Chapter 9: Dilemmas of Strategic Marketing

OVERVIEW

So far we have mainly considered aspects of "operational marketing" that deal with the problems of the application of marketing tools across cultures in order to realize the detailed marketing aims of the organization and the evaluation of the effectiveness of these activities. Because marketing is a major factor in the profitability of companies, senior management must be able to coordinate all these marketing efforts with the other aspects of the business.

We must, therefore, now turn to "strategic marketing." This is the process of formulating marketing strategy, based on examining and analyzing the environment and organization, formulating strategic aims and the ways of reaching them. The effort and necessary resourcing in strategic marketing is often proportional to the intensity of competition in the market place.

Evidence from both THT's WebCue research tools and our clients identifies key areas of most concern. These are:

1. Falling prices and thus increasing price competition.

2. An overall rise in competition as more suppliers compete for customers across the globe and as markets become increasingly oligopolistic.

3. The increasing requirement to seek higher and higher levels of customer satisfaction through the role of the customer service function.

Many of these changes owe their origin to declining product (and service) differentiation and thus the race is accelerating towards new sources of competitive advantage. In the continuous stream of innovative products and solutions, the strategic marketer has to live with the consequences of short product life cycles, rapid loss of early advantage in the market, and the corresponding fall in prices to retain market share with the ever-falling gross margins that result. In the service sector, the key issues manifest as the rising emphasis of the quality of service rather than pricing.

Already, or in only a few more years , these changes will continue to result in:

1. fewer and larger players through consolidation of competition and mergers and acquisitions,

2. the changing requirements and value systems of customers, and, of course,

3. the globalization of markets and competition.

Strategic marketing has had to change - but must do so even more in the future. Already we have seen marketing shift from a (specific) separate function to being diffused throughout channels, product ranges, or technologies. Marketing as originally conceived is gone, but some new framework for marketing is essential through which organizations can survive in their increasingly hostile markets. In our language and conceptual thinking, strategic marketing faces a number of key dilemmas as a result of these transformations that we can now explore. Organizations that can continuously reconcile these dilemmas will survive in the future.

For convenience we can classify these dilemmas of strategic marketing as:

1. The top-down versus bottom-up dilemma.

2. The inside-out versus the outside-in dilemma.

3. The lateral tension between different alternative activities (such as sales and R&D).