Undoubtedly, one cannot discuss one of the most vital drawbacks of strategic concepts and tools pointing that it is too easy for the customer to get too little attention alongside markets, capabilities and competitive advantage without taking into consideration:
· the concept of strategic marketing
· the levels of strategy
· the roles of strategy formulation and implementation
· identification of generic marketing strategies as the most common in Western economies
· evaluation of strategic performance (Blois, 2000).
Although there is the enormous number of books and articles dedicated to the issue of strategy, it is rather difficult to find a good source of knowledge concerning the nature and role of marketing strategy. The concept of strategy was created by ancient Greeks and belongs to the most essential military terms incorporated into business language. One may wonder whether it is useful to perceive business organizations in the same way as armies and treat their contacts as the peaceful or war missions. It seems that such an approach is underestimated both by academics and practitioners, who do not take into account the fact that the precepts mentioned above might help lead business organizations. As applying this way of thinking about a leading a company in terms of strategic management and strategic marketing can:
· help the business organization cope with changes,
· make them create a long-term view,
· provide systems of coordination and communication,
· apply systematic methods of decision making,
· force the consideration of strategic choices,
· ensure the success of the company (Blois, 2000).
Therefore it is worth considering strategy as one of the most crucial terms used in modern-day business. This term means the policy of the business organization referring to matching its activities to the political, social and financial environment and to its own resource capabilities. The strategy is designed to satisfy the needs and execute the objectives of the company. Marketing strategies are focused on individual product lines and brands and put some emphasis on issues such as positioning, segmentation, communication, and innovation.
In this analysis a hierarchical view of strategy formulation, implementation, and evaluation will be adopted, according to which the three most commonly accepted levels of strategic planning are applied:
· corporate-level strategies,
· business-level strategies, focusing on the strategic business units (SBUs),
· functional strategies: marketing strategies and strategies in each of the other vital functions of the business such as operations, human resources, and finance (Blois, 2000).
No doubt that the corporate level strategies are the main concern of the chief executive personnel of the company. According to Doyle (1994) there are two types of leaders who can be responsible for managing the company at the corporate level. A right-handed leader, who deals with is financial issues rather than marketing and is concerned with cost reductions and keeping his company's finances in check. A left-handed leader, whose ambitious approach results in setting marketshare objectives. The driving force in his life is the comprehension of the customers' needs, often at the expense of short-term financial gain.
The role of left handed leaders for their companies and their customers was described by one of the best known American authors, ‘At the corporate level, marketing managers have a critical role to play as advocates for the customer and for a set of values and beliefs that put the consumer first in the firm's decision malting, and to communicate the value proposition as part of that culture throughout the organization, both internally and in its multiple relationships and alliances’ (Webster, 1992). Unfortunately, left-handed leaders, who held the view that one thing that is important to the company’s success is the customer, are in a minority.
As for another level identified as business-level strategies, they are defined by the competition of businesses. The main concern of the leaders is how to maintain their market share in the face of very difficult competition. Therefore the role of marketing is strictly confined to giving the company a unique position in the marketplace which ensures a permanent, stable competitive advantage. Considering this theory in practical terms, one can say that such a marketing policy results in managing a product line to ensure its correct position in the market relative to competitive offers of other companies. It also adjusts in order to take into account the changes of consumer tastes, needs, preferences and the changes which can be observed in the competitive environment.
The third level of strategies called functional strategies is regarded as the most direct application of marketing strategy, as the marketing staff are involved in the specific management of individual brands and “the interrelations between brands” (Blois, 2000). Their activities aim at making decisions on such issues as market segmentation, targeting and positioning. When one looks into the business history of the most successful world known companies, the can notice that many of them have been built on the strength of a single brand and it was the creative marketing of that brand that built up the large assets that are evident up to now. The most spectacular examples of such concerns are Coca-Cola, Nike, Mercedes, Guinness, IBM and Microsoft.
The formulation of marketing strategy is regarded as a formal planning process, which must be preceded by the careful analysis of the company's situation. One should consider two main areas of analysis: external and internal.
The most obvious result of external analysis is the identification of opportunities and threats facing the organization, both present and potential. This type of analysis results in a keen focus on the market and therefore on the changing face of competition. According to Aaker (Blois, 2000) there are five main types of external analyses:
In the customer analysis the role of the marketing department is to act as an advocate for the needs of the customer. At this stage managers must identify existing segments, customer motivations, unmet needs, and the scale of these unmet needs. The conclusions from this analysis will exert an essential influence on the investment of capital at future points in the strategy of the firm.
As for competitor analysis it requires the identification of present and future competitors, what really matters is the guarantee that vision of the analysis is not narrowly focused, but rather is creative and innovative in its definitions.
In the market analysis the current and potential size of the market and its profit potential for the suppliers in the market are examined. What is also very important is the degree of customer loyalty to individual brands. The ideal solution to all marketing problems of the company would be to find and keep very loyal customers who would not be swayed by competitors' offers, but unfortunately such a scenario is totally imaginary and unrealistic for most of the companies. This type of analysis teaches the marketing staff to perceive and comprehend the precise dynamics of the marketplace, especially the structure of distribution channels, that show the potential for increasing or losing market share.
Another type of analysis called industry one points to the nature of competition within different industries which varies a lot and in influenced by two factors the number and the size of companies that operate within the industry. There is one more important feature of so called industry structure namely, the cost structure of the industry, which means that in practice larger companies have a substantial advantage over the smaller firms.
One cannot imagine a proper and precise external analysis of the market without environmental analysis. It seems to be obvious and logical as undoubtedly, there is no market which could operate in a vacuum influenced only by the forces of the internal market. There are trends within the environment that also exert an influence upon the marketplace. Four forces in particular have been noted as the most meaningful for market operations: technological, governmental, cultural, and demographic.
As far as internal analysis (or self-analysis) is concerned it takes into account the elements of the organization that have an impact on the success of the company. What really matters here are non-financial aspects of the company such as: customer satisfaction, brand equity, product/service quality, firm reputation, and new product potential. In addition, it is necessary “to analyse the product portfolio of the company, considering the strengths and the performance of each of the products in the line and any possible synergies available among them. We must also look at general trends and characteristics of the company's history. These relate to strengths and weaknesses inherent in the structure of the organization often related to its history as well as its current strategic direction, capabilities, and constraints” (Blois, 2000).