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SELECTING MARKETING STRATEGIES

These notes are intended to be used as a revision aid for AQA AS BUSINESS
STUDIES UNIT 3 STRATEGIES OF SUCCES: MARKETING STRATEGIES. They will cover
the topic of SELECTING MARKETING STRATEGIES. The notes have been well
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Notes

What is a market strategy?

A business needs a well-thought-out plan for the marketing activities that must
be carried out (Abedian et al., 2021). A good marketing plan will capitalize on the
business's unique selling points and factor in the product's expected lifespan and
present phase of the life cycle.

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Application

The marketing strategy for Heinz Beans will reflect the reality that the brand
has reached maturity more than a century after its inception and still has at least
a century of potentially profitable sales ahead of it. An appropriate strategy
should cover three years and ten years. In contrast, a video game's promotion will
centre on making the biggest splash possible as soon as possible, which may be
anytime within the next three months. When developing a marketing plan, it's
crucial to consider the specifics of the business and the brands it sells.

The following are crucial to consider before deciding on the best course of
action:

 The company's mission.

 The available resources.
 The potential rewards.
 The competitive landscape in which the firm's brands compete.

Importance of marketing strategy

A marketing plan's value is that it spells out in great detail the marketing
activities that must be carried out to guarantee the achievement of critical goals
(Abedian et al., 2021). Then, objectives and action plans can be developed for the
individual or the group according to the selected strategies. Workplaces that
provide these are more likely to have employees who feel like their occupations
are giving them purpose, focus, and motivation.

Difference between marketing strategy and marketing tactics

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 A strategy is an overarching plan of action, while a tactic is a more immediate
measure with limited long-term effects. A strategy is meant to be implemented
over several months or years, while a tactic is intended to be implemented quickly
and with limited impact. For example:

 Marketing tactic: drop the price by 10p before the product launches.
 Market strategy: Promoting to the masses can be as simple as dropping
the price of a once-premium mobile phone to the level of more
affordable models.

Types of strategy

 Ansoff's matrix

The Ansoff matrix is a type of diagram that shows how new the product is and
how new the market it is entering. This exemplifies how the risk rises with
decreasing development and market expertise.

 Market penetration

This suggests that efforts to increase market share should centre on products
already on the market. Given the market's familiarity and the product's nature,
this strategy carries the least amount of risk. Consumers already established in a
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given market tend to stick to specific brands and products, making it challenging
and expensive to persuade them to switch from Galaxy to Yorkie chocolate. While
there is nothing to lose, there may be little to gain if successful: clients tend to
stick to their tried-and-true routines once established in a market.

 Market development

To do this, one must focus on existing products while developing new outlets
for selling them. This may necessitate expanding product distribution to include
previously untapped niches, different regions within the country, or even foreign
markets. One example is Cadbury Dairy Milk's introduction to the Chinese market.

 Product development

Product development describes businesses that stay in the same market while
creating new products for that market. One example is how Coca-Cola changed
the game by releasing Coke Zero. Because most new products fail, this tactic is
riskier than either market penetration or market development. In addition, there
are always significant costs involved in introducing new products.

 Diversification

To do so necessitates penetrating an undeveloped market with a new product.

This method has the greatest potential for failure because it requires venturing
into an unproven market with an unproven product. When a company
successfully diversifies its activities, it lessens its reliance on any one market or
any one type of product (Zahay and Griffin, 2010). Although there is always some
risk when trying anything new, diversification can stabilise a business. The
introduction of Coca-Relentless Cola into the energy drink and nightclub industry,

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which Red Bull dominates, is an example of a diversification strategy that has
been met with limited success. Considering a more evocative model, consider
Nintendo's shift from card game manufacturing to video game manufacturing.
Through diversification, a business can lessen its reliance on any one market. Any
company whose primary product is chocolate would be hit hard if official data
emerged linking chocolate consumption to a fatal disease. The repercussions of
changes in this market will have less of an adverse influence on the bottom line of
a business that sells various products, including chocolate.

To be effective, a company's strategy must do the following:

 Help the company reach its long-term goals

 Anticipate and plan for the future
 Take into account all relevant factors.
 Identify the optimal alignment among company goals, firm resources, and
market opportunities
 Detail strictly which activities will be carried out and when.

Application of the topic

Ansoff's matrix discusses the link between risk and reward connected with
various business strategies. Nintendo is the best example to demonstrate this
point. How likely was it that a modest manufacturer of playing cards would wind
up outselling the industry giants Sony (PS3) and Microsoft (Xbox 360) in the
business of making video game consoles? Nevertheless, despite the dangers, the
payoffs have been highly substantial. Playing cards currently make up less than
one percent of Nintendo's sales, and Nintendo's profits routinely exceed Sony's.
However, most students think Ansoff is only about risk; they fail to consider the

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other side, profit. If you analyse both the proponents and the opponents of the
theory, your responses will stand out more.

Evaluation of the topic

Working in marketing is exciting because there are no surefire methods. The

same marketing director can devise a brilliant strategy one year and the wrong
one the next. Customers' whims and habits change regularly, usually in response
to economic developments (Zahay and Griffin, 2010). Economies and markets are
constantly shifting. Even the most prosperous multinational firms perform
extensive market research before settling on a strategy, but mistakes can still be
made. A risk-averse marketing director will implement a safe marketing plan (like,
let's do the same as last year) if the organization has a low-risk tolerance. That's
why companies risk wasting time and money chasing a dead end (such as Kodak,
which kept pursuing film until its market was swept away by digital cameras). In
marketing, there are instances when taking a chance is essential to success. To
quote Spock from Star Trek, the best strategy may be to go where no man has
gone before boldly.

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Reference list

Abedian, M., Amindoust, A., Maddahi, R. and Jouzdani, J. (2021). A game theory
approach to selecting marketing-mix strategies. Journal of Advances in
Management Research, ahead-of-print (ahead-of-print).

Zahay, D. and Griffin, A. (2010). Marketing strategy selection, marketing metrics,

and firm performance. Journal of Business & Industrial Marketing, 25(2), pp.84–
93.

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