“Marketing strategy – the marketing logic by which the business unit hopes to achieve its marketing objectives” (P. Kotler, 2005 p. 595)
Any economic strategy is combining theoretical and practical aspects of entity functioning on the market, taking prevailing tendencies as a basis. Nevertheless, marketing strategies find their routes in the military. There are five basic types. (Paley, 2007 pp. 27-31):
A direct attack implies using available resources to full extend and in many business situations results in exhausting budgets and people. In the case of direct attack the company may have little or none resources left for the further penetration to the market. Therefore, this tactics is useless towards an opponent who is strongly in the leading position. Consequently, if there is not strong differentiation of the product, price, place and promotion on the market, success chances are approaching zero.
According to Liddell Hart1, indirect attack is the most efficient approach due to conserving the greatest amount of strength. When applied to business strategy, the main focus is given to the undeveloped, neglected or just emerging segments of the market, as initial point on market entry. Following the entry, market strategy is determined by using the suitable marketing mix to create a competitive advantage. In this case, the available resources are mobilized to fulfill the need in the segment and create the long-term fruitful relationships with the customers.
This type of attack consists of two major stages:
Focus on a specific market (the same way as in indirect attack).
Identification of additional segments and development of suitable offer to “envelope” the entire market.
The core meaning of the bypass attack is the expansion of the areas of interest to the unrelated segments of the market. Thought it is deceiving the competitor, it may also cause a negative effect of being spread and dispersing the main focus from any single area.
This strategy involves small, and, on the first glance, chaotic attacks with the aim to lead the opposing manager into making a strategic mistake. For example, selective price cuts, promotional bursts, supply interference, etc. Mainly, it is used for a small company, competing against a large corporation.
As discussed above, indirect approach strategy implies a company entering the undeveloped segments of the market. The actions taken when using this approach include creation of uncertainty among the competitors, - so they have to guess what the actual strategy really is; quickly filling up the gaps in the undeveloped segments by targeted products or services; gaining access to the supply chain by add-on products or services. All the actions should be sharp, fast and causing confusion for the competitors.
It is considered to be the most effective way to apply indirect approach by means of differentiating the components of marketing mix. Differentiation should be considered in such areas as customer service (including faster delivery, after purchase follow-up, packaging, management training, etc.) and intangibles as reliability, reputation, prestige and value. Even when the competitors’ products may seem identical, differentiation in the areas stated above will add up to the overall image of the product and the company in general.
Concentration is an important part of the marketing strategy, following up the indirect approach and differentiation. Its success is determined by the ability to distract competitor and seek out an opportunity in a developing segment. But it is important to take into consideration that concentration is effective only to extend one can successfully differentiate from the competitors.
Taking all that into consideration, it’s time to proceed to marketing mix, as a core structure under development of the marketing strategy. Marketing mix is usually composed of so-called 4P components – Product, Price, Place and Promotion. Every of the four primary components suggest strategy possibilities. For example, it is extremely helpful when comparing performance of the company to the competitors’ one to determine is the chosen strategy is the most suitable one. The table below is providing a guideline for creating a strategy out of a marketing mix. (Paley, 2007 p. 51)
The basis, when working with the marketing mix, is to effectively determine the factors that can possibly become a distinctive competitive advantage on the market.
For example, a company should select a feature of an offered product or service that a competitor cannot match, put quality and service as a general priority and try to focus on premium priced segment. Maintaining a market-driven orientation it is easier for the company to establish long-lasting relationships with customers through timely identifying and fulfilling their needs and wants.
Constant investigation of opportunities, which can contribute to the long-lasting goals, like, for example, new exporting situation, is a must. Timely investigation of the opportunities may as well result in the identification of the emerging niche on the market and lead to successful expansion. (Paley, 2007 pp. 52-53)
“In the marketing discipline, the Internet serves as a distribution channel, communication medium and fertile ground for new products. It has also lowered marketing costs and put tremendous downward price pressure on products sold online” (P. Kotler, 2005 p. 148)
Established and old-school marketing practices are not rejected with the technological advancement, they are being adopted. Now they are being used on a different scale, as globalization has brought a lot more space for the activities.
Table : Creating strategies out of the marketing mix
Marketing strategies take their routes in military and differentiate into direct, indirect, envelopment, bypass and guerrilla attacks. Having those five basic military principles in head, it is possible to combine them into an actionable plan. For example, indirect approach implies using an element of surprise towards the competitors confusing them with the taken actions while targeting the low-competitive or emerging segments of the market. Strategy of differentiation infers excelling the competitor increasing reliability, prestige and value. Concentration is about distracting a competitor to seek out an opportunity in undeveloped segment. When determining a strategy marketing mix elements should be taken into consideration – product, price, place and promotion. Analysis of those basic components helps to determine a distinctive advantage over the competitor.