What are Marketing Strategies?
Marketing today is involved at all levels of the value creation chain. Before production, to determine the target market; during production to decide the price and the product; and after production to communicate with customers.
It is clear that marketing is involved in this whole process of defining, creating and communicating value. Your marketing strategy must be defined before creating your product. Thereafter, your activities take place within the context defined by this strategy.
The development of a strategy marketing includes 5 stages:
- Market opportunity analysis and market segmentation
- Define the target market (target customers)
- Positioning of your offer
- Determination of action plans
- Control and review of your offer
Your strategy must therefore be a general orientation, not a series of isolated decisions. D.it should also be described in the clearest, most precise and concise as possible.
Here we see the first ones in detail three stages of the development of the marketing strategy:
Opportunity and Market Segmentation
Market opportunities are analyzed in various ways, mainly using 5 Porter's Forces and PESTEL analysis. If you want you can also do aSWOT analysis of the company, so also the opportunities and external threats are considered.
There are many types of customers, with totally different needs. A careful analysis of the consumer must be made to understand the needs and desires to be able to satisfy them.
Consumers can be divided in several ways, considering the variables:
- Geographic: nations, states, regions, cities, neighborhoods;
- Demographic: age, gender, family size, income, profession, religion, nationality, level of education;
- Psychographic: social class, lifestyle, personality;
- Behavioral: knowledge and use of the product, purchase opportunity, desired benefits, type of user, intensity of use, level of loyalty.
Companies are increasingly using more than one of these variables to segment the market. This is to try to identify smaller and more defined groups.
There assessment of the segments is based on these factors:
- Segment size and growth rate
- Structural attractiveness of the segment (5 Forces of Porter aimed at the segment if it has not been done previously)
- Company objectives and resources
After this evaluation, the company decides which and how many segments to serve most effectively (target marketing). There is the thought of wanting to reach as many customers as possible, but this is not the right path, indeed it is impossible, because there is the risk of not satisfying any segment by doing so.
You have to select the customers that you are able to best satisfy, gaining a profit and an advantage over the competition. Many companies prefer to target a small number of consumers, but let's see what definition strategies there are.
The target market definition strategies there are 4 (from the most generic to the most specific):
- Strategy of undifferentiated marketing: mass marketing, ignoring the differences of the various segments, the same offer
- The differentiated marketing: segmented marketing, specific offers for certain segments
- Concentrated marketing: niche marketing, conquering one or more segments ("niches") with a large share
- Micromarketing: meet the preferences of individuals or local groups
Which strategy is best to adopt depends on the company's resources, the homogeneity and stage of the product life cycle, the homogeneity of the market and the marketing strategies of competitors.
Value Proposition (Positioning)
At this point, the company must decide how to differentiate its offer for each target segment. In other words, it must define how it wants to position itself within the market.
One must reach one unique and original market position to give customers a different perception compared to those of competing products. Otherwise they will have no reason to buy our products.
Ideal positioning should be set on the competitive advantage. To acquire it, the firm must offer customers greater value than the competition in two ways: by lowering the price or by offering more benefits at a higher price.
More precisely, one of these can be selected general positioning strategies (value proposition):
- Offer high benefits at high prices
- Supply high benefits at medium prices
- Aim on average benefits at low prices
- To give scarce benefits at very low prices
- Or the most successful but difficult, which is to offer high benefits at low prices