One of the ways that an organization can improve its return on investment for marketing is to base its marketing activities on a well-considered, empirically-based strategy for its unique situation. Among the factors that should be considered in the development of this strategy are the assets and skills possessed by the organization, the drivers of the particular market, the nature of the competition, the stage of the life cycle of the industry or market, and any strategic windows that affect the organization's ability to successfully compete in the marketplace. Marketing strategies tend to focus on providing lower cost products or services than or differentiating their offerings from those of their competition, or by focusing on a market niche. Two examples of industries that have had to change their marketing strategies in response to the changing demands of the marketplace include the automotive industry and the pharmaceutical industry.
"Build a better mousetrap," the saying goes, "and the world will beat a path to your door." However, as all too many established businesses with new products, entrepreneurs with better mousetraps, and Internet hopefuls have found through bitter experience, if the world does not know that the new mousetrap is, indeed, better or that it is available, it is unlikely that a path will be beaten to one's door. Further, marketing is much more than getting the world out. Both our snail mail and e-mail boxes tend to overflow with advertisements for products we may or may not want, most of which are unsolicited. To send out a flyer announcing one's better mousetrap is unlikely to bring one the success desired. In addition, different types of products require different marketing strategies. For example, an advertisement for a new walker is much more likely to yield positive results if placed in the AARP Magazine (which has a target audience of people 50 years of age and older) than in Seventeen Magazine. Similarly, readers of Sports Illustrated are more likely to pay attention to an advertisement for sporting goods than are readers of Ladies Home Journal. In each of these examples, the cited marketing effort is probably doomed to failure because it is not reaching potential buyers. Further, many businesses find that a single approach to marketing is insufficient for attracting customers. Even if an advertisement is placed in an appropriate magazine, for example, it is unlikely to reach other potential customers who do not read that magazine. Part of successfully marketing a product is to determine the target market that one wishes to reach and then determine the right marketing mix to get the target market to purchase one's goods or services.
To improve the return on investment that an organization receives from its marketing efforts, it needs to develop a marketing strategy. This is a plan of action to help the organization reach its goals and objectives. A good business strategy is based on the rigorous analysis of empirical data, including market needs and trends, competitor capabilities and offerings, and the organization's resources and abilities.
Factors to Consider when Developing a Marketing Strategy
Each organization needs to develop its own marketing plan based on a number of factors. Although there is no such thing as a one-size-fits-all marketing strategy, there are a number of factors that should impact the development of a unique strategy for an organization or product line and the development of a concomitant strategic marketing plan (see Figure 1).
- First, one needs to consider the assets and skills that the organization already possesses or that it can readily acquire. For example, if an organization has a significant engineering department, it would be feasible for it to work on new projects that require engineering skills. However, if these personnel are already involved in other work and are not free to work on a new engineering project and the organization cannot afford to hire additional engineers, starting a new hardware line would be inadvisable at best.
- In addition, one needs to consider the market drivers when developing a marketing strategy. These are the various political, economic, sociocultural, and technological forces that may influence the wants and needs of the consumer base. For example, a technological force that has influenced the way that many people do business in recent years is information technology. Advances in this area have led to the need for businesses to be able to handle increasing volumes of information and data and the widespread use of information technology in many industries.
- In addition to market drivers, another external factor that one must also take into account is the nature of the competition in the marketplace so as to determine whether or not a marketing effort will be successful. Even businesses that start as innovators in their field soon find themselves with competition. For example, when buying a computer, one may choose between a Mac and a PC. Similarly, most soft drinks on the market are manufactured by one of two companies that offer very similar products. There are also a variety of choices available when deciding where to fill up one's car, yet most of the fuels available at the pump are virtually the same. Each of the businesses within these industries has its own market position and strives to keep its market share through marketing efforts. Part of their strategic marketing efforts is to decide how best to differentiate themselves from the competition.
- Another external factor that impacts how a business can best position oneself in the marketplace is the stage of the market or the industry life cycle. Some organizations excel as innovators, for example, being the first on the market with an innovation or new product. Other organizations excel at taking the innovation and adapting it to the needs of the marketplace (e.g., lower price, different features).
- Further, there are often various strategic windows that can affect an organization's ability to successfully compete in the marketplace. These are limited time periods during which there is an optimal fit between the needs of the marketplace and the competencies of the organization. For example, advances in computer technology have been accompanied by advances in data storage methods; although cassette tapes for data backup were innovative in their time, that time has passed. A new type of tape backup for home computers would be unlikely to meet success because the strategic window for that type of device (and type of home computer) has passed.
Once goals and objectives have been set, most businesses develop a competitive strategy to help them meet these goals and to increase competitive advantage. The three basic approaches for developing a competitive strategy are to focus on:
- The provision of low cost products or services;
- Differentiation of products from those of the competition; and
- Focus on the market niche.
Although there are generic approaches to developing marketing strategies, in order to be successful, a business's strategy needs to revolve around the nature of competition in the marketplace, stage of the market or industry life cycle, impact of market drivers, assets and skills that the organization possesses or can readily acquire, opening and closing of strategic windows, as well as other factors regarding the nature of the product or service being marketed. For example, if two companies are competing in the marketplace to sell virtually identical items, they will more than likely need different competitive strategies. One of the companies may have a longer track record for the excellence of its products or customer service while the other company may offer the product at a substantially lower price. Each marketing strategy, therefore, would be...
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