Marketing strategy

Marketing strategy is the goal of increasing sales and

achieving a sustainable competitive advantage.[1] Marketing strategy includes all basic and long-term activities in
the eld of marketing that deal with the analysis of the
strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company
and its marketing objectives.[2]

Marketing Mix Modeling is often used to help determine

the optimal marketing budget and how to allocate across
the marketing mix to achieve these strategic goals. Moreover, such models can help allocate spend across a portfolio of brands and manage brands to create value.

2 Diversity of Strategies

Marketing strategies may dier depending on the unique

situation of the individual business. However, there are
1 Developing a marketing strategy a number of ways of categorizing some generic strategies. A brief description of the most common categorizMarketing strategies serve as the fundamental underpin- ing schemes is presented below:
ning of marketing plans designed to ll market needs Strategies based on market dominance - In this
and reach marketing objectives.[3] Plans and objectives scheme, rms are classied based on their market share or
are generally tested for measurable results. Commonly, dominance of an industry. Typically there are four types
marketing strategies are developed as multi-year plans, of market dominance strategies:
with a tactical plan detailing specic actions to be accomplished in the current year. Time horizons covered by the
Leader
marketing plan vary by company, by industry, and by na Challenger
tion, however, time horizons are becoming shorter as the
[4]
speed of change in the environment increases. Mar Follower
keting strategies are dynamic and interactive. They are
Nicher
partially planned and partially unplanned. See strategy
dynamics. Marketing strategy needs to take a long-term
view, and tools such as customer lifetime value models According to Shaw, Eric (2012). Marketing Strategy:
can be very powerful in helping to simulate the eects of From the Origin of the Concept to the Development of a
strategy on acquisition, revenue per customer and churn Conceptual Framework. Journal of Historical Research
in Marketing., there is a framework for marketing straterate.
gies.
Marketing strategy involves careful and precise scanning of the internal and external environments.[5] In Market introduction strategies
ternal environmental factors include the marketing mix
and marketing mix modeling, plus performance analysis
At introduction, the marketing strategist has two princiand strategic constraints.[6] External environmental facple strategies to choose from: penetration or niche (47).
tors include customer analysis, competitor analysis, target
market analysis, as well as evaluation of any elements of
Market growth strategies
the technological, economic, cultural or political/legal environment likely to impact success.[4] A key component
In the early growth stage, the marketing manager may
of marketing strategy is often to keep marketing in line
choose from two additional strategic alternatives: segwith a companys overarching mission statement.[7]
ment expansion (Smith, Anso) or brand expansion (BorOnce a thorough environmental scan is complete, a den, Anso, Kerin and Peterson, 1978)" (48).
strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the op Market maturity strategies
timal marketing mix to attain these goals, and detail
implementation.[4] A nal step in developing a marketing In maturity, sales growth slows, stabilizes and starts to
strategy is to create a plan to monitor progress and a set decline. In early maturity, it is common to employ a
of contingencies if problems arise in the implementation maintenance strategy (BCG), where the rm maintains
of the plan.
or holds a stable marketing mix (48).
1

7
Market decline strategies

At some point the decline in sales approaches and then

begins to exceed costs. And not just accounting costs,
there are hidden costs as well; as Kotler (1965, p. 109)
observed: 'No nancial accounting can adequately convey all the hidden costs.' At some point, with declining
sales and rising costs, a harvesting strategy becomes unprotable and a divesting strategy necessary (49).

Early marketing strategy concepts

GROWTH STRATEGIES

4 Corporate strategy concepts

Andrews SWOT analysis
Although widely used in marketing strategy, SWOT
(also known as TOWS) Analysis originated in corporate
strategy. The SWOT concept, if not the acronym, is the
work of Kenneth R. Andrews who is credited with writing the text portion of the classic: Business Policy: Text
and Cases (Learned et al., 1965)" (41).
Ansos growth strategies

The most well-known, and least often attributed, aspect

of Igor Ansos Growth Strategies in the marketing literature is the term 'product-market.' The product-market
Bordens marketing mix
concept results from Anso juxtaposing new and existing products with new and existing markets in a two by
In his classic Harvard Business Review (HBR) article of two matrix (41-42).
the marketing mix, Borden (1964) credits James Culliton in 1948 with describing the marketing executive as a
'decider' and a 'mixer of ingredients.' This led Borden, in
5 Porters generic strategies
the early 1950s, to the insight that what this mixer of ingredients was deciding upon was a 'marketing mix'" (34).
Porter generic strategies strategy on the dimensions
of strategic scope and strategic strength. Strategic scope
Smiths dierentiation and segmentation strategies
refers to the market penetration while strategic strength
refers to the rms sustainable competitive advantage.
In product dierentiation, according to Smith (1956, p. The generic strategy framework (porter 1984) comprises
5), a rm tries 'bending the will of demand to the will two alternatives each with two alternative scopes. These
of supply.' That is, distinguishing or dierentiating some are Dierentiation and low-cost leadership each with a diaspect(s) of its marketing mix from those of competitors, mension of Focus-broad or narrow.
in a mass market or large segment, where customer preferences are relatively homogeneous (or heterogeneity is
Product dierentiation
ignored, Hunt, 2011, p. 80), in an attempt to shift its ag Cost leadership
gregate demand curve to the left (greater quantity sold for
a given price) and make it more inelastic (less amenable
Market segmentation
to substitutes). With segmentation, a rm recognizes that
it faces multiple demand curves, because customer preferences are heterogeneous, and focuses on serving one or
6 Innovation strategies
more specic target segments within the overall market
(35).
Innovation strategies deal with the rms rate of the new
product development and business model innovation. It
Deans skimming and penetration strategies
asks whether the company is on the cutting edge of technology and business innovation. There are three types:
With skimming, a rm introduces a product with a high
price and after milking the least price sensitive segment,
Pioneers
gradually reduces price, in a stepwise fashion, tapping ef Close followers
fective demand at each price level. With penetration pricing a rm continues its initial low price from introduction
Late followers
to rapidly capture sales and market share, but with lower
prot margins than skimming (37).
Forresters product life cycle (PLC)"

7 Growth strategies

In this scheme we ask the question, How should the rm

The PLC does not oer marketing strategies, per se; grow?". There are a number of dierent ways of answerrather it provides an overarching framework from which ing that question, but the most common gives four anto choose among various strategic alternatives (38).
swers:

3
Horizontal integration

9 Strategic models

Vertical integration

Marketing participants often employ strategic models and

tools to analyze marketing decisions. When beginning a
strategic analysis, the 3Cs model can be employed to get
a broad understanding of the strategic environment. An
Anso Matrix is also often used to convey an organizations strategic positioning of their marketing mix. The
4Ps can then be utilized to form a marketing plan to pursue a dened strategy. Marketing Mix Modeling is often used to simulate dierent strategic exing go the 4Ps.
Customer lifetime value models can help simulate longterm eects of changing the 4Ps, e.g.; visualize the multiyear impact on acquisition, churn rate, and protability of
changes to pricing. However, 4Ps have been expanded to
7 or 8Ps to address the dierent nature of services.

Diversication
Intensication
These ways of growth are termed as organic growth. Horizontal growth is whereby a rm grows towards acquiring
other businesses that are in the same line of business for
example a clothing retail outlet acquiring a food outlet.
The two are in the retail establishments and their integration lead to expansion. Vertical integration can be forward or backward. Forward integration is whereby a rm
grows towards its customers for example a food manufacturing rm acquiring a food outlet. Backward integration is whereby a rm grows towards its source of supply
for example a food outlet acquiring a food manufacturing
outlet.

There are many companies, especially those in the consumer package goods (CPG) market, that adopt the theory of running their business centered around consumer,
shopper and retailer needs. Their marketing departments spend quality time looking for growth opportunities in their categories by identifying relevant insights
(both mindsets and behaviors) on their target consumers,
8 Raymond Miles Strategy Cate- shoppers and retail partners. These growth opportunities
emerge from changes in market trends, segment dynamgories
ics changing and also internal brand or operational business challenges. The marketing team can then prioritize
In 2003, Raymond Miles proposed a more detailed these growth opportunities and begin to develop stratescheme using the categories:Miles, Raymond (2003). gies to exploit the opportunities that could include new or
Organizational Strategy, Structure, and Process. Stanford: adapted products, services as well as changes to the 7Ps.
Stanford University Press. ISBN 0-8047-4840-3.
Prospector

10 Real-life marketing

Analyzer

Real-life marketing primarily revolves around the application of a great deal of common-sense; dealing with a
Defender
limited number of factors, in an environment of imperfect information and limited resources complicated by
uncertainty and tight timescales. Use of classical mar Reactor
keting techniques, in these circumstances, is inevitably
Marketing warfare strategies This scheme draws partial and uneven.
parallels between marketing strategies and military Thus, for example, many new products will emerge from
strategies.
irrational processes and the rational development process
may be used (if at all) to screen out the worst non-runners.
BCGs growth-share portfolio matrix Based on his The design of the advertising, and the packaging, will be
work with experience curves (that also provides the ratio- the output of the creative minds employed; which mannale for Porters low cost leadership strategy), the growth- agement will then screen, often by 'gut-reaction', to enshare matrix was originally created by Bruce D. Hender- sure that it is reasonable.
son, CEO of the Boston Consulting Group (BCG) in 1968
(according to BCG history). Throughout the 1970s, Henderson expanded upon the concept in a series of short
(one to three page) articles in the BCG newsletter titled
Perspectives (Henderson, 1970, 1972, 1973, 1976a, b).
Tremendously popular among large multi-product rms,
the BCG portfolio matrix was popularized in the marketing literature by Day (1977)" (45).

For most of their time, marketing managers use intuition

and experience to analyze and handle the complex, and
unique, situations being faced; without easy reference to
theory. This will often be 'ying by the seat of the pants,
or 'gut-reaction'; where the overall strategy, coupled with
the knowledge of the customer which has been absorbed
almost by a process of osmosis, will determine the quality
of the marketing employed. This, almost instinctive man-

13 FURTHER READING

agement, is what is sometimes called 'coarse marketing';

to distinguish it from the rened, aesthetically pleasing,
form favored by the theorists.
An organizations strategy 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
prot potential and sustain the business. The marketing
strategy is the foundation of a marketing plan.

11

See also

Business model
Corporate anniversary
Customer engagement
First-mover advantage
Market segmentation
Pricing strategies
Right-time marketing

12

References

[1] Baker, Michael The Strategic Marketing Plan Audit 2008.

ISBN 1-902433-99-8. p.3
[2] Homburg, Christian; Sabine Kuester, Harley Krohmer
(2009): Marketing Management - A Contemporary Perspective (1st ed.), London.
[3] Marketing basics Marketing strategy based on market
needs, targets and goals.
[4] Aaker, David Strategic Market Management 2008. ISBN
978-0-470-05623-3
[5] Hausman Marketing Letter Denition of Marketing Series
[6] Aaker, David Strategic Market Management 2008. ISBN
978-0-470-05623-3.
[7] Baker, Michael The Strategic Marketing Plan Audit 2008
ISBN 1-902433-99-8. p. 27

8. Shaw, E. (2012). Marketing strategy: From the origin

of the concept to the development of a conceptual framework. Journal of Historical Research in Marketing, 4(1),
3055. doi:10.1108/17557501211195055

13

Further reading

Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper Collins, 2007 ISBN 9780-06-115110-1 (Review of the book by Marilyn
Scrizzi, in Journal of Consumer Marketing 24(7),
2007)

14
14.1

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