STRATEGIC MARKETING Marketing Strategies for Sri Lankan Business Entities Lewie Diasz STRATEGIC MARKETING To Romayne & Jacqueline Diasz Strategic Marketing Marketing Strategies for Sri Lankan Business Entities The first editions copyrights by Lewie Diasz 2013. E-mail (for orders and customer service enquiries): [email protected] or Visit the web Page on http://www. lewiediasz.com All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988. ISBN 978-955-44414-0-8 Typesetting & Printed by Softwave Printing & Packaging (Pvt) Ltd., No. 107 D, Havelock Road, Colombo 05. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. Contents CHAPTER 1 An introduction to Strategic Marketing 01 1.1 How has the world changed 03 1.2 How should Marketing change? 04 1.3 Marketing creativity Vs. Marketing accountability 04 1.4 A Value based approach 05 1.5 Marketing, an art or science? 06 1.6 Sustainable Competitive Advantage 07 1.7 A futuristic definition of Strategic Marketing 08 Case Study 1: ODEL – The pride of Sri Lanka’s retailing landscape 11 CHAPTER 2 Creating a Market Oriented Organization Culture 17 2.1 Types of business orientations 18 2.2 Understanding an organizations culture through the cultural web 19 2.3 The Functional Syndromes 27 2.4 Why market orientation? 28 2.5 Barriers to market orientation 31 2.6 What is a Vision Statement? 33 2.7 Strategic Vision 36 2.8 American Express Core & Periphery Values 38 Case Study 2: The Pulse of million’s Sri Lankans - Dialog the Future, today! 42 CHAPTER 3 Strategic Marketing Auditing 51 3. 1 The Marketing environment 51 3. 2 The Marketing environment 52 3.3 Steps in Scanning the MACRO environment 54 3. 4 MESO Environment Analysis - Industry analysis thought the Porters 5 forces 59 3. 5 Techniques for analyzing competitors 62 3.6 MICRO / Internal Analysis 69 Case Study 3: On the path to sustainable growth - Unilever Sri Lanka 98 CHAPTER 4 Marketing Strategy Formulation 109 4.1 Porters Generic Strategies 109 4.2 Ansoffs growth/ share matrix 112 4.3 Bowman’s strategy clock 114 4.4 Blue Ocean Strategy 115 4.5 Attack versus Defense strategies 119 4.6 Treacy and Wiersema’s value discipline model 121 Case Study 4: Commercial Bank - A dominating force and the benchmark private sector Bank in Sri Lanka 130 CHAPTER 5 Strategic Marketing for Competitive advantage 137 5.1 What is competitive advantage? 137 5.2 Characteristics of Competitive advantage 139 5.3 Defining Strategy 144 5.4 Perspective of Strategy (The 5Ps of strategy) 146 Case Study 5: Cargills the Pride of Sri Lanka. 151 CHAPTER 6 Marketing Research For Strategic Marketing 161 6.1 The Value of Marketing Research 161 6.2 What are the types of Marketing Research? 162 6.3. Stages of the Marketing Research Planning Process 163 6.4 The structure of a Research proposal 168 6.5 Types of Secondary Data 170 6.6 Gathering Qualitative Data 171 6.7 What is Observation Research? 178 6.8 Questionnaire Design 181 6.9 Quantitative Data 184 6.10 Sampling 187 6.11 Profiling Tools 189 Case Study 6: Cinnamon Grand – The Sri Lankan Indulgence Brand 195 CHAPTER 7 Consumer and Business Buyer Behavior 201 7.1 Why study Buyer behavior? 201 7.2 McGregor’s theory X and theory y 202 7.3 The Organizational Decision Making Process 204 7.4 Appendix 205 7.5 McGregor’s theory X and theory y 207 7.6 Herzberg’s two-factor theory 208 7.7 The Organizational Decision Making Process 211 Management Philosophies from the game of Golf 217 Subject index 221 Life’s Little Instructions by William Snell 224 Exam tool kit 226 Preface This is the first edition of Strategic Marketing and it attempts to make a powerful case for Marketers and Marketing as a role in driving Sri Lankan entities towards success by establishing it on a sound intellectual basis. It is the first of its kind in Sri Lanka, where theories are contextualised and explained using Sri Lankan corporations whilst simplifying complex Management theory. This book aims at emphasizing Marketing’s contribution to long-term shareholder value creation, which is a critical discussion today. For marketing professionals the book provides a practical introduction as to how Strategic Marketing can lead to an organisations sustainable competitive advantage. Students who use this book can benefit from the thought provoking, insightful Sri Lankan case studies and attempt to peruse theory when answering the questions at the end of the chapter. Many senior managers have noticed a paradox in how firms perceive marketing and every chief executive’s mission statement puts marketing at the very top of the agenda. Getting closer to customers and meeting their needs is seen as the cornerstone of building a world class company. If managers can show that marketing will increase returns to shareholders, marketing will obtain a much more prominent role in the boardrooms of industries. The discipline itself will also obtain more respect for its greater rigor and direction. A market orientation is regarded the essential coordinating focus for all disciplines and processes of a business. At the same time, marketing professionals, marketing departments, and marketing as a qualification are not highly regarded. Few chief executives are from a marketing background. Most companies do not have a marketing director on the board, and marketing qualifications are often not treated seriously. This book is intended for readers in the academic, professional and practitioner markets who are linked by the need for an up-to-date understanding of the meaning and scope of marketing strategy. The material covered will be of direct importance to students of marketing strategy in both postgraduate and undergraduate programmes as a marketing strategy textbook. It is also useful to those undertaking professional qualifications in marketing and business and who need to build their understanding of marketing as a strategic issue. I believe that this book will be of value to marketing practitioners who wish to explore new ways of looking at the marketing process, their target markets; with a view to managing marketing better as a route to gaining an edge over their competitors. About the author Lewie Diasz was awarded the Youngest Fellow member in the world by the Chartered Institute of Marketing in 2012 and has been recognized for his teaching and research in Marketing and Business Strategy. He is a Chartered Marketer and has produced Double World Prize Winners for Emerging themes (a final stage CIM subject) and many Sri Lankan prize winners over the years. He is a founding Partner of Strategy College of Business and Marketing which is a top ranking business college located in the heart of Colombo, Sri Lanka. He has been a mentor and has coached MBA, post graduate and under graduate students for over 12 years and is on the faculty’s of reputed universities such as the University of Colombo, ACBT, American National College, University of Southern Queensland, SLIM and the University of Wales in Sri Lanka as a senior tutor, examiner and research supervisor. He has worked with top global brands such as American Express, Boston Consultancy Group (BCG) and local giants such as The John Keells Group and managed large marketing budgets whilst being accountable for Retail Banking ROI. He holds an MBA from the University of Wales and was the former Vice President at the Sri Lanka Institute of Marketing. During his career, Lewie Diasz ran over 30 in house and public executive programs for senior managers throughout Sri Lanka and was voted “Outstanding Teacher” on numerous university and corporate courses. He is a Certified Professional Marketer in the Asia Pacific Region and considers himself a student of social research whilst reading for his Doctorate at the University of Colombo. Acknowledgements My heartfelt gratitude goes out to my mother Mrs. Romayne Diasz & wife Jacqueline Diasz, the two women in my life that have been and always will be behind me, supporting, believing & encouraging everything I do. My late grand mother Rita, who would have been proud and loved to have me, read a chapter to her. My sister Rozanne, & brother in law Dilruk, who are my best friends and my brother Poori for being a true friend over the years. I wish to acknowledge the support of many friends, colleagues, students and family who have helped me over the years. Sabrina Gallaher who has inspired me in more ways than one, Brian Abeysekera for the unwavering support when I needed it the most, my dad Jeremy Diasz & brother Jack Diasz. Special thanks goes out to the few people that have inspired me over the years; Rajiv Caderamanpulle, Prof Ranjith Bandara & Renuka Fernando. Thank you for having faith in me, believing in me and trusting me to achieve what I have. Yasas and Ajani Hewage, the couple I can always count on for support & Pastor Niroshan and Taniya for imparting Godly Wisdom. Thank you! Ludmila Bopitiya and Miranthi Dole, for assisting me with the graphic design and editing. Dinesh Kumara for the web and digital campaign. To all the Corporate leaders who supported me without any hesitation; Rohan Karr from Cinnamon Grand; Hasrath Munasinghe from Commercial Bank; Otara Gunewardane and Upendra from ODEL; Dr.