Strategic Marketing

Benefits of Strategic Marketing in Business

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Introduction to Strategic Marketing

Strategic Marketing refers to the competitive benefits of the firm which helps it to gain a sustainable competitive edge and market position (Olson, Slater and Hult, 2005). These benefits can be categorized as the modernized inventions, geographical locations, extremely accomplished personnel etc. These core competencies help the company in measuring their business performance and growth for its success in the marketplace. In this context, present report is developed which focuses on strategic scenario. In this report in depth discussion is done on effective tools and techniques of strategic marketing. Further, Marks and Spencer (M&S) is being taken into account.

M&S is the multinational retail company of the UK. It is a public limited giant organization that trade in home products, garments and luxury food offerings. This company serve the worldwide customers by providing them with series of goods such as, apparels for every segment, kids and women’s accessories, casuals, jeans, formals etc.

ACTIVITY 1

Role of strategic marketing in an organization

Strategic marketing can be defined as the core competencies, core advantage, tools and tactics of the firm which helps in competing with other rivals. This helps the business in evaluating the effective means of factors to get success in the market (Vorhies and Morgan, 2003). Strategic marketing measures of company seek in delivering high value preposition for organization. M&S has formulated an effectual way of comprehensive strategic standards that assist the firm in making brand position. The value based operations and ethical business activities have resulted in developing organizational performance rather than merely increasing the sales.

Marks and Spencer is a reputed leading retail enterprise. It has developed strategic management marketing tactics for the company to understand the desires and requirements of the consumers. The purpose of strategic management within the company evaluates the scope of development in market. This seeks differential measures for analyzing the demand and needs of buyers and for implementing the same within the organization (Venkatesan and Kumar, 2004). While managing the relations with stakeholders, the value creation approach of firm leads in creating positive brand image in the market and thus, helping the employees in recognizing company easily among competitors. Moreover, the ethical measures of business operation create high value for the company. The supreme quality and effective pricing policy helped in evaluating the success and growth scenario of the firm. Hence, it is proved that, strategic marketing assist in developing unique brand image by creating value for money for its buyers.

Relationship between corporate strategy and marketing strategy

Strategy is the comprehensive planning implemented to achieve company's specific aim and objectives of longer time frame. In order to gain a leading market position, M&S has developed its effectual marketing and corporate strategies. Marketing tactics are implemented in accomplishing the firm long term oriented goals (Doole and Lowe, 2008). The strategies reflect marketing mix of an enterprise i.e. it deals in variety of products such as groceries, general household products and clothing segment. The pricing strategy focused on the middle and upper class segments. Further, company uses online, in store and international stores for shopping. For promoting its products and services, organization mostly prefers celebrity endorsements and effective promotional tactics.

On the other hand, corporate strategies are implemented in accomplishing long term objectives of the cited firm. The corporate tactics of M&S are:

  • Increasing profitability and sales volume.
  • Implementing POS and SAP software.
  • Product diversification to reduce the single product dependency.
  • More emphasized on groceries and food products.
  • Direct International deliveries to avoid miss-communication.
  • Transforming efficient human resources.
  • Creating comfortable environment and atmosphere for the customers, suppliers, employees, business partners and other members.
  • Accessing latest and modernized technologies.

Hence, it can be stated on the basis of above discussion that, marketing strategies stresses on the mission of the cited company whereas corporate strategies focus on the vision of the enterprise. Further, marketing strategies are a part of corporate strategies and are implemented to attain the planned corporate level strategies.

How marketing strategy is developed

Marketing strategy is a long chain process of customer satisfaction. It is developed to reach the organization long term oriented objectives (baker, 2014). The scenario of marketing tactics is:

Understand customer: M&S conducted several interviews, surveys and questionnaires to know detailed preferences and demands of the customers. Consumer’s preferences should also be analysed by using effective promotional activities.

Analyse market: Organization analyses internal and external market scenario by conducting SWOT and PESTEL analysis. This evaluation helps the cited firm to know about its market position and growth strategies.

Analyse competition: Cited Company conducted surveys which provides a review about the performance and growth of the competitors. The core competitors of M&S are TESCO, Next PLC etc.

Research distribution: Enterprise products and services are distributed at its own retail store and online store (Kotler, Kotler and Kotler, 2008). It even disseminated its products at international stores and direct deliveries methods are adopted for such stores for effective communication.

Marketing mix: It reflects company's marketing strategies i.e. worldwide distribution of products at a competitive price along with adaption of sound communication.

Financial analysis: M&S examines various budgeting strategies for proper cash flows in the organization. It evaluates several competitors pricing strategies to know the customer’s price era. Cited company focuses on the premium pricing policy because the customers of the organization are very brand conscious.

Review and Revise: It is the most important step in creating a marketing tactics because it includes past performance of the enterprise and competitors. Past data or previous records always helps the cited company in implementing an impressive strategy.

Decisions and choices of corporate level

Corporate level managers of M&S take several decisions for the success and growth of the business. These are  upper level of managers namely chairman, board of directors, chief executive officers (Dwyer and Tanner, 2002). These managers make decisions for the overall growth and performance of the mentioned company. They spend more of their time in planning and organizing the activities for the firm. Further, they execute policies and procedures which are implemented by the business level managers. Policies are the guidelines that guide other members of the company about Do’s and Don'ts and about the structure which is followed by the company.

Moreover, decisions taken by senior level of managers are very complex in nature because they are made for the overall development of the cited company. They prepare long term plans for M&S which are generally made for 5 to 25 years. Even, corporate level managers delegate the authority and responsibility to other business and functional level of managers. Additionally, authoritative decisions are taken on the basis of skills, competencies, traits of other members and accordingly, responsibilities are divided. Furthermore, these managers make decisions regarding capital budget, cash flows, resource allocation and implementation of strategies.

In order to have effective and comprehensive strategies in the organization, corporate level managers execute atrocious pricing strategies, promotional tactics and well-integrated distribution channels (Onkvisit and Shaw, 2004). Even, they give the opportunity to middle and lower class managers in the decision making process for the enterprise.

How decisions influence marketing at business unit and functional level

Top level decisions influences the administrative and operational level decisions because these upper level decisions are dependent on two other levels. Even, senior level decisions are extremely distinct from the middle and lower order decisions (Varadarajan and Yadav, 2002). Senior level decisions are taken in respect to the whole business planning scenario of M&S whereas, administrative decisions are taken for the development of a specific commercial segment and operational level decisions are taken to control the structural fields of management namely human resource, operation management, strategic management, IT, finance etc.

Business unit and lower level decisions are made to achieve long term corporate level decisions. The business level strategies are decided by the administrative managers namely head of department. These managers prepare short term programs for their departments which are generally made for 1 to 5 years. They spend more of their time in coordinating and communicating the activities of the cited company. Further, they implement policies and strategies which are made by the senior level managers. Middle level managers also provide recommendations and suggestions to the top series of managers.

On the other hand, operational level of decisions is interpreted by the line managers namely supervisors, team leaders, foremen etc. These people are responsible in making daily, monthly, and weekly plans (Hawkins and Mothersbaugh, 2009). They spend more of their time in directing and controlling the functions of the mentioned firm. Moreover, they direct and supervise employees and workers regarding their work and develop the morale of the workers. They regularly give reports to the administrative level of managers and maintain a link between middle level of managers as well as employees.

Competitive positioning of Marks and Spencer

Marks and Spencer is a multinational company which serves broad series of products across globe. It uses effective positioning tactics for the promotion of its goods and services.

Specialist positioning: M&S uses special positioning to enhance the growth of its food products in the market (Craven and Piercy, 2008). Despite of tough market competition, cited company increases the sales and profit margins of its food and drinks segments. Further, organization sales are increasing 36% year on year and it is named as “The supermarket of the year” in the international wine challenge. Cited enterprise will continue its specialist positioning strategy for the coming years because of the outstanding performance of its brands in the market.

Market positioning: M&S is a market leader of UK because it has 40% share of the lingerie market which is more than ₤1.75 billion. The company has good relations with the suppliers in order to maintain a well-integrated distribution channels. Company has strengthened its market position to compete with the emerging competitors and the new entrants to the firm. Further, to understand the complex market conditions, organization required experience, judgment capability and entrepreneur talent.

Strategic position: Marks and Spencer operates in various segments like food, clothing, home and beauty segments. The firm adopted premium pricing policy for its products and services. Further, the core key factors which affect the performance of the firm are online purchasing and the ever changing trends because the enterprise has no control on these factors. The strategic values of the company are premium quality, service and affordability.

Evaluation of approaches to internal environmental analysis

For the purpose of assessing micro environment analysis, M&S adopted 5M's model of management which is explained below:

Men: In order to have an effective work flow, cited company has efficient and strong workforce. Moreover, the area served by the firm is huge but because of its highly skilled and competent manpower, M&S is able to cover  huge and broad area.

Material: (Ferrell and Hartline, 2011). It uses fabric and cotton material for its clothing segments; fresh items for its food segment. Further, for the beauty segment, company uses more of eco-friendly ingredients like aloe Vera, turmeric, Neem etc. in order to have no hazardous chemicals.

Money: Firm adopted premium pricing for its branded products because the consumers of M&S are very brand conscious. Along with the premium policy, cited company offers excellent quality products to seek more customer attention.

Method: Enterprise adopted various levels of methods and process for its atrocious performance. For example, it uses well integrated supply chain for distribution of its products and services. Suppliers of the above company are scattered across the globe to have massive distribution of brands.

Machine: Latest, modernized and innovative technologies are used by the company for its business operations. It is considered technologically efficient company. Further, some of its innovative technologies are General and Pediatric Eye Care, Validated Contrast Sensitivity Testing .

In the support of above statement, it can be said that there are number of benefits that Marks and Spenser attain through 5m of management. It provides an better opportunity to select right personnel for right position so that organisational effectiveness and efficiency. It also allows business firm to have effective allocation of human resources in order to boost organisational productivity. It also provide better information about availability of resources so that location can be selected in proper way as per availability of material. It is also beneficial for effective development of supply chain process. On the other side, it also has various disadvantages that impacts the work culture of Marks and Spenser. In this management does not have enough time to micromanage various factors because process does not includes high number of managers. In the support of this, it can be said that the individual contributors does not have proper information about different subjects.

Evaluation of approaches to external environmental analysis

M&S conducted PESTEL analysis to study the macro environment factors which includes political, economic, social, technological, environmental and legal factors (Madhavaram and Hunt, 2008).

Political factors: It has been spotted that the government establish number of regulations in context of health, tax, etc. These factors are related to environmental and health regulations, taxes and labour policies, industrial norms etc. M&S has taken several initiatives which include fair trade policy for the safety of the customers. The policy includes cutting salts and fat content in the food, animal welfare protection and recycling of packaging. It is necessary for Marks and Spenser to follow regulations set out by government  in order to avoid various legal issues. If company will not consider political aspects as significant then business may face few issues.

Economic factors: These factors outlooks industrial and future economic growth namely inflation, cost of raw material, consumer spending etc. Currently the economic outlook is very uncertain and this is more than likely to affect retail sales, as people do not have the spare cash to spend on luxury items such as clothing and food luxuries. M&S revenue growth is very low i.e. only 2%. The company have had to change the way of their marketing techniques so that, they can come up with the new ideas. It is necessary for management of Marks and Spenser  to take decisions regarding pricing as per current conditions of economy as it provides long term sustainability.

Social factors: These factors include trends, purchase patterns of consumers, cultural backgrounds; consumer’s needs for safety and health goods. It has been identified that the social needs has changed rapidly and it is essential for management to bring diverse changes in operational activities as per social needs. Since the requirements and preferences of the customers are very dynamic, with respect to this, M&S adopted low pricing strategy for its products and services. It is necessary for Marks and Spenser to changes its product line as per currents trends of market so that business can have impressive success.

Technological factors: M&S uses new and latest versions of the technologies for the better promotion of its brands and success of business operations (Dou and et.al., 2010). The key two technological factors which company focuses are e-commerce and sustainability. In the support of this, it can be said that the technology is factor that changes rapidly. For example, Marks and Spenser  has adopted latest technology to improve distribution channel but technology has upgraded then it will increase the cost of operation and force firm to change technological tools as per change.

Environmental factors: It includes environmental friendly products which are free from noxious chemicals. M&S launched solar PV system, Amber ISIS Renewable Energy, with the aim to become the world's most sustainable carbon neutral retailer. It is also necessary for management of Marks and Spenser to follow and rules and regulations that are established by government to protect environment.

Legal factors: It includes various laws, legislation related to customer safety and health and environment. M&S took several initiatives for the safety and health of customers and employees by launching employees support programs and promoting comfortable and safe work environment.

How internal and external analyses are integrated

In order to analyse the internal and external environment, M&S conducted SWOT analysis (Kim and et.al., 2012). The strength and weakness covers the company's internal environment whereas, opportunities and threats covers the external environment.

In the support of this, it can be said that internal and external environment both plays a vital role in organisational success. In order to gain better competitive advantages it is necessary for business firm to design strategies as per outcome of internal and external analysis. It has been observed that internal analysis helps in identification of some factor within the organization which can affect its activities and operations. On other side, external analysis assist in identification of diverse elements that relates with outside environment. It has been spotted that number of business firm faces issues due to improper identification of internal and external analysis. Improper information about key barriers also impacts organisation internal and external environment. Firm are required to identify them and take corrective measures in order to overcome them. Improved level of integration among internal and external factors is beneficial for creating awareness regarding competitor strategies and policies.

Strategies that contributes to the competitive advantage of M&S

For the purpose of attaining competitive advantage, M&S adopted porter's generic strategies (Sousa and Lages, 2011). These tactics contribute in the success and prosperity of the enterprise. The strategies are cost leadership, differentiation and focus strategy.

Cost leadership: It focuses on pricing of the product. According to this strategy company can charge prices accordingly. M&S uses this policy by charging premium pricing to its products and services in order to capture the customer’s attention. Since, users of the cited firm are very brand conscious so they prefer this policy.

Differentiation strategy: It focuses on the differentiation of the product. According to this strategy, company can offer product of their own choice (Verhoef and Leeflang, 2009). M&S uses this tactics by developing its branded products with supreme quality. It utilizes this policy by charging different price from other competitors.

Focus strategy: It comprises of focusing on cost as well as on differentiating product.. M&S uses this approach by focusing on both the cost and product differentiation and the same is achieved by adopting premium pricing and superior quality.

Marketing communication strategies of M&S

For the purpose of effective and better promotion of its goods and brands, M&S adopted comprehensive communication practices. Company stresses on high measures of advertisements through pamphlets, banners, televisions, radio, newspaper and other related sources (Hinterhuber, 2008). For the promotion of its latest and innovative brands, it uses awful promotional tools which include social networking sites such as Twitter, Skype, Facebook, you tube etc. Cited organization even uses E-mails, blogs, pop ups, to have direct communication with the customers. With these sites, company can also take feedback from the customers about their products and services.

Further, enterprise sets an extremely high standard in the retail world of UK for sustainability of the environment. M&S have its own strategic site in which it promotes its products to make its customer aware. Moreover, organization uses digital marketing for the promotion of its highly established brands.

Marketing strategies and its implications

Marketing strategies are implemented in achieving long oriented aim of the company. These strategies reflect the marketing mix portal of the company. M&S adopted effective techniques and tools for the accomplishment of its strategies (Hinterhuber, 2008). The company serves its products and services for broad perspective and for this, it is necessary to use deliberate pricing strategies and promotional techniques (advertising, digital marketing).

In this respect, it is necessary for business firm to focus on marketing plan so that goals can be accomplished in proper way. In this it is also essential for management to focus on advertisement and promotional activities. In addition to this, successful marketers always carry out market research before developing and implementing any kind of marketing strategy. This research help in getting aware about the changing need and demand of customer along with the market termed.  In the support of this, it can be said that as per the outcome of research the effective strategies need to be developed. Number of planning campaigns can also boost the application of activities.

Further, organization uses premium pricing policy for its brand conscious customers. Along with this policy it also offers quality goods. These policies and strategies are executed by the corporate level of managers and the same are implemented by the middle level managers. Moreover, the management hierarchical levels play a key role in allocating resources and decision making process.

Conclusion

Hence, it can be stated that, strategic marketing plays a key role in achieving competitive advantage for the company. It helps businesses in evaluating effective series of benefits. Hence, it is evident from the above discussion that M&S adopted various atrocious and beneficial strategies and tools for its business operations and growth of the enterprise.

References

  • Dou, W. and et.al., 2010. Brand positioning strategy using search engine marketing. Mis Quarterly.
  • Dwyer, F. R. and Tanner, J. F. 2002. Business marketing: Connecting strategy, relationships, and learning. New York: McGraw-Hill.
  • Ferrell, O. C. and Hartline, M., 2012. Marketing strategy, text and cases. Cengage Learning.
  • Hawkins, D. and Mothersbaugh, D., 2009. Consumer behavior building marketing strategy. McGraw-Hill.
  • Hinterhuber, A., 2008. Customer value-based pricing strategies: why companies resist. Journal of business strategy.

On the other hand, corporate strategies are implemented in accomplishing long term objectives of the cited firm. The corporate tactics of M&S are:

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