Marketing strategy

Professor: Josefina B. Bitonio, DPAME 201 Strategic Management of EngineeringEnterprise

MARKETING STRATEGY

is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.

this should be centered around the key concept that customer satisfaction is the main goal.

is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche

combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe.

Basic theory:

Target Audience Proposition/Key Element Implementation

Tactics and actions

A marketing strategy can serve as the foundation of a marketing plan. A marketing plan contains a set of specific actions required to successfully implement a marketing strategy

A strategy consists of a well thought out series of tactics to make a marketing plan more effective. Marketing strategies serve as the fundamental underpinning by marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results.

A marketing strategy often integrates an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole.

Similarly, the various strands of the strategy , which might include advertising, channel marketing,internet marketing, promotion and public relation can be orchestrated.

Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned.

Types of strategies

1. Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies:

Leader Challenger Follower Nicher

2. Porter Generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow.

Product Differenciation (broad) Cost Leadership (broad) Market segmentation (narrow)

3. Innovation strategies - This deals with the firm's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types:

Pioneers Close followers Late followers

4. Growth strategies - In this scheme we ask the question, “How should the firm grow?”. - The four main growth strategies defined by the Product/Market Ansoff matrix:

5. Marketing Warfare Strategy - This scheme draws parallels between marketing strategies and military strategies.

Diversification

is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets.

This can occur either at: - the business unit level, it is most likely to expand into a new segment of an industry that the business is already in. - the corporate level, it is generally very interesting entering a promising business outside of the scope of the existing business unit.

Different types of diversification strategies

Concentric diversification - This means that there is a technological similarity between the industries, which means that the firm is able to leverage its technical know-how to gain some advantage. - It also seems to increase its market share to launch a new product that helps the particular company to earn profit.

Different types of diversification strategies

Horizontal diversification - The company adds new products or services that are often technologically or commercially unrelated to current products but that may appeal to current customers. - In a competitive environment, this form of diversification is desirable if the present customers are loyal to the current products and if the new products have a good quality and are well promoted and priced. - This strategy tends to increase the firm's dependence on certain market segments

Different types of diversification strategies

Conglomerate diversification (or lateral diversification) - The company markets new products or services that have no technological or commercial synergies with current products but that may appeal to new groups of customers. -The main reasons of adopting such a strategy are first to improve the profitability and the flexibility of the company, and second to get a better reception in capital markets as the company gets bigger. Even if this strategy is very risky, it could also, if successful, provide increased growth and profitability.

Risks

Diversification is the riskiest of the four strategies presented in the Ansoff matrix and requires the most careful investigation.

Going into an unknown market with an unfamiliar product offering means a lack of experience in the new skills and techniques required.

Therefore, a firm should choose this option only when the current product or current market orientation does not offer further opportunities for growth.

The four main growth strategies defined by the Product/Market Ansoff matrix:

In order to measure the chances of success, different tests can be done:

The attractiveness test: the industry that has been chosen has to be either attractive or capable of being made attractive.

The cost-of-entry test: the cost of entry must not capitalize all future profits.

The better-off test: the new unit must either gain competitive advantage from its link with the corporation or vice versa.

5. Marketing Warfare Strategies - are a type of strategies, used in business and marketing, that try to draw parallels between business and warfare, and then apply the principles of military strategy to business situations, with competing firms considered as analogous to sides in a military conflict, and market share considered as analogous to the territory which is being fought over.

5. Marketing Warfare Strategies

One person’s gain is possible only at another person’s expense. Success depends on battling competitors for market share.

are a type of marketing strategy that uses military metaphor to craft a businesses strategy

"Generally, he who occupies the field of battle first and awaits an enemy is at ease, he who comes later to the scene and rushes into the fight is weary." by: Sun Tzu

Marketing Warfare Strategies:

Offensive marketing warfare strategies are used to secure competitive advantages; market leaders, runner-ups or struggling competitors are usually attacked.

* Frontal attack - A direct head-on confrontation * Encirclement strategy -Envelop the opponents position * Leapfrog strategy - Avoid confrontation by bypassing enemy or competitive forces.

Marketing Warfare Strategies: Defensive marketing warfare strategies

are used to defend competitive advantages; lessen risk of being attacked, decrease effects of attacks, strengthen position.

* Pre-emptive strike - Attack before you are attacked

* Position Defense - The erection of fortifications

* Mobile defense - Constantly changing positions.

* Counter-offensive - When you are under attack, launch a counter-offensive at the attacker’s weak point

Marketing Warfare Strategies:

Defensive marketing warfare strategies

* Strategic withdrawal - Retreat and regroup so you can live to fight another day

* Flank positioning - Strengthen your flank

Flanking marketing warfare strategies Operate in areas of little importance to the competitor.

Marketing Warfare Strategies:

Guerilla marketing warfare strategies Attack, retreat, hide, then do it again, and again, until the competitor moves on to other markets.

Deterrence Strategies Deterrence is a battle won in the minds of the enemy. You convince the competitor that it would be prudent to keep out of your markets.

Sequential Strategies A strategy that consists of a series of sub-strategies that must all be successfully carried out in the right order.

Marketing Warfare Strategies:

Alliance Strategies The use of alliances and partnerships to build strength and stabilize situations.

Cumulative strategies A collection of seemingly random operations that, when complete, obtain your objective.

Companies typically use many strategies concurrently, some defensive, some offensive, and always some deterrents.

According to the business literature of the period, offensive strategies were more important that defensive one

Defensive strategies were used when needed, but an offensive strategy was requisite

Only by offensive strategies, were market gains made. Defensive strategies could at best keep you from falling too far behind.

The marketing warfare literature also examined leadership and motivation, intelligence gathering, types of marketing weapons, logistics, and communications.