How Do Marketing Strategies Impact Business Growth?

Explore a comprehensive overview of marketing strategies, detailing definitions, key elements, types, competitive tactics, and international approaches. Learn how to effectively design and implement strategies for achieving marketing objectives, maximizing customer value, and gaining a competitive edge in the marketplace.

Marketing Strategies: A Comprehensive Overview

A firm’s marketing strategy is the complete, strategic plan or framework designed specifically to achieve its marketing objectives. While marketing objectives define the firm’s desired destination, it outlines the design for getting there. It is fundamentally a company’s competitive posture in the marketplace, requiring the integration of all marketing efforts.

The primary aim of a marketing strategy is to effectively cope with competition.

I. Definitions of Marketing Strategies

• Simple Terms: A complete and unbeatable plan or instrument for attaining a firm’s marketing objectives.
• Michael E. Porter: Strategy’s main aim is to cope with competition, primarily driven by five forces: threat of new entrants, bargaining power of customers and suppliers, threat of substitutes, and jockeying among existing competitors. A strategist’s goal is to find a defensible position against or influence these forces.
• Cundiff, Still, and Govoni: A company’s overall marketing strategy is its competitive posture in the market place, formulated through the integration of all marketing dimensions.
• Prof. Philip Kotler: It is the basic approach a business unit uses to attain its goals, involving decisions on target markets, market positioning, marketing mix, and expenditure allocation, while considering the expected environment and competitive conditions.

II. Five Important Elements of Marketing Strategies

The core of the visible strategy is the marketing mix (Product, Place, Price, and Promotion). Effective strategy requires an integrated, unified, and dynamic handling of these elements.

1. Unified Handling of the Marketing Mix: The elements of the marketing mix must be managed in a unified manner, as juggling one affects the others. An integrated approach is essential for problem resolution.
2. Dynamic Nature of the Marketing Mix: While strategy is the opposite of ‘ad hoc responses,’ the marketing mix is a dynamic entity that must be modified based on short-term requirements and market changes (environment, competition, consumer tastes, technology). The overall strategy is long-term, but tactical maneuvers occur constantly within that framework.
3. Dependence on Firm’s Resources: Decisions on the marketing mix are heavily constrained by the resources (money, materials, men) available to the firm and apportioned to the specific business unit.
4. Complexity in Multi-Business Firms: For multi-business firms, a distinct marketing mix is developed for each brand/product, but it operates within a larger strategy framework (corporate, business unit, product line, and brand levels), linked by resource allocation and common business objectives.
5. Marketing Mix as the Visible Strategy: The marketing mix is the most visible part of the marketing strategy. Customers, competitors, and the trade perceive the firm’s strategy only through its actions on product, promotion, price, and channel. To formulate an effective strategy, one must study competitors’ visible marketing mixes.
6. Gaining Competitive Consciousness: The essence and purpose of marketing strategy is scoring over competition. Strategy is fundamentally necessitated by competition, and it represents the firm’s competitive posture in the market.

III. Types of Marketing Strategies

Marketing strategies are often categorized based on their scope and competitive stance.

A. Building Marketing Strategies (Product Life Cycle Focus)

Strategies are formulated for functional areas and adapted based on the product life cycle (PLC) stage. The corporate strategy should aim for overall cost leadership, differentiation, and focus.

Functional Areas for Strategy Building:

• Market segmentation
• Positioning of goods and services
• Product line
• Price
• Physical distribution and outlets
• Sales force
• Service and advertising
• Sales promotion
• Research and development
• Market research

Strategies by PLC Stage:

PLC Stage	Strategic Focus	Example Strategies
Introductory	Launch and Awareness	High price/high promotion (rapid skimming); Low price/high promotion (rapid penetration); Market segmentation strategy.
Growth	Sustain Competition & Brand Image	Improve product quality; Add new attributes/models; Identify new segments/channels; Enhance distribution; Shift to product-performance advertising; Keep prices low to attract sensitive buyers; Seek high market share over high current profit.
Decline	Management of Weak Products	Identify weak products; Augment investments to strengthen competitive base; Risk management; Harvesting (gradual cost reduction while maintaining sales) or Divesting (dropping products).

B. Strategies of Customer and Producer Mix under Competition

This involves using a matrix to plot the company’s marketing effectiveness (operational and system competence) against the unit cost of products.

• Goal for Mass Market: Improve effectiveness and lower unit cost.
• High Effectiveness/High Unit Cost: Achieved through technological and marketing interventions.
• Low Effectiveness/Low Unit Cost: Slow growth, requiring revival strategies.
• Low Effectiveness/High Unit Cost: Non-viable economy of scale, leading to decisions on diversification or market strengthening.

C. Branding Strategies

Decisions on brand sponsorship (manufacturer/national, distributor/private, or licensed) and brand name selection are critical.

• Brand Name Selection: Should be easy-to-pronounce, short, convey meaning/attribute, and be distinct.
• Brand Strategy Options:
  • Line Extension: Existing brand name to new attributes in the existing product category.
  • Brand Extension: Existing brand name to a new product category (e.g., Honda two-wheelers and four-wheelers).
  • Multi-Brands: New brand names to the same product category (e.g., P&G detergents) to appeal to different buying motives.
  • New Brands: New brand names for new product categories.

D. Relative Market Strategies

These strategies are based on a firm’s competitive position in the target market.

Competitive Position	Strategic Focus	Example Strategies
Market Leader (Largest Share)	Expand Total Market, Defend Share, Aggressively Market	Market penetration, New user strategy (e.g., Enkey Foods’ Onjus), Geographical expansion, Discovering new uses (e.g., Vaseline), Defensive marketing.
Market Challenger (Runner-up, Fighting to Increase Share)	Define Objectives, Attack Leader/Weak Companies	Attack Strategies: Frontal (head-on), Flanking (geographically or segmentally where opponent is weak), Encirclement (comprehensive promotional schemes), Bypass (diversification, new markets, new technology).
Market Follower (Runner-up, Holds Share without “rocking the boat”)	Copy/Improve Leader’s Products, Keep Costs Low	Strategy: Achieve significant profits by saving R&D costs; Focus on holding existing customers and winning new ones; Cloning (emulate leader’s mix), Donor (knock-off products), Imitator (copy some, differentiate others), Adaptor (improve leader’s goods, avoid segment confrontation).
Market Niches (Serves small, overlooked segments)	(Not detailed in this section)

IV. Two Major Steps in Competitive Marketing Strategies

1. Competitor Analysis

The process of identifying, assessing, and selecting competitors to attack or avoid.

• Identifying Competitors: Firms offering similar products/services to the same customers at similar prices, all firms making the same product class, or all companies competing for the same customer spending.
• Assessing Competitors: Evaluating objectives, strategies (more resemblance means more competition), strengths, weaknesses (often using Benchmarking), and reaction patterns.
• Selecting Competitors: Preferably aiming at weak competitors and sometimes close competitors, but often avoiding the destruction of a close competitor to prevent its absorption by a larger, stronger company.

2. Competitive Strategies

Designing broad strategies to gain a competitive advantage by offering superior customer value.

A. Basic Competitive Strategies (Michael Porter’s Winning Strategies):

• Overall Cost Leadership: Achieve the lowest production/distribution cost to offer lower prices and gain a large market share.
• Differentiation: Create a highly differentiated product line and marketing program to be the “class leader” in the industry.
• Focus: Concentrate efforts on serving a few market segments well.

B. Value Disciplines (Strategies for Superior Value):

• Operational Excellence: Lead in price and convenience through cost reduction and a lean value delivery system.
• Customer Intimacy: Precisely segment the market and tailor products/services to match needs, building close relationships and loyalty.
• Product Leadership: Offer a continual stream of leading-edge, often obsolete-making, products or services.

V. Factors Affecting Overall Marketing Strategies

1. Competitors’ Counter-Moves: Competitors can easily match price changes but struggle to retaliate against product innovations, making product/promotion variation a preferred path to differential advantage.
2. Synergistic Potential: Marketing inputs should be mutually reinforcing (e.g., displays repeating advertising messages).
3. Substitutability: The extent to which one marketing input (e.g., advertising) can be substituted for another (e.g., personal selling) to achieve marketing objectives within budget constraints.
4. Diversity in Productivity Levels: Not all inputs have equal productivity; some need a minimum level of use to have a measurable effect (e.g., advertising repetition).
5. Elasticity of Marketing Inputs: Inputs influence product demand and must be recognized (e.g., setting different prices for different customer segments based on demand elasticity).

VI. Planning, Implementation, Control, and Evaluation

The marketing plan, consisting of a perspective plan (long-term objectives) and an action plan (annual targets), guides this continuous cycle.

• Planning: In large companies, product managers coordinate plan preparation, often through workshops to review the current year, present proposals, analyze budgets, and finalize plans.
• Implementation: A good process specifies activities, responsibilities, timing, location, and execution methods (e.g., sales representatives targeting specific accounts).
• Control/Evaluation: Managers must continually monitor performance and revise strategies as conditions change. Evaluation areas include environmental scanning, product-market analysis, brand equity, and marketing-program/mix component effectiveness. The Balanced Scorecard (a formalized management control system) translates strategy into specific actions across four areas: financial, customer, internal business process, and learning and growth.

VII. International Marketing Strategies

Firms choose one of three approaches for international markets:

• Hybrid Strategy: A combination of the two, typically involving a uniform product but changing advertising and promotion to suit local conditions (e.g., Coke changes advertising, Levis Jeans’ positioning differs by country). The most popular strategy.
• Global Strategy: A single, uniform international business strategy and marketing plan for all markets (e.g., Mercedes car Benz, Coke, Toyota). Best for universally accepted products.
• Multi-Domestic Strategy: Different products, brands, and marketing tactics for each country, changing product specifications, pricing, and advertising to suit local tastes (e.g., Lever Brothers, FMCG firms like Unilever and P&G). Best for products where tastes differ significantly.