What Are Marketing Strategies?

Marketing strategies are long-term plans formulated to achieve business objectives and marketing goals. For a business to be successful, it should have a proper marketing plan to showcase its products and services to its target customers.

A successful marketing strategy should be customer-oriented. Businesses exist to deliver products that satisfy customers' demands and earn revenue through this activity.

Significance of Marketing Strategies

Marketing strategies have significance in the following areas:

• Distribution: Marketing strategies help in the establishment of an effective distribution system for products and services across marketing channels, such as retail distribution and wholesale distribution channels.
• Innovation: Marketing strategies help an organization seize opportunities and develop new products for customers that increase revenue and profit.
• Planning: Marketing plans are formed based on overall marketing strategy. Marketing strategies are formulated first, and marketing plans are formulated based on that strategy. Marketing plans can be short-term and long-term. Short-term marketing plans are formed for up to one year or less, and long-term market plans are formed for up to five years.
• Customer insights: Formulating a marketing strategy helps a company in understanding the needs and preferences of its customers, in addition to identifying the target audience to whom the company is going to sell its product.
• Resources: Marketing strategy helps an organization use its available resources to their optimum level. If a resource is unavailable, then this helps the business to arrange for that resource before the production or manufacturing of the product.
• Communication: A good marketing strategy helps in the selection of the right tactics to communicate USP to target customers.
• Brand image: Apart from all the above advantages, a marketing strategy helps in building the goodwill and corporate image of the business organization.

Steps Included in Marketing Strategy Formulation

The marketing process can vary based on several factors, including the organization, its goals, the specific marketing strategy or campaign being implemented, and more. However, in general, there are eight major steps to formulate a marketing strategy:

• Step 1: Identify and set the overall organizational objectives and goals. This is the foremost step included in market strategy formulation.
• Step 2: Evaluate and analyze the organizational environment.
• Step 3: Conduct a SWOT analysis to know the prospective opportunity and threat areas for your product.
• Step 4: List all the possible alternatives and evaluate them.
• Step 5: After evaluating alternatives, choose the best alternative suitable to your product and brand.
• Step 6: Implement the plan and ensure minimum full compliance with the initial plan.
• Step 7: Evaluate and measure the planned strategy with the actual result.
• Step 8: Follow up, control, and review the performance.

Levels of Marketing Strategies

There are three levels of marketing strategies: corporate-level strategy, business-level strategy, and functional-level strategy. Together, they are also called "Strategy Pyramid."

Corporate-Level Strategy

Corporate-level strategy is a top-level strategy since it is formulated by the people involved in the top-level management, such as the director, CEO, managers, and partners of the business organization. It involves the highest level of strategic decision-making. Corporate-level managers, and particularly CEOs, are viewed as guardians of the shareholders' wealth. Corporate-level strategies are very rigid, as they are the basis for all the work of the organization. They define the overall objective, vision, and mission of the business organization.

Types of Corporate-Level Strategy

1. Stability strategy: The firm stays along the lines of its current business and product market. They maintain the existing level of effort and remain satisfied with the current growth and income.

2. Growth or expansion strategy: Growth or expansion strategy involves redefinition or enlarging the scope of the business and gradually increasing the investment in the business. It is the opposite of stability strategy. A growth strategy leads to the growth of the business.

3. Retrenchment strategy: This is the strategy that is followed when an organization is not doing well and reduces its scope of work. This strategy aims to reduce the size and work of the business organization for its good. It involves the diagnosis of problematic areas and working to improve or remove them from the business.

4. Combination strategy: With a combination strategy, a firm or business organization combines the above strategic alternatives and adopts the best suitable combination.

Business-Level Strategy

Business-level strategy is a middle-level strategy that is formulated by the principal general manager at the business level. A strategic business unit is a self-contained division with functions such as financing, purchasing, production, marketing, and so on. Business-level managers deal with strategies that are specifically concerned with a particular business unit.

Business-level strategies deal with issues such as:

• Meeting the needs of key customers
• Achieving competitive advantages over competitors
• Avoiding competitive disadvantages

Functional-Level Strategy

Functional-level strategy is formulated by functional-level managers who are responsible for specific business functions or operations, such as human resources, purchasing, product development, customer service, and so on. They are not responsible for the organization’s overall performance.

Context and Applications

This concept is important in various exams both on the graduates’ and postgraduate levels. It is an important part of various professional management courses and professional management training programs such as Masters in Business Administration and Bachelors in Business Administration. Moreover, marketing strategies are extensively used by companies to promote their products. It is extensively used by every company to showcase its products to potential customers.

Practice Problems

1. Which is the last step of marketing strategy formulation?

1. Follow up, control, and review the performance
2. Identifying all the possible opportunities and threats
3. Implementing the best suitable strategy chosen earlier
4. Evaluating and measuring the planned strategy with the actual result

Answer: a

Explanation: The last step of marketing strategy formulation is to follow up, control, and review performance. Identifying all the possible opportunities and threats, implementing the best suitable strategy, and evaluating and measuring the planned strategy with the actual result are the first, sixth, and seventh steps, respectively.

2. Which of the following defines the corporate mission, vision, and objective?

1. Mission statement
2. Vision statement
3. Corporate strategy
4. Functional strategy

Answer: c

Explanation: Corporate strategy defines the mission, vision, and objective of the organization, whereas functional strategy is not responsible for the organization’s overall performance.

3. Marketing strategies are formulated after the marketing plan. True or False?

1. True
2. False

Answer: b

Explanation: Marketing strategy is formulated before the marketing plan. It lays the foundation of the marketing plan and the vision of the business organization.

4. Which is NOT a corporate-level strategy?

1. Focus and differentiation strategy
2. Growth strategy
3. Stability stagey
4. Retrenchment Strategy

Answer: a

Explanation: Growth, stability, and retrenchment are the parts of the corporate-level strategy, whereas focus and differentiation are the parts of the business-level strategy.

5. What is the strategy that helps in the implementation of corporate- and business-level strategies called?

1. Corporate-level strategy
2. Business-level strategy
3. Cost strategy
4. Functional-level strategy

Answer: d

Explanation: The functional-level strategy helps in the implementation of both corporate and business level strategies because it is responsible for specific business functions or operations, such as human resources, purchasing, product development, customer service, and so on.