly important to the study and practice of
management.
In this article, we explore the process through which organizations change to adopt a greater market
orientation by studying a group of firms over time.
2. Research
To discover how firms create a market orientation, we observed and analyzed firms seeking to create
a greater market orientation. We conducted our research using the longitudinal-processual method.
This approach combines in-depth, qualitative data collection techniques (i.e., ethnographic
observation, depth inter- views [in particular, oral histories], and historical documents) with
comparative analysis to develop a process model of change. The longitudinal-processual method
com- pares each organization with itself at different stages of a chronological process and compares
longitudinal progressions across organizations to develop insights into a common change process.
3. Overview of Results
Our analysis reveals a four-stage process of organizational change: (1) initiation, (2) reconstitution,
(3) institutionalization, and (4) maintenance. In contrast to current conceptualizations, the authors
find that creating a market orientation requires dramatic changes to an organization’s culture and
the creation of organizationally shared market understandings. We identify six key values that are
shared by the market-oriented organizations in our analysis. These values, which are shared
throughout the organization, become central to the change process. Indeed, an early objective of
people who transform organizations is to establish new values and norms for behavior. These values
are central to a market orientation.
The Model
Stage 1: Initiation (MediaCo)
Our research finds that change is precipitated by powerful stakeholders recognizing a threat, who
then create coalitions to plan and implement change efforts.
Stage 2: Reconstitution (Motorola)
The reconstitution stage consists of taking the new concept for the firm public with a demarcation
ceremony. After the plan becomes public, the effort turns to value and norm development,
, reconnecting with the market, personnel changes, and the development of a collaborative strategy.
As a result of these efforts, the reconstitution stage creates the culture, understanding, and
processes that lead to the organization-wide generation of, dissemination of, and responsiveness to
market intelligence described.
Stage 3: Institutionalization (MarshfieldDoors)
The institutionalization of a market orientation requires formalization of organizational structures
and processes, alignment of rewards, and cultural indoctrination through training. These changes
institutionalize a power shift from the guiding coalition to the larger organization
Stage 4: Maintenance (Harley Davidson)
Organizational leaders develop processes and model behaviors in an effort to maintain a market
orientation. Three processes reinforce a market-oriented culture: cultural screening of new
members, culture maintenance rituals, and ongoing market connection activities to update market
schemas and validate market-oriented process schemas. Firms also exhibit two characteristics
protecting their market-oriented cultures from outside influences: Cultural “flame keepers” approve
organizational changes based on cultural consistency, and there is a vigilance against management
fads and fashions.
4. Summary
Stage 1 focuses on planning for change by a small group of powerful executives. Stage 2 is
characterized by guiding-coalition efforts to build a consensus for change, based on new
organizational values and norms and shared market experiences. If successful, the firm moves to
Stage 3, in which it institutionalizes changes in organizational structure, processes, and formal
rewards. In Stage 4, having achieved a greater market orientation, the organization creates
mechanisms to sustain it.
▪ Main idea: investigate how firms can become more market orientated
▪ Research question: How can we change a firm to become more market-orientated?
▪ Relevance: More successful new products, higher customer satisfaction, higher profits –
regardless of industry or geography
▪ How to become more market-orientated
1. It is a cultural change process that involves changes to Assumptions → Values →
Behavioral norms → Market-oriented behaviors
