Marketing relies on specific theories to help the organization achieve its goals and objectives. One of these theories is the Ansoff approach which is identifiable as the Ansoff matrix due to its grid layout, aids marketers in seeing chances to increase sales for a company by creating new goods and services or entering new markets. Therefore, it is occasionally referred to as the Product-Market Matrix rather than the Ansoff Matrix. Because of its emphasis on expansion, the Ansoff Model is one of the most popular marketing models. By comparing potential new market combinations for products and services with the four tactics offered, it is used to assess prospects for businesses to improve sales.
Marketing Decisions at the Corporate Level
The management must apply different approaches to ensure that actions correspond to the initial plan. The most common marketing decisions at the corporate level include cost leadership, differentiation, cost focus, and differentiation focus. These approaches have advantages and disadvantages, but the main issue is that they should be relevant to the particular context. Therefore, marketing decisions increase the company’s revenue and enhance its image when they correspond to the market demand.
Cost leadership is a strategy that focuses on providing fair commodity prices to customers by demanding low charges for exchanging the commodity or service. Cost leaders concentrate on making production processes more efficient to cut manufacturing costs. One of the business examples of this strategy is Walmart, which sells high-quality products at the lowest price in the market, which is its competitive advantage (Palmer, 2022). This approach has many advantages due to the flexibility of this strategy. For instance, the company can cut prices while still turning a profit due to its cheap costs. Cost leaders are well-equipped to cut expenses, which can put the brakes on competitiveness. If they are still determining if they will succeed, higher-priced rivals rarely want to compete with cost leaders actively. Cost leaders must consistently come up with fresh strategies for cutting expenses. Competitors replicate an efficient cost-cutting strategy once a corporation discovers it. The disadvantage of this strategy is the difficulty of retaining the appearance of quality when the marketing plan is based on providing the most affordable products.
Differentiation helps the company to provide unique commodities through diversification of the quantities and qualities, thus helping customers to select a variety they prefer. An example of the differentiation strategy is the marketing of Tiffany & Co., which launched more democratic jewelry collections for younger clients (Rascouet, 2022). Instead of appealing to a single demand, businesses that employ differentiated marketing can meet various customer needs. By taking multiple techniques to market their goods and services, businesses attend to more consumers. Additionally, distinctiveness marketing can assist companies in adapting to changes in their sectors, customer expectations, and the general markets they target.
The advantage of this strategy is that it gives companies an edge over rivals who target just one or two specific market niches, in addition to expanding market segments. As a result, businesses may outperform their rivals by offering various goods and services to meet various demands. Despite the benefits, a differentiation approach only sometimes ensures that customers will see the benefits that set the product apart from other, more conventional choices. When a company pursues a differentiation approach, it must invest extra time, effort, and money into creating a product that stands out from the competitors. These consequences significantly affect smaller enterprises with few employees and low resources. Buyers will no longer benefit from their product’s distinction as consumers get savvier as technology and products advance.
A differentiation focus strategy offers a unique commodity type to a narrow market group instead of catering to the entire market. For example, Gibson presented a vintage series of Les Paul guitars with a limited number of copies at a comparatively high price (Falcon, 2021). This proposition is made for the narrow market group, and the price is the secondary concern in this case. At the same time, high prices and narrow market groups are the weak sides of this approach. When a business tries to win over potential clients only through competitive pricing, it pursues a cost-focused approach. These businesses strive to offer the most negligible value for their products by undercutting their competitors’ prices. Companies that use this strategy focus on a particular market sector to promote their goods.
Approaches to Competitive Positioning of Business
There are different approaches to the competitive positioning of the business in the market. A competitive positioning strategy ensures that the business succeeds in creating a positive interaction between the business and the customers. The main approaches to a competitive positioning of business include being market leaders, challengers, followers, and niches. Market leaders ensure they are up to date with the trends in the market to obtain extreme market control. On the other hand, market followers depend on market trends to make decisions and focus on following the footsteps of successful organizations. Conversely, the market challengers offer stiff competition to the current opportunities in the market hence competing with the market leaders. A niche market is a subsection of a broader market characterized by its particular requirements, preferences, or identity, distinguishing it from the market as a whole.
Strategic Marketing Decisions Influence Marketing at Lower Levels Within the Organizations
Strategic marketing decisions help develop goods and services that generate high revenues for the company. It is because strategic marketing begins by performing a competitive analysis of the organization, the consumer’s market analysis, and an analysis of the market’s current trends. The best possible goods and services are then produced for the consumer using this knowledge. Setting attainable marketing goals is easier with a comprehensive marketing plan. The goals ought to be measurable and should have a deadline. Assessing an organization’s posture and performance is made easier with the aid of strategic marketing. Understanding an organization’s resources available at any one time is crucial. Understanding how effectively an organization operates within the larger competitive environment is made possible by the data gathered.
Successful strategic marketing decisions influence lower levels within the organizations. For example, the company’s profitability leads to the increased profits of all its employees whose salaries grow. In addition, they might receive bonuses for their practical work. Another issue is connected with a more structured and goal-focused work of all team members because they understand the reason for work. The last low-level advantage of practical strategic marketing implementation is the increased quality of the company’s products and services. In this case, clients receive better products for less money, which is the apparent positive outcome.
References
Falcon, G 2021, âA “perfect rock ‘n’ roll machine”: Les Paul’s crowning achievementâ, CBS News, Web.
Palmer, A 2022, âWalmart overtakes Amazon in shoppersâ search for Black Friday bargainsâ, CNBC, Web.
Rascouet, A 2022, âLVMH Has a Younger Arnault Working on Its Makeover of Tiffanyâsâ, Bloomberg, Web.