STRATEGIC MARKETING MANAGEMENT

Chapter 1 — Exam Revision Notes

SECTION 1: KEY DEFINITIONS (List & Describe Questions)

1. What is Marketing?
Definition: The process by which companies engage customers, build strong customer
relationships, and create customer value in order to capture value from customers in return.

Simple version: "Managing profitable relationships with customers."

Core idea: Create value → Capture value.

2. What is a Business Model?

Simple definition: 'How you planned to make money'
It has two key components:
• Strategy – whom to target and what value to offer
• Tactics – the specific activities (marketing mix) to execute the strategy
📌 Exam Example: Razors-and-blades model: sell the razor cheaply, profit from blade refills.

3. What is Marketing Strategy?

Strategy answers two questions:
• Who is the target market?
• What is the value proposition?

4. What is Strategic Marketing Management?

Definition: The process of implementing a business's mission through specific strategic
processes in order to maximize the marketing plan.

Key idea: The planning cycle alone is inadequate — rapid environmental change demands
real-time, proactive decision-making.

SECTION 2: KEY LISTS TO MEMORIZE

A. The 5 Factors Defining the Target Market (5 C's)

1. Customers
2. Company
3. Collaborators
 4. Competitors
5. Context (economic, social, tech, regulatory, physical)
📌 Memory Trick: The 4 inner players + 1 surrounding environment = your market.

B. The 3-V Optimal Value Principle (3 Key Questions)

6. Does the offering create superior value for target CUSTOMERS vs. competitors?
7. Does the offering create superior value for COLLABORATORS vs. competitors?
8. Does the offering create superior value for the COMPANY vs. other options foregone?
📌 Exam Tip: The sweet spot is where all three value propositions overlap — this is your optimal
offering.

C. The 7 Ts — Marketing Tactics (Marketing Mix)

9. Product
10. Process
11. Physical Evidence
12. Price
13. Promotion
14. People
15. Distribution (Place)
📌 Memory Trick: The 7 Tools managers use to create value.

D. The 5 Stages of the Management Process

16. Strategic & Marketing Analysis — Where are we now?
17. Strategic Direction & Formulation — Where should we go?
18. Identifying Alternative Means — How might we get there?
19. Evaluation & Selection — Which is the best option?
20. Implementation & Monitoring — Execute and correct.

E. 3 Main Managerial Activities

• Planning
• Decision-making
• Control
(All done considering the past, present, and future.)

F. Evolution of Strategy (4 Stages — Historical Perspective)

21. Budgeting (early 1900s) — control deviations, manage complexity.
22. Long-Range Planning (1950s–60s) — anticipate growth; assumes past trends continue.
23. Strategic Planning (1960s–70s) — manage changing thrusts & capabilities; past extrapolations
are inadequate.
24. Strategic Management / Strategic Market Management (modern) — real-time, proactive,
responds to rapid environmental change.

G. 7 Reasons WHY Strategic Marketing Management is Needed

25. Precipitates consideration of strategic choices
 26. Forces a long-range view
27. Makes resource allocation visible
28. Aids strategic analysis and decision-making
29. Provides a strategic management and control system
30. Provides horizontal & vertical communication and coordination
31. Helps a business cope with change

H. Characteristics & Trends of Strategic Market Management

• External Market Orientation — customer-driven strategies
• Proactive Strategies — influence events, not just react
• Relies on Information Systems — continuous, real-time data
• Online Analysis & Decision-Making — not just annual planning cycles
• Entrepreneurial Thrust — responsive to opportunities
• Implementation — strategy must fit org structure, people & culture
• Global Realities — international markets, threats & opportunities
• Longer Time Horizon — balance short-term pressure with long-term assets

I. Achieving Market Orientation (5 Areas)

32. Customer Focused — understand needs, build relationships, monitor satisfaction
33. Competitor Focused — benchmark rivals' strategies and capabilities
34. Integrate Marketing into the Business — every department creates value
35. Strategic Vision — long-term, market-led strategy at senior level
36. Realistic Expectations — match goals to capabilities and resources; make trade-offs

J. Balanced Scorecard (Kaplan & Norton, 1992) — 4 Perspectives

37. Financial — How do investors/shareholders perceive us?
38. Customers — How do customers view us?
39. Internal Activities — Where must we outperform competitors?
40. Innovation & Learning — How do we continuously improve and create value?

K. Business/Marketing Orientations
• Production Orientation — mass production, efficiency, cost control
• Product Orientation — innovation and design drives buyers
• Sales Orientation — sales volume is the key to success
• Market Orientation — success from understanding and meeting customer needs

L. Process of Strategic Marketing (3 Phases)

41. Strategic Analysis — Where are we? (environment, customers, internal review)
42. Formulating Strategy — Where are we going? (STP, competitive advantage, core
competencies)
43. Implementation — How do we get there? (marketing mix, monitoring & control)

M. Segmentation, Targeting, Positioning (STP)

• Segmentation — break market into groups with common characteristics; forecast demand
• Targeting — evaluate and select sustainable segments for long-term relationships
• Positioning — establish a distinctive superior position matched to customer needs
SECTION 3: CASE STUDY GUIDE

How to Approach a Case Study Question

Step 1: Identify the issue
What strategic problem or situation does the company face? (e.g., new competitor, market
change, failing product)

Step 2: Apply the relevant framework

Match the case to a concept — e.g., value proposition, strategy vs. tactics, market
orientation.

Step 3: Analyze with evidence from the case

Quote or refer to specific facts in the case text. Link to theory.

Step 4: Recommend or evaluate

What should the company do? Use the 3-V principle or the management process stages.

Key Frameworks for Case Studies

Use these depending on the case question:

Framework 1: The 5 C's (Target Market Analysis)

Use when: asked to analyze a company's market or competitive position.
• Customers — Who are they? What do they need?
• Company — What are our strengths/capabilities?
• Collaborators — Who are our partners/suppliers?
• Competitors — Who else serves this market?
• Context — What external forces (PEST) affect the market?

Framework 2: The 3-V Principle (Value Proposition Analysis)

Use when: asked about whether a strategy is sound or an offering creates value.
• Does it create superior value for customers?
• Does it create superior value for collaborators?
• Does it create superior value for the company itself?

Framework 3: Strategy and Change (PEST + Strategic Drift)

Use when: asked about why a company succeeded/failed or needs to adapt.
• Driving change: Political, Economic, Social, Technical
• Impact of change: Volatility, Globalization, Intense competition, Redefining markets
• Result: Opportunity (if proactive) OR Strategic Drift (if reactive/slow)

Framework 4: Balanced Scorecard

Use when: asked about measuring performance or business success.
• Financial, Customer, Internal Processes, Innovation & Learning
Sample Case Study Scenario + Answer Structure
SCENARIO: Nokia dominated the mobile phone market in the early 2000s but failed to adapt
to the smartphone revolution. Apply strategic marketing management concepts.

ANALYSIS:
1. Strategic Drift: Nokia's strategy changed incrementally (Phase 1–2) while the environment
changed rapidly — classic strategic drift. They failed to transform (Phase 4 = demise).

2. Orientation Problem: Nokia had a product orientation (believing hardware design was
sufficient) rather than a market orientation (responding to what customers actually wanted —
smart connected devices).

3. Strategic Management Failure: Nokia relied on annual planning cycles and failed to act
proactively. Strategic marketing management requires real-time analysis and decisions
outside the planning cycle.

4. 3-V Principle Breakdown: They failed to create superior customer value (no app
ecosystem), which cascaded into losing collaborators (developers) and ultimately company
value.

RECOMMENDATION:
Nokia needed to shift to market orientation, use continuous environmental scanning, develop
an entrepreneurial thrust, and align their value proposition to all three stakeholders
(customers, collaborators, company).

Quick-Reference: Concepts by Question Type

Question Type Key Concept to Use Key List/Framework
Define marketing strategy Strategy = target market + value 5 C's, 3-V Principle
proposition
Explain business model Strategy + Tactics 7 Ts, 3-V
Why SMM matters 7 Benefits of SMM 7 Reasons (F-G above)
Analyze market position 5 C's framework Customers, Competitors,
Context
Performance measurement Balanced Scorecard 4 Perspectives (K&N 1992)
Company failed to adapt Strategic Drift 4 Phases of drift diagram
Market orientation Customer + Competitor + 5 Areas to achieve MO
Integrated
Evolution of strategy Historical Perspective 4 Stages: Budget → SMM
Strategic analysis stages Management Process 5 Stages + 3 Activities

Strategic Marketing Management — Chapter 1 | Exam Notes