Types of Marketing Strategies and Elements of a Successful Marketing Strategy - Term Paper Example

?Running Head: Marketing Strategies Marketing Strategies [Institute’s Table of Contents Table of Contents 2 INTRODUCTION 3 TYPES OF MARKETING STRATEGIES 3 Strategies based on Market Dominance 3 Market Leader Strategies 3 Market Challenger Strategies 3 Market Follower Strategies 4 Market Niche Strategies 4 Porter’s Generic Strategies 4 ELEMENTS OF A SUCCESSFUL MARKETING STRATEGY 4 MARKETING STRATEGY AND MARKETING PLAN 5 MARKETING STRATEGY - A HALLMARK OF SUCCESS 6 IMPORTANCE OF MARKETING STRATEGY 7 SUCCESSFUL MARKETING STRATEGIES 8 CONCLUSION 9 INTRODUCTION Marketing has become one of the most important functions of any business and it is not possible to separate this function from any business and still be able to run the business smoothly. Marketing is that function of any business that focuses on satisfying customer needs. It is so important that if is done carefully, so it can become a reason of the turnaround of a failed business and vice versa. Therefore, it is very important that companies select and design marketing strategies that would benefit them. One should remember that marketing is not like mathematics, in which there are set formulae to derive results. However, goals are met on the basis of past experiences, and some trial and error. Marketing strategies are based on the principles of psychology and sociology and believes in one core value that customers come first; therefore, one needs to satisfy their needs. TYPES OF MARKETING STRATEGIES Marketing strategies are divided on the basis of the status of the organization in the market, its stage in the life cycle and also on the basis of different levels in the company. Strategies based on Market Dominance Market Leader Strategies Market leader focuses on expanding total market, defending market share or expanding market share. Total market can be expanded either by attracting new users, creating more usage or new usage. Market share can be defended through “position defense, flanking defense, pre-emptive defense, counter-offensive defence, mobile defence, market broadening, and market diversification and contraction defense” (Smith, n.d). Market Challenger Strategies A challenger can attack the leader by making “a frontal, flank, encirclement, and bypass or guerrilla attack” (Smith, n.d). Other strategies available to a market challenger include “offering price discounts, offering goods at low cost, introducing prestige goods, doing product proliferation, bringing innovation in the product, improving services, bringing innovation in the distribution, reducing manufacturing cost or doing intensive advertising” (Ranchhod, Tinson, & Gauzente, Marketing Strategies, 2004, p. 182). Market Follower Strategies Market follower can either become a counterfeiter, cloner, Imitator, or adapter. Market Niche Strategies Market niche follows “market differentiation strategy” (McDonald, 1995, p. 50). Porter’s Generic Strategies Porter generalised marketing strategies in three broad types that companies can choose from in order to get a competitive advantage. These are “market segmentation, market differentiation and cost leadership” (Bradley, 2005, p. 152). There are strategies related to growth of the company, and then there are product and pricing strategies and many others. Product and pricing strategies are designed once a company decides the stage of the lifecycle it is in and the broad strategy it wishes to pursue. Moreover, there are corporate level strategies, business level strategies and functional level strategies. It is important that a company stays consistent from corporate level to functional level when selecting a strategy. For example, if a company has chosen low cost strategy on corporate level, then it has to find out innovative ways to make that low cost possible at functional level through reducing manufacturing cost and the like (Kaynak, 1993, p. 290). ELEMENTS OF A SUCCESSFUL MARKETING STRATEGY The core idea of devising a successful marketing strategy is to keep the customer first. In other words, it should be customer-centred and not company centred. In order to make any strategy customer-oriented, a company has to perform a thorough analysis of the psychographics of the target audience that the company has selected (Ferrell & Hartline, 2010, p. 51). A strategy also becomes successful if it capitalises on the hidden or latent needs of the customers as Apple did by launching iPod and iPhone (Kotler, 2008, p. 11). Third important element of designing a strategy is not becoming a victim of marketing myopia, which is paying too much attention on the product and not on the customer’s needs. This should be made an important part of product strategy. A product should be such that exists to satisfy the needs of the customers. MARKETING STRATEGY AND MARKETING PLAN Marketing strategy is the most important document of the marketing department of any company. Developing one is a very difficult task as it is the game plan of the marketing department and guides future actions. Therefore, marketing strategy should be developed after a careful analysis of the market in which the company aims to operate. Hence, it leads a company to perform a detailed situation analysis. This analysis includes analysing the macro-environment of the company. Then a company goes on to make its mission and vision. Mission is the purpose of the existence of a company; whereas, vision is the future of the company or where it sees itself in the future. It is important that both mission and vision are developed after analysing the external and internal environment of the company. Internal environment includes its employees, and other resources. A company should enter into something only if it has the required resources. Marketing strategy is made on three levels i.e. corporate level, business level and functional level. Corporate level strategy focuses on making long term objectives for the firm in order to achieve its vision. Its basic aim is to allocate resources to different strategic business units. In a lot of companies that are in only one business, strategic and business level strategy is same. At this level, a company has to keep in mind the changing market conditions and should consider the long term potential and growth of the business (Paley, 2006, p. 16). In addition, business level or mid level strategy focuses on the functioning of a product line or a particular business unit. Therefore, it is more specific than corporate strategy and includes both quantitative and qualitative objective covering 4 to 5 years. Business level strategy focuses on the growth of the company by either penetrating existing markets, entering new markets, developing new products for same markets or by developing new products for new markets (Paley, 2006, p. 16). The third level is functional level, lower-level or tactical strategy. It focuses on day to day operations and on ways to follow corporate level strategy. It is shorter than the above two levels i.e. it focuses on one-year long plans. This level focuses on making a marketing plan that broadly includes decisions relating to price, promotion, product and placement (Paley, 2006, p. 16). It is important that all these levels are consistent at all levels and a strong follow-up is maintained by the company to check it. MARKETING STRATEGY - A HALLMARK OF SUCCESS It is a proven fact that carefully designed marketing strategies help companies in meeting their goal of making profits. Marketing strategies are very important in defining a company’s success. This is because if a marketing strategy is wrongly chosen i.e. if a strategy is chosen that does not support a company’s external and internal environment, is not consistent with the stage of life the company is and does not cater to the needs of the customers then the company would not be able to reap any benefits out of its marketing campaign as the campaign would not hit customer’s minds and hearts. On the other hand, if a strategy is chosen that is based on careful analysis of the needs of the target audience, and if the target audience is chosen after matching the product qualities and market’s needs then the marketing campaign would click to the target audience and thus it would become successful. It was true till earlier that marketing starts from the initial product design and continues till the customer buys the product, and a marketer’s job ends there. However, this is not the case anymore. A successful marketing strategy starts from research and development (R&D) and never stops. This is because once the product is sold; a successful marketing strategy aims at building strong customer relationship by retaining the customer, offering them good after sales service, sorting out their problems with the product etc. This, in turn, helps the company to reap benefits of those retained customers by offering them new company products and by making them their customers of existing products for life. It has been proven by research that it takes any company much less in servicing existing customers than by looking out for new customers. Hence, marketing strategies if chosen wisely can become a basis for a successful marketing campaign and helps a company to transform its offering from a mere product to a brand. This is important because once a product becomes a brand then a company can charge premium and the customer would still pay for it because it has build emotional ties with the brand. IMPORTANCE OF MARKETING STRATEGY There are numerous marketing strategies that a company uses in order to bring its product in the market, and make its place in the hearts of its target audience. Carefully designed and chosen marketing strategies are immensely important for the success of any company because it works as a guideline for the company to be followed and implemented. These strategies set out a direction for the company in order to achieve its corporate vision and win the hearts of the customers. Marketing strategies are a way to achieve marketing objectives and thus corporate objectives. Achievement of these corporate objectives, in turn, helps a company in getting a competitive advantage over the rival, and thus achieving the core goal of making profits. Marketing strategies help organizations to build on its opportunities and strengths and deal with its threats and weaknesses effectively. Marketing campaigns are formed on the basis of marketing strategies. Therefore, effective marketing strategies lead to fulfilment of marketing objectives and thus corporate objectives. Therefore, one can’t deny the importance of marketing strategies as corporate objectives are vague and useless without these strategies. SUCCESSFUL MARKETING STRATEGIES There are many organizations that have successfully chosen market strategies, and have implemented them. One can’t forget to include Apple’s marketing strategy as a success story. Apple’s core strategy is differentiation. The company focused on its customers’ latent needs and capitalised on those needs by giving them something they don’t need but would like it if given. At the time when iPod came into the market, people needed more and more songs in their music players, but they were not really concerned about the looks of their players. However, this is where Apple realised that though people are not asking for stylish looking music players, but they would like it once it is out and once they see their friends having it. The same is true with all other products launched by Apple i.e. iPhone, tablet etc. Apple materialised its strategy of differentiation by bringing in innovation in its products and services and by giving its customers an experience that they didn’t even imagine. Apple’s strategy strongly capitalised on mirror neurons, and made more people buy its products even out of their budget because it signified a status and because others were having it (Ranchhod, Marketing Strategies: A Contemporary Approach, p. 9). Similarly, another company that started off and continues to build on with the same strategy of differentiation is Starbucks. Starbucks differentiated its coffee from other coffee shops by playing with the quality of coffee, customer service and by providing its customers a friendly environment with Wi-Fi facility where they can stay as long as they want. CONCLUSION It is widely seen and observed that companies become successful once they bring innovation in their systems and in their marketing strategies. If a company decides to be a cost leader, for example, then it has to think of innovative ways to make that cost leadership possible and by making sure that cost leadership doesn’t get challenged by any other company. A classy example in this regard is southwest airlines, which offers low prices and is profitable at the same time. Southwest airlines achieved this by increasing their flying time etc (Smith, n.d). Whichever strategy a company chooses, it should make sure that it has the desired resources and skills to make it happen. Companies can choose to follow cost leadership, differentiation strategy or segmentation strategy but it should stay as innovative as possible in order to be in the competition. Similarly, a company should select a strategy depending upon its strength in the market i.e. if it is a market leader then its strategies to maintain that leadership would be different than a market challenger company, which is trying to give a tough competition to the leader and the like. One cannot deny the importance of marketing strategy in the success and growth of any business. The key is to understand the customers and then design the product according to the needs of the customers. This is why marketing is defined as satisfying customer needs through an exchange. A successful marketing strategy brings in many advantages to a company and makes it retain its customers and make them customers for life. Therefore, every company should do a thorough research on the market and then design a strategy according. Lastly, a company should make sure that its marketing strategy is consistent with its corporate mission, vision, and with its corporate objectives so that the same message is communicated from the top of the organization to the bottom. This should be done by making a company wide marketing strategy or a game plan that serves as a long term plan to materialise its marketing objectives. REFERENCES Bradley, Frank. 2005. International Marketing Strategy. London: Financial Times/Prentice Hall. Ferrell, O., & Hartline, Michael. 2010. Marketing Strategy. London: Cengage Learning. Kaynak, Erdener. 1993. The Global Business. London: Routledge. Kotler, Philip. 2008. Principles of Marketing. New Delhi: Pearson Education India. McDonald, Malcolm. 1995. Marketing Strategies. London: Pergamon. Paley, Norton. 2006. The Manager's Guide to Competitive Marketing Strategies. London: Thorogood Publishing. Ranchhod, Ashok. Marketing Strategies: A Contemporary Approach. New Delhi: Pearson Education India. Ranchhod, Ashok., Tinson, J., & Gauzente, C. 2004. Marketing Strategies. London: FT/Prentice Hall. Smith, Michael. n.d. Examples of Cost Leadership & Strategy Marketing. Retrieved on May 19, 2012: http://smallbusiness.chron.com/examples-cost-leadership-strategy-marketing-12259.html Read More