Last updated: August 17, 2019
Topic: ArtDesign
Sample donated:



In today’s competitive environment,
many organisations are faced with the challenge to create value for their
customers due to highly fragmented and competitive market place. Thus, there is
a need to move from mass marketing to choosing the right customers. This leads
to firm’s developing Customer-Driven(CD) marketing strategies during their
planning process to ensure building a long-term relationship with the

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The paper will focus on introducing the
concept of Strategic Marketing Planning Process (SMPP) and its role in creating
customer value for targeted customers and achieving profitable customer
relationships. This is followed by the discussion of the four steps in CD marketing
strategies namely segmentation, targeting, differentiation and positioning
(STP’s) and its contribution to SMPP. Finally, a conclusion will be presented.


Strategic Marketing Planning Process (SMPP)

SMPP is a logical sequence and a
series of activities taken by the firm’s management to create and implement effective
marketing strategies (Donald and Kolsaker, 2014). Creating a strong competitive
position and robust (CD) marketing strategies are the important aspects of the
planning process (Ellson,2004). An effective marketing strategy provides
philosophical, conceptual and methodological benefits to an organization in creating
value for its customers (Biggadike,1981). It is of paramount importance for an
organization to identify which customers to serve and how to create value for
them. Therefore it is essential to understand the importance of STP’s (4 steps)
in SMPP.


Market Segmentation (MS) and Market Targeting (MT)

The first step in CD marketing
strategy is MS which is a crucial step in the planning process. MS enables an
organization to identify and characterize a “set of buyers” who would
eventually become targets for the company’s marketing plans. This technique
divides the heterogeneous market into homologous segments that have common
characteristics. In response to a marketing stimuli, these characteristics in a
given segment explains and predicts the response of the consumers (Tynan, 1987).


In order to be used as an effective tool,
segmentation depends on the identification of appropriate variables to divide
the total demand in the market into subgroups that are economically viable
(Baker,1984). There are four variables on which segmentation can be carried out
namely geographic, demographic, psychographic and behavioural (Appendix 1) These
four variables affect feasibility of MS in terms of measurability,
accessibility, substantiality, differentiability and actionability (Kotler,


Market Targeting

MT is the second step that involves evaluating
the identified segments and deciding which segments to target its marketing
resources. Target market helps the firms to identify the opportunities and gaps
in the market during the planning process itself and also provides insights
regarding the design of operational programmes to cater to the market (Ellson,2004).

It is of paramount importance to understand the firm’s resources, capabilities
and attractiveness of the chosen segments in order to serve them better and
enhance the SMPP. Monitoring the size and growth of the target segments enables
the organisation to estimate the amount of investment required. Entering a
segment with low levels of competition is easy but on the other hand, the
investment required for activating the needs of the consumers in a particular
segment is significant (O’Shaughnessy,2014). Kotter (2018) described that targeting
a market can be achieved by four ways namely undifferentiated, differentiated,
concentrated and micro marketing (Appendix 1)


Hence MS and MT offers great insights
by identifying and defining the customers’ characteristics, needs, wants and
the price that they are willing to pay that serves as the basis for developing
new products and services. A clear understanding of the market and demands
allows incorporation of effective marketing programs into the SMPP. This, in
turn, helps the firms to better meet the demands thereby increasing customer
satisfaction. For example, new opportunities in concentrated (niche) markets or
under-served customer groups are identified as a result of segmentation.

Customers in the niche markets often seek varied benefits and are willing to
pay premium prices when their demands are met creating a sense of loyalty to
the producer. Efficient use of the organisation’s marketing resources can also
be achieved through these processes. Strategically, it helps the firm to
achieve competitive advantage and enhance the performance of the business (Grant,
1994). Public welfare is also achieved through innovation that fosters high
productivity in both industry and society level as a result of segmentation
(Shelby et al, 2004). However, target marketing poses controversy and concern
in terms of targeting vulnerable consumers with potentially harmful products. The
fast food chains targeting low income group and children with unhealthy fast
food and mortgage lenders targeting poor urban population are some of the
examples (Kotler, 2018).

Differentiation and Positioning

Differentiation and Positioning are last
two steps and very important tools in SMPP, that are focussed on the concept of
the value proposition (Kotler, 2018). The third step, differentiation strategy revolves
around creating superior or added value to customers in terms of providing them
with superior quality, features or after-sale service to increase customer
satisfaction. This strategy during SMPP process enables firms to design and
build a distinctive competitive advantage strategy over competitors (Wheelen
and Hunger, 2012). After creating a distinctive value for desired targeted
segments, it is important to identify the position it holds in the minds of


Hence, the fourth step is positioning
refers to the act of establishing the company’s image and communicating the
products unique benefits to the target market so that it occupies a distinct
place in the minds of the target customers (Kotler, 2018). Developing strong
positioning strategy during the SMPP is crucial for the firm’s longevity in the
market place. The positioning tools namely product, place, price and promotion explain
how a brand or a product should be positioned. 
Positioning not only enables to understand the strength and weakness of
the organisation in the SMPP but also the competitors’ position in the market. Thus,
through identifying the effective position of the firm’s product in SMPP it helps
the firm build superior performance over competitors (Cravens and Peircy, 2009).



Thus, the main goal of SMPP is to
enable the organisation to build flexibility and cope up with the challenges
and uncertainties by taking full advantage of the dynamic environment. STP’s
are critical for decision and planning process of marketing and provide great
insights regarding the identification and selection of potential customers and
communicating the unique benefits of the product to them.