The Role of Marketing Strategy Development
As marketing professionals, we have a clearly defined role within the organisation—to promote the organisation’s services and/or products to potential customers in order to increase market share and grow the business. Yet throughout the years, marketing and promotion is straightforward in a world where consumers are spoiled for choice with most any product or service. In addition, consumers cannot be considered a group as a whole. Customers are people, and vary considerably and have different needs so cannot all be satisfied in the same way. (Kotler 31)
These reasons mean that marketing must be strategic in order to have the biggest impact on obtaining customers, increasing market share, and growing the business. Strategic marketing is defined as the process of aligning strengths of an organisation with the groups of customers it can serve. (Kotler 31) This means that the marketing strategy will align an organisation with a group of customers where it can meet their needs better than its competitors.
Strategic marketing affects the whole direction and future of an organisation. You need a complete understanding of the macro and micro environments and markets served to inform your marketing process. In the same way that your organisation is developing strategic marketing plans to grow the business, your competitors will be doing the same thing, constantly searching out new ways to capture and retain customers.
Therefore the basics of strategic marketing involve three interdependent parts so messages are directed appropriately: market segmentation and positioning, developing a relationship with the customers, and competitive strategy. (Kotler 31) Figure 1 defines these parts of strategic marketing.
Figure 1: Strategic Marketing
Three Parts of Strategic MarketingDefinition
Segmentation and positioningDividing the total market into groups of similar customers, then targeting specific groups depending on their attractiveness; giving the product favourable associations in the minds of the target customers Relationship marketing Building and maintaining profitable customer relationships by delivering better value and satisfaction Competitive strategyBuilding an advantage over the competition; delivering customer value that competitors will find difficult to copy
By analysing these three parts of strategic marketing, the organisation can also gain a deeper understanding of itself. Knowing who its customers are, their perceptions and purchasing habits, and also understanding how the organisation’s products, services and marketing differ from its competitors enables organisations to plan the future activities to engage with its marketplace.
One way to illustrate the organisation’s areas for potential market growth is to use Ansoff’s product/market expansion grid as shown in Figure 1. (Kotler 66)
Figure 2: Ansoff’s product/market expansion grid
Existing productsNew Products
Existing MarketsMarket PenetrationProduct development
New marketsMarket DevelopmentDiversification
In this table, Ansoff provides a way of deciding how to achieve growth. It shows four areas for achieving growth: market development, new markets, new products and diversification.
Market penetration is increasing sales of existing products in existing markets. (Kotler 65)
Market development is entering new markets with existing products. (Kotler 66)
Marketing strategy provides the guiding philosophy for the company (how to serve the needs of customer groups), as well as inputs to overall company strategy by identifying market opportunities and assessing the firm’s potential to take advantage of them. (Kotler 67)
Strategic marketing has a key role to play in developing market share and growth when you focus on market penetration and market development. Because the organisation already offers...