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adapt to and influence their environments in order that they achieve their goals. What is also clear is that the demarcation between an organisation and its environment is less clear than it used to be. An imaginary line was once used to refer to a border between an organisation and its environment. This line is no longer deemed valid as organisations are now viewed as boundary-free. The implications of this borderless concept for marketing communications are potentially enormous. Not only do contemporary views of strategy amplify the significance of the interaction between strategy and an organisation’s environment but they also stress the importance for strategy, at whatever level, to be contextually oriented and determined.

Although there is debate about what strategy is and what it is not, the one main area wherein most authors find agreement concerns the hierarchical nature of strategy within organisations (Kay, 1993; Mintzberg and Ghoshal, 2003; Johnson et al., 2010). This refers to the notion that there are three main levels of organisational strategy; corporate, competitive and functional. Corporate strategy is considered to be directional and sets out the broad, overarching para-meters and means through which the organisation operates in order to realise its objectives. Strategies at the functional level, for example, marketing, finance and production, should be integrated in such a way that they contribute to the satisfaction of the higher-level competitive strategies, which in turn should satisfy the overall corporate goals. Competitive-level strategies are important because not only do they set out the way in which the organisation will compete and use resources, but they should also provide clear messages about the way in which the organisation seeks to manage its environment.

From this it becomes clear that marketing strategy should support an organisation’s com-petitive strategy and complement the corporate strategy. In the same way the marketing communications strategy should support the marketing strategy by delivering the marketing promise to targeted customer groups. Figure 4.1 sets out the inter-relationships between the different levels of strategy hierarchies.

Segmentation, targeting and positioning

One of the elements central to most marketing strategies is the market segmentation, target marketing and positioning process. This STP approach is a sequence of activities that

Figure 4.1 Strategic relationships

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constitutes a core part of marketing strategy because it involves several key strategic activities, namely; how is the market segmented, which segments are to be targeted and how are we to be positioned within the selected target markets?

The process of market analysis and evaluation leading to planned strategies designed to meet prescribed and measurable goals is well established. It is argued that this approach enables finite resources to be used more efficiently as they can be directed towards markets which hold, potentially, greater value than other markets. Wastage of resources is reduced and, more importantly, the STP process enables organisations to define the broad context within which their strategic business units (SBUs) and products are offered.

Viewpoint 4.1 Segments galore

United AirlinesUnited Airlines segments its global markets using psychographic data about its customers. Among its categories are:

Schedule optimisers: must reach their destination by a certain time and select their flights accordingly.

Mile accumulators: go out of their way to take flights that will build up their air miles entitlement.

Quality vacationers: treat the travel as part of the holiday experience and so fly with carriers that provide superior services.

Frugal flyers: seek out the lowest-cost carriers, but still expect their flight experience to be a good one.

Source: Based on http://www.thetimes100.co.uk/case_study

T-MobileAccording to T-Mobile’s website it targets four key market segments: personal, small businesses, medium businesses and corporates.

The segments identified for a women’s portal include the following groups:

Pillars: characterised by their family orientation, high income and broad range of interests.

Explorers: notable for being single, 30-something, outgoing and more social than career oriented.

Free spirits: the youngest segment, typically unmarried, Internet savvy, and not yet committed to careers or rais-ing a family.

Source: Based on www.debmcdonald.com/

QuestionHow might these segment characteristics inform the marketing communications to be used by United and T-Mobile?

TaskChoose an industry and find out how it has been segmented by the principal brands.

Market segmentation is the division of a mass market into identifiable and distinct groups or segments, each of which have common characteristics and needs and display similar responses to marketing actions. Through this process specific target segments can be selected and marketing plans developed to satisfy the individual needs of the potential buyers in these chosen segments. The development, or rather identification, of segments can be perceived as opportunities and, as Beane and Ennis (1987) suggest, ‘A company with limited resources needs to pick only the best opportunities to pursue’. The most common bases upon which markets can be segmented are set out in Table 4.1.

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