The development of existing and the emergence of new players in entrepreneurship contributes to the growth of competition. Today, this competition has reached perhaps unprecedented proportions. Companies need to win this competition in order to not only exist, but also actively develop in these conditions. And here marketing comes to the rescue. In this article, we will try to tell you what marketing strategy is and what general marketing strategies exist today.
What is a Marketing Strategy
Any organization has a common strategy that corresponds to its global goals. One of those is the marketing strategy.
In general, marketing strategy is a general plan for implementing the company’s goals.
The essence of a marketing strategy is to create tools aimed at achieving business goals.
The main goal is to increase sales volume and net profit. The development of a marketing plan is carried out by professionals who help the organization to effectively use existing resources and create a sales market with the expectation of a long term.
A marketing strategy is an action aimed at optimizing the workflow within an organization in order to develop it in the internal and external environment.
The success of organizations today is determined by the degree of demand for the product of its activities by consumers. Therefore, the marketing strategy plays a key role in the company’s strategy that ensures its long-term market success. When forming a marketing strategy, top manager takes into account a number of very important factors:
- the place of marketing in the management of an organization;
- overall development strategy of the organization;
- state and features of competition in the market;
- demand state, trends in its development and other factors of the external marketing environment;
- management resources and capabilities of the company itself.
An action plan is sometimes drawn up for a period of up to 25 years! But more often, especially in small and medium-sized businesses, planning tends to be carried out for up to 3 years. It plays a huge role, especially when the situation is changing rapidly. At the same time, you should make adjustments to the plan, otherwise the company risks getting a decrease in sales, losing to competitors.
The general marketing strategy is the main direction of an organization’s action, that should lead it to its intended goal in the long term.
The general strategy should ensure the organization’s long-term survival, which means in a competitive market environment producing a competitive product that will consistently find buyers.
Any marketing plan must be consistent with the company’s overall strategy to achieve set goal. Here are some strategies tasks that are solved by marketers in the company.
- Increase the brand’s market presence. Any company or enterprise needs sales markets for the implementation of its marketing plan. That’s why the goals of the specialists in this case are pretty simple – to “occupy” as large niche as possible.
- Growth of sales. If customers don’t buy company’s product enough, it means that marketing strategy doesn’t work properly. Because as the market share increases, the number of customers always increases too. And with customers, orders and sales come.
- Increase of the company’s profit. Sales growth directly affects the profitability of the company.
- The brand positioning. To constantly sell products at the market price, the company needs to be correctly positioned in the niche. The target audience must understand the value of the product and associate the qualities of the product with the brand.
Let’s talk about these strategies more detailed.
General Marketing Strategies
Currently there are 3 general marketing strategies:
The differentiation strategy implies that the company gains a competitive advantage and, as a result, more fully meets consumer demand and provides high-quality products at high prices. Inflated prices are considered justified – the buyer is willing to pay money for the unique quality of the product.
The differentiation strategy means not only the presence of a unique product/service, but also obtaining such product properties that it is quite difficult for competitors to repeat. It’s better if it can’t be done.
To develop a product with special properties requires additional costs – research, know-how in technology, changes in packaging design, and so on. To promote the product and convey its benefits to the target audience, you need an investment, while to compensate for these costs, a higher price should be set for the new product. Product differentiation contributes to increased sales and profit growth as a result of attracting new loyal customers.
By applying a differentiation strategy, a company often becomes the market leader for a specific product category. But you need to be able to protect the competitive advantage of a product – and thereby, use a patent.
What methods of differentiation should you use in practice to stand out from the competition? This can be different taste characteristics, exclusive design, availability of a more complete range, and so on.
This strategy has two serious drawbacks. First, such companies can lose a lot of potential buyers, because not everyone is willing to pay a lot, even for the best quality. Secondly, it is almost impossible to create an absolutely unique product that other companies cannot imitate.
Market segmentation strategy
This type of marketing involves developing a product to meet the specific needs of clearly defined groups of consumers.
This marketing strategy involves dividing the market into several separate segments and working with each segment separately.
To divide the market into segments, you need to choose the principle by which this division will be made, and develop a segmentation system. In practice, most often the market is divided by the income parameter and the level of customers ‘ solvency.
The segmentation strategy (working on multiple segments, considering each segment according to its needs) allows companies to focus on the needs of customers. If the company has segmented markets, it can develop specific products, promotion strategies, distribution systems, as well asprices for each individual segment.
Segmentation helps to stimulate the development of new products, as well as the development of an effective marketing mix. Understanding the needs of a segment helps you develop advertising strategies. Another advantage of segmentation strategy is that it helps distribute marketing resources between different products.
One of the significant disadvantages of this strategy is that companies that specialize in a few segments have a high risk of going bankrupt if customers of one of the segments lose interest in their products.
Market share strategy
This strategy involves reducing product prices by reducing production costs. By implementing this strategy, companies strive to produce low-cost products as efficiently as possible and increase their market share due to increased demand for goods.
Companies increase their competitiveness by being able to provide more products at lower prices.
This strategy is quite risky, because companies deliberately reduce their profits and can only hope for an increase in demand for products. Also, such companies need to look for markets with a few the same retailers that sell products at low prices. This significantly restricts sales markets and makes companies less flexible in the face of increasing competition. Withal, such companies have a fairly limited range of products that they can offer to consumers.
However, despite some significant disadvantages, all these strategies are quite common and effective and are popular among other marketing strategies.
Do you need help with choosing your nonlosing marketing strategy?