What is Marketing Strategy?
Marketing strategy is the sum of all activities completed as part of developing an organizational marketing strategic plan. While each of the activities has their own subset of strategies, it is the whole of these activities that create the marketing strategies. There are five primary activities that a business completes in developing a strategy, as follows:
1. Development of a Marketing Plan
2. SWOT Analysis
3. Market Segmentation Analysis
a. Identify Target Market
4. Implement a Marketing Mix
5. Establish Marketing Plan Objectives
A marketing plan is a living document that serves as a guide for making business decisions related to marketing; guiding the organizational long-term marketing objectives. The marketing plan contains the documented results of each of the analytical activities. It communicates the research and analysis, and it identifies the strategies the business will implement to achieve its' objectives. A marketing plan contains the following sections:
1) Business Mission Statement
2) SWOT Analysis
4) Marketing Strategy
a. Target Market Strategy
b. Marketing Mix (the Four P's)
ii. Distribution (Placement)
5) Implementation, Evaluation, & Control
A SWOT analysis lays the framework for the organization to make strategic decisions; this understanding lays the foundation from which all other decisions are based upon. This analysis looks at the business strengths and weaknesses (from an internal perspective), as well as opportunities and threats (the external business environment). Based on this analysis, strategic decisions can be made to focus on improving core organizational strengths/weaknesses, or to create strategies to confront external opportunities/threats. Decisions made here allow the business to influence the 'big-picture' marketing strategy.
For example, a business may recognize an opportunity to improve distribution to an under-served market; increasing speed of product to market. This could play a valuable role in making decisions when the business begins evaluating the marketing mix. Once the internal and external business environment is fully understood, a business can begin to shift focus to customer identification and the strategies that will be implemented to create value for those customers.
Market segmentation is the process of identifying customers and grouping them based on common characteristics. The purpose of this activity is to establish an understanding of who your customers are, and this will serve as a guide for identifying the target market. Market segmentation is based on 3 primary characteristics; 1) Geographic, 2) Demographic, and 3) Psychographic. Each of these characteristics has a subset of variables/traits that allow the business to drill down to very specific details related to their customer (or potential customers). These characteristics also allow the business to develop marketing strategies catering to the needs and wants of each group in a way that will have a specific impact on that group.
The target market is the specific customers, or area where customers exist, that the business is seeking to market to. With these specific customers identified the organization can review the marketing mix, creating a uniquely tailored marketing experience for each target market.
The marketing mix (also referred to as The Four P's of Marketing) is a set of strategies the business will implement to reach the target market. The marketing mix is based on; 1) Product, 2) Place (Distribution), 3) Promotion, and 4) Price. Each of these categories offer the business an opportunity to implement specific strategies, so each contains multiple strategic opportunities while as a whole the marketing mix is a set of marketing strategies.
For example, when evaluating the product category of the marketing mix a business may make strategic packaging decisions or may make a strategic decision to provide a uniquely tailored post-sale service program (an opportunity to add value for the customer, influencing a potential sale, and leveraging product differentiation). These are product marketing strategies to add value to the customer, improve perception, and cater to this specific markets wants, needs, and expectations. These strategies then become part of the Marketing Mix as a whole, which then rolls up under the Market Plan; the marketing plan is the sum of all of the strategies documented in each section of the plan.