A marketing strategy is usually a long-term plan for achieving a company’s commercial and corporate goals. As part of these tasks, marketers are engaged in promoting the brand to the market, selling goods and services, and pricing processes. In addition, this includes working with clients and staff.
The marketing strategy is an official document that is fixed in the company’s policy. Accordingly, the document reflects the real position of the brand in the market, including an assessment of development prospects, the availability or lack of necessary resources for growth. At the forefront of any marketing strategy is sales growth. This is usually achieved by increasing the flow of customers or the number of orders.
Marketing strategies in practice
Any action plan should be consistent with the overall strategy of the company to achieve its goals. Consider what strategic tasks are solved by marketers at the enterprise:
- Increasing brand presence in the market. Any company, enterprise needs markets for its products to implement a marketing plan. Therefore, the goals of specialists in this regard are very transparent – to “capture” as large a share as possible in a niche.
- Growth in sales. If customers do not buy the company’s products, then marketing strategies do not work as they should. It’s practically an axiom. Always with an increase in market share, the number of customers is added, and with them orders and sales come. Proper marketing should stimulate the activity of buyers.
- Increasing the firm’s profits. Accordingly, sales growth directly affects the profitability of the enterprise. The company’s marketing strategy affects the liquidity of the business. For example, you can quickly sell products at a reduced price, achieve crazy sales growth, and end up with a loss. The reason is incorrect pricing (price dumping).
- Brand positioning. To consistently sell products at a market price, you need to position yourself correctly in a niche. The target audience must understand the value of the product and associate these qualities with the brand. Marketing is the link between the company’s product and the mind of a potential buyer.
To solve these problems, it is necessary to study the target audience of the company or the promoted product / service. Without a clear understanding of who you are selling to, it is difficult to get a good result. You should describe in detail all segments of the target audience – this will be a great help for the marketer.
It is also important, if a physical product is offered, to describe the marketing mix – product, distribution, cost, promotion. To implement the service, three more points will be added to the existing ones – the physical environment, the process and the employees. Determine the USP of the product – this may be the most important characteristic in terms of customer benefit. Think about what niches are best suited for promoting a product / service, whether additional premises and staff of specialists are needed.
Marketing strategies: types and groups

Marketing strategies can be classified according to several development criteria:
- concentrated growth. The sales market adjusts to new products or products and services are upgraded to fit the characteristics of the niche. Often, marketing is aimed at expanding the zones of influence of one brand product (horizontal increase in market share), as well as at competition.
- integrated growth. This is a type of vertical development marketing strategy. That is, it is not the market itself that is expanding, but the structure of the enterprise. It is based on the production of new types of goods or services, the opening of branches, cooperation with dealers and partners.
- diversified growth. This type is applicable when the company has already exhausted the resources to promote certain goods and services on the market. In this case, it makes sense to expand the assortment matrix by releasing new or modified / modernized old products.
Also, marketing strategy can be divided into types according to market orientation. For example, companies focus on launching and selling a single product in a niche, or offering a choice of multiple product categories. There are companies that can cover the entire market with their products – full coverage or offer customers selective specialization in segments.
Marketing strategies may differ in the means that the company uses to promote – product matrix, advertising campaigns, corporate identity, pricing.
How to choose a strategy by type? In practical terms, two perspectives need to be taken into account: advantage over competitors (USP) and positioning the company in a niche. Consider several options for the first paragraph:
- If a company produces a unique product that has value for the target audience, then a differentiation strategy should be chosen. This type of marketing is more suitable for “old” companies that have a stable customer base, constant income and opportunities to invest in the development of a unique product.
- If a company produces products with minimal production and marketing costs, it makes sense to focus on leadership in this aspect. This will allow you to take a leading position in pricing in a niche. Often, companies operating in the same region or city resort to such a strategy. For example, free shipping is one of the tools for implementing the minimum cost strategy. Enterprises with advanced equipment can reduce the cost of producing goods and, accordingly, bring products to the market at a reduced price.
Accordingly, these strategies can and should be mixed. For example, a company produces a group of products that have strong competitive advantages in a niche. At the same time, it has minimal production costs, which means the best prices on the market.
The marketing strategy of the company’s development also depends on positioning. For example, there are niche leaders – these are companies that create the main demand in the market. There is always fierce competition among them. The persecutors hit the weak points of the leader, trying to take away the share of buyers. A leader must constantly innovate in a niche in order to be head and shoulders above the competition. In a word, marketers in TOP 3-5 companies work tirelessly.
There are middle market players and niche players. The first and second are looking for low-competitive segments, they conduct “guerrilla” marketing. Here, companies need to be flexible, quickly adapt to changes. Otherwise, big players will crush small businesses.
Levels of marketing strategy

Classical marketing includes four levels – corporate, business units, functional and operational. However, in practice, the functional level is usually excluded, since it seriously reduces the development potential of the company. Let’s take a closer look at the key areas:
- Corporate level. The marketing development strategy is based on the formation of a differentiated product matrix with a strict focus on the existing market.
- Business units. At this level, competitive marketing strategies are developed for each type of company activity.
- Operational or product level. This is, in fact, the positioning of goods in the market. The product can be combined into groups and complexes within the framework of a strategic plan.
- Accordingly, the levels can interact with each other, creating sublevels within one or more areas of the company’s development.
Structure and content of the marketing strategy
Experts distinguish the following structure:
- Analysis of target segments and market. This helps to determine the relationship between the capabilities of the enterprise and the sales market. That is, the company, based on the results of an analytical review, must decide what services and products it will offer customers in a niche.
- Segmentation of customers by target groups. It is necessary to divide the general flow of potential buyers into small target segments in order to satisfy their demand. It is recommended to focus on the target group itself, following the Pareto rule: 20% of customers bring 80% of the company’s profits. This result indicates that the target segment is defined correctly.
- Positioning. A marketing development strategy involves a clear definition of your position in a niche. Taking a leading position in a highly competitive niche is possible only if you have a valuable USP, competitive advantages and corporate identity.
- Marketing package of measures. These are combined tools that help marketers to promote products and services to the market. As a rule, the complexes include: pricing policy, product strategy, promotion policy, distribution and marketing of goods.
Formation and stages of strategy development

There are usually four stages in the formation and development of an enterprise marketing strategy:
- Analytics. Specialists explore the features of the market, the company’s capabilities and product characteristics. They also study the activities of competitors and the needs of the target audience in a particular niche. The analysis takes into account external and internal factors according to the SWOT model, where S are the strengths (advantages) of the brand/product; W – weaknesses (disadvantages); O – capabilities/resources of the enterprise; T – external threats that cannot be influenced.
- Market selection. Having decided on the advantages and disadvantages, resources and USP of the company, it is necessary to choose a sales market. That is, to analyze supply and demand, to determine the need for a niche product.
- Development of a marketing plan. At this stage, the goals of the company are specified in the context of the obtained research data. Next, the pricing policy of the product on the market, positioning methods, advertising campaign objectives and other points are determined. As a result of all discussions and works, the marketing plan of the company is approved.
- Control. For each stage of the implementation of the strategy, the results are analyzed, tasks are adjusted, and tools are adjusted.
Efficiency mark
Monitoring the results will determine the correctness of the choice of marketing strategy, as well as control the implementation of the company’s goals. For a fully functional control, it is necessary to analyze the following components:
- Sales of products. Sales channels are analyzed, as well as the demand for brand goods and services among the target audience. Strong and weak markets, new places for the sale of goods, sales volumes are determined. In addition, marketers analyze the factors that affect sales activity.
- The ratio of the volume of orders to the income received. Analysis of these metrics allows you to determine the greatest market effect from the sale of goods. In addition, the average bill for the market and a specific product group is determined.
- Satisfaction of the target segment of customers. Metrics that show the level of demand and sales volumes for the main group of buyers are being studied. According to the 20/80 law, meeting the needs of the target segment brings the maximum benefit to the company.
- Market shares. The ratio of sales volumes to the distribution of goods by market segments is analyzed. This allows you to determine the most significant product categories that bring the main income in a niche.
- Costs and profits. The analysis of metrics helps to find ways to reduce costs, as well as to determine the most popular products on the market by income item.
Semi-conclusion
We have studied what the marketing strategy of a company/enterprise is. We determined its types and levels, and also considered the stages of the implementation of the plan. In conclusion, we determined the features of the formation of a strategy and metrics to evaluate its effectiveness.
Marketing strategy: why it is and how to develop it
A marketing strategy is a comprehensive business development plan. It includes all issues related to increasing profits and sales.
What are the objectives of the marketing strategy
The marketing strategy covers 4 main goals:
- Market . This can be, for example, expanding the occupied share in a niche, increasing the number of customers, increasing profits.
- Industrial . Implementation of innovative technologies, launch of a new product, increase in production volume, competent planning of the work of the team.
- Organizational . Assume the optimization of personnel management. For example, the development of a clear hierarchy, the definition of the responsibilities of each unit.
- Financial . Covers all company goals related to money. These can be a reduction in manufacturing costs, an increase in sales volumes, and an improvement in profitability.
A strategy is a way to identify priority business areas and plan activities. It allows:
- optimal use of resources;
- prevent possible marketing errors;
- improve the efficiency of the company.
This document can cover a long period – up to 20-25 years. But in small and medium-sized businesses, planning, as a rule, is carried out for up to 3 years. This is due to the fact that the current situation can change quickly. Therefore, a marketing strategy is not a step-by-step instruction for action. If necessary, it is adjusted according to the circumstances.
Types of Marketing Strategies
There are many options for marketing strategies, we will list the main ones.
Global
Global strategies are aimed at development in the global market and continuous geographical expansion of activities.
The main global marketing strategies are:
- Internationalization – the development of new sales channels at the international level.
- Globalization is the production of products taking into account uniform market standards.
- Cooperation – cooperation with other enterprises on a mutually beneficial basis.
- Segmentation is the production of goods for different customer segments.
- Diversification is the simultaneous development of different types of activities.
The preference for one or another direction of development depends on how ready or not ready the company is for scaling. Someone chooses to increase market share, others choose to minimize risks.
An example of a brand with a global promotion strategy is McDonald’s. The company actively uses segmentation, bringing local flavor to the menu in different countries. For example, in Italy these are balls with spinach and ricotta:
McDonald’s, Italy, spinach and ricotta balls
In Taiwan, tea with whipped cream:
McDonald’s, Taiwan, cappuccino
In Vietnam, grilled pork with rice:
McDonald’s, Vietnam, grilled pork with rice
McDonald’s takes into account the needs of the local audience and this allows the company to actively develop on a global level.
Basic
The basic strategies are fundamental. They determine whether the company will grow, reduce activity or develop at the current level.
Basic strategies can have different directions:
- Specialization. The company is trying to win leadership in a narrow niche.
- Differentiation. Its task is to give the product properties that will distinguish it from competitors. This is how companies expand their activities, including through a variety of directions or assortment.
- Leadership. The priority is business costs and their reduction. Under careful control are the volume of costs, return on investment in production. Each new type of product is worked out to the smallest nuances.
Basic marketing strategies are characterized by a choice based on an assessment of the benefits and costs.
An example of a brand that has become world famous thanks to a narrow specialization is Porsche. Since the 1930s, the company has been producing different variations of cars.
Porsche 64 (1939)
However, the real success came only after 1983, when the company decided to advance through motorsport.
Porsche Cayenne (2002)
Today, Porsche is a globally recognized brand of premium sports cars, sedans and SUVs.
Competitive
There are four approaches to competitive strategies:
- Leader. The company dominates the market and is looking for a new target audience, including through advertising, marketing and expanding the scope of the product.
- Leader follower. The company observes the leader and imitates his decisions or takes an offensive position. In the latter case, they look for the weak points of the leader and the audience not covered by him. The main task is to take the main positions of the market.
- Challenger. The “challenge” is to change the price, attack the weak positions of competitors.
- Nisher. This marketing strategy is often chosen by companies with a narrow specialization and serving one or more segments of the audience. The tactic is to conquer segments that the leader has ignored.
Each of these marketing strategies is based on the competitive advantages that the company uses to capture new markets and attract audiences.
Nike is an example of a niche brand. In general, the company specializes in the production of sportswear – this is a global niche. But Nike is also trying to cover narrower niches. In them, the company creates special products: shoes for various sports, hiking, cycling. Then Nike splits up its niche products: shoes for those who walk quickly and slowly, clothes for slender and full.
Variety of Nike footwear range
This approach allows the company to attract narrow segments of the audience and thus protect itself from competitors.
Growth Strategies
Growth strategies focus on scaling the business, expanding production and continuously increasing market share by sales volume or region of coverage.
Options:
- Market penetration . The company sells an existing product in the same market as before, but is trying to increase its market share. For example, a decrease in prices contributes to an increase in the share.
- Market expansion . In this case, existing products are sold to a new market if there are no growth prospects in the old markets.
- Product extension . The company increases the volume of production or complements the functionality of the product.
- Diversification . Involves selling new products to new markets. Accordingly, there are big risks and success directly depends on the quality of marketing research and finding the right audience.
- Acquisition . To expand its activities, the company acquires another company to increase production or enter new markets.
The choice of a certain growth strategy is determined by the financial position of the company, the level of competition in the niche and other factors.
An example of business development based on diversification is the Wildberries online store. Initially, the basic categories were clothes, shoes and accessories. Gradually, as the customer base grew, the assortment included cosmetics, books, sports equipment, baby food, electronics, and more.
Product category section on Wildberries
There are now about 35,000 leading brands in the Wildberries online catalog.
In practice, marketing strategies are rarely used in their pure form. Most often, different options are mixed, taking into account the situation. If the strategy is monotonous, then the market quickly adapts to it, and instead of achieving the set goals, failure may occur.
How to develop a marketing strategy
The development process can be divided into three stages:
- Analytical.
- Practical.
- Control.
Analytics
At this stage:
- They analyze the external environment : the level of income in the region, inflation, business lending opportunities, legislative changes, business support measures, global and local trends, the degree of technology development in the region.
- Analyze the market . Evaluate threats from substitute products. Assess the degree of dependence on suppliers of raw materials, external logistics, employees. Explore the complexities of licensing, distribution, production. Determine the size of the target audience and its characteristics .
- Assess the state of the company . For example, they use the SWOT analysis method , where S are the strengths of the product and the advantages of the company, W are the disadvantages and weaknesses, O are the opportunities that can be used, T are the likely external threats.
- Analyze competitors . Study competitive products. Explore the characteristics and capabilities of competitors. Determine the competitiveness of their own product and the likely share of market capture.
Based on the results, a possible development plan is drawn up.
Practice
What is done at this stage:
- They set goals . Determine the final marketing goal that is planned to be achieved. For example, increase profits by 5 times, enter the foreign market within 6 months, become the market leader in your region. The main thing is that the goal should be realistic, specific and measurable so that the process can be evaluated in dynamics.
- Determine the “showcase” and pricing policy . Reveal the most valuable qualities of the product, which will focus the attention of consumers. Develop an information policy plan – how information will be conveyed to consumers. Establish a pricing policy – how much the product will cost relative to competitors’ products.
- Develop an action plan . They decide how to achieve the goal – through the expansion of the range, the increase in distribution channels, changes in the advertising policy. They also determine possible actions in case of force majeure – what to do when new competitors appear or prices for raw materials change.
Write out a marketing plan . Based on the goals and action plan, develop a marketing plan. In it, the process of achieving the goal is divided into stages and for each of them an indicator is established to measure the results.
The concepts of “marketing strategy” and “marketing plan” are often confused and used as synonyms. The strategy explains the goals that the company wants to achieve through marketing. The plan explains how these goals are supposed to be achieved. That is, the strategy describes the “what”, and the plan describes the “how”. The marketing strategy should always precede the marketing plan.
Control
It is important to determine whether a particular activity has helped you get closer to your goal. For example, whether the advertising campaign was effective, whether the profit increased due to changes, whether the presence of the product in specific points of sale increased.
The approved scheme of action must be regularly monitored for compliance with market changes. If necessary, the marketing plan is adjusted.
You should constantly monitor the profit from each type of product in order to timely remove unprofitable goods from production or modernize the product.
Be sure to monitor consumer reviews in order to find out the needs of the audience in time and identify the negative.
Regular and comprehensive control allows you to clearly follow the direction set by the marketing strategy.
What mistakes are important to avoid
There are many factors that influence the success of a marketing strategy. But there are three most common mistakes that can reduce all efforts to zero:
- Application of templates . Each company has its own way – if something helped one of them, it may not work for another. In each individual case, it is necessary to adapt the marketing strategy to current circumstances and make the necessary changes in a timely manner.
- Focus on one channel . It is better if your strategy covers as many promotion channels as possible (email newsletters, online and offline advertising, content marketing, etc.).
- Lack of control . The success of a marketing strategy can only be judged by the results. If you do not track the consequences, then you can not notice weaknesses and omissions. As a result, it will not be possible to improve the strategy and eliminate ineffective actions.
A good marketing strategy helps you choose a promising direction for business development, in which all resources work at full capacity and give a positive result.
THE STRATEGIC USE OF DIFFERENT MARKETING CHANNELS AFFECTS… IN DEPTH!
How is the concept of “strategic marketing” interpreted?
The term “strategic marketing” appeared relatively recently – in the late 1980s – early 1990s. There is no consensus among theorists and practitioners regarding the essence of this concept. So, some consider strategic marketing in a broad sense, based on the approaches of specialists in management, philosophy, sociology and other disciplines. Others evaluate it more narrowly, mainly as a set of elements of the marketing mix, ignoring the issues of meeting customer needs and building relationships in distribution channels. Representatives of the third approach believe that strategic marketing is a direct process developing a marketing strategy. For example, according to the well-known marketer F. Kotler, marketing is a two-way process, the first stage of which is strategic marketing. His statement about the essence of strategic marketing is widely known, which is summarized in the formula: “Segmentation-goal-setting-positioning”.
Another popular marketing theorist J.-J. Lambin introduced the concept of strategic marketing in his book of the same name. The scientist does not define strategic marketing in the conventional sense, but based on the ideas outlined in the book, one can conclude that, in his opinion, strategic marketing works to analyze customer needs and develop products to meet them.
Lamben believes that strategic marketing shows how effective the measures taken are within the framework of operational marketing, which, in turn, is aimed at meeting targets for the sale of products through the use of marketing mix tools.
Lambin singled out the main elements of strategic marketing: needs analysis and definition of the base market, market segmentation, macro- and micro-segmentation, attractiveness analysis and competitiveness analysis, choice of enterprise development strategy.
Among the components of operational marketing, the scientist noted the choice of the target market segment, the marketing plan, complex marketing pressure: product, sales, price, communications, marketing budget, implementation and control of the marketing plan.
The main goal of the company’s strategic marketing is to develop an action plan aimed at achieving the set goals in terms of product sales within the established time frame by increasing profitability, attracting external investors and timely responding to changes in the internal and external environment of the company.
The following functions of strategic marketing are distinguished:
- analysis of the external environment;
- selection of priority market segments;
- product positioning in terms of relevant properties and characteristics for consumers;
- analysis of competitors’ actions when developing a product positioning strategy.
Key principles of strategic marketing:
- Accounting for the size and structure of the market when making management decisions (the growth rates of the company and the market must be the same, the company must expand simultaneously with the market, one must strive to maintain competitiveness and not go beyond the break-even point, etc.).
- Taking into account the factors that support the demand for products (focus on the products that are in greatest demand, maintain high product quality, strive to constantly update the range, customer focus, maintain customer loyalty, develop the idea of after-sales service, etc.).
- Active actions in relation to the consumer (adaptation to the existing level of demand, independent formation of demand for products).
- Timely response to market changes (monitoring of current changes, development of an action plan, taking into account the extrapolation of current trends for the short and medium term, etc.).
- Choosing a way to respond to market changes (reducing or increasing the number of products produced, revising the range, raising or lowering prices, choosing other distribution channels, etc.).
- Changing the characteristics of products, taking into account market trends (development of new products, the strategy of following the leader in the industry, releasing new products, etc.).
- Formation and maintenance of the distinctive features of the company’s products (unique packaging, unlike other manufacturers, product properties, advertising, etc.).
This is an incomplete list. Among other principles, strategic marketing can be based on various combinations of these options.
What is an enterprise marketing strategy
Let us turn to the etymology of the word “strategy”. Translated from ancient Greek, it means “the art of the commander”, his long-term plan of action in the war.
The modern world dictates its own terms, but strategy today remains an art that every entrepreneur must master in order to win the battle for profit and market share. Today, the strategy is a long-term plan of action aimed at achieving the global goals of the enterprise.
Any organization has a general strategy that corresponds to its global goals and strategy by activity. One of these is the marketing strategy of the enterprise.
Despite the fact that the number of companies in various markets is constantly growing, the store shelves are bursting with a variety of goods, and the consumer is becoming more whimsical and picky, many Russian companies still neglect marketing. Although it is the marketer who is able to highlight your product on the store shelf among competitors, make it special and make a profit. Therefore, the development of a marketing strategy is one of the key issues in planning an organization’s activities.
Marketing strategy – a general plan for the development of each element of marketing (physical product – product, distribution, price, promotion; service – product, distribution, price, promotion, physical environment, process, personnel), developed for the long term.
The marketing strategy, as an official document, is fixed in the company’s marketing policy.
What is the difference between strategic and tactical marketing
Strategic marketing is focused on drawing up a global plan for the development of the company. His main task is the strategic management of marketing in general. Tactical marketing has a different goal – to find and retain customers, create demand for products in an existing sales market, and increase profits by selling the company’s products. Tactical marketing has a short-term planning horizon.
Operational marketing aims to use the most effective sales methods, trade marketing tools, and minimize costs. In addition, it is aimed at achieving the company’s indicators that appear in the operational plan (a certain level of sales, ensuring the profitability of various products, territories, markets and distribution channels).
Tactical marketing includes the following components:
- sales promotion͵ development of search options and involvement of distributors;
- study of the assortment policy of retail distributors and networks;
- planning effective display and competent merchandising at points of sale;
- development of advertising campaigns; formation of pricing policy for retail sales and distributors.
What is the difference between strategic marketing and tactical marketing?
- Global and Focused Approach
Strategy development involves covering more global issues in the context of company growth. Strategic marketing studies the market as a whole, the resources of the enterprise, potential and existing opportunities – all that in the future will give impetus to reaching a new level of development. He evaluates the effectiveness of the implementation of the strategy with the help of certain tactical actions. Tactics is a narrower concept; with its help, goals and objectives are achieved within the framework of a global development strategy. Tactical marketing is designed to implement the resources that are available in the company.
- different validity period
As already mentioned, strategy is something long-term. It can be a benchmark for the company for more than one year. At some point, the strategy may change, partially or completely, or it may be the same for a very long period. The second option prevails. Tactics are used to achieve some goals or objectives, that is, the period of its validity relative to the viability of the strategy is very limited. If the strategy is practically unchanged, then the tactics may change depending on the situation in the economy, on the market, on the income of consumers and the actions of competitors. Tactical marketing must be very sensitive to any processes taking place in the industry, so that the company can quickly navigate and make changes in its work without changing the strategy.
- Responsibility levels
Each person in the company has his own responsibilities and is responsible for the order and achievement of certain results at his level. The development of the company’s strategy is usually carried out by directors, heads of departments – in a word, the management team. Their goal is a good level of enterprise performance, the development of new horizons, adequate and stable profits, and a healthy atmosphere within the company itself.
Those who are engaged in tactics mostly have lower positions (of course, everything depends on the level of the company), the range of their duties and responsibilities is narrower. They demonstrate the results of their work to “strategists” and implement their global ideas.
The practical importance of marketing strategy for an enterprise
The marketing strategy, being an integral part of the overall strategy of the enterprise, directs activities to achieve the following strategic goals:
- Increasing the company’s market share in the market;
- Increasing the company’s sales volume;
- Increasing the profit of the enterprise;
- Gaining a leading position in the market;
- Other.
The goals of the marketing strategy must necessarily be consistent with the mission of the enterprise and the overall global goals. As we can see, all goals are related to competitive or economic indicators. To achieve them without having a marketing strategy, if not impossible, then very difficult.
To achieve any of the above goals, it is necessary to prescribe the following elements in the company’s marketing strategy:
- The target audience for your business/product. The more detailed you describe your target customer, the better. If you have chosen several segments for yourself, then describe each of them, do not be lazy.
- Marketing complex. If you are offering a physical product, then describe each of the four P’s (Product, Distribution, Price, Promotion). If you are selling a service, then you have to describe the 7 P’s (Product, Distribution, Price, Promotion, Physical Environment, Process, Personnel). Do this as detailed as possible and for each element. Name the core benefit of your product, indicate the key value for the client. Describe the main distribution channels for each product, determine the price of the product, possible discounts and the desired profit per unit. Think about what marketing activities will be involved in the promotion. If you offer a service, then determine who, how and where (in terms of the design of the premises, work tools) will implement it.
Each of the elements must also form its own strategy, which will be included in the overall marketing strategy of the business.
- marketing budget. Now that you have a detailed marketing strategy, you can calculate your total budget. It doesn’t have to be exact, so it’s important to include a fallback here.
Once you have identified each of the listed elements, you can begin to achieve your goals through a series of tasks:
- Formulation of a strategic marketing problem (this point should be given the most attention);
- Needs analysis;
- Segmentation of the consumer market;
- Analysis of threats and business opportunities;
- Market competition analysis;
- Analysis of the strengths and weaknesses of the enterprise;
- Choice of strategy.
Enterprise Marketing Strategy Levels
As we can see, the overall marketing strategy includes strategies for marketing elements. In addition, the marketing strategy must be developed at all strategic levels of the enterprise.
In the classical reading, four levels of enterprise strategies are distinguished:
- Corporate strategy (if your company is differentiated, that is, it releases several products, otherwise this level will not exist);
- Business strategies – a strategy for each type of enterprise activity;
- Functional strategy – strategies for each functional unit of the enterprise (Production, marketing, R&D, and so on);
- Operational strategy – strategies for each structural unit of the company (workshop, trading floor, warehouse, and so on).
However, the marketing strategy will only cover three levels of the strategic hierarchy. Marketing experts recommend excluding the functional level, as it involves considering marketing as a narrowly functional type of activity. Today, this is not entirely true and leads to short-sighted marketing decisions.
So, the marketing strategy must be considered from the point of view of three levels:
- Corporate level: formation of assortment marketing strategy and market orientation strategy;
- Business unit level: development of a competitive marketing strategy;
- Product level: product positioning strategy on the market, strategies for the elements of the marketing mix, strategies for each product within the product line strategy.
As we can see, we should develop 6 types of strategies as part of the overall marketing strategy of the enterprise.
The main tasks of strategic marketing
The main task of strategic marketing is to regularly monitor the company’s activities in order to identify opportunities and options for achieving higher profits and profitability.
Strategic marketing is based on conducting preplanned marketing analysis, marketing research, market segmentation and positioning of the company’s products in the sales region. All of these elements require the development of certain tactical actions.
Based on this, the following tasks of strategic marketing are distinguished:
- the focus of the entire work of the company on the maximum satisfaction of customer needs;
- determination of the vital position of the company;
- argumentation of the chosen marketing strategy to the top management of the company.
The organization must operate under the principle “we make the goods the customers need and we don’t sell the things they don’t need”.
Strategic marketing is part of the overall market mechanism, it is aimed at solving the following tasks:
- Streamlining the work of the sales market, ensuring its maximum transparency for subsequent evaluation, adjustment and determination of directions for further development.
- Regulation of the sales market in order to minimize spontaneous, uncontrolled manifestations.
- Streamlining competition, preventing and removing unscrupulous competitors from the market.
- Coordination of production processes and sales operations in order to meet the needs of customers.
- Substantiation, development and implementation of technological innovations that can improve the processes of production and distribution of goods and services of the company.
- Maximization of the effect of ongoing promotional activities, formation of a sales market taking into account the demand and needs of customers, increasing the attractiveness of the company’s products for the target audience.
It should be noted that depending on the specifics and direction of activity, each organization may have its own individual tasks that strategic marketing performs.
Types of strategic marketing
The development of strategic marketing involves the study of its varieties, followed by the preparation of a global plan for the growth of the company. What strategic directions of marketing are distinguished today?
- A strategy that consists in conquering a part of the market or achieving certain indicators of some of its shares (the rate of mass and profit). A new product is introduced to the market that contributes to this goal. Thanks to this, the task of increasing the profitability of production and the efficiency of the company is achieved faster and easier.
- Innovation strategy. The point is to develop and manufacture absolutely new products, which have no analogues on the market.
- Strategy of innovative imitation. It consists in combining innovative elements of competitors’ products in their products.
- Product differentiation strategy. Based on the improvement and modification of existing products.
- Cost reduction strategy.
- Waiting strategy.
- Consumer individualization strategy. This model is prevalent primarily among manufacturing equipment manufacturers.
- Diversification strategy.
- Internationalization strategy.
- Cooperation strategy. It is based on profitable cooperation of different enterprises.
Other types of marketing strategies
In general, the specific composition of marketing strategies proposed by M. Porter is usually called “classic”, but in practice there are other approaches to their classification.
In general, the classification of marketing strategies is shown in Figure 3. Let’s consider some of their types in more detail.
According to F. Kotler, the main classification feature for dividing marketing strategies is the market position of the company, and the strategies themselves are divided into:
- leader strategy;
- strategy of the applicant for leadership;
- follower strategy;
- niche strategy.
Depending on the type of product and the market in which it is planned to be sold, a firm’s marketing strategies can be divided into market penetration, market development, product development, and diversification strategies.
According to the stages of the life cycle, a strategy for bringing a product to the market is distinguished, as well as strategies for growth, maturity and decline.
Depending on the state of millet for the company’s products, marketing can be promotional, conversion, demarketing, remarketing or synchromarketing.
Remark 3
As practice shows, companies can often use several marketing strategies at once, combined with each other depending on the goals, features, and conditions for the functioning of the business.
Strategic Marketing Tools
In the arsenal of strategic marketing there are many tools to influence consumers and stimulate sales:
- advertising campaigns;
- sales promotion methods;
- mass propaganda tools;
- individual trade event.
Advertising goods or services requires certain financial investments. It does not involve personal contact with the target audience. An advertisement aims to introduce the company’s products to the consumer.
Sales promotion is short-term, based on the use of various methods to encourage the purchase or purchase of the firm’s services.
The organization of mass propaganda allows you to increase consumer demand for a particular model and product group. It is carried out by specialized agencies and requires appropriate funding. The essence of mass propaganda is the presentation of a product to consumers through magazines and other printed publications, informing the target audience about its benefits and benefits.
An individual sales event involves a verbal presentation of a product in a personal conversation with a client for the purpose of a subsequent sale.
Each organization independently chooses a set of strategic marketing tools for each individual case.
A professional marketer, when choosing suitable strategic marketing tools, is guided by the following principles:
- Focus on promoting innovation. Consider an example. The company has developed a new product with improved performance compared to similar products on the market. But this is not enough to ensure the required level of sales. It is not enough to produce and sell a quality and more perfect product, it is necessary to convey to consumers its value and significance, to show how with the help of this product they can better satisfy their needs. After all, most often people buy those products or brands that they are used to, the properties of which they are well aware of. If you bring to the market a product based on modern technologies, without proper marketing preparation, there is a risk of an extremely low level of sales. This is especially true for products with unique properties that have no competitors in the market.
- Conducting specialized marketing research when releasing new products. To correctly predict the demand and level of sales of new products, you need to analyze the market. Old studies on other product groups will not be enough.
Let’s take an example of how popular companies used various strategic marketing tools in their work to increase the efficiency of their activities.
Now everyone knows about stickers – sticky notes of different sizes, on which you can make notes, and then stick them in a conspicuous place so as not to forget. At the dawn of their appearance, they were not in demand. Consumers did not understand why they needed stickers if they could write down the necessary information on ordinary pieces of paper. So it was until someone decided and bought the first sticky notes. Having appreciated the convenience and practicality of stickers, the consumer began to buy them again and again. What does this example say? In order for customers to understand that they really can’t live without your product anymore, they need to test it in life, this will allow them to appreciate all the benefits of the product.
Another example. A large company decided to launch a new material on the market with unique properties. It was a special fiber, as strong as steel, yet very flexible. The top management of the enterprise was sure that consumers would be delighted with a material with such characteristics. The management believed that the use of the latest technologies and significant financial investments would provide a competitive advantage for their new product and they would easily take a leading position in the market. Therefore, they began to deal with marketing and sales issues after the completion of the production of the first batch of fiber. But everything turned out quite differently. It took a lot of effort to convey to the target audience the uniqueness and significance of the material they developed using various marketing tools.
What conclusions can be drawn from the given examples? It is not enough to offer the market a new product with improved properties and characteristics. It is necessary with the help of strategic marketing to form a demand for a novelty. In this case, you can be sure that the investment will pay off.
Also, before engaging in the production of a new product, you should study the market, assess the potential demand. This will save the financial resources of the enterprise and avoid unforeseen expenses. If, based on the results of market research, you understand that consumers are interested in purchasing your new product, you can safely invest in the production process.
Strategic Marketing Examples
Consider a few basic strategies that allow you to compete with other market players and take a leading position in it.
1. Porter’s competitive strategies
Strategy author Michael Porter created the Five Forces of Competition Model and Strategy Matrix with Choice Alternatives. The matrix is built on two axes:
- target group;
- competitive advantage.
The target audience of a company can be different: wide (meaning the entire market) and narrow (a specific niche). To work with a narrow audience, a focusing strategy is often used. As a result, we get 4 quadrants, each of which contains one of the strategies.
If a company does not stop at some strategy, it is inefficient.
Porter believes that achieving leadership positions can be achieved through two things:
- lower costs (and hence the sale of cheap goods);
- differentiation (creating a unique offer on the market).
The first option is chosen by companies that have the opportunity to sell their goods and at the same time make a profit, despite the low income. In addition, it is important for them to be able to compete on price with other enterprises. Examples include low-cost airlines and the FixPrice inexpensive goods store.
The differentiation strategy is to quickly and actively introduce some new products to the market that are different from everything that is available on it, and constantly update the range of its products. Pricing must be such that profits reliably cover costs. Within the framework of this strategy, for example, Apple and Nike are operating. These companies are considered innovators in their industry, they constantly offer the audience something completely new, products that no one else has analogues.
The focus strategy is based on the needs of the target audience and their satisfaction. At the same time, the company must effectively interact with its customers, thereby favorably standing out against the background of competitors. Examples of companies that use this strategy are any narrowly focused stores (for example, “Being Mom”), magazines, and so on.
2. Ansoff’s growth strategies
Igor Ansoff has developed growth strategies for companies that intend to explore new business horizons. These strategies look like product-market matrices. The company’s products and markets are divided into existing and new ones. At the intersection of the axes of the matrix, 4 quadrants are obtained.
The Coca-Cola Company is one of the prime examples of businesses that use Ansoff’s growth strategy. Moreover, in the process of its development, Coca-Cola used all four growth strategies. For example, the market penetration strategy was implemented in the conduct of promotional events and promotions, the purpose of which was to increase demand for the company’s products. The market development strategy is to launch a diet Coca-Cola aimed at those consumers who want to consume less sugar. The product development strategy is in the release of Coca-Cola with vanilla flavor. Diversification strategy – in the production of new products (high-protein drinks).
3. Tracey and Wiersema’s Leadership Strategies
Researchers identify 3 strategies that can ensure a leading position in their industry:
- manufacturing excellence (production of quality products at a low level of costs);
- competitive advantage of the product (release of the best product on the market);
- proximity to the consumer (the best solutions for consumers).
Rules for evaluating the chosen enterprise development strategy
To develop a company’s strategy, data from theoretical analysis and the ability of specialists to evaluate and use the data obtained using various tools are needed. The most popular is the classic SWOT analysis. This technique allows you to study the internal and external parameters of the organization, identify threats and prospects, build a matrix of advantages and disadvantages, focus on the most promising areas of market development. Usually a SWOT analysis is carried out to develop a strategy for the economic development of an enterprise.
For strategy evaluation to be effective, the following 4 components are required:
1. Motivation: The beginning of work should be preceded by a desire to evaluate the developed strategy or certain indicators.
2. Information: It can be provided in any form (the main thing is that it is convenient for work and allows you to evaluate the strategy itself and the consequences of its practical application). This requires the existence of an effective management information system and a full objective report on the expected results of the developed strategies and the consequences of their implementation. The information provided must be complete so that no questions can arise.
3. Criteria: The evaluation of the strategy is carried out according to clearly established parameters (criteria) corresponding to the following groups:
- Planned. The most significant function of the strategy is harmony with the activities of the enterprise.
- Relationship/suitability. The strategy should provide for possible global changes in the external environment and the response to them.
- Feasibility. The strategy should objectively assess the available resources and not create additional problems.
- Acceptability. The strategy should take into account the desires of certain employees of the enterprise.
- Superiority. The strategy should contribute to the formation or maintenance of superiority over competitors in the chosen niche.
4. Conclusions based on the results of the evaluation: Evaluation is not the completion of work, but information for reflection. Its results should influence the choice of strategy, help determine the most effective one. Appropriate systems must be in place that can use the results of the evaluation to correct actions.
Strategy is a thin thread that connects the real with the desired. A clear detailed plan for the development strategy of the enterprise will help to strengthen it and achieve the desired result.
Let’s look at a few examples. The world-famous Coca-Cola brand is implementing a capacity development strategy. What does it look like in practice? When the manufacturer decided to develop the Russian market, he had to face a serious competitor – Pepsi. An increase in production capacity and the formation of the production basis of Coca-Cola began. In the 90s, a bottling plant for this drink was launched. The brand is gradually being introduced into large, and then into smaller regions. The totality of the measures taken has provided the brand with a serious advantage over its competitors.
Or an enterprise development strategy on the example of the Hilton hotel complex. At some point, there was a glut of the market, and the pompous hotels, in which the company specialized, remained, as they say, out of work. The management of Hilton changed the direction of the company’s work and began work on the construction of hotels designed for consumers with an average income. It was assumed that the expansion of the niche would lead to the emergence of competition. This did not happen due to the successful strategy of the Hilton management, which used the high quality of customer service as a competitive advantage.
Stages of developing an enterprise development strategy
Work on creating an enterprise development strategy involves a comprehensive analysis of a particular business sector and takes place in several stages.
- Market analysis (study of internal and external factors). During marketing research, it is necessary to assess the size of the market and find representatives of your target audience. Also, it is worth conducting a comparative analysis of your product or terms of cooperation with what competitors offer. You need to find out: why customers should prefer your company. Why are you interesting to them? If you know your competitive advantages, you will be able to competently and effectively represent the product and company. Market analysis will be incomplete without monitoring the internal environment, which involves the process of identifying the strengths and weaknesses of the product and company, analyzing the range of goods in order to determine the main positions, etc.
- Formation of the mission (the public goal of the enterprise). Reveals the objectives and key goal of the business. A clear mission statement brings the company out of the shadow of competitors and increases consumer loyalty. It reveals the philosophy of the organization, reflects competitive advantages and areas of activity, management technologies and the target audience. A public goal needs to be adapted to the conditions appropriate to a given market, as it focuses on a specific list of tasks, determines the main stages of development and company values, names the main competitors, etc.
- Setting goals and defining tasks. In this case, the goal means the results that the company plans to achieve for a clearly defined period of work, by solving certain tasks. Tasks are stages of progress. The main requirements for goal setting are achievability, measurability and clarity.
- The choice of an enterprise development strategy , justified by the results of the analysis of the competitiveness of the product and the company.
- Appointment of employees responsible for the implementation of the strategy. The people who are responsible for the successful implementation of the strategy set deadlines and control the progress of the process. Please note that the adoption of the strategy must be confirmed by the appropriate order for the enterprise.
Instructions for implementing the enterprise development strategy
Step number 1. Determining the current state of the company and the dynamics of its development.
This step involves assessing the state of the enterprise at the moment. To obtain the correct data, it is necessary to carry out calculations for a certain planning period, for example, for a year.
For example, in some cases, you can work with the following company activity data during the year:
- Sales of goods: volumes and structure of sales (by groups or business areas), main competitors, profit. The main questions are: what are the fluctuations in sales? Which product from the proposed range was in high demand? Who was the main consumer and competitor? what events in the market preceded certain changes?
- Investment and financial market: realized and borrowed funds, liquidity of assets, main investors and creditors. The main question is: what is the financial potential of the enterprise?
- Labor market: structure of the company in the context of departments, number of staff positions, salary. The main questions are: are the company’s employees competent enough? how to attract new specialists?
- Logistics market: dynamism of prices and availability of supplies of basic resources and services necessary for the life support of the company. The main question is: how did the situation in the market of key providers and suppliers affect the work of the enterprise?
In addition, it is necessary to analyze changes in the legislative framework that affect the company’s activities for the entire list of indicators proposed above.
To make a full-fledged analysis of the enterprise development strategy, you will need the behavior of a SWOT analysis (matrix of threats and opportunities). To simplify the work with the table, we recommend highlighting one significant factor in each cell.
Step #2: A balanced reunion of ambition and opportunity
This step is intended for the formation of 4 options for strategic behavior and decision making. Options are data obtained through analysis of threats, potential and parties named in the matrix. To facilitate the work, we recommend that you make a table in which, along with the advantages, disadvantages and threats of the company, ways to solve problems will be named.
When the options are formed, it is necessary to choose the most suitable one for implementation. The rest will be alternatives that you can use if the selected option does not meet your expectations.
Having made your choice regarding the possible course of events, proceed to the formulation of the goal, indicating specific indicators, the achievement of which will confirm the effectiveness of the chosen strategy for the development of the enterprise. The indicators should match those that were indicated in step number 1.
Step number 3. Revision of the enterprise management structure and the powers of managers.
This step is the preparation of changes in the structure of the company’s management. It is necessary so that, if necessary, it is possible to painlessly introduce new units or job units. The following target adjustments are allowed:
- strengthen the purchasing unit to create a purchasing pool and work directly with suppliers;
- strengthen the sales unit by hiring specialists who will be able to establish new distribution channels for promoting goods;
- strengthen the distribution block to ensure the stability of supplies and enter the network retail.
Required conditions.
1. Creating your own logistics service, which consists of:
- from the purchasing department, derived from the commercial division;
- from the transport department;
- from warehouses allocated by the production service;
- from the distribution department, aimed at solving new problems.
2. Strengthening positions related to sales. It implies the expansion of the range, the introduction of new commodity units for their further promotion and distribution in the retail network.
Step number 4. Measures to eliminate possible risks.
It is impossible to exclude the danger of influence on the effectiveness of the implementation of the enterprise development strategy of undesirable factors that can not only slow down the process, but even bring it to nothing.
During the SWOT analysis of the strategy, these factors must be included in the “Threats and Disadvantages” block. This step is necessary in order to consider ways to neutralize the undesirable influence of these factors. You have to decide how you can ensure the security of the implementation of the chosen strategy.
Step number 5. Adjustment of the strategy.
The enterprise development strategy needs to be revised due to inevitable changes in certain conditions:
- A year later, planned adjustments are made.
- With the emergence of new unique opportunities to realize the potential of the company.
- If there is a deviation from the planned indicators by more than 20% in any direction (this means that when drawing up the strategy, incorrect calculations were made for all or some of the strategic indicators).
- When there is a threat of occurrence (or occurrence) of situations that affect the fundamental factors of the strategy. During the development of a strategy, such situations cannot be predicted.
Remember: enterprise development strategy is both a planning technique and a process of thinking about the business mission.
Efficiency mark
Monitoring the results will determine the correctness of the choice of marketing strategy, as well as control the implementation of the company’s goals. For a fully functional control, it is necessary to analyze the following components:
- Sales of products. Sales channels are analyzed, as well as the demand for brand goods and services among the target audience. Strong and weak markets, new places for the sale of goods, sales volumes are determined. In addition, marketers analyze the factors that affect sales activity.
- The ratio of the volume of orders to the income received. Analysis of these metrics allows you to determine the greatest market effect from the sale of goods. In addition, the average bill for the market and a specific product group is determined.
- Satisfaction of the target segment of customers. Metrics that show the level of demand and sales volumes for the main group of buyers are being studied. According to the 20/80 law, meeting the needs of the target segment brings the maximum benefit to the company.
- Market shares. The ratio of sales volumes to the distribution of goods by market segments is analyzed. This allows you to determine the most significant product categories that bring the main income in a niche.
- Costs and profits. The analysis of metrics helps to find ways to reduce costs, as well as to determine the most popular products on the market by income item.
The 7 Most Successful Types of Market Marketing Strategies
Even at the initial stages of business development, the manager chooses a marketing strategy in accordance with which the company will move on. And if the decision is made correctly, then soon you can notice a positive result.
1. Consolidation in the market
Most often, young enterprises operate under this scheme, which need to establish effective activities in accordance with current market conditions. Firms with rich experience can use it in the development of completely new niches for themselves.
2. Conquest of the market
The goal of this strategy is to increase the number of customers. There are two main methods for this: the first is geographical expansion, in which the sale of goods is organized in other regions. The second is the creation of new markets, associated with attracting the attention of new target groups within the already developed territory.
Consider the success story of Johnson & Johnson as an example. During a certain period of its existence, it faced a real threat of falling sales. Statistical data and demographic projections indicated that the birth rate was steadily declining, which means that the demand for products for children was also declining. Then experts suggested that adults can also use baby shampoo.
After the promotional activities, sales of baby shampoo skyrocketed, moreover, the product became a leader in its industry. So the correct marketing strategy of the company made it possible to form a new class of buyers of the existing product.
Another effective method of conquering the market is to find alternative ways to use the product. Thus, DuPont, which was the first to market nylon, expanded its market for a long time. This material has been used in a variety of applications since the beginning. But every time it seemed that all the options for its application were already known, the company found more and more new opportunities. Soon literally everything was made from this fabric: parachutes, clothes, socks and stockings, carpets and even car tires. So the life cycle of one product was extended over and over again by finding new ways to benefit from it.
Quite often, consumers themselves suggest to enterprises how to use the offered product in a different way. This happened, for example, with vaseline cream. It was originally created to lubricate mechanisms, but then it turned out that with its help you can style your hair and moisturize your skin. After some time, the scope of this product has become almost limitless.
Another firm that has come up with new ways to use its product on a number of occasions is Arm & Hammer, a baking soda maker. The production volumes of this company have always been stable, but sales have been gradually declining for more than a hundred years. Then marketers decided to draw the attention of the audience to the versatility of the product, which was known for a long time, but was not mentioned in any advertisement. The first campaign featured baking soda for the first time as an odor absorber in the refrigerator. A few years later, another one was launched, which told that baking soda could be used to fight grease stains. In both cases, consumption of the product increased after the advertisement was released.
By the way, to expand the market space is not necessary to attract new customers. Equally effective is the method in which consumers are persuaded to use the product more often or in greater quantities. This technique can be traced, for example, in the advertising of goods from Procter & Gamble: the manufacturer claims that if you increase the usual dosage of the care product, its effect will become much more noticeable.
The intensity of the use of the product can be increased in a variety of ways, the main thing is to be smart. Michelin Tire, a French tire manufacturer, was very creative in this process. The point of her unusual marketing strategy was to encourage car owners to drive more long distances and change tires. As part of this plan, an action was carried out related to the development of a list of the best restaurants in France. In the first positions in this list were establishments located in the south of the country. Further, the list was reworked into a guide to make it easier for people in their own cars to find their way. As a result, more and more metropolitan gourmets began to travel to the Riviera or Provence to taste the local cuisine.
3. Market launch of a new product
Offering customers something new is one of the most effective strategies for developing a company, but at the same time one of the most risky. A novelty will bring success to the company only if there is a demand for it or it is easy to call. Therefore, before starting production, it is necessary to conduct appropriate marketing research. At the preparatory stage, specialists also assess possible risks, study the activities of competitors that produce similar products, and compare costs with the expected profit.
When using this strategy, it is important to overcome a kind of barrier that prevents consumers from trying a new product. However, if the properties of the product turn out to be really unusual and customers see its real usefulness, the income can be huge.
Interestingly, a new product does not always involve the use of some innovative technologies: sometimes it is enough just to look at familiar things from a different angle. This is how the authors of such cult things as “Tetris”, “Monopoly” and the Rubik’s Cube took a favorable position in the market.
4. Strength strategy
This marketing strategy is chosen by representatives of medium and large businesses. Strength here refers to the ability that distinguishes large organizations from smaller ones: they can produce large quantities of one product, achieving the lowest possible cost. At the same time, the company receives a number of advantages associated with large-scale research, the formation of a wide distribution network and promotional activities.
In this way, Malboro cigarettes, Electrolux refrigerators, Toyota cars and KamAZ trucks were once promoted on the market.
5. Strategy for working with certain niches
Companies that specialize in the production of non-standard products for a small target audience follow this path. Stable sales and high profits are achieved due to the fact that for a certain circle of buyers this product is indispensable.
Here is a small list of companies that are successfully developing in the market, selling a specialized product:
- Bandog (tire retreading and various truck parking services);
- Ritz-Carlton (a well-known brand in the hotel business);
- eBay (an online auction platform);
- Porsche (sale of sports cars);
- Cannondale (premium mountain bike manufacturer);
- Horizon, AtlanticSoutheast and Comair (an airline that operates flights between 50 and 250 miles);
- Jiffy Lube International (refueling, lubrication and minor car repairs);
- Enterprise Rent-a-Car (the company offers to rent a car while repairing personal vehicles).
6. Adaptation strategy
Most of the local businesses are behaving in accordance with this strategy. A small specialized enterprise is being created, the main advantage of which is flexibility. Such a company can be profitable for a long time due to the fact that it quickly and efficiently satisfies the specific needs of customers in a given region.
7. Strategy of the pioneer
Here, the existing market segment is completely transformed or a fundamentally new one is created. This is not even about improving the product, but about finding revolutionary solutions, the benefits of which cannot be predicted. However, it is precisely because of this risk that many firms have become world famous for creating something truly innovative in the field of engineering, biotechnology, etc.
In many cases, the pioneers can be called business representatives who are the first to distribute an unusual product in a certain region. A great example is the opening of McDonald’s restaurants in Korea and Japan. As franchisors, the world famous brand attracted not just entrepreneurs, but those who had experience in innovative fields, such as microelectronics. This was due to the risky nature of the undertaking: it was simply impossible to predict the reaction of the inhabitants of Asian countries to American fast food. Most of them had no idea what it was, and even the system of cooking on the “conveyor line” was a novelty there.
Advanced Marketing Strategies in Business
positional defense.
Any type of defense is built in accordance with the basic principle, which is to create an ultra-reliable defense of its territory. Between the wars, France built the impregnable Maginot Line to protect the state from a possible encroachment by the Germans. But Germany refused a direct assault and went around. Military strategists are unanimous in their opinion: any static defense is bound to fail.
From a purely defensive standpoint, a company is shortsighted from a marketing standpoint. Consider Henry Ford obsessed with his Model T. As a result of his limited policies, the largest enterprise, with an annual income of more than $1 billion, almost went bankrupt.
Even market leaders such as The Coca-Cola Company, as well as Bayer’s Aspirin, cannot be considered as a guaranteed long-term source of development and income. Coca-Cola currently sells over 50% of all soft drinks in the world. But, despite this, he buys companies specializing in the production of fruit drinks. In this way, it diversifies production. A firm that is attacked by competitors is taking a big risk by reinforcing its existing product.
Flank protection.
The market leader is forced not only to strengthen the borders of the territory, but also to protect its most vulnerable areas. The peculiarity of the defense is that these places can be used to switch to a counterattack and transfer military operations to enemy territory.
Flank defense is especially important if the tactics are well developed. General Motors and Ford did not attach much importance to quality training, making a big mistake. These enterprises did not take the attack of Japanese and European manufacturers seriously, but formally treated the development of compact Vega and Pinto models. Subcompact American-made cars could not be called very high quality. At the same time, they cost about the same as Japanese ones. As a result, the US car market was captured by Japanese manufacturers for a certain time.
Preemptive defensive actions.
If you do not want to take a passive position, strike your opponent with a preemptive strike first. Supporters of this tactic are sure that timely prevention is better than further long-term treatment.
An enterprise can use several methods to create proactive protection. Carry out combat reconnaissance along the entire front: hit one opponent, attack another, frighten the third, thereby knocking them out of their usual working rut.
Later on, you can go on the offensive across the board, following the example of Seiko, which once offered 2,300 watch models to distributors around the world, or launch price attacks, like Texas Instruments.
If the designed actions are successful, then the entrepreneurial marketing strategy of the business, based on preemptive defense, maintains a high level of competitiveness.
The nature of pre-emptive defense is often purely psychological, when the market leader warns opponents against ill-conceived attacks. Suppose a large construction company in Berlin leads the market. Whenever she hears about competitors’ plans to expand operations and lower prices for properties, she leaks her intentions to provide large discounts on the purchase of real estate and the opening of new branches. Opponents learn the information and are afraid to enter into an unequal struggle, and the leading company quietly works on.
Counterattack.
Most of the organizations that occupy the leading positions in the market prefer the tactics of oncoming combat, that is, they respond to attacks with attacks. In their opinion, passive surveillance is not the best solution, and one should not calmly look at falling prices, blitzkriegs of promotions, product improvements, or attacks on distribution channels.
Northwest Airlines has a flight – one of the most cost-effective – from Minneapolis to Atlanta. A rival organization launched an attack by significantly reducing the cost of tickets and organizing an extensive marketing campaign. In response, Northwest cut prices on the Minneapolis-Chicago flight, the most profitable for the competitor company. Fearing to lose the main source of income, the attacking side returned the tickets to their previous cost.
A counterattack often also takes the form of an economic or political blockade of a competitor. The leader can subsidize lower prices for certain categories of goods (usually the most profitable ones) at the expense of other products, or announce the planned release of a new product so that people stop buying from the opponent.
It also happens that the executive or legislature lobbies for actions that are disadvantageous to a competitor.
mobile defense.
This entrepreneurial business marketing strategy is not limited to border protection. It involves spreading the leader’s influence into new territories and forming a base for subsequent attacks or the creation of defensive structures.
To expand the boundaries, the enterprise not only distributes the trademark. It enlarges and diversifies markets, allowing for greater strategic depth and resilience against adversaries.
In accordance with the expansion of the market environment, the company ceases to focus on a particular product. She begins to closely study the needs that satisfy the category of the product as a whole, conducts research and development work throughout the entire technological chain. Thus, enterprises producing gasoline began to call themselves “energy”, which required immersion in related areas of the oil, coal, hydropower, nuclear and chemical industries.
In line with an active market expansion strategy, the company adheres to two key military principles. The first is setting goals (clear and achievable goals). The second is the principle of concentration (it is necessary to concentrate efforts on the weakest areas of the enemy).
It is not necessary to abstractly formulate the task for the enterprise: to run the energy business. Running such a business involves activities aimed at satisfying not one need, but several (heating, lighting, etc.). Due to the multiplicity of goals resulting from a broad interpretation, the enterprise, in preparing for battles, ceases to follow what competitors are doing.
Marketing farsightedness replaces marketing myopia. That is, the firm focuses on the future to the detriment of what is happening in reality.
You can reasonably expand the market. While Armstrong World Industries previously referred to its business as carpeting, it now manufactures decorative home coverings to meet customer needs for aesthetically pleasing interiors using a variety of materials.
Another way to create strategic depth of defense is to diversify the market by invading areas that are not related to each other. When US tobacco manufacturers Reynolds and Philip Morris faced smoking restrictions, they didn’t even try to be on the defensive. Companies went the other way: they began buying up food companies that produce beer, frozen foods and soft drinks.
Forced reduction.
It happens that large-scale enterprises understand that their resources do not allow them to reliably protect themselves from competitors, while the rival, meanwhile, is attacking on several fronts.
In this situation, it is best to resort to a planned reduction (strategically withdraw). We are only talking about leaving territories that are impossible and unjustified to defend. The most optimal solution is to concentrate resources on promising areas.
The planned cuts are resorted to in order to consolidate competitive production and focus on solving clearly formulated tasks.
In recent years, such a marketing strategy has been successfully used by Heinz, General Mills, Del Monte, General Electrics.
Challenger firms favor offensive strategies over leaders.
There are plenty of examples when companies wishing to lead in their industry have successfully won back positions from market leaders. Thus, the position of Canon, which in the mid-70s of the 20th century occupied only 1/10 of Xerox, is now more profitable than that of the former leader in the production of copiers. Toyota today produces more cars than General Motors. Nikon makes more cameras than Leica. British Airways carries more passengers on international flights than the once-leading Pan American.
The challenger is strong in that he sets himself a high goal and directs resources to achieve it. As for the market leader, he does the day-to-day routine work. The most intense competition between competitors and the most intense price wars are in the areas with the highest fixed costs, where significant R&D expenditures are required and primary demand is stable: in the chemical, automotive, paper, metallurgy and industrial sectors.
Now let’s look at competitive offensive marketing strategies in international business used by companies that are claiming leadership.
First of all, offensive strategies differ in goals.
Attack on the position of the market leader. The strategy is associated with rather high risks. However, it can give the best results, especially if the market leader is performing poorly.
First, the applicant must find out what buyers need and how satisfied their needs are. The ideal target for attack is a large market segment that is either not served by the leader, or buyers are not satisfied with the quality of its product or service. Miller’s Lite Beer was extremely popular, as the low-calorie, unsaturated beer appealed to so many people.
An alternative strategy is understood as the capture of the leader segment with the help of a fundamentally new product. For example, Xerox was able to conquer the copier market when it announced its innovative copying technology. Canon took a significant share from Xerox by introducing the audience to portable devices.
An attack on similarly sized competing companies that are not able to fully meet the needs of the market, which are in a difficult financial situation, produce goods that are not in demand due to inflated prices or low technical characteristics.
An attack on small local and regional companies that are in financial difficulty and unable to meet customer requirements. For example, large-scale breweries have been gaining market share mainly through “guppies”—local breweries—with little or no overlap with serious competitors.
Having defined the goals, the company should choose one of five marketing strategies:
Frontal attack.
A frontal offensive is a concentrated strike by the main forces against the strongest positions of the enemy. The one who has more resources and a stronger spirit wins the fight. The rival steps on the product, and on advertising activities, and on prices.
According to the principle of strength, the one with the most customers wins the fight. This principle needs to be adjusted if the opponent has the advantage of a higher density of fire or convenient positions on the battlefield (dug in on commanding heights).
According to the military, the principle that a successful frontal attack implies a threefold superiority of the attacker in manpower and fire power is an axiom. Otherwise, the offensive is a sure road to death.
Relatively recently, a Brazilian razor company tried to dislodge Gillette from its leadership position on all fronts. The company was asked if it would offer the market better blades, to which a negative response followed. Then they asked about the price – will it be lower? No. “Maybe you will hold a grandiose advertising campaign?”. And again no. “Will you give big discounts to wholesalers?”. There will be no discounts. “Do you have a secret weapon?” To which the company finally answered in the affirmative: “Yes, we are striving for victory!”. Needless to say, her aspirations were not crowned with success?
An alternative to a frontal attack can be its modified version – a price war.
Lowering the cost of a product will bring good results if:
- there is no response from the market leader,
- convince consumers that the quality of your product is not worse than that of a competitor, but it costs less.
The second method is based on large financial investments by the attacking side in the modernization of technologies, aimed at reducing production costs and further falling prices. Companies in Japan are especially good at pursuing such a marketing policy.
flank attack.
The bottom line is that the strongest units of the defending side are concentrated along the front in the expected directions of offensive strikes. As a rule, the flanks are weaker fortified, and therefore are excellent objects for the offensive.
War is waged according to the modern principle of concentrating strength against weakness. The advancing side can defiantly attack the opponent in the center of defense in order to draw his most combat-ready units onto himself, and prepare a real breakthrough of the front on the flank.
Such an offensive can be called a manifestation of true marketing intuition. It is usually used by enterprises with limited resources. If the attacking side understands that it will not overcome the opponent in a frontal attack, one can only hope for the ability to maneuver.
Depending on the direction, the flank offensive can be geographical and segmental. The first assumes that the attacking side activates activity in subjects where the enemy is inactive. So, IBM’s competitors, namely Honeywell, have established representative offices in medium and small American cities, where the company was passive.
Segmentation attack implies that the market leader identifies unmet customer needs. This business marketing strategy has been successfully implemented by Japanese automakers, who captured the booming market for fuel-efficient cars, as well as by Miller Brewing, which pioneered the production of low-calorie light beer.
A flanking strategy is tantamount to the ability to identify and satisfy customer needs as a result of shifts in market segments and the development of new strong industries. In contrast to the fierce struggle between enterprises competing with each other on the same territory, a highly effective flanking attack makes it possible to better meet the needs of buyers.
Flanking is the best attack in today’s marketing philosophy that the goal of marketing is to identify and satisfy customer needs. Of course, it is much more effective than the frontal one.
Encirclement attempt.
The company advances in several directions at once: along the front, from the flank, from the rear. The attacking side offers the market the same as the opponent, but a little more so that the buyer cannot refuse. An attempt to surround the enemy is reasonable only if there are significant resources, and a surprise attack will take the opponent by surprise, which will deprive him of the opportunity to defend himself.
bypass maneuver.
Such an entrepreneurial business marketing strategy has the goal of attacking more accessible markets and thus expanding the resource pool of the advancing company. In accordance with the tactics, the production and markets of the enterprise are diversified, new technologies are being introduced.
Companies that want to take leadership positions do not copy a competitor’s product. Instead, they leisurely conduct scientific research, create new technologies and attack the enemy, transfer the front line to territories where they have a more significant advantage.
Guerrilla war.
The essence of the strategy is to carry out numerous attacks by small forces throughout the territory on which the enemy has settled, unexpected and demoralizing attacks from pre-prepared bases using all types of weapons and methods of warfare: selective price reductions, intensive blitz campaigns to promote products, as well as – as an exception – legal shares.
The notion that guerrilla warfare is a strategic alternative for businesses with limited resources is wrong. It’s quite costly to run. In addition, guerrilla battles are, perhaps, a preparation for military operations. There is only one effective way to respond to the aggressor-partisan – to swiftly counterattack him.
Marketing strategy on the example of a specific company
Nestle
Nestle is the largest food manufacturer in the world. The company’s credo is to improve life by producing high quality, balanced and complete food products.
Nestlé was founded in 1866. Fighting infant mortality, Henry Nestle developed Farine Lactee infant formula and organized its industrial production. Since that time, the company has been constantly expanding its product range with new products: now it produces products under 8500 trademarks, known to consumers on every continent.
As part of its development strategy, Nestlé sees its task as making long-term investments. In our country, the company constantly invests in local production, the development of new products that meet the preferences and traditions of Russians, and also processes local raw materials and uses domestic ingredients. This allows you to combine global experience and leadership in the food industry with the needs of the target audience.
Nestle’s strategy aims not only to strengthen and modernize the production infrastructure of enterprises, to introduce innovative technologies. It also aims to increase production efficiency while reducing costs. In addition, the company invests a lot in staff training, advanced training and professionalism of employees, transferring international experience and scientific and technical knowledge to them.
Apple
Without a doubt, Apple is one of the most successful companies today. Apple not only has millions of fans: it has a lot of people imitating it. The company’s products inspire its followers to develop new devices. Microsoft can be mentioned here: it is believed that it became successful largely thanks to Apple.
Apple has always prioritized creating the best customer service in the world. The management believes that the company’s marketing development strategy is very important, and if it is correctly implemented, excellent results can be achieved. No one knows the details of this strategy. Nevertheless, we give a general description of the marketing strategy of the company’s policy:
- Quality. To consistently overtake competitors, Apple has chosen a difficult path. For example, Apple Stores cannot boast of being cheap, they took a lot of time to develop. However, all the costs were justified by the effect obtained. For the first time, consumers could not only look at the product, but also try to work with it. Since Apple products were created friendly to users, they received only a positive impression from the operation of a product that had not yet been purchased. If the company did not strive to improve the quality of its products, then all this would be impossible.
- Consistent promotion. It doesn’t matter which store you buy Apple products from, the quality is always top notch. Such a strategy helps a lot to promote the brand, it allows you to win the loyal attitude of consumers. Stores with excellent design and beautiful interiors were opened in Cupertino. In them at any time you can meet a lot of buyers. The company has achieved that customers have an opinion about their products as premium, with a high status. Buying it, they are sure of its impeccable quality. Even the packaging of the goods is very attractive. When opening the box, customers feel satisfaction and joy from the purchase.
- Strive to satisfy customers. At the heart of the loyalty of customers to the company is satisfaction with their quality of goods and services. Any competent marketer knows how important it is to have loyal customers to strengthen the brand in the market, to build a solid business foundation. If consumers are ready to stand in line and stay in the rain at some time before the start of sales of a new product, this indicates that the company has reached the level of a rock star. The presence of fans, and not just satisfied customers, is a guarantee of the stability of the company for many years. And in a highly competitive environment, this is very important.
Coca-Cola
Coca-cola’s strategy puts stable growth at its core. If the company develops, it will be able to realize its long-term plans and grow further, it will become successful.
Competitive advantages of the company are competent marketing and implementation of innovations. By choosing the right development strategy, Coca-cola has achieved success and become a leader in the soft drink industry. Its brands are known all over the world.
One of its principles is to look for opportunities in everything and everywhere. Here are convincing examples:
- The company’s enterprises located in more than 200 countries of the world produce over 2800 product items. The range includes juices and nectars, drinking water, sports drinks and energy drinks, iced tea, children’s food, kvass. Every day, the company’s research centers are developing new flavors that will give consumers energy, help quench their thirst, and cheer up.
- The company has the largest distribution system of goods, due to which the delivery of products is carried out in the shortest possible time. She tries to anticipate the tastes and satisfy the desires of customers.
- A few years ago, Coca-Cola invested $40 million to build the world’s largest PET bottle-to-bottle remanufacturing facility in America.
- The company’s specialists have achieved a reduction in the amount of water used for production needs by more than 20%. This made it possible to save more than 160 billion liters of water.
bmw
BMW’s success is based on two interrelated factors. BMW is characterized by a higher level of development than other car manufacturers. Often, companies move their production to countries with low wages, where employees who do not have the necessary qualifications work on assembly, or they are completely replaced by robots. At BMW factories, highly qualified specialists are involved in assembly work.
Like many German companies, BMW takes advantage of the German educational system. Its peculiarity is to provide the opportunity to acquire basic technical skills of activity to almost all citizens. That is why the reputation of the company, which is a typical representative of the German industry, is high.
Nevertheless, it cannot be said that the achievements were given to BMW easily, and that they are unambiguous. Previously, the company was engaged in the production of aircraft engines, and in the summer of 1945 it did not have a sales market, equipment … The times of the German economic miracle were also difficult for BMW. She did not have any definite prospects, but nevertheless began to produce cars of various models (from small cars to limousines), and in 1959 she became practically bankrupt.
Many believed that the only chance to survive was to agree to the takeover of Mercedes. However, BMW management was able to find an influential shareholder – Herbert Quandt, who praised the company’s internal advantages. The situation was reversed by the company’s identification of the target market in which the implementation of opportunities was most effective (the market for universal cars).
In 1961, the BMW 1500 rolled off the assembly line and gained a reputation for being a top quality car. Young businessmen with money paid attention to the brand. BMW has become one of the most profitable companies thanks to the combination of a production system that gives a certain advantage in the target market segment, high quality that has gained worldwide recognition, and a brand that emphasizes the goals and aspirations of car owners.
Nike
This brand is so famous that we can talk about the exceptional results of the company in the use of marketing. The company has developed a strategy to provide the highest quality products to famous athletes, and this has changed the idea of sports marketing forever. Each year, Nike dedicates hundreds of millions of dollars from its budget, paying for the endorsement of its brand by famous personalities, organizing promotional events, and issuing a lot of catchy advertising. Consumers associate the company with the names of sports stars. It doesn’t matter what sport you are into. With a high degree of probability, we can say that your favorite athlete is a Nike client.
The company cares not only about the mental, but also about the physical condition of its customers. She sees her task as not only increasing sales, but also developing sports for the common good. For example, she runs an advertising campaign “If you know how to play”, her goal is to attract women to engage in various sports. It demonstrates the benefits that girls and women get from sports activities. Nike also invests in the development of sports that are less popular, although they receive much less profit from this. This reinforces the notion that Nike doesn’t just make high-quality sportswear, but also cares about its customers.
7 Best Practices for Developing a Marketing Business Strategy
- Take your time when forming budget marketing strategies. It is on their basis that a marketing plan is created.
- If there is even a small opportunity, try to capture market share, as it is always much cheaper and easier to do than to create a new one.
- Don’t turn strategies into action guides. Strategies should talk about goals in general, indicate the main direction of activity.
- Don’t focus on 1-2 marketing areas. Remember: marketing strategies (business) should indicate in which direction to work in all areas important for the implementation of the plan.
- Avoid complex and long descriptions. Use the most simple language that focuses on one idea. They should not be like strategic plans. Write simple descriptions, indicate the direction to follow when creating plans.
- Avoid stagnation in strategic thinking. Otherwise, you will be far behind your competitors.
- Don’t expect immediate success from most market research and testing programs. Most new ideas fail. To win back positions from competitors, sometimes both a few and one, but very successful idea are enough.
Source: grizli.club materials