In its strategic role, marketing focuses on a business’s intentions in a market and the means and timing of realizing those intentions. The strategic role of marketing is quite different from marketing management, which deals with developing, implementing, and directing programs to achieve designated intentions. To clearly differentiate between marketing management and marketing in its new role, a new term - strategic marketing - has been coined to represent the latter. This article discusses different aspects of strategic marketing and examines how it differs from marketing management. Also noted are the trends pointing to the continued importance of strategic marketing. The article ends with a plan for the rest of the article.

CONCEPT OF STRATEGIC MARKETING

At the corporate level, marketing inputs (e.g., competitive analysis, market dynamics, environmental shifts) are essential for formulating a corporate strategic plan. Marketing represents the boundary between the marketplace and the company, and knowledge of current and emerging happenings in the marketplace is extremely important in any strategic planning exercise. At the other end of the scale, marketing management deals with the formulation and implementation of marketing programs to support the perspectives of strategic marketing, referring to marketing strategy of a product/market. Marketing strategy is developed at the business unit level. Within a given environment, marketing strategy deals essentially with the interplay of three forces known as the strategic three Cs: the customer, the competition, and the corporation. Marketing strategies focus on ways in which the corporation can differentiate itself effectively from its competitors, capitalizing on its distinctive strengths to deliver better value to its customers. Agood marketing strategy should be characterized by (a) a clear market definition; (b) a good match between corporate strengths and the needs of the market; and (c) superior performance, relative to the competition, in the key success factors of the business.

Together, the strategic three Cs form the marketing strategy triangle. All three Cs - customer, corporation, and competition - are dynamic, living creatures with their own objectives to pursue. If what the customer wants does not match the needs of the corporation, the latter’s long-term viability may be at stake. Positive matching of the needs and objectives of customer and corporation is required for a lasting good relationship. But such matching is relative, and if the competition is able to offer a better match, the corporation will be at a disadvantage over time. In other words, the matching of needs between customer and corporation must not only be positive, it must be better or stronger than the match between the customer and the competitor. When the corporation’s approach to the customer is identical to that of the competition, the customer cannot differentiate between them. The result could be a price war that may satisfy the customer’s but not the corporation’s needs.

Marketing strategy, in terms of these three key constituents, must be defined as an endeavor by a corporation to differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer needs in a given environmental setting. Based on the interplay of the strategic three Cs, formation of marketing strategy requires the following three decisions:

1. Where to compete; that is, it requires a definition of the market (for example, competing across an entire market or in one or more segments).

2. How to compete; that is, it requires a means for competing (for example, introducing a new product to meet a customer need or establishing a new position for an existing product).

3. When to compete; that is, it requires timing of market entry (for example, being first in the market or waiting until primary demand is established).

Thus, marketing strategy is the creation of a unique and valuable position, involving a different set of activities. Thus, development of marketing strategy requires choosing activities that are different from rivals. The concept of strategic marketing may be illustrated with reference to the introduction by Gillette Company of a new shaving product, Mach 3, in April 1998. For some time, Gillette had faced slow growth in its razor’s division, partly because Schick, its smaller rival, had recently launched a new razor of its own. Investors had begun to fret about slowing growth and lackluster sales at Gillette. This threatened its basic business, that is, razor and blades market, in which it had 71% of the North American and European market. Apparently, Gillette needed a new marketing strategy to protect its razor and blades territory. Looking around, Gillette decided to introduce a new razor that its research laboratory had been developing and that was ready to be launched. Gillette had an unusual approach to innovation. Most companies tweaked their offerings in response to competition or demand. Gillette launched a new product only when it had made a genuine technical advance. To make the Mach 3, Gillette had found a way to bond diamond- hard carbon to slivers of steel. The time was on Gillette’s side. It needed something revolutionary to strengthen its market position, and its research laboratory had a unique product ready to be launched. Gillette delineated the following marketing strategy:

• Market (where to compete) - Gillette decided to introduce Mach 3 throughout the U.S. on the same day.

• Means (how to compete) - Gillette decided to offer Mach 3 as a premium product that was priced 35% more than SensorExcel, which itself was 60% more expensive than Atra, its predecessor. Gillette reasoned: “People never remember what they used to pay. But they do want to feel they are getting value for money.”

• Timing (when to compete) - Gillette decided to introduce the new product before its CEO, Mr. Al Zein, retired. Mr. Zein’s ability to communicate had been a hit on both Wall Street and in the company. Much of the Gillette’s recent success was attributed to Mr. Zein, and the company wanted Mach 3 to adequately settle in a dominant position before Mr. Zein retired.

Gillette’s Mach 3 strategy emerged from a thorough consideration of the strategic three Cs. First, market entry was dictated by customers’ willingness to adopt new products in the toiletry field. Eight years ago, Gillette was losing its grip on the razor market to cheap throwaways. Sensor, which replaced Atra razor, saved the company. The company was hopeful that the Mach 3 would have a similar effect. Second, the decision to enter the market was based on full knowledge of the competition, which included its own substitute products, such as Sensor and Atra shavers, as well as companies like Schick. The company was more concerned about its own products competing with Mach 3, and, therefore it ran down stocks of its Sensor and Atra shavers ahead of Mach 3’s launch. Third, Gillette’s strength as an aggressive successful marketer of packaged goods with its vast experience in shaving products business and adequate financial resources (Gillette spent over $750 million in developing Mach 3) properly equipped it to enter the market. Finally, the environment (in this case, a trend toward acceptance of technologically advanced products; Mach 3 was covered by 35 patents) substantiated the opportunity. This strategy seems to have worked well for Gillette. In nine months ending 1998, Gillette shaving products sales were up 28%. And yet, the company has to introduce the product in Europe (with 71% market) as well as in developing countries (Latin America, where the company has 91% market for blades, and India with 69% of the market). Inasmuch as Gillette did not tailor its product to local peculiarities, it was able to achieve vast economies of scale in manufacturing. The economies of scale were mirrored on the distribution side as well. The company usually broke into new markets with razors and then jumped into batteries, pens, and toiletries through the established sales channels.