The Hierarchy Of Strategies Marketing Essay

The phrase Strategy was at first introduced and defined in ancient military services texts. It originates from the Greek word strategos, meaning an over-all in command of army. It is made from 'stratos', meaning army and 'ag', signifying to lead. (Warnock Davies, 2000)

Although 'strategy' first became a popular business catchphrase during 1960s, it continues to be subject of generally differing definitions and interpretations. Strategy is not a thing; it is extremely a continuing process. "Strategy is a means of thinking about an enterprise, of examining its advantages, of diagnosing its weaknesses, of envisioning its opportunities. " To summarise from what we have learnt up to now, "strategy is not at all something we have, it is something we do and have to keep doing in order to support and grow a successful business or corporation. " (Jonathan Pugh, L. Jay Bourgeois III, 2011). The simplest explanation of Strategy as been provided by Ohmae (n. d. , cited by Michael Thomas, 1989), which views strategy "as indicating watching customer needs and preventing immediate competition".

However, this is in "Marketing Strategy - a decision-focussed strategy 5e" by Walker, Mullins, Boyd and Larrenche; efficiently describes the term as

"A technique is fundamental routine of present and planned objectives, source deployments, and relationships of an organisation with markets, challengers, and other environmental factors"

It says a strategy should always be able to specify

What - aims to be accomplished

Where - as in, on which industries and product markets to focus

How - to allocate resources and activities, so as to meet environment opportunities and dangers in each product-market and also gain a competitive advantage

In other words, "strategy is a design or plan for reaching a company's policy goals and objectives". Strategy decides the way the goals and aims of the company were to be achieved, the operational units that'll be used to achieve them, and how would those functional units be organised. It is again strategy that decides what resources will be required and exactly how these resources will be attained/used, to accomplish goals and goals of the company. Strategy is hence, "a design or plan that defines how coverage is usually to be achieved. " (Warnock Davies, 2000)

According to Walker et al (2006), a well-developed strategy includes pieces of issues:-

Scope: It identifies the span of the strategic domain; this means, the quantity and types of industries and market sections it competes in or have programs to get into.

Goals and targets: Strategies should detail desired degrees of achievement on one or more level of performance - such as quantity, profit, or profits on return - over a specific time period for each businesses and product market segments and also, for the organisation, all together.

Resource deployments: As every organisation's financial and human resources is limited, formulating a technique also contains deciding the way the resources should be obtained and how they would be allocated, within each business or product-market, among businesses, product market segments, efficient departments and activities.

Identification of any sustainable competitive benefit: A very important part of any strategy is to plan, the way the organisation would compete in each of its business and product-market. How it would position itself to build up and support a competitive benefit over its current and potential competition? To answer these varieties of questions, managers need to look at each business and product-market and their market opportunities in, combined with the company's unique competencies or positive factors in comparison to its competition.

Synergy: Synergy exists whenever a company's businesses, product-markets, reference deployments and competencies harmonize and support one another. Synergy really helps to raise the total performance of the specific businesses to be increased, than it could have been otherwise.


Most organisations don't have a single complete strategy any longer these days. In fact, hierarchy in strategies originated in 1920s, when a few of the most significant US firms started to diversify strategy. (Bala Chakravarthy, Wayne Henderson, 2007). So, companies now, have a hierarchy of interrelated strategies, which are formulated at another level of the firm. According to Walker et al (2006), the three major degrees of strategy in most large, multiproduct organisations are

Corporate strategy

Business level strategy

Functional strategies

(hierarchy composition from publication)

The commercial strategies are handled by the corporate level, which is the highest level in virtually any organization.

Corporate managers are concerned with the problems of overall company, and their decisions or actions affect all other organizational levels.

The business level comprises of smaller units within the complete organization that are generally handled as self-contained businesses. The theory behind this is to break an enormous and complex company into smaller models that can effectively operate like 3rd party businesses. This is the level at which competition takes place; i. e. , sections usually compete keenly against competitor business units and not commercial levels.

The practical level involves all the diverse efficient areas in a business unit. A lot of the work of an business unit is performed in its various efficient units. Marketing forms an important part of this level and for that reason, efficient level, is often also conditions as Marketing level. (Marketing's Strategic Role in the business, Jason C. H. Chen, n. d. )

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Strategic planning typically occurs at each organizational level, in multiproduct organizations. Tactical programs of higher organizational levels are meant to provide course for strategic ideas of lower levels. In other words, lower-level plans are manufactured, in order to execute the higher level plans. As a result of this relationship, strategic planning must be contained and dependable throughout levels. (Walker et al 2006)

Types of Strategic Plans

According to Marketing's Strategic Role in the Organization (Jason C. H. Chen, n. d. ), there are different strategic plans, according to the hierarchal degrees of an organisation, as below

Corporate proper plan - It is designed to provide assistance for strategic planning all other organizational levels. Some of the important corporate and business strategy decisions include issues regarding commercial vision development, corporate objective formulation, source of information allocation, etc. These assists with determining the type of company, the organization is or desires to become.

Business proper plan - This implies how each self-contained businesses product, in the corporate family needs to win in the marketplace, keeping in mind the vision, targets and development strategies, given in the corporate strategic plan. These devices, within the same company generally have different aims and business strategies. Each business can be involved about decisions related to the number of the market it assists and involves various functions to be performed, in which for every major function, tactical strategies may be developed. So, most organizations generally have marketing, financial, processing, and other practical strategic ideas as well.

Marketing strategic plan - It comprises of plans of marketing managers to execute the business enterprise strategic plan. It is focussed on the "general marketplace and marketing mix approaches". Each business product has another product marketing plan that targets specific target markets and marketing mixes, for every product.

Product marketing plan - It normally includes both "strategic decisions (what to do) and execution decisions (how to do it)". It really is particularly important for organizations to integrate their strategic plans across all levels.

(key components framework from book)


Marketing has a very important role to play, in the tactical planning process in most organizations. Marketing is generally an integral part of the useful level within the smaller business units of any organisation, but in some of them, marketing positions is there at the corporate level as well. Below is a diagram, which talks about this but however, marketing, in a few or the other way, involved with strategic planning whatsoever organizational levels. (Marketing's Strategic Role in the Organization, Jason C. H. Chen, n. d. )

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Strategic marketing describes marketing activities that affect corporate and business, business, and marketing proper programs. John Zinkin (2006), attempting to gather the perspectives of Drucker, Doyle and Friedman, defines it as - "Strategic Marketing creates competitive advantage through the customer value provided by interactions with respected customers to maximise shareholder value. "

Marketing management relates to marketing strategies of specific product. It is different from proper marketing in its basic origins. Strategic marketing is concerned with general tactical decisions and are treated at corporate and business and business levels whereas, Marketing management is concerned with definite tactical decisions for each product and also, the day-to-day activities required to be able to execute these strategies effectively. Marketing managers, at the operational level, must particularly give attention to the four Ps of the marketing combine - product, price, advertising, and place (circulation). (Jason C. H. Chen, n. d. )

Marketing and marketing management's proper role, is currently in a stage of considerable transform and development. Within the new organizational environment, marketing operates by any means three levels, i. e. , corporate and business, business or SBU, and efficient or operating levels (Boyd and Walker 1990). In addition to this, marketing can likewise have three different dimensions - "marketing as culture, marketing as strategy, and marketing as tactics" and each of these are located at a separate level of strategy. "Marketing as culture, is a simple set of beliefs and values about the central importance of the customer that guide the organization (as articulated by the marketing concept), is generally the duty of the corporate and SBU-level professionals. " Marketing as strategy is applied at the SBU level, where market segmentation, focusing on, and positioning are the key concentration areas and it also defines how the company is to contend in its chosen business. On the operating level, marketing professionals need to focus on marketing tactics, i. e. , the "4Ps" of product, price, promotion, and place/circulation, which will be the components of marketing combine. "Each degree of strategy, and each sizing of marketing, must be developed in the context of the preceding level. Even as move down the degrees of strategy, we move from strategy formulation to strategy implementation. " (Frederick E. Webster, Jr. , n. d. )


Most of the authors, about marketing strategy, explain it in the sense that they consider it to be. For example, Chang and Campo-Flores (1980) considers marketing strategy to be always a essential and important part of marketing function. "Similarly, Baker (1978) sees it to be a broad means of achieving given seeks, Good luck and Ferrell (1979) as being fundamental means or techniques and Kotler (1976) as being the grand design to accomplish objectives". Even some companies, who acquired considered part in the previously reported research, have given same kind of broad statements. Many companies had said that their online marketing strategy is a long-term activity plus some also said that it helped in the entire achievement of targets of the company. (Gordon E. Greenly, 1984)

However, the definition of online marketing strategy in "Essentials of Marketing: A Global-Managerial Approach, 9th release" by William D. Perreault, Jr. and E. Jerome McCarthy, is as follows
"A marketing strategy specifies a target market and a related marketing combination. It really is a "big picture" of what a firm can do in a few market. Two interrelated parts are needed

1. A target market - a fairly homogeneous (similar) group of customers to whom a firm wishes to charm.

2. A marketing mix - the controllable variables the business puts collectively to meet this goal group. "

When marketing strategies are given for a few particular target customers, it is called target marketing. It is different from mass marketing, in the sense that; in aim for marketing, the marketing blend is customised for a particular goal group whereas, in the second option, same marketing mix is used in most cases, for everyone. The shape below, portrays this notion even more clearly.

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The main focus of marketing strategy is to successfully achieve the firm's targets within a particular business product, by effectively allocating and co-ordinating marketing resources and activities. Therefore, specifying target market(s) is the major concern regarding the range of a online marketing strategy, for a specific product or product line. The next issue is to seek competitive advantage and synergy through the modified program of marketing mixture elements (mainly the 4Ps of product, price, campaign and place) as per the needs and would like of potential prospects of the mark market. (William D. Perreault, Jr. and E. Jerome McCarthy, n. d. )

To support and enhance business strategy, proper practical strategies are essential; specially Marketing strategies. This is because, marketing strategies symbolize the group of integrated decisions by which the business focuses on to achieve the marketing aims and also, meet up with the targets of its customers, in the prospective market (Varadarajan & Clark, 1994). As observed by Michael Porter (1985, p. xvi) : ''Competitive benefit grows fundamentally out of the value the organization can create for its buyers. '' As reviewed earlier, the most important marketing decisions pertains to market segmentation and targeting; and to develop a setting strategy based on the marketing mixture decisions. (Business Horizons, 2010)


According to Chakravarthy & Doz (1992, cited in Business Horizons, 2010) the introduction of effective strategies inside a business is named Strategy formulation. For the technique to be effective, its formulation process needs to be customised in order to meet the issues that are inbuilt in the organisation's environment and marketing strategy, as different strategies may have different goals and would be alternatively fitted to different environmental contexts (Chakravarthy & Lorange, 1991).

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The shape above shows the three-tiered framework envisaged in the planning process and the connections of every level with others. The great things about a company, derived from marketing planning, are due to its position in its life pattern, its competitive environment and most importantly, its inside environment. Marketing plan has been successfully developed as a way to change commercial culture to customer targeted perspective. (William Giles, 1989)

Developing the Marketing Plan

Earlier, as businesses were simple, with fewer products and an clear market to target at; therefore, the main strategy was to provide good quality, at an acceptable price and increase sales. But today, most companies are usually involved with a variety of businesses, operating in various marketplaces, against different competitors who offer a number of technology and products in market that is no longer constrained within the nationwide boundaries of the country. With time, firms do make changes both in their organisation and product, scheduled to various environmental factors. Sometimes these are big changes and sometimes they are really small. But also for the future, no matter which route is considered, a consistent proper approach is much more likely to achieve goals; as well as for that, a good plan is very much necessary. (William Giles, 1989)

Writers such as Hayes and Abernathy(1980), Anderson(1982) and Piercy (1982) reported that lately, the focus on marketing in companies has been "orientated towards short-term benefits in revenue and revenue". Therefore marketing methods of short-range functional planning has been given more importance. But the latter is obviously important, it is evenly important to consider full marketing strategy. It is because, it can help to add in future performance and success, along with providing a platform for the twelve-monthly marketing plan operations. (Gordon E. Greenley, 1984)

"An effective planned way towards marketing should achieve the next benefits

Improvement in revenue focuses on and investment come back;

Focus on the company's specific markets;

Efficient use of scarce resources;

Usage of company and product talents working mutually;

Development of new products and markets for future years;

A proactive method of change;

Additional business concentrated in areas of competitive strength;

A restored vigour and improved motivation of managerial personnel;

A point of view on the need for cultural change inside your organisation. "

The planning system itself needs the utilization of some organising process, which were produced by merging many successful methods and concepts, suited to a number of businesses. But it isn't a widespread solution or any short-cut; rather there can not be any. However, it does give a reliable procedure for evaluating opportunities and checking other strategies. It also supplies the basis for allocation of resources to supply the best competitive advantages. This is exactly what majorly comprises of the Marketing plan. The amount a firm gets from the exercise is straight proportional to the quantity of effort the company puts in whatsoever degrees of the organisation. (William Giles, 1989)


Apparently, insufficient proper accountability and effect has resulted in undermining the consistency of marketing within the company and also threatened its living as another potential unit within an organisation (O'Sullivan & Abela, 2007; Rust et al. , 2004). The need for marketing activities reaches risk and even marketing scholars have raised their voices displaying concerns about the opportunity of vitality of marketing subunits declining (e. g. , Day, 1992; Kotler, 2004; Kumar, 2004; Sheth & Sisodia, 2005). This has led to several studies on the marketing's role within the firm (e. g. , Homburg, Workman, & Krohmer, 1999; Verhoef & Leeflang, 2009).

Power of Marketing :

There are numerous different perspectives and proper ideas on vitality (Bacharach & Lawler, 1980; Lukes, 1975). Actually the concept of electric power has been researched in a big variety of areas, beginning with organisational change to interpersonal group dynamics and planning. However, it has been argued that the application of the concept of electric power in marketing has been slow-moving and restricted due to "theoretical fragmentation and insufficient convergence" (Merlo, Whitwell, & Lukas, 2004). In fact, the utilization of electric power theory in marketing has been limited mainly to four areas: (1) circulation stations, (2) organizational buying, (3) consumer behavior and (4) the influence of marketing departments and marketing people. Fundamentally, vitality may be defined as the ability of a performer to get a different performer to do something that the latter wouldn't normally have often done.

In an assessment of main institutions of thought in power and their possible worthiness in Marketing Research by Merlo et al. (2004), he identifies four main areas of thought on electric power: "the bureaucratic point of view, the critical contingencies point of view, the network perspective and the subconscious perspective". Although each of these perspectives pays to to study various marketing phenomena, Merlo et al. (2004) points out that the 'critical contingencies strategy' is best to study the distribution of electric power within the organization, and particularly, the energy of the marketing function. This approach says that there are "three important elements of vitality: (1) a function's capacity to handle uncertainty, (2) its substitutability, and (3) its centrality within the work stream of activities". Therefore, the energy of marketing can be explained as "the amount to that your marketing subunit is relied upon to cope with uncertainty, is non substitutable, and keeps a central location within the task stream of activities. " (Industrial Marketing Management, 2012)

Role of Marketing within the Company :

This section is about the contribution of marketing departments in firm's performance. Studies of the role of marketing within the organization, may be divided into four key categories

Research that examine the role of marketing as an orientation (Kirca, Jayachandran, & Bearden, 2005; Langerak, 2003; Slater & Narver, 2000). These studies tend to confirm the positive hyperlink between market orientation and performance.

Research that studies the effect of marketing at the organization level (e. g. , Day, 1992; Varadarajan & Clark, 1994). These studies will probably conceive that the Chief Marketing Officer and the status of marketing's within the company are meticulously related (Kerin, 2005; Nath & Mahajan, 2008)

Research that studies marketing as an organisational subunit. Homburg et al. 's (1999) work, exhibited marketing's comparative impact and discussion with other efficient units and determined the situations where marketing's effect is higher.

Research that considers marketing's role together as a function and an orientation. Verhoef and Leeflang (2009) found that a marketing department's influence has positive performance outcomes only due to its link to market orientation, and note: "the inability of the marketing department's impact to describe significant incremental variance in performance beyond market orientation calls for further research" (p. 30).

Marketing power and business performance :

In a study conducted by Seigyoung Auh and Omar Merlo (Industrial Marketing Management, 2012), the partnership between the marketing electricity and business performance stands out clear. Their test formed of an Australian Mailing list, composed of of 600 associates in both large and medium sized organisations (<=50 employees) in a variety of manufacturing business. The members included people from all degrees of organisation, from Managing directors to CEOs, general managers among others. However, Marketing managers were purposely not included, to enhance the reliability of the studies. Their device of analysis was the Strategic Business Unit (SBU) and they collected data through a 'self-administered field study questionnaire', sent out via mail.

After the conclusion of research and its analysis, the data they got exhibited that the most effective subunits within the test organisations were Creation & Creation and Marketing. However, the finding about creation is not surprising, as the test is from the production industries. Nonetheless it is amazing that marketing keeps a far more powerful position than Finance section, and even Research and Development. With respect to substitutability, their studies proved that R&D and Marketing have emerged as the utmost non substitutable functions in a organization.

The research also turned out that "a powerful marketing function plays a part in business performance" and therefore, the recent development of drop of marketing sub-units needs careful monitoring. Many senior managers have a tendency to first cut down marketing budgets randomly in times of turmoil, which is expected to then lead to increase the firm's cash flow without affecting any other function of the business, specifically sales (Quelch & Jocz, 2009). Nevertheless the research results are in contrast with the identified notion and most commonly practiced happening. It suggests that "when marketing's vitality is low, there could be negative performance implications. " Recently within an interview with Businessweek, Phillip Kotler argued that if marketing is not being able to improve financial performance, the most apparent reason for this is the slash on marketing budget.

As described by Boyd, Chandy, and Cunha (2010), often Chief Marketing Officers (CMO) lose reliability and are blamed more than they should have, due to the fact that marketing results are not easily measurable. This occasionally leads the Chief Executive Officials of any company to assume that CMOs does not should have to be 'on the executive plank of the firm' (Webster et al. , 2003) plus they tend to decrease the marketing function's ability to obtain and retain the resources, even further (Boyd et al. , 2010). The results of the study by Seigyoung Auh and Omar Merlo that "a powerful marketing function has a direct connect to business performance should contribute to persuade company professionals of the key role that marketing plays within the firm, and by expansion, of the key role of the CMO as the primary functional exec with responsibility over marketing. " However, it says that, as a company is an assemblage of varied functional groups, it is vital to involve some kind of, symmetry of power among the groups. The research end result highlights "negative aftereffect of vitality asymmetry on business performance". But somehow, as the marketing function is thought to provide important proper suggestions and develop "customer-getting differentiation" through "marketing thoughts" (Levitt, 1986), sometimes an asymmetrical distribution towards the marketing function may have beneficial effects on performance of the organization.

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