We will discuss in detail the importance of modern marketing to a company and why it is essential. A parallel between marketing and corporate strategy will be drawn to show the inseparability and juxtaposition of these areas. In addition, it will examine how marketing strategy is related to a company’s competitive advantage and why investing appropriately in marketing can be a winning move for a firm. Finally, recognizing the importance and benefits of marketing, we will discuss some of the steps that can be used to build a unique strategy.
The term “Marketing Strategy” is not entirely new, and what is more, many of the professionals of the last century may have used marketing skills without realizing it. If you turn to the Figure, you can see that the academic community constantly explores the issue in different categories of knowledge. Most citations and publications come directly from a business, management, and economics, but marketing strategies are also well studied in computer science, environmental disciplines, and even the medical industry. Thus, marketing is an important, integral component of any industry. The term itself does not have a clear definition, and so as not to complicate the presentation, here and below, we will understand a marketing strategy as a long-term plan for the implementation of commercial and corporate goals of the company.
So, marketing strategy is a complex and complicated phenomenon on which the life of a company directly depends. Does this mean that ignoring marketing is a hundred percent guarantee of corporate doom? There is no exact answer because there are known cases from life when entrepreneurs did not invest in advertising or brand packaging, but their small stores attracted hundreds of regular customers. Nevertheless, on a larger scale, marketing is vital, especially in a competitive environment. When a convenience store opens next door and offers significant discounts on everyday items, most consumers will switch to a better shopping experience. Marketers develop a comprehensive strategy to achieve this goal of winning the trust and money of more customers. Thus, any successful marketing strategy consists of brand promotion, product and service sales, pricing procedures, customer and staff outreach, and tangible asset management.
Until now, it might have seemed that marketing strategy is an abstract concept that lives somewhere in the head of the company’s leader. On the contrary, a natural, professional strategy is a formal document that is documented in company policy.
Today it is accepted that the primary goal of marketing is to create and maintain opportunities in which the company can achieve such a volume of sales, which will be sufficient for the profitable existence of the activity and a sustainable position in the market. This goal has another side: attracting as many customers as possible. How well the company uses its marketing strategy depends on how many new customers it will be able to attract and retain current ones, ultimately increasing profits. In this context, one should never forget the unique example of Apple, which breaks sales records every year by rigorously retaining current customers and constantly attracting new ones through product feature extensions (Kahney, 2019; Walters, 2018). To achieve this goal, a company needs to regularly assess the company’s resources and needs, based on which to adjust its corporate development plan.
In discussing marketing strategies, the importance of corporate strategies cannot be ignored. It is important to recognize right away that these two types of strategies are not the same thing, and confusing them is fraught with threats to the business. Generally, a corporate strategy should be understood as a set of procedures and activities that a company uses to achieve specific goals (Sull et al., 2018). For example, if a company’s goal is to increase the number of customers by 10% by the end of the year, then any of the tools used are part of the corporate strategy. Since marketing is the most obvious way to attract new customers, a marketing strategy should be considered part of the corporate strategy (Thompson, 2019). To put it another way, developing a marketing strategy in isolation from the corporate strategy is unacceptable.
A hypothetical example will better understand the relationship between corporate and marketing strategy. Let us imagine that a small store without advertising decides to expand in the face of increasing competition. His long-term goal is obvious – for example, to increase sales by 30% and grow the customer base by 50% over the next year. Setting such a goal, combined with the team’s values and internal culture, is part of the corporate strategy. A store manager can either refuse or agree to use marketing to attract new customers. However, if he refuses, growth in sales and customer base is not possible because any tools of attraction will always be seen as part of the marketing strategy. For example, lowering the price, focusing on the b2b-vector, or introducing a loyalty program for visitors is part of the marketing strategy. So there is a conjugate relationship between the two strategies that cannot be broken.
A little more discussion of marketing strategies in practice is in order. As noted, achieving marketing goals in isolation from a company’s overall strategy is impossible. The following will discuss four marketing strategy practices most commonly used in businesses to achieve the goals outlined.
A company’s primary competitive goals is to increase brand presence in the marketplace. In a highly competitive environment, this goal seems to be the highest priority because, without a company’s reliable access to the industry market, it is impossible to imagine an increase in sales (Walgrove, 2019). Consumers then find themselves simply unaware that the company exists, and even if it presents excellent quality goods at reduced prices, this will only be known to a very narrow circle of individuals. Consequently, any enterprise, regardless of its size, needs appropriate markets for its products or services and needs customers. From this follows an essential strategy for marketers in an enterprise, namely to capture as much market share as possible.
When the mission statement is clear, namely increasing industry market share, marketers can think about specific practices to achieve it. For example, investing in business innovation will increase share by attracting new customers: people love novelties, and innovation gives a company the character of a modern, progressive firm (Konya-Baumbach, 2019; Mall, 2020). Second, conducting a competitive analysis is critical because understanding the performance of direct competitors allows one to assess one’s weaknesses and adjust activities to fit them (Casarella, 2021). In addition, some sources advise being confident in your niche and developing products only within it (Egan, 2020; Creatives, 2019). For example, Louis Vuitton confidently occupies a luxury fashion niche (Cohen, 2018).
In contrast, some multinational companies show the opposite strategy as the same Apple or Google: developing services, developing electronic technologies, developing cars (Perez, 2018). In this regard, the horizontal integration strategy, which allows a company to increase market share by expanding its product range dramatically, comes to mind especially (Daniel & Joseph, 2019). Ultimately, no specific rules or guidelines are universal for any company. That being said, marketers must use all available resources to increase market presence.
Another practical goal of a marketing strategy related to increasing competitiveness is to increase sales. This is usually the most obvious of the goals that any commercial enterprise is always pursuing. It is an axiom in marketing that marketing tools work poorly if customers buy a few of the company’s products (Brandenberger, 2021). A small store suffers a crisis not because a cheap supermarket has opened nearby but because the store director is unwilling to develop marketing strategies. Once market share begins to increase, new customers come into the company, and effective outreach, whether through discounts, loyalty programs, or gifts, is designed to increase sales (MacDonald, 2021). In other words, adequately tuned marketing should stimulate consumer buying activity.
There is no doubt about how sales growth relates to a firm’s profitability. The more sales made in a period of time, the greater the business’s profitability. However, in this sense, it is essential to understand that increased sales are not always directly related to liquidity. For example, many inexperienced entrepreneurs think that reducing prices to the cost of production will lead to the rapid commercial growth of the company. Indeed, sales growth will peak, and the company will quickly sell out all of its inventory, but it may ultimately lead to a loss if the price dumping was set up incorrectly (Learn, 2020).
Finally, brand positioning is an essential practical task that needs to be continually addressed in the enterprise. Proper positioning in an industry niche allows you to consistently sell products at a market price in a way that is in demand by consumers. Large companies perfectly position their brand: it is recognized and trusted, and, in a sense, brands set the market trends. There are not yet many privileges for small and medium-sized companies, so additional positioning tools are needed.
In this sense, marketing is particularly effective, a bridge between the brand’s perceived value and the potential buyer’s mind. In order to improve the quality of this bridge, i.e., to strengthen brand positioning, several well-known ways can be used. Conventionally we can distinguish four positioning strategies. The first is to improve customer service. An incredible service experience can justify overpriced comfort, as is often the case with luxury airlines (Gravier, 2019). Second, it is a service-related convenience strategy where visitors are willing to pay more for better comfort. Understanding why one firm’s product is more comfortable than another’s strengthens brand positioning and makes it more competitive. For example, coffee in a paper cup is always more convenient for going to work than coffee in a store’s ceramic mug that needs to be returned. Third, brand positioning can be reinforced through pricing models. Positioning a product or service as the most affordable in the market expands the customer base and increases sales. In this case, however, thresholds must be considered, as a product that is too cheap is often seen as low quality, as is the case with Aliexpress products (Zhong, 2018). The fourth strategy is a differentiation strategy that emphasizes why the purchased product is unique. A brand can be positioned as potent and selective because there are few competitors in the industry market, as with the most innovative technology, be it electric cars or VR gaming equipment, for example. Ultimately, it must be said that brand positioning, share growth, increased sales, and profitability is integral mechanisms of a marketing strategy that involves competitive market research.
So, before we get to the specific steps necessary to implement a unique marketing strategy in production, we need to assess the overall importance of the strategy. To do this, look to the example of the multinational company McDonald’s, which at the beginning of its development, presented a business plan based on the ill-conceived franchise model (Haden, 2020). As a result, each entrepreneur opened his branch of the chain and could introduce any products into the menu, thereby lowering the unified integrity of the business. This is an example of a poor marketing strategy that may have increased customer awareness of McDonald’s but could hardly lead to increased trust and a qualitative increase in sales. By completely rethinking the sales chain and achieving network unity, Ray Kroc could provide McDonald’s with today’s success and recognition. Thus, an essential component of any marketing strategy is the strategic thinking of its initiator.
However, many entrepreneurs, like the hypothetical director from a small store, may delude themselves into thinking that a marketing strategy is a waste of the company’s finances. Indeed, reliable, adequate marketing management requires hiring qualified employees and using company resources and budgets, so working through this phase can be financially heavy (Ĺukasik & IĹźyĹska, 2018). With this in mind, unwise entrepreneurs often refuse to invest in marketing. In addition, one can see that since profits are coming in as it is, marketing is unnecessary – it is just like the case with the store before the competitors appeared. Finally, a manager may recognize the importance of a marketing strategy but decide to do it himself. In any of these cases, the business is guaranteed to be ruined after a while because there was no strategic thinking on the part of its creator.
So, there is no doubt that a marketing strategy is essential. In addition, it should be drafted by competent individuals who can provide a quality result that does not lead a business to collapse. Writing a marketing strategy, however complex, is a unique experience that is based solely on the resources and capabilities of the individual business. Obviously, Apple’s or McDonald’s strategies may prove ineffective for a small business that sells fruit and vice versa. That said, some tacit algorithms can be used to improve the overall marketing process. These are discussed next.
The first of the steps is a market opportunity analysis to identify a company’s potential in the marketplace. This is a complex step that includes competitor analysis, financial analysis, macro environment analysis, political and legal factors, the audience needs analysis, and internal company strengths and weaknesses analysis, including SWOT methodology (Elavarasan et al., 2020). Other test options that can be performed in this step include Porter’s competitive forces analysis, PESTEL, SOAR, NOISE, and any other available tools (NMBL Strategies, 2021).
Once the market opportunity analysis has been completed, the resulting information can be transported for strategic marketing planning. In this planning, the main issues are determining precisely what market niche is planned to take, how to achieve the desired goal, and what resources are required to do so. In addition, the alignment of the strategic vision with corporate missions and goals is assessed (Yohn, 2017). Thus, it is necessary to exclude situations in which marketing strategies are at odds with the company’s values.
The development of devised plans can be carried out according to different models, of which the 4P is one of the most well-known (Twin, 2021). In this model, product, price, place, and how to promote it are inextricably linked. In other words, focusing on these aspects of the marketing mix allows you to cover the minimum needs of the business and improve the sale of products and services in the industry market.
All the planning and development phases are complete, so the implementation phase of specific marketing strategies, or operational marketing (Kreutzer, 2019), begins. In other words, this is the direct action phase, which may include acts of pricing, offering discounts, advertising campaigns, and, for example, evaluating the effectiveness of promotions.
The final step in the overall marketing strategy scheme is the audit. The audit allows an independent assessment of the success of the full implementation of the complex and its individual parts, whether it is customer service or works with discounts. Budgeting, assessment of resources used, time efficiency, and other metrics are subjects of investigation by the auditor at this stage (Harvey, 2020). Notably, audits can be performed by a separate department within a company or by a completely independent party.
Hence, to summarize, it is essential to emphasize that marketing strategy is a vital component of any business interested in increasing sales and profits. Marketing and corporate strategy are not the same things, as a corporate strategy is a broader concept. Generally, a marketing strategy must be developed in accordance with the corporate strategy, namely the enterprise’s values, mission, and vision. The key objective of marketing strategy, namely increasing profits and sales, is directly related to competitive market analysis. There are many effective practices for implementing a strategy, but these are individual experiences that are not universal for every company. Finally, a marketing strategy is a comprehensive approach, so it requires the systematic execution of the steps mentioned in the presentation to be successful.