1. How to define business strategy?

Business strategy outlines specific ways in which organizations plan to position themselves, and accomplish their short and long-term goals.

2. How to define marketing strategy?

What is a marketing strategy?

Well, a business marketing strategy denotes the overall plan to reach the potential customers, and turn them into actual customers.

Marketing strategy definition:

A well-developed marketing strategy:

· Reflects the long-term planning of how business objectives could be achieved.

· Defines how a sustainable competitive advantage could be created.

· Encompasses all key details, from determining the target market, to deciding the channels to reach the identified customers.

· Offers a long-term vision, and provides direction for overall marketing efforts (Baker, 2017).

After defining what is marketing strategy, the next section discusses the following:

· What is a marketing plan; and

· What is the difference between marketing strategy and marketing plans?

2.Difference between marketing strategy and marketing plan

Marketing strategy	Marketing plan
Provides an overall business direction	Focused on routine performance and results
Offers long-term framework	Provides insights at a specific stage of business development
Explains ‘why’ behind the marketing efforts	A roadmap to execute the strategy
Offers a holistic view, with a focus on long-term goals	Relevance of goals and objectives is evident in the short run

3. Characteristics of an effective marketing strategy

Creating a marketing strategy requires the following:

· A clear knowledge of target customers

· Strong interconnectedness between different marketing elements

· Clear communication of unique selling point

· Focus upon customers’ problems (David, 2011).

4. Advantages of a well-developed marketing strategy

As per a 2022 study by Co-Schedule:

· Marketers with a clear marketing strategy are 331% more successful.

· Marketers who developed clear marketing goals and objectives are 337% more successful.

· Marketers who develop and document a clear marketing strategy are 674% more likely to reach the goals.

5. Importance of marketing strategy

· Provides an in-depth knowledge of the target market, their demands and expectations, and competitive differentiation that offer sustainable competitive advantage.

· Explains the factors that influence customer behavior, and optimize the brand positioning.

· Defines clear goals, identifies lead and lag indicators, and directs the marketers’ efforts on what has potential to bring best results (Ferrell et al. 2021).

6. What is the basis of any marketing strategy?

The marketing mix framework provides the base for marketing strategy. Marketing-mix includes four core components of marketing strategy.

What are the 4 types of marketing components?

· Product (what to sell?)

· Price (at what price?)

· Place (where to sell?)

· Promotion (through which promotional techniques?)

6.1. Product strategy

6.1.1. What is a product mix?

The product mix includes the total number of individual products/services and product lines that a company offers to its customers.

Example: Product mix of Samsung

6.1.2. What is an effective product strategy?

The product defines ‘what’ the business is selling. An effective product strategy must clearly communicate the unique selling point of the product, identify the target market, and reflect desired marketing goals. Marketers may then use this information as a foundation to develop the core product features and specifications (Singh, 2012).

6.1.3. What are key product features?

Key product features are:

· Product quality

· Product variety

· Product design and features

· Brand name and packaging

· Product size/variations

· Warranties, after sale services and return policy

6.1.4. What is unique selling proposition (USP) in product strategy?

A USP is the essence of all key tangible/intangible features that differentiates offered product/service from competitors.

Examples- USPs

Brands	USPs
Nike	High quality shoes specifically made for professional athletes
Apple	Product quality, innovation and exclusivity
McDonald	Ronald McDonald- a clown put outside every McDonald outlet that attracts children

6.1.5. Product strategies in marketing

Brands use different product strategies to set the USP, and sell the product to target market:

Examples- product strategy types

Product strategy types	Definition	Examples
Cost strategy	Cost strategy focuses on cutting costs to the minimum possible level to offer products at low prices	Walmart
Differentiation strategy	Differentiation strategy focuses on features that may set a distinctive product image	Apple
Focus strategy	Focus strategy guides the brands to develop products that serve the needs of specific market segments	Rolex
Quality strategy	Quality strategy guides the brands to specifically focus on improving the quality of the product	Starbucks
Service strategy	Service strategy focuses on improving the quality of after-sale services	L.L Bean and Caterpillar

6.2. Pricing strategy

6.2.1. What is an effective pricing strategy?

This marketing concept defines the price at which the product will be sold. A well-developed pricing strategy connects the value that product/service provides with the target market’s willingness to pay (Singh, 2012).

6.2.2. Factors influencing pricing strategy

· Product cost (higher product cost puts upward pressure on prices)

· Demand and supply trends (high demand and low supply puts upward pressure and vice versa)

· Customers’ perceived value (intangible factors like brand exclusivity suggests setting higher prices)

· Economies of scale (possibility of achieving economies of scale due to low production cost guides brands to set low prices)

· Distribution (high distribution/transportation costs put upward price pressure) (Nagle and Muller, 2018).

6.2.3. Types of pricing strategies with examples

Pricing strategies	Definition	Examples
Skimming pricing	Price skimming is a strategy in which a firm initially higher prices than competitors, and then gradually lowers the prices to meet the market average.	Apple, Gucci and Samsung
Penetration pricing	Businesses use a penetration strategy to attract customers by initially charging low prices.	Netflix
Value based pricing	Instead of looking at the cost or competitors, businesses that employ value-based pricing base their prices based on how customers perceive the value of offered products/service.	Amusement parks, different tiers of airline brands
Cost-plus pricing	Businesses set cost-plus pricing by adding the fixed percentage/amount to product/service cost.	Walmart- Everyday low prices
Competitive pricing	Competitive pricing strategy involves setting the prices based on what competitors are charging their customers.	Pepsi and Coca-Cola

6.3. Place strategy

6.3.1. What is an effective distribution strategy?

This marketing-mix component describes ‘where’ to sell the product. An effective distribution strategy delivers the goods/services to end-customers through channels that maximize company revenue, as well as customer satisfaction (Singh, 2012).

6.3.2. Key distribution channels

· Direct distribution channels- Company delivers the products/services (through official outlets and/or official website) to end customers directly without involving any intermediary.

· Indirect distribution channels- Indirect distribution channels involve intermediaries, like wholesalers, retailers and distributors.

· Hybrid channels- This distribution model involves a mix of direct and indirect distribution channels.

Example- distribution channels

6.3.3. Key distribution methods

· Intensive distribution- Businesses find all possible ways to make the product available to end customer. Example- Pepsi.

· Selective distribution- Businesses select specific intermediaries to reach the final customers. Example- Whirlpool and General Electric.

· Exclusive distribution- Businesses select only one distributor to sell its products. Example- Lamborghini

6.3.4. Levels of distribution

· Level 0- firms sell directly to end consumers

· Level 1- firms deliver products to distributors, who then resell to customers

· Level 2- firms deliver products to distributors, who then sell them to customers through retailers

· Level 3- firms deliver products to distributors, who sell them to retailers. Retailers then sell them to customers through agents

6.3.5. Types of intermediaries

· Distributors

· Wholesalers

· Retailers

· Brokers

· Agents

· Resellers

· Sales team

· Online distribution platform (own website or through online distribution partners)

6.4. Promotion strategy

6.4.1. What is an effective promotion strategy?

Promotional strategy is the methods that companies use to advertise, promote and sell the products to target market. An effective promotional strategy outlines the sales and marketing strategies that companies use to raise the product/brand awareness, encourage existing customers to buy it, and grab the attention of potential customers to make the purchase decision (Pride and Ferrell, 2019).

6.4.2. What is a promotion-mix?

Companies’ promotional mix is the amalgamation of various marketing techniques that brands use to promote their products, with an aim to- reach a wider audience, build brand awareness, increase revenue, and/or meet the sales target.

6.4.3. Promotion-mix components

· Traditional advertising (e.g. TV/radio advertising, print media, billboards, brochures etc.)

· Digital marketing (e.g. online marketing schemes, influencer marketing, blogging, SEO, social media marketing etc.)

· Public relations (e.g. press release, public events etc.)

· Sales promotion (e.g. discounts, flash sales, promo codes etc.)

· Personal selling (e.g. sales teams in departmental stores)

· Direct marketing (e.g. mail order catalogues, door-to-door selling etc.)

The marketing-mix is only a part of marketing strategy, which is more holistic. Marketing mix is a preliminary document that explains what, where and how the product will be marketed to reach the target market (Lee and Carter, 2011).

Once the marketing mix is defined, the marketers need to set objectives, allocate budget, conduct competitive analysis, create content, and then identify the performance metrics to evaluate the marketing strategy success.

Next section explains how to create a marketing plan by discussing key marketing strategy components involved in the creation of marketing plans:

6. Components of marketing strategy for business

The marketing strategy has seven key components:

6.1. Marketing mix framework

As mentioned before, the first component of marketing strategy is the ‘marketing mix framework’. At this stage, the businesses define-

· What products they will sell?

· At what price, the products will be sold?

· Through which channels, the products will reach the end customer?

· What are the strategies for marketing a product?

Marketing Mix Strategies Example- Tesla

Product Product strategy: Quickly introduce new, sustainable products. Product mix: Model S, Model 3, Model X and Y, and semi-truck	Price Pricing strategy: Skimming pricing strategy Current prices: Tesla model 3 starting price= $44,490; long range model starting price= $55, 990, performance model starting price= $61,990.
Place Distribution strategy: direct distribution strategy Distribution channels: online distribution channel	Promotion Promotion strategy: minimalistic marketing strategy Promotion methods: viral marketing; one-to-one customer engagement; public relations; unconventional PR strategy

6.2. Marketing objectives

Marketing objectives are the measurable goals that businesses set to achieve the specific targets. Well-defined marketing objectives follow the SMART criteria.

· Specific

The marketing objectives should be specific, and focus on clearly defined metrics.

· Measurable

The marketing objectives should be measurable. The marketers should attribute quantitative attributes to the objectives, so that the progress could be measured quantitatively.

· Attainable

The marketing objectives should be realistic and attainable with available resources and time.

· Relevant

The marketing objectives should be relevant, and aligned to the overall business strategy.

· Time-bound

Finally, the marketing objectives should be time bound.

6.3. Marketing budget

· After developing the SMART objectives, the marketers allocate the budget to implement the marketing strategy.

· To get the higher returns from marketing efforts, the brands must firstly invest.

· The marketing budget outlines all direct and indirect expenses that companies incur to market their products/services.

· The budget covers the finite time period, and its time length could vary anywhere between a month, to a year.

Examples- marketing budgets

6.4. Competitive analysis

· After deciding on the marketing budget, the brands then conduct the detailed competitive analysis to develop a marketing strategy that leads to success.

· The purpose is to get an idea of- who competitors are, what they are doing, and how to handle the competition through effective marketing strategies.

· The competitive analysis framework includes- researching competitors’ products, pricing strategies, promotional techniques, and customer-service approaches (Cravens and Piercy, 2006).

6.5. Segmentation, targeting and positioning

6.5.1. Segmentation

· Market segmentation divides the customer market into subgroups that share similar characteristics, needs and wants.

· Marketers can use different variables to segment the market.

· Common segmentation bases are- demographics, geographic, psychographic and behavioral.

o Demographic (e.g. age, gender, marital status etc.)

o Geographic (e.g. cities, regions, countries etc.)

o Psychographic (e.g. opinions, interests and social status etc.)

o Behavioral (e.g. usage behavior, benefits sought, loyalty etc.)

6.5.2. Targeting

After segmenting the market, the next step is to choose the segments with high growth/profitability potential. The targeting strategy involves:

· Dividing market into segments

· Choosing the most appropriate segments that meet the desired criteria

· Determining the products/services that businesses can offer to each chosen segment

6.5.3. Positioning

Once the target market is identified, the marketers then set a clear positioning strategy. The positioning strategy is a plan that determines:

· Where the business will stand

· How its offered products will be positioned in the customers’ mind, and;

· How it will be distinguished from competitors

Mamaearth STP example

Segmentation variables	Target market	Mama-Earth Positioning
· Age · Gender · Income · Marital status	Young to middle age married women from the middle to upper middle class, with infants and young children at home.	A caring, organic, all-natural, and friendly brand

6.6. Marketing content

· At this stage, the marketers know the marketing mix, target market, desired positioning, marketing objectives, and available budget.

· By using this information, the marketers then create the ‘actual marketing content’ for the target audience.

· The marketers must strategically place the content over different platforms to achieve the desired outcomes.

· The content can evoke emotions, could be informational, or could be a blend of both. The decision is taken by considering the product's nature, brand image, and customers’ expectations.

· The content could be in the form of- text, infographics, videos, blog posts, testimonials and reviews, WOM created by influencers, and so on (Homburg et al. 2009).

Findings of a previous survey showed that top three most popular content types are: videos (69%), infographics (50%), and blog posts (35%), as depicted in the following graph:

Source: e-Strategy Trends

6.7. Key performance indicators

At the end, the marketers identify the key performance indicators to measure the marketing strategy success. Some possible key performance indicators could be- revenue growth, qualified leads and conversion rate etc. (Reyes-Menendez et al. 2020).

After trying to explain the concept of marketing strategies, now the article explains ‘what are marketing strategies’ when business makes the expansion decision.

7. Types of marketing strategies

Marketing plays a key role in business expansion. There are four basic marketing strategies that businesses can adopt to fuel the expansion.

7.1. Market penetration

· Market penetration denotes the extent to which the business can further penetrate into an existing market.

· It measures how much the target customers use the product compared to the total market estimate.

· The businesses that pursue a market penetration strategy sell the existing product to the existing customers (Taylor, 2012).

Market penetration example

7.2. Product development

· The product development strategy refers to developing new products for existing markets. New product development strategy is riskier than the penetration strategy.

· Therefore, new product success largely depends on in-depth customer, competitor and market knowledge (Trott, 2008).

Product development examples

7.3. Market development

· The businesses that pursue market development strategy introduce the existing products to new markets.

· The previous experience help companies in successfully introducing their already existing products to new potential market segments.

· Although, the product remains the same, but companies have to adapt their pricing, distribution and promotional strategies according to the new market conditions (Loredana, 2016).

Market development examples

7.4. Diversification

· Diversification strategy involves introducing new products to new markets

· Diversification strategy is riskier than the other three marketing strategies, but it also has the potential to offer higher returns (Bowen and Wiersema, 2005).

Diversification example

8. What are the marketing strategies of successful brands?

Following table presents some examples of the best marketing strategies adopted by some highly successful brands:

Marketing strategy examples

Spotify	Provide a unique customer experience!
Go-Pro	Trust and leverage the power of user-generated content
Taco-Bell	Understand the target audience
Red-Bull	Adopt a bold marketing approach, and take risks
Vogue	Invest on loyalty programs

9. Popular marketing strategies 2023

9.1. Influencer marketing

The influencer marketing will continue playing an important role in the upcoming years.

Source: Collabstr.com

The influencer marketing trend will grow from $9.7 billion (2020) to $22.2 billion (2025).

9.2. Streaming/video-based content

The video based content is gaining high popularity, particularly among Gen Z. From TikTok short videos to Instagram reels and YouTube shorts, marketers are investing on bite-sized videos to interact and engage with the audience.

Other than short videos, live streaming is also gaining high popularity among customers. In 2021, customers spent about 548 billion hours on live streaming.

9.3. User-generated content

User-generated content will be an important part of companies’ marketing strategies in 2023. Following graph shows the constant rise in the user-generated content by individuals and marketers:

Source: KBV Research

Following graph shows the breakdown of user-generated content by the product type:

Source: KBV Research

9.4. Social media marketing strategy

Social media marketing strategy success in 2023 lies in- unpolished, authentic content, with a concentrated focus on the personalized interactions.

9.5. Augmented reality (AR) advertising

Augmented reality advertising is on the rise. Marketers are integrating AR into advertising tactics to capture the customers’ attention. As per Statista, the AR ad spending increased from $0.59 billion (2017) to $6.72 billion (2027):

Source: Statista

10. Conclusion

To sum up, a well-developed marketing strategy plays a critical role in business success. However, marketers have to take care of multiple factors to achieve the desired objectives from their marketing efforts. The marketing strategy must be well-integrated, and aligned with overall business goals to be successful.

Abstract

This article defines and explains the marketing strategy components with real-world examples. The marketing strategy guide is useful for students, teachers and researchers who are interested in studying the marketing strategy concept. The addition of real-world examples enhances the relevance of shared information for a broader set of stakeholders.

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