Role of strategic marketing

Role of strategic marketing

Strategic marketing management involves a series of activities and plans which focus on growing business of an organization. It is the manner by which an organization effectively distinguishes itself from its competitors by taking full advantage of both its potential and current strengths to provide better value to its client’s way above what the competitors are providing. It aims at turning the leads into the actual sales. It applies not only on sales and marketing department but all level employees of entire organization. This research paper focuses on the, San Tong Holdings Limited (SST), a Hong Kong famous beauty and slimming corporation, is used to demonstrate this noble corporate aspect of strategic management.

2.0 Role of strategic marketing

Strategic marketing is comprised of all the activities that the organization carries out so as to be able to create the necessary demand for its products. Any successful marketing must have the ability of realizing actual sales failure. It combines all marketing goals into one comprehensive plan as a foundation which focus on assisting strategic perspective development, fulfilling the demands of customer or consumers, achieving the maximum profit and sustain the business (Anderson and Vincze, 2000). The market segmentation theory involves the dividing up of the market into the various groups based on similarities. This is owing to the fact that people have distinct buying habits hence the need for the firm to come up with a strategy of providing only that which the different categories of consumers are comfortable with (Foreman and Money, 1995).

Strategic marketing is significant in various ways. First, it enables the organization to carry out market segmentation, secondly, the management is able to allocate adequate marketing resources and lastly, the organization is able to factor in the kind of products and services being offered by the consumers in terms of prices and quality and provide way above their standards in the name of product positioning (Arnould et al, 2002).

The four major strategic marketing concepts include market segmentation; marketing mix, product positioning and value chain. These are basically the techniques used to identify different aspects of the products and industry and hence to assist in strategic planning by allocation of resources and skills in selected product markets (Arnould et al, 2002). These concepts are anchored on the theory of relationship marketing which holds that the firm should endeavor to create customer loyalty for it to have ready market for its products.

2.1 Processes in strategic marketing

Analysis, Formulation and Implementation are the “Three-stage” process of strategic marketing planning.  The initial process “Analyst” is to analyze the external and internal environments of the organization, the status of customers and competitors. The information and audited data are important for identifying the limitations, assets and competencies of the corporation and the surrounding aspects so as to identify marketing objectives, and then decide the marketing strategies and any necessary actions of future orientation (Anderson and Vincze, 2000).The next stage is Formulation where the market targets are selected and competitive advantages are defined.  As a result, competitive marketing positioning is created.  At the Implementation stage, the assigned strategies are being put into practice so the products and services can be conveyed to the target market (Bartlett et al, 1995). It is proper to underscore the fact that all the three-stage process is anchored on the market orientation theory that seeks to put the buyers of the goods and services at the centre of the business (Chernev, 2014). The buyers are the most important and hence the goods and services produced and supplied must be customized to meet the needs and wants of the consumers. By this way, the company will have created a ready market hence easy marketing exercise.

2.3 Sau San Tong profile

Sau San Tong Holdings Limited (SST) (Stock code: 8200) was established by Dr Shirley Cheung in the year 2000 and became the first listed beauty and slimming company on the Hong Kong Stock Exchange in the year 2003.  SST business engages in the following activities beauty, slimming and spa hydrotherapy services, also selling cosmetic, health, slimming and skincare products (Tai, 2006).  SST entered China market in 2004 and expanded the beauty market through franchise in 2010.  There are about 110 franchise shops located in 77 cities from 25 provinces in China and expanded the market in Canada in 2016.

With rapid expansion, SST has become the leader and expertise in the industry in the recent years.  The company also provides a series of health-oriented supplements and beauty care products. The company has appointed a number of pop stars in Hong Kong and China like Joyce Cheng, Anita Yuen, Na Ying, among others have been appointed be the official spokespeople since the business started (Tai, 2006).  All these popular stars have attracted public attention and sustained SST to build up a positive image and brand altogether.

2.4 Links between strategic marketing and corporate strategy in SST

Corporate Strategy is an overall scope and direction in an organization like financing, capital structure, ownership, TQM, BPR and even the management of change while Marketing Strategy is a crucial part of corporate strategy in business unit level, together with appropriate resources allocation, would combine to be the key part of strategy implementation. Game theory is a critical corporate strategy since it enables the organization to identify a game among the competing companies and find solutions that revolve around non-cooperation (Wilson and Gilligan, 2012). This is important since this kind of approach will import competitive advantages into the firm (South China Morning Post. 2017).

It is proved that the strategic marketing of SST links to the corporate strategy, mission statements, organizational structure, corporate responsibility and ethics. “Healthiest and most perfect choices” is the mission statement and the 4S Brand Concept (Slim, Sincerity, Safe, and Superior) is created as the logo and slogan.  This mission and 4S Brand Concept are the corporate strategies.  To implement these corporate strategies, SST adopted diversification marketing strategy which provides tailor-made personalized slimming and beauty services according to health-based slimming concept and customers individual needs (Rothaermel, 2015). Sincere attitude, efficiency and safety, new technology and equipment are the selling points that the organization is using to promote the products. In terms of corporate responsibility and ethics, SST Volunteer Team is established for supporting different charity affairs and initiatives, it is an intangible assets and positive corporate reputation in public.

2.5 Analyst Models for SST

Analysis is the initial and core process of marketing strategy.  Some useful models are utilized for analyzing different situation of SST like Porter’s 5 forces, SWOT, Industry life cycle and PEST. Porter’s 5 forces is a tool used to analyze the situation and structure of the market including industry competitors, intensity of rivalry, and substitutes in other industries, potential new entrants, suppliers and buyers. Michael Porter’s formulated the five forces of competitive position model that is critical in assessing and analyzing the competitive strength and position of the business organization (Rothaermel, 2015). This theory is very critical since it makes it possible for the business entity to understand some of the external forces that directly impact on its activities and plan how to protect it from the effects of such factors in advance. Porter’s 5 forces model for Sau San Tong (Appendix A) shows that the beauty and slimming industry is competitive. Substitutes, buyer’s power, potential new entrants and rivalry among existing companies are high while the power of suppliers is low (Sargeant, 1999).  The industry is primarily service oriented and as such, developing relationships with customers and patience of the front end employees are the necessary conditions of survival in this industry, SST performs well on these aspects.

SWOT model is a helpful tool for assessing the internal and external capabilities and vulnerabilities under an operating environment.  The aim is to consolidate the strengths and eliminate the weakness also to take advantage of the opportunities and minimize the effect of the threats. The SWOT analysis marketing theory was coined by Albert Humphrey and it is used in the analysis and evaluation of the strengths, weaknesses, opportunities and threats of an organization (Valentin, 2001). These are the factors that the organization has direct control over. SWOT analyst of SST is showed in Appendix B.

The Life Cycle Curve Analyst,” Stages in the industry life cycle of SST” (Appendix C) shows the life cycle of SST in the market segment of the industry.  It is estimated the local market is mature and going to reach declining stage while the China market is under growth stage and has a high potential to develop continually.

PEST analyst is an overall assessment base on Political, Economic, Sociocultural and Technological factors around the corporation.  PEST analyst of SST (Appendix D) will be described in details in next section of this report. From the PEST analysis it is evident that SST has a relatively conducive environment for its future operations. It has better economic environment in china, innovative and creative equipment, a culture of fitness and health consciousness among individuals and health exercise campaign by HK government.

3.0 Positioning

It is affirmed that positioning is an essential part within strategic marketing.  A good positioning is a part of strategies to take a psychological approach to marketing. It focuses on attracting customers by placing the products and services firmly in customer’s minds at present and in future (Foreman and Money, 1995).

This is anchored on the theory of brand equity that aims at ensuring that the product has the best features to the extent that it qualifies to be ‘a go to brand’. This will translate into a ready market for the goods and services provided by the organization.

To success positioning, some steps are involved like defining the future position, collecting information (internal figures such as number of orders and invoiced values and external figures such as general economic data of the relevant market), analyzing (internal and external factors) and choice of strategies. After choosing the strategy, a range of marketing tactics like internal growth, market development and product development have to be factored in during the implementation of the strategic plans (Peter and Donnelly, 2011). This is based on the brand positioning theory that aims at promoting the identity of the brand to the consumers. This will activate the desire that will make it easy for the clients to actually buy the product.

There are a lot of similar corporations in the industry, two most common companies are Modern Beauty Salon (MB) and Phillip WainHealth & Beauty (PW) which are selected for comparing and analysis as Figure 1, Competitor Analysis and

Figure 2, Market Position Analysis.

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