Marketing Strategy: Fundamental Issues

In an 1999 editorial essay in the Journal of Marketing, Day and Montgomery enumerated the following as issues fundamental to marketing:
· How do customers and consumers really behave?
· How do markets function and evolve?
· How do firms relate to their markets?
· What are the contributions of marketing to organizational performance and societal welfare?

In a 1991 editorial essay in the Strategic Management Journal, Schendel listed the following as research issues fundamental to strategy:
· Why do firms differ?
· How do firms behave?
· How does the policy making process affect policy outcomes?
· What is the role of the corporate headquarters in multi-business firms?
· What explains success and failure of firms?

In a 1998 survey of the members of the American Marketing Association (AMA) Marketing Strategy Special Interest Group (SIG), I elicited member responses to the following question:



“Given your construal of the general domain of marketing strategy, what do you view as some issues fundamental to the field? Please phrase your responses in the form of questions (e.g., why do …; how do …; what is …; what explains …; when does …; is …).”

Summarized below are the responses (edited) from 35 marketing academicians. The issues fundamental to marketing strategy are:

· Understanding, explaining and predicting competitive behavior

· Customer acquisition and retention

· Measuring, meeting and managing customers’ expectations

· Optimal allocation of marketing resources

· Defining and delineating the strategic role of marketing in organizations

· Creation, managing and leveraging of brand equity, customer / customer relationship equity, channel / channel relationship equity, market knowledge and marketing knowledge

· How to compete and where to compete?

· How does marketing strategy create economic value?

· How do various elements of the marketing mix, individually and in combination impact on business/product/brand performance?

· How does marketing strategy contribute to a business’ sustainable competitive advantage?

· How does (should) the marketing function interact with other functional areas to create sustainable competitive advantage and superior business performance?

· How do (should) businesses incorporate customers’ and competitors’ perspectives in marketing strategy decisions?

· What explains the choice of a competitive marketing strategy from among alternatives by a business in an industry?

· How do firms learn about markets?

· What is the theoretical basis for distinguishing marketing strategy from business strategy?

· What are the principles of marketing strategy?

· What theories, principles, constructs, premises, axioms and maxims are fundamental to the field of marketing strategy?

· How is competitive equilibrium reached over time?

· How can (when should) a business accelerate market penetration?

· How can (when should) a business pursue preemptive defense?

· When do (when should) firms cannibalize their own product offerings?

· When should (under what conditions should) strategic alliances be pursued?

According to Day and Montgomery (1999), fundamental issues are those that are enduring to a field of study, amenable to accommodating new insights and approaches, and distinguish a field of study from related fields and contributing disciplines. Fundamental issues serve to establish the identity of a field of study, distinguish it from other fields and disciplines, and compel further research inquiry.

Which among the issues in foregoing list meet the criteria to be viewed as fundamental issues?
Are there other issues that you believe are fundamental to marketing strategy?

Issues fundamental to a field of study cannot be a long list. Clearly, the above list needs to be critically evaluated and pruned.


Listed below are issues that I view as fundamental to marketing strategy:

1. Understanding, explaining and predicting the marketplace behavior of businesses that entail the deployment of marketing resources. Here, marketplace behavior refers to a business’ actions directed at customers, competitors and channel members. Deployment of marketing resources refers to a business’ present and planned pattern of deployment and amount of deployment of marketing resources. Patter refers to specific types of marketing resources deployed and allocation of total amount of resources by resource types.

An alternative perspective of issues fundamental to marketing strategy are the following, stated in the form of questions.

· Why do competing businesses behave the way they behave in the marketplace? (What explains the competitive marketplace behavior of businesses?)

· How do the characteristics of the focal business, the characteristics and behavior of its competitors and customers, and characteristics of the industry and the macro environment influence its behavior in the marketplace, and why?

· How should a businesses deploy marketing resources at its disposal under specific organizational, industry structural, and environmental conditions, and why?

2. Given that a business’ marketing strategy decisions are based on both supply side and demand side considerations, the supply side and demand side perspective of an issue fundamental to marketing strategy can be stated as follows:

· Supply Side Perspective: How does (should) a business choose to deploy marketing resources at its disposal to compete in the marketplace in the context of the structural characteristics of the market in which it operates, competitors’ characteristics and behavior, and its own characteristics?

· Demand Side Perspective: How does (should) a business choose to deploy marketing resources at its disposal to compete in the marketplace in the context of buyer characteristics and behavior?

3. Another issues that can be viewed as fundamental to marketing strategy is understanding, explaining and predicting the:

· Antecedents of a business’ competitive marketplace behavior -- organizational and environmental antecedents.

· Outcomes of a business’ competitive marketplace behavior -- competitive positional advantages, marketplace performance (customers’ responses to a business’ competitive marketplace behavior), and financial performance.

· Moderators of the relationship between a business’ competitive marketplace behavior and outcomes.

· Mediators of the relationship between a business’ competitive marketplace behavior and outcomes.

I look forward to your comments and reactions to the proposed list of issues fundamental to marketing strategy. Are there redundancies?Do they meet Day and Montgomery’s (1999) criteria to be viewed as issues fundamental to marketing strategy?




References
Day, George S. and David B. Montgomery (1999), “Charting New Directions for Marketing,” Journal of Marketing, 63 (Special Issue), 3-13.


Schendel, Dan E. (1991), “Editor’s Comments on Winter Special Issue,” Strategic Management Journal, 12 (Winter Special Issue), 1-3.

Domain of Marketing Strategy

In 1998, I solicited the input of the members of the American Marketing Association (AMA) Marketing Strategy Special Interest Group (SIG) to the following question: “What do you view as the general domain of marketing strategy and major substantive areas within its domain?”

Summarized below are the responses (edited) from 35 marketing academicians.

The domain of marketing strategy is:

· The study of a business’ decisions and actions that impact on its relationship with customers, competitors and channel members.

· The study of a business’ assets, competencies, processes, and routines involved in its interactions with customers and marketing intermediaries.

· The study of value-creation processes for the entities involved in a transaction.

· The study of organizational and inter-organizational issues that impact on a business’ ability to design and deliver products that are valued by customers, and provide a competitive advantage and an acceptable return to the firm.

· The study of strategies that businesses use to create value for customers.

· The discipline of creating and sustaining offerings of superior value to customers in a competitive marketplace.

· The leveraging of the distinctive competencies of and resources made available to the marketing function to achieve sustainable competitive positional advantages.

· The pursuit of customer advantage by anticipating and meeting customers’ needs.

The following constitutes an attempt on my part toward synthesis of the above responses:

“The domain of marketing strategy is the study of organizational and inter-organizational phenomena including processes, routines, decisions and actions concerned with a business’ development of products that offer value to customers, interactions with customers, competitors and collaborators, leveraging of asset stocks that reside in the marketing function, and deployment of firm resources entrusted to the marketing function designed to achieve specific organizational objectives.”

I have given considerable thought to and written about the conceptual distinctions between corporate strategy, competitive strategy at the business unit level (other equivalent terms used include competitive strategy, business strategy, business unit strategy, market strategy). By developing and disseminating a draft statement on the domain of marketing strategy, eliciting input from the community of academics, practitioners and consultants interested in makreting strategy related issues, I intend to refine the above conceptulaization of the domain of marketing strategy.

I look forward to your comments on the merits of developing a domain statement and the proposed draft domain statement. Propose alternative domain statements and/or revisions of the proposed statement.