MARKETING STRATEGY - DEFINITION, DEVELOPMENT, RECOMMENDATIONS
STRATEGY IN GENERAL
Before looking into all the nuances and answering the question of what a marketing strategy is, a general understanding of a strategy definition in a broad sense is necessary.
One of the most common definitions is the following. Strategy is a general non-detailed plan or method of achieving an important goal in a defined period of time with the help of available resources under certain external conditions.
The first thing to understand is the mandatory definition of animportant goal
. If the goal is not defined, then it is almost impossible to build a strategy due to the huge number of hypothetical options for strategies, most of which are unrealistic to implement or do not lead to the desired result. Moreover, the more precisely the goal is defined, the higher the probability of choosing an effective strategy for its achievement. Let us imagine that our goal is "to get from Kyiv to Barcelona." Hypothetically, we have a significant number of possible strategies just by choosing the type of transport (i.e. the method) - on foot, by car, by hitchhiking, by bicycle, by plane, by cruise ship, by air balloon, etc. Most of these strategies may not meet the goal at all, as the goal is defined too broadly. If you formulate the goal as follows - "to get from Kyiv to Barcelona to see the beauty of the islands of the Mediterranean Sea", then the set of strategies will be significantly different compared to the initial set. If the goal is defined as "to get from Kyiv to Barcelona to hold a business meeting with a partner", then we will have a completely different set of strategies. That is, a clear definition of the goal is a necessary condition for choosing an effective strategy for its achievement.
The second necessary element for building an effective strategy is determining the time frame
during which the strategy should be applied. The time frame significantly affects the set of available strategies and excludes impossible options. Again, using our example, setting the travel time frame from Kyiv to Barcelona at 24 hours, 3 days, or 2 weeks will accordingly limit the set of effective strategies and avoid wasting time and resources on strategies that are unrealistic from beggining.
Third, the strategy must be implemented using available resources
. If the strategy relies on resources that are not available or the probability of their involvement is quite low, then it is not a strategy, but just a fantasy. Very simple logic - if you want "to get from Kyiv to Barcelona to see the beauty of the Mediterranean islands" during a 2-week vacation, but only have the financial resources for a bus ticket to Odesa, then booking a trip on a cruise ship in the Mediterranean Sea will be just a dream, not a real strategy for your vacation.
Finally, the strategy must always take into account external conditions
, which must be realistically analyzed. Underestimating external conditions, such as the political situation, economic policies, legal and social conditions, etc., can lead to choosing ineffective or unrealistic strategies that are not worth spending time and resources on. Imagine an air balloon trip to Barcelona in winter or during the volcanic eruption in Iceland in 2010, when clouds of smoke and ash hung over all of Europe. It is unlikely that such external conditions could leave the balloon travel strategy in the set of effective strategies.
Thus, we have determined what a strategy is in the general sense and what factors should be taken into account when building it.
MARKETING STRATEGY - KEY ELEMENTS
So, let us move on to more practical business issues such as marketing strategy. First of all, it should be noted that the marketing strategy should be separated from such concepts as the general strategy of the enterprise, commercial strategy, operational strategy, etc. Marketing strategy is not the same thing and very often it can be in conflict with other strategies of the enterprise. For example, the general business strategy of increasing marginal revenue and exiting less profitable segments may be in conflict with marketing strategies of increasing market coverage, the commercial strategy of rapidly increasing sales by reducing prices may be in conflict with marketing strategies of building a premium brand, the operational strategy of cost reduction is always in conflict with the marketing budget. Marketing strategy is a separate concept with its own goals and tools for their achievement, which is focused on creating such a system of perception by consumers that leads to their acknowledgement of the uniqueness of the product and its advantages over competitors, which in turn allows the business to achieve commercial success and its general goals.
In other words, a marketing strategy is a general non-detailed way of creating or changing consumer perceptions of a product over a defined period of time using available marketing tools and resources under certain competitive conditions, which leads to overall business success.
According to the definition, in order to build an effective marketing strategy the company needs to determine the purpose
- creating or changing consumer perceptions of the product
. Such perceptions are usually built around one or more elements that can ensure the attraction and retention of consumers according to the specifics of the market and its needs. The most common elements of the system of consumer perceptions are pleasure from consumption, product utility, reliability and quality assurance, brand status and exclusivity, service level, availability and distribution, being proven by time, value for money, digitalization of services, etc. Determining which elements should occupy a central place and become the purpose of the marketing strategy depends on the current situation on the market, the analysis of the strengths and weaknesses of the product and the company, on financial opportunities and the competitive situation, etc.Determining the period of time
required to obtain results is a necessary component of building a marketing strategy. First of all, different strategies require different time frames to achieve success. For example, if the company has chosen a promotion strategy in the value-for-money segment, then the expected time for the implementation of such a strategy will be significantly less than the time required for the implementation of the strategy of building a premium brand. Awareness and knowledge of the time frame for achieving the first results and implementing the strategy as a whole is an important component of strategy development, which allows to avoid unrealistic expectations and premature conclusions about the effectiveness of the strategy being applied.
The availability of marketing tools and resources
is also a necessary condition for choosing a marketing strategy. If the company does not have its own financial resources or the ability to borrow money for marketing activities, then the development of a strategy that involves the use of expensive tools loses all meaning. The marketing strategy must be based on a realistic marketing budget and available human resources either in-house or outsourced.
With a rare exception, marketing strategy is built or rebuilt in certain competitive conditions
, the influence of which is difficult to overestimate. A marketing strategy can either follow the path of the market leaders copying and improving current approaches and practices, or take new unconventional approaches trying to win the market with creative ideas. In any case, the analysis of the competitive environment and practices helps to outline the range of effective strategies, determine the minimum necessary set of tools for successful marketing, assess own capabilities and get closer to creating an effective strategy and marketing mix.
So, we have discussed the four main elements that should be reflected in a marketing strategy - goals, timelines, available resources, and external conditions. In practice, this results in a formalized strategy that can visually fit into no more than one A4 page or a few slides in PowerPoint. However, this outcome is preceded by a very important and detailed process of collecting, organizing, and analyzing all possible materials necessary for making a decision regarding the choice of a specific strategy from all possible options.
MARKETING STRATEGY DEVELOPMENT ALGORITHM
Let's take a closer look at the path that needs to be taken to develop a marketing strategy, with one note - each industry and each company is unique, making it impossible to create a single template or list of actions for all possible cases. Each individual case requires a personalized approach, tailored to the current realities of the industry and market, as well as the resources and capabilities of the business.
In a more generalized manner, to cover as many areas of activity as possible, we can recommend the following algorithm for developing a marketing strategy: 1. GENERAL MARKET ANALYSIS
1.1. Describe the market in a general understanding, answering questions like what the market is in the owner's understanding and what needs a typical product on the market satisfies.
1.2. Analyze the market volume over the last 3-5 years to assess the overall market perspective.
1.3. Examine the main market segments in terms of product characteristics, target audiences, distribution channels, geography, price segments, B2C/B2B/B2G segments, etc.
1.4. Study the growth rates of relevant segments to focus on promising market segments.
1.5. Analyze market trends related to technological developments, changes in consumer needs, and other relevant factors. 2. COMPETITIVE ENVIRONMENT ANALYSIS
2.1. Determine the total number of market participants and their segmentation.
2.2. Analyze commercial practices in the market, especially focusing on the major commercial practices applied by competitors.
2.3. Examine competitors' marketing practices, including their marketing strategy, branding, and marketing mix.
2.4. Describe the business models of major competitors, analyzing purchasing policies, finances, legal aspects, etc. 3. SWOT ANALYSIS OF OWN POSITIONS
3.1. Identify strengths by analyzing the market and competition, determining advantages over competitors.
3.2. Acknowledge weaknesses, understanding the shortcomings in the product and organization to find ways to overcome them.
3.3. Explore opportunities by conducting a thorough analysis of the market and competitors to identify opportunities for successful market entry and development.
3.4. Evaluate threats by analyzing external factors to anticipate challenges and prepare for an appropriate response. 4. DEVELOPMENT AND EVALUATION OF POSSIBLE STRATEGY OPTIONS
4.1. Model a set of possible realistic strategies based on the previous sections.
4.2. Eliminate less priority strategies that involve intense competition, high costs, imbalances between subcontractors and own forces, etc.
4.3. Formulate a shortlist of effective strategies for the final evaluation and selection. 5. CHOICE AND FORMALIZATION OF THE STRATEGY
5.1. Conduct a comparative analysis of strategies from the shortlist based on criteria such as realism, profitability, adaptability, and scalability.
5.2. Choose the final marketing strategy for the business.
5.3. Formalize the strategy by developing a final document that clearly defines the goals, main approaches, resource base, and implementation timelines.
In conclusion, developing a marketing strategy for a company is a complex task that requires both a deep analysis of internal capabilities, external conditions, and competition, as well as practical skills in defining strategy and knowledge of marketing tools for its implementation in the form of a marketing mix.
The development of a marketing strategy and the creation of a marketing plan are necessary and useful processes for any business. They allow a better understanding of the business's opportunities in the market and the development of an effective action plan for systematic and responsible business growth. Therefore, we recommend not neglecting these processes and strongly advise organizing their development and implementation. However, if for any reason there is no opportunity to do it independently, we suggest seeking professional assistance from our company.
Achieving the commercial goals of a company through effective marketing requires a deep understanding of the market situation, understanding consumer needs, analytical skills to find alternatives, and a creative approach to problem-solving. Our company has significant experience in determining the optimal marketing strategy for the client's business, creating a powerful brand and market positioning, as well as developing a marketing mix for the chosen strategy's implementation. You can familiarize yourself with the services and solutions our company offers on the "Services" and "Solutions" pages, respectively.