Business Dictionary define Marketing Strategy as "an organization's strategy that combines all of its marketing goals into one comprehensive plan. A good marketing strategy should be drawn from market research and focus on the right product mix in order to achieve the maximum profit potential and sustain the business. The marketing strategy is the foundation of a marketing plan.
Understanding Marketing Strategy
A marketing strategy is all of a company’s marketing goals and objectives combined into a single comprehensive plan. Business executives draw a successful marketing strategy from market research. They also focus on the right product mix so that they can get the most profit. A good marketing strategy helps companies identify their best customers. It also helps them understand consumers’ needs. With a good strategy, it is possible to implement the most effective marketing methods. A good marketing strategy should be drawn from market research and focus on the right product mix in order to achieve the maximum profit potential and sustain the business.
Marketing strategies are long-term, forward-looking approaches to planning. Their fundamental goal is to achieve a competitive advantage. When a company has an edge over a rival or rivals in the provision of a product or service, it has a competitive advantage. Mercedes, for example, has a competitive advantage over other luxury car-makers because its vehicles maintain their value. Mercedes did not obtain this competitive advantage overnight or because it was lucky. It was part of the company’s long-term strategy. Specifically, part of its marketing strategy.
Academics continue to debate the precise meaning of marketing strategy, therefore multiple definitions exist. The following quotes help crystallize the nuances of (modern) marketing strategy:
- "The sole purpose of marketing is to sell more to more people, more often and at higher prices." (Sergio Zyman, marketing executive and former Coca-Cola and JC Penney marketer)
- "Marketing is no longer about the stuff that you make, but about the stories you tell." (Seth Godin, former business executive and entrepreneur)
- "The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself." (Peter Drucker, credited as founding modern management)
- “Marketing’s job is never done. It’s about perpetual motion. We must continue to innovate every day.” (former vice chair and chief marketing officer, GE)
- "Take two ideas and put them together to make one new idea. After all, what is a Snuggie but the mutation of a blanket and a robe?" (Jim Kukral, speaker and author of "Attention!")
Key elements of a Successful Marketing Strategy
One of the key elements of a successful marketing strategy is the acknowledgement that your existing and potential customers will fall into particular groups or segments, characterised by their "needs". Identifying these groups and their needs through market research, and then addressing them more successfully than your competitors, should be the focus of your strategy.
You can then create a marketing strategy that makes the most of your strengths and matches them to the needs of the customers you want to target. For example, if a particular group of customers is looking for quality first and foremost, then any marketing activity aimed at them should draw attention to the high quality service you can provide.
Once this has been completed, decide on the best marketing activity that will ensure your target market know about the products or services you offer, and why they meet their needs.
This could be achieved through various forms of advertising, exhibitions, public relations initiatives, Internet activity and by creating an effective "point of sale" strategy if you rely on others to actually sell your products. Limit your activities to those methods you think will work best, avoiding spreading your budget too thinly.
A key element often overlooked is that of monitoring and evaluating how effective your strategy has been. This control element not only helps you see how the strategy is performing in practice, it can also help inform your future marketing strategy. A simple device is to ask each new customer how they heard about your business.
Once you have decided on your marketing strategy, draw up a marketing plan to set out how you plan to execute and evaluate the success of that strategy. The plan should be constantly reviewed so it can respond quickly to changes in customer needs and attitudes in your industry, and in the broader economic climate.
Creating a Marketing Strategy
Here is a seven-step process to create a marketing strategy:
- Goals: Clearly identify what you want to achieve, how and when. How much of a commitment will it take in time, money and people? Your goals can be basic: higher sales. But they can be more granular: media coverage, conference invitations, marketing qualified leads, sales qualified leads, etc. Well-defined goals create targets so marketing can be tracked, measured and improved.
- Target Audiences: Focus on who matters to you. Who’s your ideal or core customer? What are their needs and interests? Why would they buy from you? That’s step one. Then, create buyer personas to identify different types of customers. Within a target audience of 25-to-35 women, for example, there are consumers with different needs and interests: single women living in a large city, married women, and women with children. They’re interested in the same product but embrace it for different reasons.
- Competitive Analysis: Do a situational analysis to evaluate your marketing and how it is performing. Look for ways to optimize or change approaches, channels, campaigns, and activities. Explore the competitive landscape. Who keeps you awake at night? What companies have no profile but interesting products? Who gets talked about on social media and covered by the media? A competitive analysis identifies challenges and threats before they become problems.
- Channels: Discover and focus on the most effective channels to engage, educate, entertain and nurture customers. Marketing success happens when a fast-growing company focuses on a few channels or activities rather than spreading themselves too thin.
- Tactics: Develop a tactical implementation plan to guide who does what, when and how, as well as tools, processes, and best practices. Create an editorial calendar to structure marketing activities — social media, content marketing, advertising, conferences, etc. As important, develop a budget to establish how much money will be spent on different channels.
- Measure/Optimize: Measure how marketing is performing against well-defined KPIs and benchmarks. Then, explore ways to optimize to improve results and performance. If a particular channel or activity isn’t working, tweak or change what you’re doing, or reach into the “Soon” bucket to take a different approach. If a particular channel or activity isn’t working, tweak or change what you’re doing, or reach into the “Soon” bucket to take a different approach.
These seven steps will deliver a marketing strategy that will provide your marketing with structure and focus. It allows everyone involved to know where you want to go and the most important elements. That said, your strategic needs evolve and adapt as your product changes, customers ask for different things and new competitors emerge.
Types of Marketing Strategy
- Interactive Marketing Strategy: Interactive marketing refers to a marketing strategy that encourages active participation between the consumer and the marketing campaign. This term often refers to a fast-growing shift from one-sided customer interaction to a two-sided conversation. Interactive marketing is becoming a trend because of customers’ demand for a better online experience and improved internet technology.
- Customer-Centric: Customers want a company to know who they are as individuals, not as a demographic or just a number. For instance, every time a customer logs into a company’s website, the person may want to see his or her name displayed along with product interests and communication preferences. Interactive marketing gives customers the power to receive and give up-to-date, minute-to-minute feedback on a particular business or product. When you think about interactive marketing, a great example is Amazon. Amazon is known as the biggest trailblazer in this marketing area.
- Saving Customer Serch Data: The company collects and saves information about customers' searching and buying behavior. It also remembers customers’ names, provides suggested reading sections for book searches, suggested products based on past shopping behavior, and consistently asks for the customers feedback on items they have purchased.
- Digital Marketing Strategy: Digital marketing is a marketing campaign that takes place using a digital platform. Digital defines the medium used to deliver the campaign. Digital marketing could easily be considered and explained as a “push/pull” marketing technique. If you’re not familiar with marketing campaigns, it’s your advertising blitz to sell your service or product.
- Digital Push: The “push” part allows you to get in touch with consumers and inspire them to buy your service or product. There are a lot of ways to achieve the push. You can use technologies such as instant messaging, text messaging, content marketing, podcasting, mobile marketing, and email. Also, there are many marketing tools you can use like pay-per-click, search engine optimization (SEO), and even online banner advertising.
- Digital Pull: The “pull” technique occurs when consumers take the initiative to locate your business via an online search via digital marketing. For instance, they may perform a search on the internet using your name. The customers then establish a link, via your website, where they can easily contact your company or keep track of your business. For example, they may sign up for text messages, streaming video, emails, newsletters, or podcasts on your website. So, you’re pulling in, or attracting, customers.
- Internet or Online Marketing: Internet or online marketing is a marketing campaign that requires an internet connection. This marketing technique allows you to reach customers, conduct research, and sell your product or services over the internet. For example, you can promote your company’s message. The definition varies according to how it’s used. A home business person may refer to this marketing as selling over the internet. However, if you have a website, you may refer to it as blogging—writing articles or placing banner advertisements on other websites to drive traffic to your site. It’s important to note there are many terms for internet marketing like web marketing, online marketing, and website promotion.
Market Entry Strategy
Marketing strategies may differ depending on the unique situation of the individual business. According to Lieberman and Montgomery, every entrant into a market – whether it is new or not – is classified under a Market Pioneer, Close Follower or a Late follower
- Pioneers: Market pioneers are known to often open a new market to consumers based off a major innovation. They emphasise these product developments, and in a significant number of cases, studies have shown that early entrants – or pioneers – into a market have serious market-share advantages above all those who enter later. Pioneers have the first-mover advantage, and in order to have this advantage, business’ must ensure they have at least one or more of three primary sources: Technological Leadership, Preemption of Assets or Buyer Switching Costs. Technological Leadership means gaining an advantage through either Research and Development or the “learning curve”. This lets a business use the research and development stage as a key point of selling due to primary research of a new or developed product. Preemption of Assets can help gain an advantage through acquiring scarce assets within a certain market, allowing the first-mover to be able to have control of existing assets rather than those that are created through new technology. Thus allowing pre-existing information to be used and a lower risk when first entering a new market. By being a first entrant, it is easy to avoid higher switching costs compared to later entrants. For example, those who enter later would have to invest more expenditure in order to encourage customers away from early entrants. However, while Market Pioneers may have the “highest probability of engaging in product development” and lower switching costs, to have the first-mover advantage, it can be more expensive due to product innovation being more costly than product imitation. It has been found that while Pioneers in both consumer goods and industrial markets have gained “significant sales advantages”, they incur larger disadvantages cost-wise.
- Close followers: Being a Market Pioneer can, more often than not, attract entrepreneurs and/or investors depending on the benefits of the market. If there is an upside potential and the ability to have a stable market share, many businesses would start to follow in the footsteps of these pioneers. These are more commonly known as Close Followers. These entrants into the market can also be seen as challengers to the Market Pioneers and the Late Followers. This is because early followers are more than likely to invest a significant amount in Product Research and Development than later entrants. By doing this, it allows businesses to find weaknesses in the products produced before, thus leading to improvements and expansion on the aforementioned product. Therefore, it could also lead to customer preference, which is essential in market success. Due to the nature of early followers and the research time being later than Market Pioneers, different development strategies are used as opposed to those who entered the market in the beginning, and the same is applied to those who are Late Followers in the market. By having a different strategy, it allows the followers to create their own unique selling point and perhaps target a different audience in comparison to that of the Market Pioneers. Early following into a market can often be encouraged by an established business’ product that is “threatened or has industry-specific supporting assets”.
- Late Entrants: Those who follow after the Close Followers are known as the Late Entrants. While being a Late Entrant can seem very daunting, there are some perks to being a latecomer. For example, Late Entrants have the ability to learn from those who are already in the market or have previously entered. Late Followers have the advantage of learning from their early competitors and improving the benefits or reducing the total costs. This allows them to create a strategy that could essentially mean gaining market share and most importantly, staying in the market. In addition to this, markets evolve, leading to consumers wanting improvements and advancements on products. Late Followers have the advantage of catching the shifts in customer needs and wants towards the products. When bearing in mind customer preference, customer value has a significant influence. Customer value means taking into account the investment of customers as well as the brand or product. It is created through the “perceptions of benefits” and the “total cost of ownership”. On the other hand, if the needs and wants of consumers have only slightly altered, Late Followers could have a cost advantage over early entrants due to the use of product imitation. However, if a business is switching markets, this could take the cost advantage away due to the expense of changing markets for the business. Late Entry into a market does not necessarily mean there is a disadvantage when it comes to market share, it depends on how the marketing mix is adopted and the performance of the business. If the marketing mix is not used correctly – despite the entrant time – the business will gain little to no advantages, potentially missing out on a significant opportunity.
Importance of Marketing Strategy
Marketing strategy provides an organization an edge over it’s competitors.
- Strategy helps in developing goods and services with best profit making potential.
- Marketing strategy helps in discovering the areas affected by organizational growth and thereby helps in creating an organizational plan to cater to the customer needs.
- It helps in fixing the right price for organization’s goods and services based on information collected by market research.
- Strategy ensures effective departmental co-ordination.
- It helps an organization to make optimum utilization of its resources so as to provide a sales message to it’s target market.
- A marketing strategy helps to fix the advertising budget in advance, and it also develops a method which determines the scope of the plan, i.e., it determines the revenue generated by the advertising plan.
Marketing Strategy - Mistakes to Avoid
- Striving for a 'One-Size-Fits-All' Approach: This is perhaps the greatest mistake businesses make when implementing a marketing strategy. As mentioned multiple times in the article, the business that fails to recognize market dynamics and adapt its marketing strategy to meet market changes is setting itself for failure.
- Putting All Eggs in One Basket: Unless you have clear-cut data on your hands to back your marketing decision, you should be careful to spend all your advertising dollars on one or two promotional items (like tradeshows and direct mail). For the most part, your marketing budget should try to incorporate as many channels are possible (email, podcasts, print ads, and marketing etc.).
- Failure to Track Results: Finally, remember that marketing is only measured by results. When you execute promotional campaigns but fail to track results, you will never be able to spot weakness and hence, there will be no improvement. Marketing is an organic process and closely follows the scientific mindset of trial and error. You find out what works and shun the rest. In the future, all investment follows the strategy that works, and hence you get to save money in the long run.
Marketing Mix 4P's 5P's
Marketing Operations Management (MOM)
Marketing Resource Management (MRM)
4S Web Marketing Mix Model
5C's of Marketing Strategy
7 Ps of Marketing
Word of Mouth Marketing
Trade Marketing Mix
Direct Response Marketing
Integrated Marketing Communications
- Defining Marketing Strategy Business Dictionary
- What is a Marketing Strategy? MBN
- Nuances of What Marking Strategy Inventopedia
- Key elements of a Successful Marketing Strategy Canada Business Network
- Seven-Step Process to Create a Marketing Strategy Mark Evans
- The Different Types of Marketing Strategies TheBalanceMB
- Market Entry Strategy Wikipedia
- Importance of Marketing Strategy MSG
- What Mistakes Should be Avoided While Implementing a Marketing Strategy? PestAnalysis.Com