What is Strategic Marketing?
As every organization operates in a highly competitive as well as a dynamic market, it needs to have strategic marketing. In this, companies have to enhance their knowledge about competitors they are having with their strategies. Strategic marketing is a process of making long term plans which ultimately integrates with business strategy (Davies, 2011). It provides guidelines for assessing customer preferences and also helps in creating a strong relationship with them.
In this report, complete knowledge about role of strategic marketing and the relation between corporate strategy and marketing strategy is being discussed. It will be done by keeping a firm, Tesco in focus. It is one of the largest retail organizations in UK (Ries, 2003). Here, an elaborative study on its internal and external environment will also be done. At the international level Tesco faces many local challenges and there has been significant speculation about possible exists from underperforming markets, due to recent scandals as its share fell to 11,5% to 11 year low. (Guardian 2014). But the company had been reluctant to withdraw from further markets if there are other options available.
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Role of strategic marketing
According to Boykin, (2014), strategic marketing can be defined as identification of one or more sustainable advantage that firm can have in order to get competitive advantage in market in appropriate manner. It allows companies to deal with different kinds of issues like the products that can be launched in market, the price of products, distribution strategies, etc. According to Hunt, and Arnett, (2004), strategic management can be defined as proper formulation and implementation of different goals and initiatives that are taken by company so that it can present itself strongly in market and also in most suitable manner.
At Tesco, the main role of strategic marketing is to know about the markets where they are going to operate and compete. After that it decides how they will compete and can gain competitive advantage. The time of entrance in those markets is also predetermined so as to know at which time they would get the highest benefit (Nandakumar, Ghobadian and O'Regan, 2011). To maintain the high position within the retail industry and to promote goods and services among its customer, in effective manner these preparations are essential.
Tesco performs strategic marketing so as to build customer relationship by creating value for them. It helps in market research as it is done according to the plans Tesco has made. (Marketing Week. 2015). For instance, Tesco Club card strategy has been specified as the most effective promotional tool which greatly contributes to the business strategy of cost advantage. It helps the company in collecting some valuable information about consumer behavior as well. Furthermore, it has helped the company in achieving value for the brand. For the purpose of marketing, the brand will continue to open stores where opportunities exists and focus on displaying some imaginative thinking in all sizes of stores.
The main aim behind strategic marketing is to increase the market share and establish a good identity among the people. Tesco uses strategic marketing to show their unique features and capabilities (Yannopoulos, 2011) and it justifies their mission statement. Through the strategies which Tesco has made, actionable goals can be formulated. Marketing strategies are made for the products that the company offers and the audience to which they are offering. Strength of the products of the organization can be easily determined through these strategies (Roetzer, 2011). At Tesco, competition and revenue also plays an important role in strategic marketing. Competition pricing, as well as its distribution criteria, are also important parts of strategic marketing (Marketing Week, 2015).
Relationship between corporate strategy and marketing strategy
Corporate strategy is a set of goals and the steps leading towards reaching these goals; therefore corporate strategy is something that is decided to bring effectiveness in the business processes. Undertaking of a corporate strategy requires great concentration and focus on different types of factors. It is to be adopted when company is in need of improvements and enhancements. Marketing approaches are part of corporate strategies.
One of the major corporate strategies of the Tesco to provide value for money and based on that only company market itself as one of the companies that has cheapest and most qualitative products available. The company also has a strategy to focus on customer services and customer loyalty and for that it has launched different loyalty card schemes and other loyalty programs which have helped it to attract customers in most appropriate manner (Jordan, 2015).
Tesco's corporate strategy is one which primarily focuses on value for money and offering quality customer service. For this, company gives training and development on regular basis from which standards services can be offered to customers. For increasing revenues, this firm has taken various initiatives as it diversified its number of products. It also bought another business so as to enhance their business (TESCO Annual Report, 2014). It assesses new technologies and also takes steps to increase sales volume of their products (Daft, 2008).
At the time of making business plans, Tesco's executive management has to be in contact with the marketing department. This is to check whether business strategies are aligning with marketing strategies or not. Through marketing strategies, research is done on things like consumer behavior and their needs. It also tells people about their superiority on competitor’s product (Narasimhan, 2005). Without giving attention to marketing strategies, the long term business strategies cannot be made. Whenever a corporate strategy has been made, it may look hopeful but if strategy at marketing level is not referred, it will fail.
At Tesco, to be a good business unit first it has to be a good marketing unit (Linus, 2001). Both these strategies can be described as same as they are a customer oriented. As for the corporate strategy of Tesco, the focus is on the overall business concept, and it is made by the top management. While marketing strategies are made at middle level and here the focus is on the product, its advertisement and selling (Hunt, and Arnett, 2004). Business plans are made for all the departments in this company. Marketing plans are just for its department only. In addition to it, company focuses on CSR activity also in order to develop sound related with society. For this purpose, company runs different campaign such as environmental steering group, energy saving, ecofriendly transport packaging design, conserving water and other related. It has framed the tag line for CSR i.e. “we see ourselves as good neighbors with a real sensitivity to environmental concern.”
Developing a marketing strategy
A well-defined marketing strategy proves to be very helpful in setting mission, vision and objective of the firm. It helps in gaining competitive edge and contributes towards earning revenue and profits. It has to be made with great concentration and focus. Strategy is something which helps in achieving differentiation for the business. It is very evident that retail industry is highly dynamic and competitive. Companies operating in the industry are required to adopt effective marketing approaches from time to time so that awareness can be created and customers can become familiar with the products and services.
At Tesco it provides a framework in which information about what steps need to be taken are mentioned (Holm, 2006). Tesco develops its marketing strategies through various steps. These steps are as below:
Identifying business goals – In the first step, Tesco decides about their business goals which they have to achieve within a stipulated period, time, term. Its objectives can be to increase awareness about products they are offering or to capture a new target market (Klausner, 2013).
Stating the marketing goals – In the next step, marketing goals of the firm is being decided. These targets will specify the standards which they have to meet. Benchmarks help the employees of Tesco to achieve their goals on time (Clayton and Heo, 2011).
Market research – For any marketing strategy, research is the most important part. It includes the complete knowledge and information about market as its size, social trends and growth. It is essential to do this so as to know if there are any changes in the environment occur (Brooks and Simkin, 2012).
Profiling the potential customers – Then Tesco profiles those customers who come in its target market for assessing their needs. It helps it to identify their buying patterns as well as in maintaining a relationship