Marketing strategy allows

organizations An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived from ...

to focus limited resources on best opportunities to increase

sales Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. The seller, or the provider of the goods or services, completes a sale in r ...

and achieve a

competitive advantage In business, a competitive advantage is an attribute that allows an organization to outperform its competitors. A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled ...

in the market. Strategic marketing emerged in the 1970s/80s as a distinct field of study, further building on strategic management. Marketing strategy highlights the role of marketing as a link between the organization and its customers, leveraging the combination of resources and capabilities within an organization to achieve a competitive advantage (Cacciolatti & Lee, 2016).

Marketing management versus marketing strategy

The distinction between "strategic" and "managerial" marketing is used to distinguish "two phases having different goals and based on different conceptual tools. Strategic marketing concerns the choice of policies aiming at improving the competitive position of the firm, taking account of challenges and opportunities proposed by the competitive environment. On the other hand, managerial marketing is focused on the implementation of specific targets." Marketing strategy is about "lofty visions translated into less lofty and practical goals

hile marketing management Hile ( ne, हिले) is a hill town located in the Eastern Part of Nepal, 13 km north of the regional center of Dhankuta Bazar. At an elevation of 1948 meters, it is the main route to other hilly districts like Bhojpur and Sankhuwasabh ...

is where we start to get our hands dirty and make plans for things to happen." Marketing strategy is sometimes called ''higher order'' planning because it sets out the broad direction and provides guidance and structure for the marketing program.

History

Marketing scholars have suggested that strategic marketing arose in the late 1970s and its origins can be understood in terms of a distinct evolutionary path: : Budgeting Control (also known as ''scientific management'') : Date: From the late 19th century : Key Thinkers:

Frederick Winslow Taylor Frederick Winslow Taylor (March 20, 1856 – March 21, 1915) was an American mechanical engineer. He was widely known for his methods to improve industrial efficiency. He was one of the first management consultants. In 1909, Taylor summed up hi ...

Frank Frank or Franks may refer to: People * Frank (given name) * Frank (surname) * Franks (surname) * Franks, a medieval Germanic people * Frank, a term in the Muslim world for all western Europeans, particularly during the Crusades - see Farang Curr ...

and Lillian Gilbreth, Henry L. Gantt,

Harrington Emerson Harrington Emerson (August 2, 1853 – September 2, 1931) was an American efficiency engineer and business theorist, :Long-range Planning : Date: From the 1950s : Key Thinkers:

Herbert A. Simon Herbert Alexander Simon (June 15, 1916 – February 9, 2001) was an American political scientist, with a Ph.D. in political science, whose work also influenced the fields of computer science, economics, and cognitive psychology. His primary ...

: Key Ideas: Managerial focus was to anticipate growth and manage operations in an increasingly complex business world. :

Strategic Planning Strategic planning is an organization's process of defining its strategy or direction, and making decisions on allocating its resources to attain strategic goals. It may also extend to control mechanisms for guiding the implementation of the st ...

(also known as ''corporate planning'') : Date: From the 1960s : Key Thinkers:

Michael Porter Michael Eugene Porter (born May 23, 1947) is an American academic known for his theories on economics, business strategy, and social causes. He is the Bishop William Lawrence University Professor at Harvard Business School, and he was one of t ...

: Key Ideas: Organizations must find the right fit within an industry structure; advantage derives from industry concentration and market power; firms should strive to achieve a monopoly or quasi-monopoly; successful firms should be able to erect barriers to entry. : Strategic Marketing Management It refers to a business's overall game plan for reaching prospective consumers and turning them into customers of the products or services the business provides. : Date: from late 1970s : Key thinkers: R. Buzzell and B. Gale : Key Ideas: Each business is unique and there can be no formula for achieving competitive advantage; firms should adopt a flexible planning and review process that aims to cope with strategic surprises and rapidly developing threats; management's focus is on how to deliver superior customer value; highlights the key role of marketing as the link between customers and the organization. :

Resource-based view The resource-based view (RBV) is a managerial framework used to determine the strategic resources a firm can exploit to achieve sustainable competitive advantage. Barney's 1991 article "Firm Resources and Sustained Competitive Advantage" is widely ...

(also known as ''resource-advantage theory'') : Date: From mid-1990s : Key Thinkers: Jay B. Barney,

George S. Day George S. Day is an educator and consultant in the fields of marketing, strategy and innovation management. He is the Geoffrey T. Boisi Professor Emeritus at the Wharton School of the University of Pennsylvania. He founded the Mack Institute for I ...

Gary Hamel Gary P. Hamel (born 1954) is an American management consultant. He is a founder of Strategos, an international management consulting firm based in Chicago. Biography Hamel graduated from Andrews University in 1975, and from Ross School of Bus ...

Shelby D. Hunt Shelby D. Hunt (1939-2022) was an American organizational theorist, the Jerry S. Rawls and P. W. Horn Professor of Marketing at the Texas Tech University, and a highly cited marketing researcher. He is noted for his contributions to competition th ...

, G. Hooley and

C.K. Prahalad Coimbatore Krishnarao Prahalad (8 August 1941 – 16 April 2010) was an Indian-American entrepreneur and author. He was the Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy at the University of Michigan Ste ...

: Key Ideas: The firm's resources are financial, legal, human, organizational, informational and relational; resources are heterogeneous and imperfectly mobile, management's key task is to understand and organize resources for sustainable competitive advantage.

Overview

Marketing strategy involves mapping out the company's direction for the forthcoming planning period, whether that be three, five or ten years. It involves undertaking a 360° review of the firm and its operating environment with a view to identifying new business opportunities that the firm could potentially leverage for competitive advantage. Strategic planning can also reveal market threats that the firm may need to consider for long-term sustainability. Strategic planning makes no assumptions about the firm continuing to offer the same products to the same customers in the future. Instead, it is concerned with identifying the business opportunities that are likely to be successful and evaluating the firm's capacity to leverage such opportunities. It seeks to identify the ''strategic gap'', which is the difference between where a firm is currently situated (the ''strategic reality'' or ''inadvertent strategy'') and where it should be situated for sustainable, long-term growth (the ''strategic intent'' or ''deliberate strategy''). Strategic planning seeks to address three deceptively simple questions, specifically: * Where are we now? (Situation analysis) * What business ''should'' we be in? (Vision and mission) * How should we get there? (Strategies, plans, goals, and objectives) A fourth question may be added to the list, namely 'How do we know when we got there?' Due to the increasing need for accountability, many marketing organizations use a variety of metrics to track strategic performance, allowing for corrective action to be taken as required. On the surface, strategic planning seeks to address three simple questions, however, the research and analysis involved in strategic planning is very sophisticated and requires a great deal of skill and judgement.

Tools and techniques

Strategic analysis is designed to address the first strategic question, "Where are we now?" Traditional

market research Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mark ...

is less useful for strategic marketing because the analyst is not seeking insights about customer attitudes and preferences. Instead, strategic analysts are seeking insights about the firm's operating environment with a view to identifying possible future scenarios, opportunities, and threats. Strategic planning focuses on the 3C's, namely: Customer, Corporation, and Competitors. A detailed analysis of each factor is key to the success of strategy formulation. The 'competitors' element refers to an analysis of the strengths of the business relative to close rivals, and consideration of competitive threats that might impinge on the business's ability to move in certain directions. The 'customer' element refers to an analysis of any possible changes in customer preferences that potentially give rise to new business opportunities. The 'corporation' element refers to a detailed analysis of the company's internal capabilities and its readiness to leverage market-based opportunities or its vulnerability to external threats. Folio Plot BCG Matrix Example

Gartner Hype Cycle for Emerging Technologies

Mintzberg suggests that the top planners spend most of their time engaged in analysis and are concerned with industry or competitive analyses as well as internal studies, including the use of computer models to analyze trends in the organization. Strategic planners use a variety of research tools and analytical techniques, depending on the environment complexity and the firm's goals. Fleitcher and Bensoussan, for instance, have identified some 200 qualitative and quantitative analytical techniques regularly used by strategic analysts while a recent publication suggests that 72 techniques are essential. No optimal technique can be identified as useful across all situations or problems. Determining which technique to use in any given situation rests with the skill of the analyst. The choice of tool depends on a variety of factors including: data availability; the nature of the marketing problem; the objective or purpose, the analyst's skill level as well as other constraints such as time or motivation. The most commonly used tools and techniques include: Research methods *

Environmental scanning Market environment and business environment are marketing terms that refer to factors and forces that affect a firm's ability to build and maintain successful customer relationships. The business environment has been defined as "the totality of ph ...

* Marketing intelligence (also known as

competitive intelligence Competitive intelligence (CI) is the process and forward-looking practices used in producing knowledge about the competitive environment to improve organizational performance. It involves the systematic collection and analysis of information from ...

) * Futures research Analytical techniques * Brand Development Index (BDI)/ Category development index (CDI) * Brand/ Category penetration *

Benchmarking Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost. Benchmarking is used to measure performan ...

Blindspots analysis Blindspots analysis or blind spots analysis is a method aimed at uncovering obsolete, incomplete, or incorrect assumptions in a decision maker’s mental scheme of the environment. Michael Porter used the term "blind spots" to refer to conventional ...

* Functional capability and resource analysis * Impact analysis * Counterfactual analysis * Demand analysis *

Emerging Issues Analysis Emerging issues analysis (sometimes capitalized as Emerging Issues Analysis, and abbreviated as EIA) is a term used in futures studies and strategic planning, to describe the process of identifying and studying issues that have not been influential ...

* Experience curve analysis *

Gap analysis In management literature, gap analysis involves the comparison of actual performance with potential or desired performance. If an organization does not make the best use of current resources, or forgoes investment in capital or technology, it m ...

* Herfindahl index * Industry Analysis (also known as

Porter's five forces analysis Porter's Five Forces Framework is a method of analysing the operating environment of a competition of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, ...

) * Management profiling *

Market segmentation In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as ''segments'') based on some type of shared characte ...

analysis *

Market share analysis Market share analysis is a part of market analysis and indicates how well a firm is doing in the marketplace compared to its competitors. Givon, Mahajan, and Muller have researched spreadsheet and word processing software firms to give a clearer im ...

* Perceptual mapping *

PEST analysis In business analysis, PEST analysis ("political, economic, socio-cultural and technological") describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is part of an external envi ...

and its variants including PESTLE, STEEPLED and STEER (PEST is occasionally known as

Six Segment Analysis In business analysis, PEST analysis ("political, economic, socio-cultural and technological") describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is part of an external envi ...

) * Portfolio analysis, such as BCG growth-share matrix or GE business screen matrix * Precursor Analysis or Evolutionary analysis * Product life cycle analysis and S-curve analysis (also known as

technology life cycle The technology life-cycle (TLC) describes the commercial gain of a product through the expense of research and development phase, and the financial return during its "vital life". Some technologies, such as steel, paper or cement manufacturing, ...

hype cycle The Gartner hype cycle is a graphical presentation developed, used and branded by the American research, advisory and information technology firm Gartner to represent the maturity, adoption, and social application of specific technologies. The hy ...

analysis) * Product evolutionary cycle analysis *

Scenario analysis Scenario planning, scenario thinking, scenario analysis, scenario prediction and the scenario method all describe a strategic planning method that some organizations use to make flexible long-term plans. It is in large part an adaptation and gener ...

* Segment Share Analysis *

Situation analysis In strategic management, situation analysis (or ''situational analysis'') refers to a collection of methods that Management, managers use to analyze an organization's internal and external environment to understand the organization's capabilities, ...

* Strategic Group Analysis *

SWOT analysis SWOT analysis (or SWOT matrix) is a strategic planning and strategic management technique used to help a person or organization identify Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning. It ...

Trend Analysis Trend analysis is the widespread practice of collecting information and attempting to spot a pattern. In some fields of study, the term has more formally defined meanings. Although trend analysis is often used to predict future events, it could be ...

Value chain A value chain is a progression of activities that a firm operating in a specific industry performs in order to deliver a valuable product (i.e., good and/or service) to the end customer. The concept comes through business management and was firs ...

analysis

Vision and mission statements

The vision and mission address the second central question, 'Where are we going?' At the conclusion of the research and analysis stage, the firm will typically review its

vision statement A vision statement is an inspirational statement of an idealistic emotional future of a company or group. Vision describes the basic human emotion that a founder intends to be experienced by the people the organization interacts with.The Infinite ...

mission statement A mission statement is a short statement of why an organization exists, what its overall goal is, the goal of its operations: what kind of product or service it provides, its primary customers or market, and its geographical region of operation ...

and, if necessary, devise a new vision and mission for the outlook period. At this stage, the firm will also devise a generic competitive strategy as the basis for maintaining a sustainable competitive advantage for the forthcoming planning period. A vision statement is a realistic, long-term future scenario for the organization. (Vision statements should not be confused with slogans or mottos.) A vision statement is designed to present a realistic long-term future scenario for the organization. It is a "clearly articulated statement of the business scope." A strong vision statement typically includes the following: * Competitive scope * Market scope * Geographic scope * Vertical scope Some scholars point out the market visioning is a skill or competency that encapsulates the planners' capacity "to link advanced technologies to market opportunities of the future, and to do so through a shared understanding of a given product market. A mission statement is a clear and concise statement of the organization's reason for being and its scope of operations, while the generic strategy outlines how the company intends to achieve both its vision and mission. Mission statements should include detailed information and must be more than a simple ''motherhood statement''. A mission statement typically includes the following:

* Specification of target customers * Identification of principal products or services offered * Specification of the geographic scope of operations * Identification of core technologies and/or core capabilities * An outline of the firm's commitment to long-term survival, growth and profitability * An outline of the key elements in the company's philosophy and core values * Identification of the company's desired public image

Generic competitive strategy

The generic competitive strategy outlines the fundamental basis for obtaining a sustainable competitive advantage within a category. Firms can normally trace their competitive position to one of three factors: * Superior skills (e.g. coordination of individual specialists, created through the interplay of investment in training and professional development, work and learning) * Superior resources (e.g. patents, trade-mark protection, specialized physical assets and relationships with suppliers and distribution infrastructure.) * Superior position (the products or services offered, the market segments served, and the extent to which the product-market can be isolated from direct competition.) It is essential that the internal analysis provide a frank and open evaluation of the firm's superiority in terms of skills, resources or market position since this will provide the basis for competing over the forthcoming planning period. For this reason, some companies engage external consultants, often advertising or marketing agencies, to provide an independent assessment of the firm's capabilities and resources.

Porter approach

Michael Porter's Three Generic Strategies

In 1980, Michael Porter developed an approach to strategy formulation that proved to be extremely popular with both scholars and practitioners. The approach became known as the ''positioning school'' because of its emphasis on locating a defensible ''competitive position'' within an industry or sector. In this approach, strategy formulation consists of three key strands of thinking: analysis of the five forces to determine the sources of competitive advantage; the selection of one of three possible positions which leverage the advantage and the value chain to implement the strategy. In this approach, the strategic choices involve decisions about whether to compete for a share of the total market or for a specific target group (competitive scope) and whether to compete on costs or product differences (competitive advantage). This type of thinking leads to three generic strategies: * Cost leadership – the firm targets the

mass market The term "mass market" refers to a market for goods produced on a large scale for a significant number of end consumers. The mass market differs from the niche market in that the former focuses on consumers with a wide variety of backgrounds with ...

and attempts to be the lowest-cost producer in the market * Differentiation – the firm targets the mass market and tries to maintain unique points of product difference perceived as desirable by customers and for which they are prepared to pay premium prices * Focus – the firm does not compete for head to head, but instead selects a narrow target market and focuses its efforts on satisfying the needs of that segment According to Porter, these strategies are mutually exclusive and the firm must select one approach to the exclusion of all others. Firms that try to be all things to all people can present a confusing market position which ultimately leads to below-average returns. Any ambiguity about the firm's approach is a recipe for "strategic mediocrity" and any firm that tries to pursue two approaches simultaneously is said to be "stuck in the middle" and destined for failure. Porter's approach was the dominant paradigm throughout the 1980s. However, the approach has attracted considerable criticism. One important criticism is that it is possible to identify successful companies that pursue a hybrid strategy – such as low-cost positions and differentiated positions simultaneously. Toyota is a classic example of this hybrid approach. Other scholars point to the simplistic nature of the analysis and the overly prescriptive nature of the strategic choices which limits strategies to just three options. Yet others point to research showing that many practitioners find the approach to be overly theoretical and not applicable to their business.

Resource-based view (RBV)

During the 1990s, the ''resource-based view'' (also known as the ''resource-advantage theory'') of the firm became the dominant paradigm. It is an inter-disciplinary approach that represents a substantial shift in thinking. It focuses attention on an organization's internal resources as a means of organizing processes and obtaining a competitive advantage. The resource-based view suggests that organizations must develop unique, firm-specific core competencies that will allow them to outperform competitors by doing things differently and in a superior manner. Barney stated that for resources to hold potential as sources of sustainable competitive advantage, they should be valuable, rare, and imperfectly imitable. A key insight arising from the resource-based view is that not all resources are of equal importance nor possess the potential to become a source of sustainable competitive advantage. The sustainability of any competitive advantage depends on the extent to which resources can be imitated or substituted. Barney and others point out that understanding the causal relationship between the sources of advantage and successful strategies can be very difficult in practice. Barney uses the term "causally ambiguous" which he describes as a situation when "the link between the resources controlled by the firm and the firm's sustained competitive advantage is not understood or understood only very imperfectly". Thus, a great deal of managerial effort must be invested in identifying, understanding, and classifying core competencies. In addition, management must invest in organizational learning to develop and maintain key resources and competencies. Market Based Resources include: *

Organizational culture Historically there have been differences among investigators regarding the definition of organizational culture. Edgar Schein, a leading researcher in this field, defined "organizational culture" as comprising a number of features, including a s ...

e.g. market orientation, research orientation, culture of innovation, etc. * Assets e.g. brands, Mktg IS, databases, etc. * Capabilities (or competencies) e.g. market sensing, marketing research, relationships, know-how, tacit knowledge, etc. After more than two decades of advancements in marketing strategy and in the resource-based view paradigm, Cacciolatti & Lee (2016) proposed a novel resource-advantage theory based framework that builds on those organizational capabilities that are relevant to marketing strategy and shows how they have an effect on firm performance. The capabilities-performance model proposed by Cacciolatti & Lee (2016) illustrates the mechanism whereby market orientation, strategic orientation, and organizational power moderate the capabilities-performance relationship. Such a logic of analysis was implicit in the original formulation of RA theory and although it was taken into consideration by several scholars, it was never been articulated explicitly and tested empirically. In the resource-based view, strategists select the strategy or competitive position that best exploits the internal resources and capabilities relative to external opportunities. Given that strategic resources represent a complex network of inter-related assets and capabilities, organizations can adopt many possible competitive positions. Although scholars debate the precise categories of competitive positions that are used, there is general agreement, within the literature, that the resource-based view is much more flexible than Porter's prescriptive approach to strategy formulation. Hooley et al., suggest the following classification of competitive positions: * Price positioning * Quality positioning * Innovation positioning * Service positioning * Benefit positioning * Tailored positioning (one-to-one marketing)

Other approaches

The choice of competitive strategy often depends on a variety of factors including: the firm's market position relative to rival firms, the stage of the product life cycle. A well-established firm in a mature market will likely have a different strategy than a start-up.

Growth strategies

Growth of a business is critical for business success. A firm may grow by developing the market or by developing new products. The Ansoff product and market growth matrix illustrates the two broad dimensions for achieving growth. The Ansoff matrix identifies four specific growth strategies:

market penetration Market penetration refers to the successful selling of a good or service in a specific market. It is measured by the amount of sales volume of an existing good or service compared to the total target market for that product or service. Market pe ...

product development In business and engineering, new product development (NPD) covers the complete process of bringing a new product to market, renewing an existing product or introducing a product in a new market. A central aspect of NPD is product design, along wi ...

market development Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market Geography * Märket, an ...

and

diversification Diversification may refer to: Biology and agriculture * Genetic divergence, emergence of subpopulations that have accumulated independent genetic changes * Agricultural diversification involves the re-allocation of some of a farm's resources to n ...

:''Market penetration'' involves selling existing products to existing consumers. This is a conservative, low risk approach since the product is already on the established market. : ''Product development'' is the introduction of a new product to existing customers. This can include modifications to an already existing market which can create a product that has more appeal. :''Market development'' involves the selling of existing products to new customers in order to identify and build a new clientele base. This can include new geographical markets, new

distribution channel Distribution (or place) is one of the four elements of the marketing mix. Distribution is the process of making a product or service available for the consumer or business user who needs it. This can be done directly by the producer or service p ...

s, and different pricing policies that bring the product price within the competence of new market segments. :''Diversification'' is the riskiest area for a business. This is where a new product is sold to a new market. There are two type of Diversification; horizontal and vertical. 'Horizontal diversification'' focuses more on the product(s) where the business is knowledgeable, whereas ''vertical diversification'' focuses more on the introduction of new product into new markets, where the business could have less knowledge of the new market. ; Horizontal integration A horizontal integration strategy may be indicated in fast-changing work environments as well as providing a broad knowledge base for the business and employees. A benefit of horizontal diversification is that it is an open platform for a business to expand and build away from the already existing market. High levels of horizontal integration lead to high levels of communication within the business. Another benefit of using this strategy is that it leads to a larger market for

merged Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...

businesses, and it is easier to build good reputations for a business when using this strategy. A disadvantage of using a diversification strategy is that the benefits could take a while to start showing, which could lead the business to believe that the strategy in ineffective. Another disadvantage or risk is, it has been shown that using the horizontal diversification method has become harmful for stock value, but using the vertical diversification had the best effects. A disadvantage of using the horizontal integration strategy is that this limits and restricts the field of interest that the business. Horizontal integration can affect a business's reputation, especially after a merge has happened between two or more businesses. There are three main benefits to a business's reputation after a merge. A larger business helps the reputation and increases the severity of the punishment. As well as the merge of information after a merge has happened, this increases the knowledge of the business and marketing area they are focused on. The last benefit is more opportunities for deviation to occur in merged businesses rather than independent businesses. ; Vertical integration Vertical integration is when business is expanded through the vertical production line on one business. An example of a vertically integrated business could be Apple. Apple owns all their own software, hardware, designs and operating systems instead of relying on other businesses to supply these. By having a highly vertically integrated business this creates different economies therefore creating a positive performance for the business. Vertical integration is seen as a business controlling the inputs of supplies and outputs of products as well as the distribution of the final product. Some benefits of using a Vertical integration strategy is that costs may be reduced because of the reducing transaction costs which include finding, selling, monitoring, contracting and negotiating with other firms. Also by decreasing outside businesses input it will increase the efficient use of inputs into the business. Another benefit of vertical integration is that it improves the exchange of information through the different stages of the production line. Some competitive advantages could include; avoiding foreclosures, improving the business marketing intelligence, and opens up opportunities to create different products for the market. Some disadvantages of using a Vertical Integration Strategy include the internal costs for the business and the need for overhead costs. Also if the business is not well organized and fully equipped and prepared the business will struggle using this strategy. There are also competitive disadvantages as well, which include; creates barriers for the business, and loses access to information from suppliers and distributors.

Market position and strategy

In terms of market position, firms may be classified as market leaders, market challengers, market followers or market nichers. Market position and strategic requirements

Market position and strategic requirements

: ''Market leader'': The market leader dominates the market by objective measure of market share. Their overall posture is defensive because they have more to lose. Their objectives are to reinforce their prominent position through the use of PR to develop corporate image and to block competitors brand for brand, matching distribution through tactics such as the use of "fighting" brands, pre-emptive strikes, use of regulation to block competitors and even to spread rumours about competitors. Market leaders may adopt unconventional or unexpected approaches to building growth and their tactical responses are likely to include: product proliferation; diversification; multi-branding; erecting barriers to entry; vertical and horizontal integration and corporate acquisitions. : ''Market challenger'': The market challenger holds the second highest market share in the category, following closely behind the dominant player. Their market posture is generally offensive because they have less to lose and more to gain by taking risks. They will compete head to head with the market leader in an effort to grow market share. Their overall strategy is to gain market share through product, packaging and service innovations; new market development and redefinition of the product to broaden its scope and their position within it. : ''Market follower'': Followers are generally content to play second fiddle. They rarely invest in R & D and tend to wait for market leaders to develop innovative products and subsequently adopt a “me-too” approach. Their market posture is typically neutral. Their strategy is to maintain their market position by maintaining existing customers and capturing a fair share of any new segments. They tend to maintain profits by controlling costs. : ''Market nicher'': The market nicher occupies a small niche in the market in order to avoid head to head competition. Their objective is to build strong ties with the customer base and develop strong loyalty with existing customers. Their market posture is generally neutral. Their strategy is to develop and build the segment and protect it from erosion. Tactically, nichers are likely to improve the product or service offering, leverage cross-selling opportunities, offer value for money and build relationships through superior afte
direct sales service
service quality and other related value-adding activities. Most firms carry out strategic planning every 3– 5 years and treat the process as a means of checking whether the company is on track to achieve its vision and mission. Ideally, strategies are both dynamic and interactive, partially planned and partially unplanned. Strategies are broad in their scope in order to enable a firm to react to unforeseen developments while trying to keep focused on a specific pathway. A key aspect of marketing strategy is to keep marketing consistent with a company's overarching

. Strategies often specify how to adjust the

marketing mix The term "marketing mix" is a foundation model for businesses, historically centered around product, price, place, and promotion (also known as the "4 Ps"). The marketing mix has been defined as the "set of marketing tools that the firm uses to ...

; firms can use tools such as

Marketing Mix Modeling Marketing mix modeling (MMM) is statistical analysis such as multivariate regressions on sales and marketing time series data to estimate the impact of various marketing tactics (marketing mix) on sales and then forecast the impact of future set ...

to help them decide how to allocate scarce resources, as well as how to allocate funds across a portfolio of brands. In addition, firms can conduct analyses of performance, customer analysis,

competitor analysis Competitive analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities an ...

, and

target market A target market, also known as serviceable obtainable market (SOM), is a group of customers within a business's serviceable available market at which a business aims its marketing efforts and resources. A target market is a subset of the total ma ...

analysis.

Entry strategies

Marketing strategies may differ depending on the unique situation of the individual business. According to Lieberman and Montgomery, every entrant into a market – whether it is new or not – is classified under a Market Pioneer, Close Follower or a Late follower

=Pioneers

= Market pioneers are known to often open a new market to consumers based on a major innovation. They emphasize these product developments, and in a significant number of cases, studies have shown that early entrants – or pioneers – into a market have serious market-share advantages above all those who enter later. Pioneers have the first-mover advantage, and in order to have this advantage, business’ must ensure they have at least one or more of three primary sources: Technological Leadership, Preemption of Assets or Buyer Switching Costs. Technological Leadership means gaining an advantage through either Research and Development or the “learning curve”. This lets a business use the research and development stage as a key point of selling due to primary research of a new or developed product. Preemption of Assets can help gain an advantage through acquiring scarce assets within a certain market, allowing the first-mover to be able to have control of existing assets rather than those that are created through new technology. Thus allowing pre-existing information to be used and a lower risk when first entering a new market. By being a first entrant, it is easy to avoid higher switching costs compared to later entrants. For example, those who enter later would have to invest more expenditure in order to encourage customers away from early entrants. However, while Market Pioneers may have the “highest probability of engaging in product development” and lower switching costs, to have the first-mover advantage, it can be more expensive due to product innovation being more costly than product imitation. It has been found that while Pioneers in both consumer goods and industrial markets have gained “significant sales advantages”, they incur larger disadvantages cost-wise.

=Close followers

= Being market pioneer can, more often than not, attract entrepreneurs and/or investors depending on the benefits of the market. If there is an upside potential and the ability to have a stable market share, many businesses would start to follow in the footsteps of these pioneers. These are more commonly known as Close Followers. These entrants into the market can also be seen as challengers to the Market Pioneers and the Late Followers. This is because early followers are more than likely to invest a significant amount in Product Research and Development than later entrants. By doing this, it allows businesses to find weaknesses in the products produced before, thus leading to improvements and expansion on the aforementioned product. Therefore, it could also lead to customer preference, which is essential in market success. Due to the nature of early followers and the research time being later than Market Pioneers, different development strategies are used as opposed to those who entered the market in the beginning, and the same is applied to those who are Late Followers in the market. By having a different strategy, it allows the followers to create their own unique selling point and perhaps target a different audience in comparison to that of the Market Pioneers. Early following into a market can often be encouraged by an established business’ product that is “threatened or has industry-specific supporting assets”.

=Late entrants

= Those who follow after the Close Followers are known as the Late Entrants. While being a Late Entrant can seem very daunting, there are some perks to being a latecomer. For example, Late Entrants have the ability to learn from those who are already in the market or have previously entered. Late Followers have the advantage of learning from their early competitors and improving the benefits or reducing the total costs. This allows them to create a strategy that could essentially mean gaining market share and most importantly, staying in the market. In addition to this, markets evolve, leading to consumers wanting improvements and advancements on products. Late Followers have the advantage of catching the shifts in customer needs and wants towards the products. When bearing in mind customer preference, customer value has a significant influence. Customer value means taking into account the investment of customers as well as the brand or product. It is created through the “perceptions of benefits” and the “total cost of ownership”. On the other hand, if the needs and wants of consumers have only slightly altered, Late Followers could have a cost advantage over early entrants due to the use of product imitation. However, if a business is switching markets, this could take the cost advantage away due to the expense of changing markets for the business. Late Entry into a market does not necessarily mean there is a disadvantage when it comes to market share, it depends on how the marketing mix is adopted and the performance of the business. If the marketing mix is not used correctly – despite the entrant time – the business will gain little to no advantages, potentially missing out on a significant opportunity. The differentiated strategy The customized target strategy The requirements of individual customer markets are unique, and their purchases sufficient to make viable the design of a new marketing mix for each customer. If a company adopts this type of market strategy, a separate marketing mix is to be designed for each customer. Specific marketing mixes can be developed to appeal to most of the segments when market segmentation reveals several potential targets.

Developing marketing goals and objectives

Whereas the vision and mission provide the framework, the "goals define targets within the mission, which, when achieved, should move the organization toward the performance of that mission." ''Goals'' are broad primary outcomes whereas, ''objectives'' are measurable steps taken to achieve a goal or strategy. In strategic planning, it is important for managers to translate the overall strategy into goals and objectives. Goals are designed to inspire action and focus attention on specific desired outcomes. Objectives, on the other hand, are used to measure an organization's performance on specific dimensions, thereby providing the organization with feedback on how well it is achieving its goals and strategies. Managers typically establish objectives using the ''

balanced scorecard A balanced scorecard is a strategy performance management tool – a well structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from t ...

'' approach. This means that objectives do not include desired financial outcomes exclusively, but also specify measures of performance for customers (e.g. satisfaction, loyalty, repeat patronage), internal processes (e.g., employee satisfaction, productivity) and innovation and improvement activities. After setting the goals marketing strategy or

marketing plan A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan so that goals may be achieved. While a marketing plan contains a list of actions, without a sound strategic founda ...

should be developed. The marketing strategy plan provides an outline of the specific actions to be taken over time to achieve the objectives. Plans can be extended to cover many years, with sub-plans for each year. Plans usually involve monitoring, to assess progress, and prepare for contingencies if problems arise. Simultaneous such as

customer lifetime value In marketing, customer lifetime value (CLV or often CLTV), lifetime customer value (LCV), or life-time value (LTV) is a prognostication of the net profit contributed to the whole future relationship with a customer. The prediction model can have ...

models can be used to help marketers conduct "what-if" analyses to forecast what potential scenarios arising from possible actions, and to gauge how specific actions might affect such variables as the revenue-per-customer and the

churn rate Churn rate (sometimes called attrition rate), in its broadest sense, is a measure of the number of individuals or items moving out of a collective group over a specific period. It is one of two primary factors that determine the Steady state, stead ...

Strategy typologies

Developing competitive strategy requires significant judgement and is based on a deep understanding of the firm's current situation, its past history and its operating environment. No heuristics have yet been developed to assist strategists choose the optimal strategic direction. Nevertheless, some researchers and scholars have sought to classify broad groups of strategy approaches that might serve as broad frameworks for thinking about suitable choices.

Strategy types

In 2003, Raymond E. Miles and Charles C. Snow, based on an in-depth cross-industry study of a sample of large corporations, proposed a detailed scheme using four categories: * Prospectors: proactively seek to locate and exploit new market opportunities * Analyzers: are very innovative in their product-market choices; tend to follow prospectors into new markets; often introduce new or improved product designs. This type of organisation works in two types of market, one generally stable, one subject to more change * Defenders: are relatively cautious in their initiatives; seek to seal off a portion of the market which they can defend against competitive incursions; often market highest quality offerings and position as a quality leader * Reactors: tend to vacillate in their responses to environmental changes and are generally the least profitable organizations

Marketing strategy

Marketing warfare strategies Marketing warfare strategies represent a type of strategy, used in commerce and marketing, that tries to draw parallels between business and warfare and then applies the principles of military strategy to business situations, with competing firm ...

are competitor-centered strategies drawn from analogies with the field of military science. Warfare strategies were popular in the 1980s, but interest in this approach has waned in the new era of relationship marketing. An increased awareness of the distinctions between business and military cultures also raises questions about the extent to which this type of analogy is useful. In spite of its limitations, the typology of marketing warfare strategies is useful for predicting and understanding competitor responses. In the 1980s, Kotler and Singh developed a typology of marketing warfare strategies: * Frontal attack: where an aggressor goes head to head for the same market segments on an offer by offer, price by price basis; normally used by a market challenger against a more dominant player * Flanking attack: attacking an organization on its weakest front; used by market challengers * Bypass attack: bypassing the market leader by attacking smaller, more vulnerable target organizations in order to broaden the aggressor's resource base * Encirclement attack: attacking a dominant player on all fronts * Guerilla warfare: sporadic, unexpected attacks using both conventional and unconventional means to attack a rival; normally practiced by smaller players against the market leader

Relationship between the marketing strategy and the marketing mix

Marketing strategy and marketing mix are related elements of a comprehensive marketing plan. While marketing strategy is aligned with setting the direction of a company or product/service line, the marketing mix is majorly tactical in nature and is employed to carry out the overall marketing strategy. The 4P's of the marketing mix (Price, Product, Place and Promotion) represent the tools that marketers can leverage while defining their marketing strategy to create a marketing plan.

References

External links

* {{DEFAULTSORT:Marketing Strategy