Marketing Strategies: Definition, Elements, Types, Steps, Factors

Everything you need to know about marketing strategies. Stated in simple terms, marketing strategy of a firm is the complete and unbeatable plan or instrument designed specifically for attaining the marketing objectives of the firm.

The marketing objectives will tell us where the firm wants to go; the marketing strategy will provide the design for getting there.

Learn about:-

1. Definitions of Marketing Strategies 2. Elements of Marketing Strategies 3. Types 4. Steps 5. Factors Affecting

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6. Planning, Implementation, Control and Evaluation 7. Building Marketing Strategies 8. Customer and Producer Under Competition 9. International Marketing Strategies.

Marketing Strategies: Definitions, Elements, Types, Steps, Factors Affecting and International Marketing Strategies

Contents:

Definitions of Marketing Strategies
Elements of Marketing Strategies
Types of Marketing Strategies
Steps in Competitive Marketing Strategies
Factors Affecting Overall Marketing Strategies
Planning, Implementation, Control and Evaluation of Marketing Strategies
Building Marketing Strategy
Customer and Producer Under Competition
International Marketing Strategies

Marketing Strategies – Definitions Provided by Michael E.Porter, Cundiff, Still, Govoni and Philip Kotler

Stated in simple terms, marketing strategy of a firm is the complete and unbeatable plan or instrument designed specifically for attaining the marketing objectives of the firm. The marketing objectives will tell us where the firm wants to go; the marketing strategy will provide the design for getting there.

According to Michael E. Porter, “Marketing strategy has mainly one aim to cope with competition …. There are five major and vital forces that decide the nature and intensity of competition the threat of new entrants, bargaining power of customers, and bargaining power of suppliers, threat of substitute products and the jockeying among the existing contestants…. The collective strength of these forces determines the ultimate profit potential of an industry. And the strategist’s goal is to find a position in the industry where his company can best defend itself against these forces or can influence them in his company’s favour…. Strategy can be viewed as building defence against the competitive forces.”

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The marketing of goods and services goes all over the world round the clock. Millions of marketing activities takes place every day involving individuals, groups, business and government. These activities are parts of the marketing processes. Marketing management’s job is to ensure that these activities are co-ordinated into an integrated system. This requires an overall marketing strategy, a plan that optimizes marketing inputs to achieve maximum business surplus.

Marketing strategy means the game plan’ that the market will use in attaining the objectives of the business.

“Basically, a company’s overall marketing strategy is its competitive posture in the market place. Formulating an overall marketing strategy requires integration of all dimensions of the marketing effort”. — Cundiff, Still and Govoni

Again, Prof. Philip Kotler of the North-Western University defines marketing strategy as follows:

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“Marketing strategy is the basic approach that the business unit will use to attain its goals and which comprises of elaborate decisions (strategies) on largest markets, market positioning and mix and marketing expenditure allocation. Moreover, the marketer should take care of the other two strategic aspects, viz., expected environment and competitive conditions while determining the marketing strategy”. — Prof. Philip Kotler

Once deciding over the game plan, the next task of the marketer is to develop or elaborate each element of the marketing strategy. The marketer’s first task is to choose a potential market and identify its needs and patterns, after which it formulates strategies for each controllable (product, place, price and promotion).

And, it is the management which manipulates the controllable in terms of the non-controllable in such a way which can meet both the target market’s needs and wants and helps to attain the company’s overall objectives. Now to perform these tasks managements streamlined product market, distribution, promotion and pricing strategies into an overall marketing strategy.

The marketing department (or, the marketer) while establishing and implementing an overall marketing strategy mainly take care in identifying opportunities to serve the target markets in such a way which frustrates (Thwarts) other competitors efforts to take the business away on a profitable basis.

Finally, the need and importance of an overall marketing strategy varies, with the competitive setting. A small change with respect to any controllable or non-controllable calls for the re-evaluation of the entire marketing strategy.

Marketing Strategies – 5 Important Elements

The different elements in the marketing mix must be handled in a unified manner.

When one element of the mix is juggled with, the probable impact on the other elements of the mix must be taken into account. Sometimes, the solution to a particular marketing problem may seemingly lie in one particular element of the marketing mix.

But an in-depth analysis will show that the trouble really lies elsewhere. An integrated handling of all the elements of the marketing mix is thus essential.

(i) The Marketing Mix Cannot be Static:

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It is also evident that the marketing mix is a dynamic entity. It is not as though a firm can take complete rest, once it has assembled and put through its marketing mix. At the same time, the firm cannot afford to keep changing its marketing mix every other day. Basically, strategy has to be understood and used as the opposite of ‘ad hoc responses’ to the changes in the environment, competition, consumer tastes and technology.

And basically, the marketing mix decisions of a firm are strategic decisions with long-term goals and a long-term framework. All the same, they have to be modified and manipulated, based on short- term requirements.

For, quite often, short-term events do represent vital changes from the marketing point of view and these changes have to be tackled through appropriate alterations in the marketing mix, if the firm has to achieve its objectives in the market place.

In as much as the basic task of marketing is to successfully anticipate and meet the changes in the market, the marketing mix has got to be a flexible and dynamic entity. In other words, the marketing mix has both long-term and short- term ramifications.

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The overall strategy will normally remain intact over a longer term; but within that framework, adjustments and tactical manoeuvres will take place constantly.

(ii) The Resources of the Firm is an Important Consideration in the Decisions on Marketing Mix:

It is also evident that the marketing mix decisions depend very much on the resources available with the firm and the resources apportioned to the particular business unit. Mere ambition or wish will not bring about a marketing mix; only resources in terms of money, materials and men can make it.

As such, what shape a marketing mix will take and to what intensity each of the elements in the mix could be employed will depend on the resources the resources of the entire corporation and the resources that are committed to each of its business units.

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(iii) Marketing Mix Decisions Become All the More Complex in Multi-Business Firms:

In a multi-business firm, though a distinct marketing mix is usually developed for every brand/product, this mix does not operate in isolation. For, the strategy underlying the particular marketing mix for the particular brand has a much larger role. Strategy operates broadly at four distinct levels—the corporate level, the business unit level, the product line level and the brand level.

This linkage exists not only because of the resource dimension i.e., the interrelated nature of resource allocation, but also because of the objectives dimension i.e., the interrelated nature of the objectives of the enterprise and those of the constituent business units.

Though individual marketing mix decisions are taken by the marketing men in charge of individual brands/product lines, every marketing mix decision is ultimately intended to serve the common business goals of the firm. Its very genesis lies in the common strategy and common objectives of the firm.

Moreover, in the case of a multi-business corporation, the resource implication on marketing mix decision is also of added significance because the multi-business corporation has to decide carefully the sub-allocation of its resources over its various business, products and markets.

(iv) The Marketing Mix of the Firm is the Most Visible Part of the Marketing Strategy of the Firm:

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Another important and interesting fact regarding the marketing mix is that it is the most visible part’ of the marketing strategy of the firm. In fact, to the world outside, the marketing mix and the marketing strategy of the firm are synonymous. After all, the marketing strategy of any firm is seldom visible as such to the outside world.

It manifests itself only through the marketing mix of the firm i.e., through what the firm actually does with its product, promotion, price and channel. Whether it is the customer or the competition or the trade, all of them come to have an idea of the marketing strategy of the firm only after the firm finalised its marketing mix and puts it in the market in the form of a marketing programme.

In other words, the marketing mix of a firm is actually the market place manifestation of the marketing strategy of the firm. The understanding that the marketing mix is the only visible part of the marketing strategy is very essential for formulating an effective marketing mix or marketing strategy.

For, the essence of an effective marketing strategy or marketing mix is its capacity to counter the marketing strategies and marketing mixes of the competitors. And the strategies of the competitors could be countered only through a careful study of their marketing mix which is the sole visible part of their strategies.

(v) Gaining Competitive Consciousness and Scoring over Competition is the Purpose and Substance of Marketing Strategy:

The main aim of marketing strategy is to cope with competition. Undoubtedly, it is competition that necessitates strategy; or, more precisely, coping with competition is the main aim of strategy. By the same token, it can also be said that in a marketing environment that is devoid of competition, the scope and need for marketing strategies will be far less.

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While the various basic functions of marketing, especially functions like distribution and pricing would still be required to be carried out in such a market, there will be nothing strategic about this task in such a market. It is the presence of competition that primarily renders the marketing task strategic in character.

Only in a competitive market, does a firm have to necessarily move out, study its competitors, and move its policies, people and products in a combat like action i.e., in a strategic manner. Strategic action will help the firm acquire a clear competitive consciousness.

Since business growth is achieved primarily through such a competitive consciousness, strategy becomes fundamental to a business steeped in competition. In fact, it will be no ex-aggregation to say that scoring over competition is the essence of marketing strategy. Marketing strategy essentially represents the competitive posture of the firm in the market.

Marketing Strategies – Types: Building Marketing Strategies, Strategies of Customer and Producer Mix under Competition, Branding Strategies and a Few Other Strategies

Type # 1. Building Marketing Strategies:

Strategy is an approach in consonance with the goal of the company to be achieved. The strategies are formulated for short and long run according to the goals of the company. The goals indicate what a company wants to achieve in a given environment and time frame; the strategy answers how to get there. Every business must develop a tailor made strategy for achieving its goals. The corporate business strategies should possess three generic points on overall cost leadership, differentiation and focus.

The managerial strategy in business should be to reduce the cost of production and distribution. The company cultivates those strengths that will give competitive advantage in one or more ways. The companies seeking quality leadership must make or buy the best components put them together expertly after careful examination and so on. The company must plan all its operations with specific focus on one or more test segments in the beginning and then go for a larger operational area.

The company should build strategy for the following functional areas:

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i. Market segmentation.

ii. Positioning of goods and services.

iii. Product line.

iv. Price.

v. Physical distribution and outlets.

vi. Sales force.

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vii. Service and advertising.

viii. Sales promotion.

ix. Research and development, and

x. Market research.

The strategy planning should be specific in different stages of the product lifecycle. In launching the new products at the introductory stage the high or low levels for each functional variable such as – price, promotion, distribution, product quality etc., may be set. In the introductory stage, when the product is new to the market it has to be backed by the attractive promotional schemes.

The high price of the product backed by the high promotional strategy fetches rapid response while the low price level with high promotional strategy would help the product to penetrate the market quickly. On the contrary if the promotional activities are low and the price of the product is high, the marketing strategy will have slow skimming of the market and slow penetration strategy will have low product price as well as the low promotion. The market segmentation strategy also needs to be built by the company in the introductory stage of the product lifecycle.

A company may develop the strategy to place product/brand 1 in all markets and move the product/brand 2 in the next stage to the market 2 and 3 and place the product/brand 3 in market 2 and decide to fill the gaps later. During the growth stage of the product lifecycle the company will have rapid sales and the company should build effective marketing strategies to sustain the competition and establish the brand image in the market.

The company should think of the following strategies for marketing their goods and services in the growth stage:

i. Company should strive on improving the quality of the product.

ii. Add new attributes to the product and improve the presentation styles.

iii. Company should add new models and flanker products.

iv. Identify new market segments.

v. Identify new marketing channels and enhance distribution coverage.

vi. Company must pursue the product-performance advertising and give away the strategy of product awareness advertising strategy.

vii. Prices of the goods and services to be kept low to attract the price-sensitive buyers.

These strategies would help the company to strengthen its competitive position. However, the company may face the tradeoff between high market share and the high current profit. It would be a wise business decision to look for the higher market share as the company can make up its current profit in the stage of maturity. Many companies usually abandon weaker products and look for diversification of the activities and functions for better profits.

The company should carefully determine the sales volume and fix targets. The sales volume may be computed multiplying the number of user with usage rate per user. The marketing strategy should also include promotional schemes for converting the non-users into the user stream and increase the usage rate of the existing customers. The most challenging strategy that any company should think of is making the competitors out or winning their customers.

The product differentiation strategy may be built in order to improve the quality of the existing products by adding new features and attributes to it. The company should also aim at the style improvement by increasing the aesthetic appeals of the product. The advantage of the style strategy would reflect in conferring a unique market identity and help in winning a loyal following.

However, a change in style usually requires discounting the old style and company may averse risk in losing customers who liked the old style. The company needs to develop strategies for all the variables of marketing-mix in favour of customers and channels. A company faces a number of tasks and decisions to handle the market at the decline stage. Hence the company must consider the strategy building as a prime task and consider the following issues that help in effective strategy formulation.

i. Identifying the weak products.

ii. Augmenting investments to strengthen its competitive base.

iii. Risk management and keeping optimum resource base till regaining market.

iv. Quick harvest or investments, and

v. Right decision to drop the products from the product-line based on its performance in the market.

If the company is to choose between the harvesting and investing strategies, it should understand clearly that harvesting calls for gradual reduction in the goods and services or business costs while attempting for maintaining the sales. The cost reduction may be in various factors like research and development, plant and machinery, product quality, size of the organisation including sales force, marginal services and promotional expenditure. Harvesting is a difficult task to be executed in many conditions for the company.

Type # 2. Strategies of Customer and Producer Mix under Competition:

Alike customer matrix the produce matrix also needs to be constructed for developing the competitive strategy. In this process the matrix may be plotted using the information on the marketing effectiveness of the company and the unit cost of the products on the X and Y axis respectively. The effectiveness of the firm may be identified on the basis of operational competence and system competence.

If the company has to build up the competitive strategy for the mass market, it is necessary to improve the effectiveness and lower the unit cost of the product. The company may move its position of the product to the quadrant where the performance of the company as well as the unit cost also remains high due to improved technological intervention and marketing interventions.

However, in a situation where the unit cost of the product and performance of the organizations both are low, the growth rate would slow down and the strategies need to be built up to revive the growth first and then by sustaining the competition. In case of high unit cost of the product and low performance of the organization, none of the competitive strategies would prove worth due to non-viability of economy of scale.

The company has to make mainly decision on either diversifying its activities or paying more concentration for strengthening its market base. In this decision process the company has to consider some of the important variables like spillover effects in terms of supply backlog, product improvement, packaging, price sensitivity and operational problems including cost of distribution and margin spread. The company should also look into the market performance of product, effective consumer response in terms of sales and the convenience of the consumers in terms of access to the product.

The company may follow the checklist of activities in building the competitive strategy as stated below:

i. Scanning of the environment.

ii. Identifying relevant economic inevitable and rigid factors.

iii. Identifying the key trends of major competing brands.

iv. Political, economic, socio-cultural and technological factors affecting the product market.

v. Conduct an activity cost analysis for the upstream and downstream linkages with the company.

vi. Identify the core competence of the company.

vii. Look into the data bank of the company’s operational and human resource variables.

viii. Mission and key strategies.

ix. Culture and leadership style.

x. Competitive position.

xi. Adjustment and acquaintance with the Government policies.

xii. Determine levels of cost in the production and operations Price levels and consumer segments.

xiii. Strength of demand for the product.

xiv. Opportunities for expansion of product-line and market.

xv. Prepare contingency plans of marketing.

The process of building competitive strategy takes substantial time and needs to be attended through the careful analysis. It is essential that the action required to start implementation of the selected strategy needs to be prioritised and documented. Strategy is a not a task of one point of time. It should be a continuous process.

Type # 3. Branding Strategies:

The company has to assess the strength and weaknesses of the existing brands in the market before taking the branding decision for their product. The manufacturing company may have several options on brand sponsorship. The product may be launched in the market as the brand of manufacturer which is also known as national brand, a distributor brand as happens in case of edible oils, sugar, processed grains and in many products which needs re-packing, or licensed brand names.

The brand category may be chosen from the brand sponsorship in terms of national brand, private brand or licensed brand. Deciding upon the category of brand an appropriate brand name may be selected. The brand names may reflect individual name, blanket family name for all products, separate family names for all products or company trademark. The brand name should be easy-to pronounce, short and convey proper meaning in the language of the country/region.

The brand name should be such that it suggests some use value or attribute of the product and should be distinct from the existing market brands. The brand extension in the same company can be explained as product line. It has been observed that majority of new product activities consist of line extension.

The company may have four basic options in brand strategy – line extension in which the existing brand can be extended to new attributes in the existing product category, brand extension which enables the company to introduce new brand names to new product categories, multi-brands may be used if new brand names are provided to the same category of products and finally the new brands are those where new brand names are used for the new product categories.

A Company may decide to use an existing brand name to launch a product in a new category. The Honda uses its brand name for two wheelers, four wheeler and stroke engines. Likewise the Hyatt practises the brand extension strategy by using its brand name in every hotel variation such as – Hyatt’s Resorts, Hyatt’s Suits and Park Hyatt etc. This strategy makes the customers understand the reputation of the company and the quality of services.

The brand extension would be more beneficial if it serves to increase the sales of existing as well as the new products of the company. Sometimes the companies feel that multi-brands help in establishing different features to generate appeal to different buying motives. The example may be cited of the multi-brand strategy of Proctor and Gamble, which has introduced as many as nine different brands of detergents. The multi-brands may always gain small market share as compared to the solo brands and in particular these brands may not be able to generate sustainable sales revenue.

Type # 4. Relative Market Strategies:

This category of marketing strategies may include the market leader strategies, total market expansion strategies etc. The company can develop the market leader strategies in reference to the price, new products, distribution coverage and promotional intensity. The market leader may be admired by other companies in the market who acknowledge its dominance.

The market leader is a point of challenge and imitation to the competing companies. The market leader company must keep constant vigil on the followers and should enjoy the legal monopoly in the market. It is common for the leading firms to have the challenges from the competing firms who watch closely to find the weaknesses of the leading firm.

The dominant firms always wants to remain first in the market in order to expand its area of operation, protect its existing market share, aggressing marketing campaigns and increase the market size continuously. The advantage of the total market expansion is generally tapped by the dominant company. The company may look for new user segments for expanding the market applying one of the best strategies listed out as under –

i. Market penetration strategy.

ii. New user strategy.

iii. Geographical expansion strategy.

One of the greatest successes in developing the new segment of users was accomplished by Enkey Foods Ltd., of Mumbai with its natural orange juice as ready to serve beverage (RTS) branded as Onjus a nourishing health drink. The company became more concerned with the health awareness among the class of people and their inclination to change the food habits.

The market survey showed that the customers are interested to have balanced and low calorie breakfast but are not able to find such stuff in the food market. The Enkey foods Ltd., developed an advertising campaign aimed at children and adults for depicting the need for strong body and balanced food Markets can be expanded through discovering and promoting new uses for the product.

The Vaseline petroleum jelly was introduced in the market as a lubricant in machine shops during the initial days and over the years users have increased its perceived use value and now it is being used as a skin ointment, a healing agent and also for hair dressing. The company should also play a defensive role to protect its business territory, image and market share from the competitors. Hence a company should develop the defensive marketing strategies after it passes through the stage of growth.

The market leaders may improve their profitability by increasing their market share. The key variables of profitability include market share, product quality, promotion, distribution performance, price, customer value and others. The decision on increasing the market share will have three major implications.

Firstly, it may provoke distrust action and the competitors may consider it as a monopolist move. Secondly, the increased market share may not necessarily boost-up the profit level as profit tends to fall after certain level of penetration in the market. However, the optimal market share should be considered by the company. Finally, the company might pursue the wrong marketing-mix strategy in their bid to achieve higher market share which would not help them in increasing profit.

Type # 5. Market Challenger Strategies:

The strategic objectives of the company must be defined by the market challenger company. It should have clearly defined objectives, firm decisions and attainable objectives for becoming a challenger company in the market. The strategic objective may be to increase the market share and lead to the territorial leadership in the business. The company which aims to be the challenger in the market should decide either to subdue to the competitor or reduce its share.

An aggressive company may choose to attack the market leader and weak financial based companies and small and regional companies that are not performing well due to under financing. The attack strategy needs to be developed with clear objectives.

The following strategies may be pursued for attacks by the challenger company:

i. Frontal or Head on attack.

ii. Flanking attack.

iii. Encirclement attack.

iv. Bypass attack.

The challenger company should understand the strengths and weaknesses of the company to be attacked and the action areas should be the price, value added distribution, advertisement and point of purchase promotion, packaging, personal selling and the like. The flank attack may be directed geographically and segmentally. The underperforming areas of the opponent may be sighted and penetrated to kill its brand in the region.

The segmental strategy of flanking attack is to identify the need spread of customers and serve the areas which are under served and isolated. The gaps in supply may be filled and level of satisfaction may be raised in those segments. In some cases it may be essential for the challenger company to discover the latent needs of the customer and attempt to satisfy them in order to be the leader in the segment. The encirclement attack on the defending companies in the region may be aimed to encroach over some of the market segment through the comprehensive promotional schemes.

It is necessary for the aggressor to offer all that the defender is offering and some times more to satisfy the customers and channels in the region. The bypass attack is most indirect of all market assault strategies. The company following this strategy may consider for diversification of products and services, new geographical markets and new technologies for process and product improvement.

Type # 6. Market Follower Strategy:

The company which would like to choose the market follower strategy can come along the market leader, copy or improve the products for launching. The follower company may not overtake the leader but can achieve significant profits as it would be saving the expenses on R&D and innovation process. It has been observed in the competitive market that the runner-up companies feel more safe economically to be the follower of the leader than posing a challenge to the same.

The followers generally attempt to lower the prices, improve upon the customer services to draw the customers of the market leader. A market follower should be acquainted with the strategies to hold the existing customers and win significant share of the new customers and bring distinctive advantages to the target segments. The followers need to play in the market looking for safe positions as there always remains a threat from the challenger to call an attack on them. The market follower company should always keep its cost of production low and product quality and services high.

Such companies should try to scan for new opportunities and enter the new segment whenever possible. The followers should be active in making appropriate decisions and continuously define their growth path which does not provoke retaliation among the competitors. The cloning strategy of the follower company emulates the leader’s products, logistics, promotional schemes and other important functional strategies. It lives parasitically on the market leader’s built-in network and investments.

The donor company also attempts to knock-off the products and services of the market leader. Another category of Follower Company is imitator which attempts to copy some things from the leader but tries to maintain product differentiation in terms of packaging, promotional schemes, pricing etc.

Adaptor companies may take the goods and services of the leader and adapt them. Such companies also improve the goods and services of the market leader. The adaptor company avoids the segment confrontation with the market leader and sells the goods and services outside the vicinity of the market area of the leader.

Marketing Strategies – 2 Major Steps in Competitive Marketing Strategies: Competitor Analysis and Competitive Strategies

Step # 1. Competitor Analysis:

The process of identifying key competitors, assessing their objectives, strategies, strengths and weaknesses and reaction patterns and selecting which competitors to attack or avoid.

Steps in analyzing competitors:

(a) Identifying the company’s competitors:

i. Competitors may be other companies offering similar products and services to the same customer at similar prices.

ii. The company may define competitors as all firms making the same products or class of products.

iii. Competitor might include all companies that compete for the same customer spending.

(b) Assessing competitor’s objectives, strategies, strengths and weaknesses and reaction patterns:

i. The more than one firm’s strategy resembles another firm’s strategy the more the two firms compete.

ii. Recently a growing number of companies have turned to Benchmarking.

Benchmarking is:

“The process of comparing the company’s products and processes to those of competitors or leading firms in other industries to find ways to improve quality and performance.”

Knowing how major competitors react gives the company clues on how best to attack competitors or how best to defend the company’s current positions.

(c) Selecting which competitor to attack or avoid:

i. A company selects its major competitors through prior decisions on customer targets, distribution channels and marketing mix strategy.

ii. The management must then decide which competitors to compete against most vigorously.

iii. Most companies prefer to aim at weak competitors.

iv. Companies may decide to compete with close competitors (Those that resemble them most)

v. At the same time company may want to avoid trying to destroy a close competitors.

For example, if it does so then small competitors sell off to larger ones and it will have to deal with strong large competitors.

Benefits from Competitors:

i. Competitors may help increase total demand.

ii. They may share the costs of market and product development and help to legitimise new technologies.

iii. They may serve less attractive segments or lead to more product differentiation.

iv. They lower the antitrust risk and improve bargaining power versus labour or regulators.

Step # 2. Competitive Strategies:

After identifying and evaluating its major competitors the company must design broad competitive marketing strategies by which it can gain competitive advantage by offering superior customer value.

(i) Basic Competitive Strategies:

Three winning strategies suggested by Michael Porter are:

(a) Overall Cost Leadership:

Here the company works hard to achieve the lowest cost of production and distribution so that it can price lower than its competitors and win a large market share.

(b) Differentiation:

Here the company concentrates on creating a highly differentiated product line and marketing programme so that it comes across as the class leader in the industry. Most customers would prefer to own its brand if its price is not too high.

(c) Focus:

Here the company focuses its effort on servicing a few market segments well rather than going after the whole market.

(d) Operational Excellence:

The company provides superior value by leading its industry in price and convenience. It works to reduce costs and to create a lean and efficient value delivery system. It serves customers who want reliable, good quality products or services but who want them easily and at low cost.

(e) Customer Intimacy:

The company provides superior value by precisely segmenting its market and then tailoring its products or services to match exactly with the needs of targeted customers.

It specialises in satisfying unique customer needs through a close relationship with and intimate knowledge of the customer.

It builds detailed customer databases for segmenting and targeting and empowers those who are willing to respond quickly to customer needs. It serves customers who are willing to pay a premium to get precisely what they want and it will do almost anything to build longer customer loyalty and to capture lifetime value.

(f) Product Leadership:

The company provides superior value by offering a continual stream of leading edge products or services that make their own and competing product obsolete.

It is open to new ideas and relentlessly pursues new solutions and works to reduce cycle times so that it can get new products to market quickly. It serves customers who want state-of-the-art products and services, regardless of the costs in terms of price or convenience.

(ii) Competitive Position in the Target Market:

(a) Market Leader:

The firm in an industry with the largest market share is the market leader. It usually leads other firms in price changes, new product introductions, distribution, coverage and promotion spending.

(b) Market Challengers:

A runner up firm in an industry that is fighting hard to increase its market share.

(c) Market Follower:

A runner up firm in an industry that wants to hold its share without rocking the boat.

(d) Market Niches:

A firm in an industry that serves small segments that other firms over looks or ignore.

Marketing Strategies – Factors Affecting: Competitor’s Counter Moves, Synergistic Potential, Substitutability, Elasticity of Marketing Inputs and a Few Other Factors

(i) Competitors’ Counter-Moves:

This differs with various marketing inputs. Most competitors can easily and quickly match or otherwise adjust to price changes. However, they often find it difficult to follow or to retaliate against product innovations. This explains why many marketers seek to gain differential advantage over their competitors by varying product characteristics as altering promotion than prices.

(ii) Synergistic Potential:

Marketing inputs are capable of being, mutually reinforcing or having synergistic potential and marketer should consider this working towards an optimum overall marketing strategy.

Displays and advertisements can be made mutually reinforcing since the display repeats the advertising efforts message at a time when the consumer is in an outlet where the product is one sale.

Product inputs and marketing channel inputs can be mutually reinforcing, depending upon the effectiveness with which they are integrated.

(iii) Substitutability:

The selection of marketing inputs is also affected by their degree of substitutability. It is important to know the extent to which one type of input can be substituted for another type in as much as the nature of marketing objectives such as that of returning a certain level of profit presents a decision-maker from making unlimited use of all inputs.

A marketing strategist must ask himself. Consideration of such substitutability helps in determining which inputs to include and which to emphasize in the overall marketing strategy.

(iv) Diversity in Productivity Levels of various Marketing Inputs:

The marketers should recognise that not all inputs have equal productivity; some inputs need a minimum level of use before they begin to have measurable effects. An advertising message must often be repeated several times before consumers become aware of it.

The lower cost per consumer contact of radio, magazines and billboards often make it possible with a limited budget to present a much stronger impact on consumers.

(v) Elasticity of Marketing Inputs:

Different marketing inputs are elastic and they influence the demand of the product. The marketing manager must recognise that effect on the product. For example, a manufacturer determines different prices for different customers or for different areas only on the basis of varying elasticity of demand. More often, the prices for wholesalers retailers and consumers are different in almost all the markets.

The marketing manager must consider all the above factors in mind while formulating the overall marketing strategy. The strategy must also be elastic so as to incorporate all the strategic factors of the competitors as and when required.

Marketing Strategies – Planning, Implementation, Control and Evaluation of Marketing Strategies

The marketing plan guides implementation and control, indicating marketing objectives and the strategy and tactics for accomplishing the objectives. The marketing strategy consists of perspective plan and action plan. The perspective plan is developed with long-term objectives while the action plan is formed by phasing out the activities delineated in the long-term perspective plan in order to monitor the annual progress of activities and achieve the annual targets.

The relationships between marketing strategy and the action plan. The planning cycle is continuous. Plans are developed, implemented, evaluated, and revised to keep the marketing strategy on target. Since a strategy typically extends beyond one year, the action plan is used to guide short-term marketing activities. The planning process is a series of action plans guided by the marketing strategy.

An annual planning period is necessary since several of the activities shown require action within 12 months or less and budgets require annual planning. In the large companies the product managers are responsible for coordinating the preparation of plans. A planning workshop is conducted midyear for the kickoff of the next year’s plans. Top management and product- research, sales, and finance managers attend the workshop. The firm’s advertising agency account manager also participates in the workshop.

The current year’s plans are reviewed and each product manager presents the proposed marketing plan for the next year. The workshop members analyze each plan and suggest changes. Because the requested budget may exceed available funds, priorities are placed on major budget components. Each product manager must provide strong support for requested funds.

The same group meets again in 90 days to review the revised plans. In his meeting, the plans are finalized and approved for implementation. Each product manager is responsible for coordinating and implementing the plan. Progress is reviewed throughout the plan year, and the plan is revised when necessary.

A good implementation process spells out the activities to be implemented, who is responsible for implementation, the time and location of implementation, and how implementation will be achieved. Sales representatives should target all accounts currently using a competitive product.

A plan should be developed to convert 5% of these accounts to the company brand during the year. Account listings will be prepared and distributed by product management. The marketing plan can be used to identify the organizational units and managers that are responsible for implemental various activities in the plan.

Deadlines indicate the time available for implementation. The sales manager is responsible for implementation of the plan through the sales force. Planners and implementers often have different strengths and weaknesses. An effective planner may not be always good at implementing plans.

One way to deal with difficulty in the implementation of the marketing plan is to administer the balanced scorecard methods. This process is a formalized management control system that implements a given business-unit strategy by means of activities across four areas: financial, customer, internal business process, and learning and growth. The balanced scorecard provides the framework to minimize such an occurrence by encouraging implementation of a common strategy that is communicated and coordinated across all major areas of the organization.

The ‘balanced’ component of the balanced scorecard reflects the need to consider how all areas of the organization function together to achieve a common goal of strategy implementation. The major benefit of the balanced scorecard is that a frequently aggregate, broadly defined strategy is translated into very specific actions.

Through execution and monitoring these actions, management can assess the success of the strategy and, if necessary, modify and adjust it. Another major benefit of the balanced scorecard methodology is that it is feasible for any strategy at the business-unit level and provides a means to link performance evaluation to strategy implementation.

Strategic evaluation requires analysing information to gauge performance and take the actions necessary to keep results on track. Managers need to monitor performance continually and, when necessary, revise their strategies according to changing conditions. Strategic evaluation, the last stage in the marketing strategy process, is really the starting point.

Strategic marketing planning requires information from ongoing monitoring and evaluation. Evaluation consumes a high proportion of marketing executives’ time and energy. Evaluation may be done to find new opportunities or avoid threats, keep performance in line with management’s expectations, and to solve specific problems that exist.

Areas of evaluation include environmental scanning, product- market analysis, brand equity analysis, marketing-program evaluation, and gauging the effectiveness of specific marketing-mix components such as advertising.

Marketing Strategies – Building Marketing Strategy: Market Segmentation, Positioning of Goods and Services, Product Line, Price, Physical Distribution and a Few Others

Every business must develop a tailor-made strategy for achieving its goals. The corporate business strategies should possess three generic points on overall cost leadership, differentiation and focus. The managerial strategy in business should be to reduce the cost of production and distribution. The company cultivates the strengths that will give competitive advantage in one or more benefits.

The companies seeking quality leadership must make or buy the best components, put together expertly after careful examination and so on. The company must plan all its operations with specific focus on one or more test segments in the beginning and then go for a larger operational area.

The company should build strategy for the following functional areas:

i. Market segmentation,

ii. Positioning of goods and services,

iii. Product line,

iv. Price,

v. Physical distribution and outlets,

vi. Sales force,

vii. Service and advertising,

viii. Sales promotion,

ix. Research and development, and

x. Market research.

The strategy planning should be specific in different stages of the product life cycle. In launching the new products at the introductory stage the high or low levels for each functional variable such as price, promotion, distribution, product quality, etc., may be set. In the introductory stage when the product is new to the market it has to be backed by the attractive promotional schemes.

The market segmentation strategy also needs to be built by the company in the introductory stage of the product life cycle. A company may develop the strategy to place product/brand 1 in all markets and move the product/brand 2 in the next stage to the market 2 and 3 and place the product/brand 3 in market 2 and decide to fill the gaps later.

During the growth stage of the product life cycle the company will have rapid sales and the company should build effective marketing strategies to sustain the competition and establish the brand image in the market.

While making the strategies for marketing their goods and services in the growth stage, the company should:

i. Strive on improving the quality of the product

ii. Add new attributes to the product and improve the presentation styles

iii. Add new models and flanker products

iv. Identify new market segments

v. Identify new marketing channels and enhance distribution coverage

vi. Pursue the product-performance advertising and give away the strategy of product-awareness advertising strategy

vii. Keep the prices of the goods and services low in order to attract the price-sensitive buyers. These strategies would help the company to strengthen its competitive position.

However, the company may face the trade-off between high market share and the high current profit. It would be a wise business decision to look for the higher market share as the company can make-up its current profit in the stage of maturity. Many companies usually abandon weaker products and look for diversification of the activities and functions for better profits.

The company should carefully determine the sales volume and fixed targets. The sales volume may be computed by multiplying the number of user with usage rate per user. The marketing strategy should also include promotional schemes for converting the non-users into the user stream and increase the usage rate of the existing customers.

The advantage of the style strategy would reflect in conferring a unique market identity and help in winning the loyal customers. However, a change in style usually requires discounting the old style and company may take adverse risk in loosing customers who liked the old style. The company needs to develop strategies for all the variables of the marketing mix in favor of customers and channels. A company faces a number of tasks and decisions to handle the market at the decline stage.

Hence, the company must consider the strategy building as a prime task and consider the following issues that help in effective strategy formulation:

i. Identifying the weak products,

ii. Augmenting investments to strengthen its competitive base,

iii. Risk management and keeping optimum resource base till regaining market,

iv. Quick harvest of investments, and

v. Right decision to drop the products from the product line based on its performance in the market.

If the company is to choose between the harvesting and divesting strategies it should understand clearly that harvesting the class for gradual reduction in the goods and services or business costs while attempting for maintaining the sales. The cost reduction may be in various factors like research and development, plant and machinery, product quality, size of the organization including sales force, marginal services and promotional expenditure. Harvesting is a difficult task to be executed in many conditions for the company.

It is a must for any company to do thorough environment mapping before identifying the market segment and launching the product. The market information on the identical and similar products, size of business of the competing companies, distribution strategy, price spread, product line and presentation patterns need to be analyzed. The kingpin of marketing is the customer and all the companies develop their strategies to compete for the customers.

Hence it is necessary to evaluate the effective consumer response for the all the competing products in the market for any new brand entry. The companies must know that no captive market can be developed for any product or brand for a long time. The customer for any brand or product analyses the value for money by comparing the perceived use value and perceived price of the product or service.

Arthur Little D observed that a company will occupy one of the following six competitive positions in the target market:

i. The company will occupy the dominant position in the market controlling the behavior of other competitors and presents wide choices of strategic options.

ii. The company enjoys the strong base by taking independent decisions regardless of the competitor’s actions and maintains the long-term relationship with the customers and its business partners.

iii. The company finds itself in favorable conditions to exploit the market support and build long run strategies to intensify or expand the market operations.

iv. The company performs at a sufficiently satisfactory level to warrant continuing in the business but the company does not find sufficient opportunity to improve its position. Hence tenability is another competitive position that a company may face.

v. The company finds it self-weak and gets unsatisfactory performance among the competitors.

vi. The company finds it in a position of non-viability with unsatisfactory performance and no opportunity for improvement.

It has been observed that translating the competitive strategy principles into practice might be difficult for some companies that have entered afresh in the market. However, it can be achieved through structured approach and assessing the moves of the competitors. The construction of consumer matrix is an important exercise and needs to be taken up initially by analyzing a single demand segment.

On building up the appropriate strategy and positioning the goods and services, the analysis can be extended to the other segments as discussed under:

i. Identify Segments:

The identification of the segments should be made on the basis of the buyer needs and a reasonably unique buyer should be first identified. The other groups of buyers having similar needs may be segmented with the representative buyer of the unique segment. The other segments may be formulated on the same lines. The segment demarcation needs to be done carefully to avoid duplication of need bases. Such segment demarcation should be on the congruity of the buyers’ needs or perceived use value attributes.

ii. PUV Dimensions:

This segment formation should be based on the data analysis of primary survey by asking the consumers as which product attributes they prefer to assess the product. On understanding the basic needs of the consumers the dimensions of the value perceived by the consumers may be established. The survey should also rank the major dimensions of the PUV of consumers by allocating proper weights.

iii. Performance of the Company:

The performance of the company needs to be assessed in reference to its product line existing in the markets, potential products and the competing products.

iv. Matrix Plotting:

On analysis of the competitors, product positions plotting have to be done on the matrix by combining the PUV analysis with appropriate price information.

v. Common Segments:

The analysis of one segment may be extended across the other segments of demand. If the common critical PUV dimensions are found, developing competitive strategy would be possible by addressing the core dimensions. The multi-segment approach to the competitive strategy can be built if a few critical dimensions of PUV are found common across the products of the competitors.

Marketing Strategies – Customer and Producer Under Competition

Like customer matrix, the produce matrix also needs to be constructed for developing the competitive strategy. In this process the matrix may be plotted using the information on the marketing effectiveness of the company and the unit cost of the products on the X and Y axis respectively. The effectiveness of the firm may be identified on the basis of operational competence and system competence.

The operational competence refers to the technical competence including production, packaging, distribution, quality control and information management. The cost efficiency largely depends on the technical competence of the company. The system competence includes value assurance, value enhancement and innovation. The company has to build up the competitive strategy for the mass market it is necessary to improve the effectiveness and lower the unit cost of the product.

The company may move its position of the product to the quadrant where the effectiveness of the company as well as the unit cost remains high due to improved technological intervention and marketing interventions. However, in a situation where the unit cost of the product and effectiveness of the organizations both are low the growth rate would slow down and the strategies need to be build up to revive the growth first and then sustaining the competition.

In case of high unit cost of the product and low effectiveness of the organization none of the competitive strategies would prove worth due to non-viability of economy of scale. The company has to make decision mainly on either diversifying its activities or paying more concentration for strengthening its market base.

In this decision process the company has to consider some of the important variables like spillover effects in terms of supply backlog, product improvement, packaging, price sensitivity and operational problems including cost of distribution and margin spread. The company should also look into the market performance of product, effective consumer response in terms of sales and the convenience of the consumers in terms of access to the product.

The company may follow the checklist of activities in building the competitive strategy as stated below:

i. Scanning of environment.

ii. Identifying relevant economic inevitable and rigid factors.

iii. Identifying the key trends of major competing brands.

iv. Political, economic, socio-cultural and technological factors affecting the product market.

v. Conduct an activity cost analysis for the up-stream and down-stream linkages with the company.

vi. Identify the core competence of the company.

vii. Look into the data bank of the company’s operational and human resource variables.

viii. Mission and key strategies.

ix. Culture and leadership style.

x. Competitive position.

xi. Adjustment and acquaintance with the government policies.

xii. Determine levels of cost in the production and operations.

xiii. Price levels and consumer segments.

xiv. Strength of demand for the product.

xv. Opportunities for expansion of product line and market.

xvi. Prepare contingency plans of marketing.

The process of building competitive strategy takes substantial time and need to be attended through a careful analysis. It is essential that the action required to start implementation of the selected strategy needs to be prioritized and documented. Strategy is a not a task of one point of time. It should be a continuous process.

Marketing Strategies – International Marketing Strategies: Global, Multi-Domestic and Hybrid Marketing Strategies

The three strategies possible in international marketing are as given below:

1. Global

2. Multi-domestic

3. Hybrid.

Global strategy is one where the firms have a single international business strategy. For instance, Mercedes car Benz has a single marketing plan for all its markets. Lever Brothers, however, have different products, brands and marketing tactics for each country. This is called multi-domestic strategy. A combination of the two is hybrid strategy.

Firms which have a universally accepted product, like Coke and Toyota, keep a single global marketing policy, as the product remains the same the world over. However, firms with products where the tastes of countries differ use the multi-domestic policy. They change the product specifications and pricing policy and advertise according to local conditions and tastes. FMCG firms like Unilever and Proctor & Gamble follow this strategy.

Hybrid is the most popular strategy, where firms have a uniform product, but change advertising and promotion to suit local conditions. Even Coke changes its advertising and promotion to suit the country, while keeping the product same universally.

Levis Jeans are workers’ clothes in the USA, while in France, Italy and India they are a fashion statement. Mercedes car is used as taxi in Germany, while it is considered a status symbol in the rest of the world.

If value is added in upstream activities like commercial aircraft it is global strategy. If the value is added downstream like prepared food it is multi-domestic strategy.

In most countries, foreign firms can get competitive advantage by having good relations with the government.