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Marketing strategy

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A marketing strategy serves as the foundation of a marketing plan. A marketing plan contains a list of specific actions required to successfully implement a specific marketing strategy. An example of marketing strategy is as follows: "Use a low cost product to attract consumers. Once our organization, via our low cost product, has established a relationship with consumers, our organization will sell additional, higher-margin products and services that enhance the consumer's interaction with the low-cost product or service."

A strategy is different from a tactic. While it is possible to write a tactical marketing plan without a sound, well-considered strategy, it is not recommended. Without a sound marketing strategy, a marketing plan has no foundation. Marketing strategies serve as the fundamental underpinning of marketing plans designed to reach marketing objectives. It is important that these objectives have measurable results.

A good marketing strategy should integrate an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole. The objective of a marketing strategy is to provide a foundation from which a tactical plan is developed. This allows the organization to carry out its mission effectively and efficiently.

Marketing strategies are partially derived from broader corporate strategies, corporate missions, and corporate goals. They should flow from the firm's mission statement. They are also influenced by a range of microenvironmental factors.

Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics.

Contents

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Types of marketing strategies

Every marketing strategy is unique, but if we abstract from the individualizing details, each can be reduced into a generic marketing strategy. There are a number of ways of categorizing these generic strategies. A brief description of the most common categorizing schemes is presented below:

A more detailed schemes uses the categories:
  • Prospector
  • Analyzer
  • Defender
  • Reactor
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Marketing Practice [1]

In practice, as opposed to theory, research has indicated [2] that the outstanding problems facing marketers lie in the use of specific functions. Most senior managements have committed to the philosophy, even though their junior managers may be cynical about the degree of that commitment. Unfortunately, there is little evidence to show that this new-found belief has led to positive action. Indeed, if we look at the marketing activities they do subscribe to, using the 4Ps framework say, there is little evidence that marketing practice (as opposed to the theory) has been widely embraced. In particular, pricing is largely on a cost-plus or competitive basis, promotional budgets are small (and spent more on sales promotion than advertising or PR), 'place' is - in any case - not relevant, and marketing research is almost all second-hand.

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Conviction Marketing[3]

One aspect which is little recognized is 'Conviction marketing'. Sometimes called 'commitment marketing', it is, in many respects, alien to most of the concepts of traditional marketing. Yet it is probably more prevalent than the genuine use of pure marketing; and arguably it is not infrequently more successful. It has a long and chequered history. The propaganda machines developed by the Nazis offered some of the most potent, and widely deplored, demonstrations of its power (and this represents one possible reason why discussion of this style of marketing is even now generally avoided). The religious 'marketing machines' had been even more effective in earlier generations (and can even now be very powerful, as is evidenced by the case of Islamic fundamentalism). In the commercial sector, though, its use has sometimes been just as powerful - and very productive! Indeed, the majority of the few truly global brands have embodied it to some degree; IBM, with its philosophy of 'Customer Service', McDonalds, with Q. S. C. & V, Coca Cola, with its embodiment of the American teenage dream, Marlboro, and the wide open spaces of the frontier!   It is different to 'selling', which is conventionally seen as the main alternative to marketing, in that its focus is very firmly on the consumer; as all marketing is supposed to be - where the focus of 'selling' is internal (the customer is to be persuaded to take what the organization has to offer). On the other hand, conviction marketing's focus is still one-sided. There is little or no attempt to use market-research to find out what the consumers need or want, though research is sometimes used to justify the organization’s existing prejudices - and is frequently used, to great effect, to optimize the presentation of its chosen message.  

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Practical Rules for Conviction Marketing

Currently, there is very little theory available to support conviction marketing; indeed, it is often shunned - as an unfortunate aberration - by marketing academics. However, there are a number of ideas which appear to lead to successful implementation of this ‘rogue’ form of marketing.

Thus, the power-house of such 'conviction marketing' is the powerful idea (the 'conviction' to which the organization has made its 'commitment'), to which the organization believes the consumers are also committed (despite any evidence to the contrary!) or need (for their own good!). Despite the focus on the consumer, and frequent reference to the importance of that consumer, the real organizational commitment is to the overarching idea (or set of ideas, often a 'lifestyle'). The essence of, and the strength of, such 'conviction marketing' is the power it gives to the marketing organization; to 'evangelize', where religious as well as political parallels, are often more relevant than those of conventional marketing theory.

In turn this power derives - where it is successfully applied - from a number of factors:

  1. Distinctive - The concept being marketed must be distinctive. Successful conviction marketing is not the province of the marketer who is dedicated to pallid incrementalism. It has to be readily identifiable; as Coca Cola was - in terms of the very powerful image of the bottle, if not necessarily the product contained. Beyond that, however, it has to be based on an identity, a brand personality. The beneficiaries of conviction marketing are typically not products where the technical features are predominant. Coca Cola and Marlboro are a matter of personal taste, but it is the images associated with them, their brand persona, which add the necessary richness to the relatively mundane. Even in the case of IBM it was the marketing and support (rather than the very complex technology) which was its outstanding feature. The richness, the depth, to the identity seems to be necessary (at least in the most successful examples), to give an almost human identity.
  2. Communicable - Despite the richness of the concept it has to be instantly communicable, which demands that it be clear; and preferably simple. It has to be conveyed by simple messages, such as the shape of the bottle (or now the graphics on the can) of Coca Cola, or the cowboy and Marlboro. Where the product is complex, and none could be more complex than that of IBM, it has to be enshrined in an associated philosophy, "Customer Service" (personified by the field personnel in the now rather outdated, but very necessary, dark suits and white shirts). It is frequently associated with a distinctive form of quality; McDonalds 'Hamburger University', for example.

Conviction marketing is, above all, dependent upon the consumers belief in what its communicators say. Being somewhat unrelated to the basic needs, the 'vision' of the 'product' (of its identity) has to be conveyed to the target audience. They, in turn, have to enter into a 'belief' in the 'product' before they can fully appreciate it. This means that the message being communicated has to be believed; and that in turn means that the communicators themselves need to believed.

In some cases the 'communicators' can be those of conventional marketing; the Marlboro cowboy in the advertising, or the bright clean image of McDonalds' outlets. But behind them there is often a human face. In IBM it was the sales force, immensely capable and imbued with (many would argue indoctrinated in) the IBM culture; and which of their customers could resist such evangelists. But, above all, it usually requires a strong (and almost obsessively dedicated) human personality at the centre, to make the vision work; the Watsons at IBM and Ray Kroc at McDonalds developed very rich cultures which were aimed more at their own employees (the 'communicators' the public see) rather than at their markets.

www.qprintstation.com

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Competitors

  There is one element of conviction marketing which is beyond the control of the organization itself, and that is what its competitors choose to do. Almost by definition, a 'conviction marketed' brand will develop a new segment of the market. Its unique identity will, at least for a time, give it a monopoly there. Eventually, though, competitors will recognize the success of the brand; and will want some of the action.

It is a peculiarity of conviction marketing that the almost hypnotic effect of the message also seems to infect competitors. They usually attempt, with only marginal success, to copy the original. Inevitably, the copies turn out to be pale imitations of the original; Burger King could not match the evangelical dedication to standards of McDonalds. Pepsi, for many decades, had to follow Coca Cola. The competitors usually have to wait, therefore, for the leader to make a mistake, or for the market to change; Pepsi was eventually rewarded when the market did change, and Coca Cola made a very public mistake with its change in recipe! Compaq similarly capitalized on both the changes in the PC market and IBM's uncharacteristically unsure handling of its own responses.  

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Categories of Conviction Marketing

  Although customer needs are at the heart of conventional marketing, they are only an 'enabling' factor in the case of conviction marketing. If the 'vision' is too far removed from the consumer's view of reality, it will not be accepted. Even so, Clive Sinclair's C5 electric/pedal-power car (eventually, derisively, called the 'electric clog') was initially accepted with praise by the media, based on his own charismatic image and obvious commitment to it; and it took nearly three months for commentators to admit that the idea was in reality laughable. The resultant shock to believability, on the other hand, probably brought down the remainder of his business empire (which was unconnected to the C5, and more soundly based)! There have been other spectacular mismatches to reality; IBM's PC Junior, Ford's Edsel. These are, however, the recorded exceptions; for most mismatches fail at the 'new product' stage - and disappear with the 90% of such new products which do not achieve acceptance.

Conviction marketed products can be broadly divided into two groups;   

                       PRODUCT BASED <> VALUE BASED

The former are products, or services - frequently in the high technology field, whose creator has a blinding faith in what product or service features are needed. Steve Jobs, at Apple, believed in the special technology of his products (even after IBM set new standards - and John Sculley had to be recruited from Pepsi, to inject more conventional marketing expertise), Alan Sugar believed in his personal ability to put together low-priced electronics packages. The problem with conviction marketed products in this category is that they can be very rapidly overtaken by changes in the market; typically, new technology supersedes them (as the Commodore Pet, one of the original PCs, was displaced from the business market by Apple, which in turn was superseded - as brand leader - by IBM), or tastes change (as Woolworth found out as its traditional place on the high street was undermined).   As already indicated, however, the strongest 'conviction marketed' brands are those in very general markets where the distinctiveness comes from the image; from the intangible VALUES associated with the brand. These brands are usually much more capable of change, since the identity is not usually locked into 'physical' features. The customers (and the organization’s own employees) can easily accommodate the new features needed to accommodate developments in technology and taste. IBM's 'Customer Service' carried it though decades of revolutionary change and Disneyland is constantly absorbing new rides - but still keeping them immaculately clean! Even McDonalds, which should perhaps be one of the most product based of retailers, is in reality based on conviction marketing of values; Q. S. C. & V." (Quality, Service, Cleanliness & Value). It has managed to change what it serves (adding a breakfast menu - and lines based on chicken and fish, as well as pizza) and how it serves (increasing the size of its 'sit down' sections - so that it has become a restaurant rather than just a take-away outlet) as well as embracing (for a while at least) 'healthy foods'.   The challenge for less charismatic marketers, committed to the wisdom of the 'outside-in' viewpoint, is to understand to what extent the success of 'conviction marketing' undermines traditional marketing theory. This is a question mark which implicitly hung over much of marketing theory through the 1980s; and, in particular, drove practitioners and academics alike to look for alternative approaches - such as competitive advantage. The reality is that most products and services (at least in terms of numbers of lines, if not of value of sales) are managed without reference to the principles of marketing; and have been throughout history. The difference is that 'conviction marketers' have very successfully extended this common 'inside-out' approach by adopting some of the tools of marketing. Indeed, the conviction marketers probably make greater use of marketing tools (albeit to somewhat perverted ends) than do many of those who would pay lip-service to traditional marketing. Philip Morris, which owns the Marlboro cigarette brand, also owns the Miller Brewing Company of Milwaukee. In applying the same sort of charismatic (and 'macho') image to 'Miller High Life' they used extensive market research to fine tune the positioning. More important, the company continued to be aware of the demands of its market place, and subsequently launched the highly successful 'Miller-Lite' (low calorie beer) as a 'less filling' beer which fitted this image.   At the end of the day, the basic justification for conventional marketing, in the absence of the blinding (and hopefully viable) vision of the conviction marketer, is simply that it is generally the most successful approach to product or service management. Giving the customer what he or she wants rarely fails!  

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Problems inherent in Conviction Marketing

  The main problem facing conviction marketers is that the necessary strength of their commitment may blind them to the realities facing them and their customers. It is difficult enough for any marketer to adopt the unbiased perspective essential to understanding the customer's needs and wants. It may be impossible for a conviction marketer, whose 'vision' may be so powerful that it precludes any doubts about the 'product'. The Concorde airliner development team were convinced of the market for their 'baby'; and their market research supported that view - it was only the market which disagreed. Even IBM can fall foul of this problem, as it did with its personal computers; when its immensely strong corporate 'vision' got in the way of any meaningful recognition of the scale of the problem posed by its wayward dealers.   Catastrophe theory is derived from science and technology; but it may be very applicable to conviction marketing. In a very simplified form (for it is the idea, not the detail, which is important) it states that some systems can be 'over-stressed', so that they will support loads beyond the point at which other systems would obviously start to deteriorate. When they pass the final point of no return, however, their performance degrades (they fail) suddenly and catastrophically. This compares with most other systems where the fail point may reached much more quickly, but the subsequent degradation in performance is much more gradual; and, hence, predictable and controllable (allowing, perhaps, for the possibility of recovery).    The problem is that, once past the point of no return (and frequently triggered by an apparently trivial change in circumstances), the position can be destroyed; by simply being forced, almost overnight, to obey the normal rules of the game.   This phenomenon has been most notable in the financial futures markets (the October 1987 crash, for instance), or in political circles (even Communism in Eastern Europe suffered this fate in 1989). In a less dramatic manner it might also be seen at work in those national industries (such as the UK motorcycle industry) virtually destroyed by Japanese competition.   A final comment before I finish this section. Marketing was not developed, nor dramatically advanced, in the laboratories of its academic theorists. It was the outcome of the practical explorations by practitioners, gradually probing the frontiers of what could be achieved by their activities. The academics usually came later and served a very valuable function by documenting, in a form which could be transferred to other managers, what had been learned by this practice. Even so, it is the practice of marketing which is important; and the theory which should be in support of this - a fact which some academics may have begun to overlook!  

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Coarse Marketing

  The marketer, in real life, does not face each decision with a copy of a text-book in his or her hand - ready to work through the various lessons. The marketer starts with a quite specific environment; which will immediately limit the range of factors to be explored to a small subset of the literally hundreds explored in this book. To the perceptive marketer the range of options to be explored will usually be obvious. Beyond this, the position will be further constrained by the resources available to deal with them. For instance, theory always says that the first step is marketing research, but if your competitor has just made a major change in strategy you may have just days to react - where research may take months.   Real-life marketing primarily revolves around the application of a great deal of common-sense; dealing with a limited number of factors, in an environment of imperfect information and limited resources complicated by uncertainty and tight timescales. Use of classical marketing techniques, in these circumstances, is inevitably partial and uneven.   Thus, for example, new products will emerge from irrational processes and the rational development process may be used (if at all) to screen out the worst non-runners. The design of the advertising, and the packaging, will be the output of the creative minds employed; which management will then screen, often by 'gut-reaction', to ensure that it is reasonable.   Indeed, the most successful marketer is often the one who trains his or her 'gut-reaction' to simulate that of the average customer!   For most of his or her time the marketing manager is likely to be using his or her considerable intelligence to analyze and handle the complex, and unique, situations being faced; without easy reference to theory. This will often be 'flying by the seat of the pants', or 'gut-reaction'; where the overall strategy, coupled with the knowledge of the customer which has been absorbed almost by a process of osmosis, will determine the quality of the marketing employed!   This, almost instinctive management, is what is sometimes called 'coarse marketing'; to distinguish it from the refined, aesthetically pleasing, form favored by the theorists. It is often relatively crude and would, if given in answer to a business school examination, be judged a failure of marketing. On the other hand, it is the real-life world of most marketing!

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