There is one strategy that is at times weaved into marketing strategies, however not explicitly stated. And it is unethical in that it specifically targets unsuspecting minority groups. First, consider the definition of
ethics, which is the moral question of whether or not something is socially acceptable. Applying this definition to marketing strategy, companies must be wary that they do not purposefully seek to seclude groups of people based on their cultural background. A company that is seeking to expand internationally has a duty to establish their marketing agenda with multiple cultures in mind, so as to prevent bodies of people from getting left out. Marketing strategies have two goals: first of which, keeping with company's goals, is to benefit in some way consumers on a micro level from person to person and then second, keep all of society as a whole in contentment. In this approach, the strategic choices involve decisions about whether to compete for a share of the total market or for a specific target group (competitive scope) and whether to compete on costs or product differences (competitive advantage). This type of thinking leads to three generic strategies: Porter's approach was the dominant paradigm throughout the 1980s, allowing others who sought to formulate strategy within their business model to follow his (at the time) best division of the ways in which to target the market. This only lasted a little while though, as Porter's approach began receiving a good amount of criticism mainly due to its simplicity; which is part of what made his approach so popular.
Resource-based view (RBV) During the 1990s, the
resource-based view (also known as the
resource-advantage theory) of the firm became the dominant paradigm. It is an interdisciplinary approach that represents a substantial shift in thinking. It focuses attention on an organization's internal resources as a means of organizing processes and obtaining a competitive advantage. The resource-based view suggests that organizations must develop unique, firm-specific core competencies that will allow them to outperform competitors by doing things differently and in a superior manner. Barney stated that for resources to hold potential as sources of sustainable competitive advantage, they should be valuable, rare, and imperfectly imitable. A key insight arising from the resource-based view is that not all resources are of equal importance nor possess the potential to become a source of sustainable competitive advantage. •
Organizational culture e.g. market orientation, research orientation, culture of innovation, etc. • Assets e.g. brands, Mktg IS, databases, etc. • Capabilities (or competencies) e.g. market sensing, marketing research, relationships, know-how, tacit knowledge, etc. After more than two decades of advancements in marketing strategy and in the resource-based view paradigm, Cacciolatti & Lee (2016) proposed a novel resource-advantage theory based framework that builds on those organizational capabilities that are relevant to marketing strategy and shows how they have an effect on firm performance. The capabilities-performance model proposed by Cacciolatti & Lee (2016) illustrates the mechanism whereby market orientation, strategic orientation, and organizational power moderate the capabilities-performance relationship. it has never been articulated explicitly and tested empirically. In the resource-based view, strategists select the strategy or competitive position that best exploits the internal resources and capabilities relative to external opportunities. Given that strategic resources represent a complex network of inter-related assets and capabilities, organizations can adopt many possible competitive positions. Although scholars debate the precise categories of competitive positions that are used, there is general agreement, within the literature, that the resource-based view is much more flexible than Porter's prescriptive approach to strategy formulation. Hooley et al., suggest the following classification of competitive positions: • Price positioning • Quality positioning • Innovation positioning • Service positioning • Benefit positioning • Tailored positioning (one-to-one marketing)
Other approaches The choice of competitive strategy often depends on a variety of factors including: the firm's market position relative to rival firms, the stage of the product life cycle. A well-established firm in a mature market will likely have a different strategy than a
start-up.
Growth strategies Growth of a business is critical for business success. A firm may grow by developing the market or by developing new products. The
Ansoff product and market growth matrix illustrates the two broad dimensions for achieving growth. The Ansoff matrix identifies four specific growth strategies:
market penetration,
product development,
market development and
diversification. :
Market penetration involves selling existing products to existing consumers. This is a conservative, low risk approach since the product is already on the established market. There are two type of Diversification; horizontal and vertical.
Horizontal diversification focuses more on the product(s) where the business is knowledgeable, whereas
vertical diversification focuses more on the introduction of new product into new markets, where the business could have less knowledge of the new market. A benefit of horizontal diversification is that it is an open platform for a business to expand and build away from the already existing market. A disadvantage of using a diversification strategy is that the benefits could take a while to start showing, which could lead the business to believe that the strategy in ineffective. A disadvantage of using the horizontal integration strategy is that this limits and restricts the field of interest that the business. Horizontal integration can affect a business's reputation, especially after a merge has happened between two or more businesses. There are three main benefits to a business's reputation after a merge. A larger business helps the reputation and increases the severity of the punishment. As well as the merge of information after a merge has happened, this increases the knowledge of the business and marketing area they are focused on. The last benefit is more opportunities for deviation to occur in merged businesses rather than independent businesses. By having a highly vertically integrated business this creates different economies therefore creating a positive performance for the business. Vertical integration is seen as a business controlling the inputs of supplies and outputs of products as well as the distribution of the final product. Some disadvantages of using a Vertical Integration Strategy include the internal costs for the business and the need for overhead costs. Also if the business is not well organized and fully equipped and prepared the business will struggle using this strategy. There are also competitive disadvantages as well, which include; creates barriers for the business, and loses access to information from suppliers and distributors. :
Market leader: The market leader dominates the market by objective measure of market share. Their overall posture is defensive because they have more to lose. Their objectives are to reinforce their prominent position through the use of PR to develop corporate image and to block competitors brand for brand, matching distribution through tactics such as the use of "fighting" brands, pre-emptive strikes, use of regulation to block competitors and even to spread rumours about competitors. Market leaders may adopt unconventional or unexpected approaches to building growth and their tactical responses are likely to include: product proliferation; diversification; multi-branding; erecting barriers to entry; vertical and horizontal integration and corporate acquisitions. :
Market challenger: The market challenger holds the second highest market share in the category, following closely behind the dominant player. Their market posture is generally offensive because they have less to lose and more to gain by taking risks. They will compete head to head with the market leader in an effort to grow market share. Their overall strategy is to gain market share through product, packaging and service innovations; new market development and redefinition of the product to broaden its scope and their position within it. :
Market follower: Followers are generally content to play second fiddle. They rarely invest in R & D and tend to wait for market leaders to develop innovative products and subsequently adopt a “me-too” approach. Their market posture is typically neutral. Their strategy is to maintain their market position by maintaining existing customers and capturing a fair share of any new segments. They tend to maintain profits by controlling costs. :
Market nicher: The market nicher occupies a small niche in the market in order to avoid head to head competition. Their objective is to build strong ties with the customer base and develop strong loyalty with existing customers. Their market posture is generally neutral. Their strategy is to develop and build the segment and protect it from erosion. Tactically, nichers are likely to improve the product or service offering, leverage cross-selling opportunities, offer value for money and build relationships through superior service quality and other related value-adding activities. Most firms carry out strategic planning every 3– 5 years and treat the process as a means of checking whether the company is on track to achieve its vision and mission. Strategies often specify how to adjust the
marketing mix; firms can use tools such as
Marketing Mix Modeling to help them decide how to allocate scarce resources, as well as how to allocate funds across a portfolio of brands. In addition, firms can conduct analyses of performance, customer analysis,
competitor analysis, and
target market analysis.
Pioneers Market pioneers are known to often open a new market to consumers based on a major innovation. They emphasize these product developments, and in a significant number of cases, studies have shown that early entrants – or pioneers – into a market have serious market-share advantages above all those who enter later. Pioneers have the first-mover advantage, and in order to have this advantage, business’ must ensure they have at least one or more of three primary sources: Technological Leadership, Preemption of Assets or Buyer Switching Costs. and lower switching costs, to have the first-mover advantage, it can be more expensive due to product innovation being more costly than product imitation. It has been found that while Pioneers in both consumer goods and industrial markets have gained “significant sales advantages”, they incur larger disadvantages cost-wise.
Close followers Being market pioneer can, more often than not, attract entrepreneurs or investors depending on the benefits of the market. If there is an upside potential and the ability to have a stable market share, many businesses would start to follow in the footsteps of these pioneers. These are more commonly known as Close Followers. Due to the nature of early followers and the research time being later than Market Pioneers, different development strategies are used as opposed to those who entered the market in the beginning,
Late entrants Following the so called, "Close Followers" are the "Late Entrants". Late Followers have the advantage of catching the shifts in customer needs and wants towards the products. It is created through the “perceptions of benefits” and the “total cost of ownership”. If the marketing mix is not used correctly – despite the entrant time – the business will gain little to no advantages, potentially missing out on a significant opportunity.
The differentiated strategy The customized target strategy The requirements of individual customer markets are unique, and their purchases sufficient to make viable the design of a new marketing mix for each customer. If a company adopts this type of market strategy, a separate marketing mix is to be designed for each customer. Specific marketing mixes can be developed to appeal to most of the segments when market segmentation reveals several potential targets. Customization must however be generalized or not target consumers based on race or ethnic background. This sort of marketing strategy is unethical. Currently more research has to be done to discern a way that prevents this strategy, because a generalized set of rules to police what is considered the overall "good" cannot be instituted. ==Developing marketing goals and objectives==