Marketing Strategy Definition: A marketing strategy is a process that can allow an organization to concentrate its (always limited) resources

on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.

On This Page Key part of the general corporate strategy Sectorial tactics and actions Types of marketing strategies Strategic Marketing Models Marketing Practice Example

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Marketing strategy as a key part of the general corporate strategy A marketing strategy is most effective when it is an integral component of corporate strategy, defining how the organization will engage customers, prospects and the competition in the market arena for success. It is partially derived from broader corporate strategies, corporate missions, and corporate goals. They should flow from the firm's mission statement. They are also influenced by a range of microenvironmental factors.

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Marketing strategy and sectorial tactics and actions A marketing strategy also serves as the foundation of a marketing plan. A marketing plan contains a set of specific actions required to successfully implement a marketing strategy. For example: "Use a low cost product to attract consumers. Once our organization, via our low cost product, has established a relationship with consumers, our organization will sell additional, higher-margin products and services that enhance the consumer's interaction with the low-cost product or service."

A strategy consist of well thought out series of tactics. While it is possible to write a tactical marketing plan without a sound, well-considered strategy, it is not recommended. Without a sound marketing strategy, a marketing plan has no foundation. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives[3]. It is important that these objectives have measurable results. A good marketing strategy should integrate an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole. Many companies cascade a strategy throughout an organization, by creating strategy tactics that then become strategy goals for the next level or group. Each group is expected to take that strategy goal and develop a set of tactics to achieve that goal. This is why it is important to make each strategy goal measurable. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned

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Types of marketing strategies Every marketing strategy is unique, but if we abstract from the individualizing details, each can be reduced into a generic marketing strategy. There are a number of ways of categorizing these generic strategies. A brief description of the most common categorizing schemes is presented below: 1. Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are three types of market dominance strategies: Leader Challenger Follower 2. Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firms sustainable competitive advantage. Cost leadership Product differentiation Market segmentation 3. Innovation strategies - This deals with the firm's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types: Pioneers Close followers Late followers 4. Growth strategies - In this scheme we ask the question, How should the firm grow?. There are a number of different ways of answering that question, but the most common gives four answers: Horizontal integration

Vertical integration Diversification Intensification 5. A more detailed schemes uses the categories: Prospector Analyzer Defender Reactor 6. Marketing warfare strategies|Warfare based strategies- This scheme draws parallels between marketing strategies and military strategies.

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Strategic Marketing Models Marketing participants often employ strategic models and tools to analyze marketing decisions. When beginning a strategic analysis, the 3C's can be employed to get a broad understanding of the strategic environment. An Ansoff Matrix is also often used to convey an organization's strategic positioning of their marketing mix. The 4P's can then be utilized to form a marketing plan to pursue a defined strategy.

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Marketing Practice In practice, as opposed to theory, research has indicated that the outstanding problems facing marketers lie in the use of specific functions. Most senior managements have committed to the philosophy, even though their junior managers may be cynical about the degree of that commitment. Unfortunately, there is little evidence to show that this new-found belief has led to positive action. Indeed, if we look at the marketing activities they do subscribe to, using the 4Ps framework say, there is little evidence that marketing practice (as opposed to the theory) has been widely embraced. In particular, pricing is largely on a cost-plus or competitive basis, promotional budgets are small (and spent more on sales promotion than advertising or PR), 'place' is - in any case - not relevant, and marketing research is almost all second-hand. Coarse Marketing The marketer, in real life, does not face each decision with a copy of a text-book in his or her hand ready to work through the various lessons. The marketer starts with a quite specific environment; which will immediately limit the range of factors to be explored to a small subset of the literally

hundreds explored in this book. To the perceptive marketer the range of options to be explored will usually be obvious. Beyond this, the position will be further constrained by the resources available to deal with them.For instance, theory always says that the first step is marketing research, but if your competitor has just made a major change in strategy you may have just days to react - where research may take months. Real-life marketing primarily revolves around the application of a great deal of common-sense; dealing with a limited number of factors, in an environment of imperfect information and limited resources complicated by uncertainty and tight timescales. Use of classical marketing techniques, in these circumstances, is inevitably partial and uneven. Thus, for example, new products will emerge from irrational processes and the rational development process may be used (if at all) to screen out the worst non-runners. The design of the advertising, and the packaging, will be the output of the creative minds employed; which management will then screen, often by 'gut-reaction', to ensure that it is reasonable. Indeed, the most successful marketer is often the one who trains his or her 'gut-reaction' to simulate that of the average customer! For most of his or her time the marketing manager is likely to be using his or her considerable intelligence to analyze and handle the complex, and unique, situations being faced; without easy reference to theory. This will often be 'flying by the seat of the pants', or 'gut-reaction'; where the overall strategy, coupled with the knowledge of the customer which has been absorbed almost by a process of osmosis, will determine the quality of the marketing employed! This, almost instinctive management, is what is sometimes called 'coarse marketing'; to distinguish it from the refined, aesthetically pleasing, form favored by the theorists. It is often relatively crude and would, if given in answer to a business school examination, be judged a failure of marketing. On the other hand, it is the real-life world of most marketing!

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Example of marketing strategies Product product mix (lining) vs. product bundling product strengths and weaknesses perceptual mapping Product Life Cycle Management (PLM) and New Product Development (NPD) Brand name, brand image, and brand equity the augmented product product portfolio analysis B.C.G. Analysis Contribution margin analysis

G.E. Multi Factor analysis Quality Function Deployment Market share objectives by products, by customer segments, by geographical markets Price pricing objectives pricing method (eg.: cost plus, demand based, or competitor indexing) pricing strategy (eg.: skimming, or penetration) discounts and allowances price elasticity and customer sensitivity price zoning break even analysis at various prices Promotion promotional goals promotional mix advertising reach, frequency, flights, theme, and media sales force requirements, techniques, and management sales promotion publicity and public relations electronic promotion (eg.: Web, or telephone) Distribution geographical coverage distribution channels physical distribution and logistics electronic distribution Market Analysis market definition market size market segmentation industry structure and strategic groupings Porter 5 forces analysis competition and market share competitors' strengths and weaknesses market trends Consumer Analysis

nature of the buying decision participants demographics psychographics buyer motivation and expectations loyalty segments

Strategies based on market DominanceTypically there are four types of market dominance strategies: leader challenger follower nicher Innovation Strategies-This deals with the firm rate of new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There arethree types: pioneers close followers late followers Horizontal Integration vertical integration diversification (or conglomeration) intensification Aggressiveness Strategies: This asks whether a firm should grow or not, and if so, how fast. One scheme divides strategies into: building holding harvesting MARKET DOMINANCE STRATEGIES Typically there are four types of market dominance strategies that a marketer will consider: There are

 Market leader, Market challenger Market follower, Market nicher. 1 Market Leader It typically is the industry leader in developing innovative new business models and new products(although not always). Of the four dominance strategies, it has the most flexibility in crafting strategy. The main options available to market leaders are: Expand the total market by findingnew users of the product o new uses of the product o more usage on each use occasion Protect your existing market share by:o developing new product ideas o improve customer service o improve distribution effectivenesso reduce costs Expand your market share: by targeting one or more competitor o without being noticed by government regulators2 Market Challenger A market challenger is a firm in a strong, but not dominant position that is following anaggressive strategy of trying to gain market share. It typically targets the industry leader (for example, Pepsi targets Coke), but it could alsotarget smaller,more vulnerable competitors.The fundamental principles involved are: Assess the strength of the target competitor. Consider the amount of support that thetarget mightmuster from allies. Choose only one target at a time. Find a weakness in the target?? Position. Attack at this point. Consider how long it will take for the target to realign their resources so as to reinforce this weak spot. Launch the attack on as narrow a front as possible. Whereas a defender must defend alltheir borders,an attacker has the advantage of being able to concentrate their forces at one place. Launch the attack quickly, and then consolidate.Some of the options open to a marketchallenger are: price discounts or price cutting line extensions introduce new products

reduce product quality increase product quality improve service change distribution cost reductions intensify promotional activity 3. Market Follower A market follower is a firm in a strong, but not dominant position that is content to stay at that position.The advantages of this strategy are: No expensive R&D failures No risk of bad business model Best practices? are already established Able to capitalize on the promotional activities of the market leader Minimal risk of competitive attacks Dont waste money in a head-on battle with the market leader 4 Market Nicher In this niche strategy the firm concentrates on a select few target markets. It is also calleda focus strategy. It is hoped that by focusing ones marketing efforts on one or two narrow marketsegments and tailoring your marketing mix to these specialized markets,The most successful nichers tend to have the following characteristics: They tend to be in high value added industries and are able to obtain high margins. They tend to be highly focused on a specific market segment. They tend to market high end products or services, and are able to use a premium pricingstrategy. They tend to keep their operating expenses down by spending less on R&D, advertising, and personal selling.