4 Pages Posted: 5 Apr 2010
This simple model of marketing strategy can provide keys to creating a sustainable competitive advantage. Suitable for MBA and executive formats, this technical note demonstrates that individual marketing strategy concepts are interconnected, which renders the strategic process vulnerable to the political machinations of executives. Evolving customer needs and competitors' proactive efforts to steal market share require a dynamic marketing strategy.
Rev. Jun. 6, 2016
THE SEVEN QUESTIONS OF MARKETING STRATEGY
1. Who are our customers and how do we serve them? Many years ago, Peter Drucker said that the only valid definition of business purpose was “to create a satisfied customer.” Ted Levitt agreed: “The purpose of a business is to create and keep a customer. There can be no corporate strategy that is not in some fundamental fashion a marketing strategy, no purpose that does not respond somehow to what people are willing to buy for a price.” When executives in a firm think this way, we often refer to their businesses as customer-focused or customer-oriented firms. Most marketers believe that customer-orientation is the foundation of all business success. Academics often refer to this belief as the marketing concept, which says that the best way for a firm to accomplish its goals over the long run is to choose a group of customers and do a better job than competitors of satisfying the needs of those customers.
While most executives pay lip service to the value of a customer orientation, they are easily distracted by competitors. This often happens when marketers conclude that the reason for the poor performances of their own products lies in something that competitors did. But competitor actions do not occur in a vacuum. The effectiveness of a competitor's actions depends on the actions of the marketer's own firm. If a competitor fills a need the firm has chosen not to fill, the proper reaction is not to blame the competitor, but blame oneself for failing to identify the unmet need before the competitor did. Thus the heart of the strategy creation process outlined in the hieroglyphics is a careful analysis of customers. This is not to say that competitor analysis is not important. An understanding of competitor strategies, along with the skills and assets that make those strategies possible, is critical to the proper evaluation of the marketer's strategic options. Having said that, priorities should be clear. We identify possible marketing strategies by studying customers. We evaluate the attractiveness of those strategies in part by analyzing competitors, costs, and risks. For the marketer who cares about creating value, the goal is not to make competitors miserable, but to make high-priority customers happy.
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Keywords: marketing strategy basic
Suggested Citation: Suggested Citation
Farris, Paul and Parry, Mark E. and Borden, Neil and Venkatesan, Rajkumar and Sharpe, Kathryn, The Seven Questions of Marketing Strategy. Darden Case No. UVA-M-0779. Available at SSRN: https://ssrn.com/abstract=1584114
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