Marketing Strategy - Definitions And Reasons For Importance

Marketing strategy is the primary key to business success. The No. 1 reason businesses fail is that they don't practice effective marketing strategy.

The No. 1 reason businesses fail is that they don’t make enough money. And the No. 1 reason they don’t make enough money is that they don’t adequately understand and practice effective marketing strategy. Marketing strategy offers these powerful benefits:

• Concentrating your resources and efforts on your greatest opportunities for success
• Sharpening your competitive advantage so that your business is superior to your competitors’ in ways that matter to customers
• Increasing the income of the firm more effectively than any other way
• Uniting the leadership team to all pull in the same direction, maximizing positive results
• Giving your brand a clearer focus so that it will be better known in the marketplace
• Stimulating demand for your products and services
• Improving the effectiveness of messages you send to customers and prospects
• Strengthening your ability to understand and meet the needs of customers
• Ensuring that your business will survive and thrive far into the future

Let’s be clear what marketing strategy is.

Definitions of Marketing

“Marketing” comes from the Latin word merx or mercis meaning merchandise. Originally a market was a large open space where merchandise was displayed for sale, like pictures we’ve seen of large open marketplaces in Third World countries, or today’s farmer’s market. Originally “marketing” involved selling products in a marketplace. And that’s still the core meaning. But professional marketing has evolved to such a high degree of sophistication, like computer science and medicine, that it involves much more than just selling in a marketplace.

Traditionally marketing has been defined as a combination of the “4 P’s”:

• Product or service provided
• Price which is charged for the product or service
• Place, location or distribution system
• Promotion or communications

But in the real world, many people responsible for marketing have little influence over the first 3 P’s – those decisions are made by other managers – thus marketing often functions as a combination of sales and promotion/communications, including publications, advertising, public relations, and Internet marketing. Technically, face-to-face or personal selling is a form of communication.

The American Marketing Association, the largest professional organization of marketers in the U.S., defines marketing as follows:

“Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”

This definition gets around the limitations on product and pricing decisions most marketers have by calling it “creating value.” Communicating and delivering value cover promotion and place. But this definition makes no mention of generating sales and income, the primary aims of business marketing, perhaps in deference to the many nonprofit organizations which are members of the AMA and are more focused on “delivering value” and “managing customer relationships.”

Definition of Marketing Strategy

Based on years of experience and study, I have come to define marketing strategy this way:

“Concentrating the organization’s resources on its greatest opportunities to better meet customer needs, outperform competitors, increase income, and achieve enduring success.”

Implied in this practical definition is the key idea that you have or will develop a niche or position in the marketplace which you can dominate or at least be a top player in, by building on strengths which distinguish you from your competition. Also implied is that you will be most successful if you concentrate on better meeting customer needs as a path to increasing sales, rather than just focusing on outbound communications or a sales force to persuade potential customers to buy.

Elsewhere on this website we explain more about how to develop an effective marketing strategy for your business or organization. See the navigation bar at the top of the page to learn more.

Marketing Strategy Depends On The Marketing Orientation

The term "marketing orientation" is an important way to understand marketing strategy and how to use it.

Due to the corporate culture, the history of the business, or the preferences of top managers, a company often adopts an overall orientation which can make marketing thrive or struggle. The so-called marketing orientation means the business as a whole is oriented to understanding and meeting the needs of customers. By contrast, three other forms of orientation are common:

Many businesses function as if their sole purpose is to provide jobs and income for the owners and employees of the business. They use their knowledge and capabilities to produce one or more products and services which they expect customers to buy. Their orientation is to produce as much as possible in the belief this will increase sales. This is called the production orientation. And they use marketing as a way of attracting customers to buy what they in the company want to make or offer.

A second and very common situation is the selling orientation. Here the focus is on selling what the people in the business want to sell, rather than offering what customers want to buy. Many companies have large groups of sales people who call on customers and prospects on a regular basis. Often the head of the sales team is called the director or vice president of sales and marketing. In other words, the marketing title may be added because someone thinks it sounds better, or because the company thinks marketing means producing advertising and collateral material. In the real world many people are put in charge of marketing because they are good in sales, not because they truly understand marketing or have studied it in any depth. Companies with the selling orientation reward their best sales people and focus on selling as more of a “push” activity instead of responding to customer needs.

A third business situation often encountered, although it is not usually listed as one of the main three orientations, is the engineering orientation. This is common among manufacturers of technical products and equipment that require engineering expertise. Often the president is an engineer by training and experience. The focus becomes designing and manufacturing products which the engineers like because they are able to use the latest technology or features. Whether customers are willing to pay for all these added bells and whistles is often not asked.

We remember working for a company that made dentists’ chairs. The engineers had designed a chair so high-tech that it cost far more than most dentists were willing to pay for. It was a really cool dentist’s chair, for sure, but the company fell into serious financial problems and almost shut down as a result of these and other consequences of its engineering orientation. This story is not intended to undermine the engineering profession, which is valuable to this country and its businesses in countless ways. Rather it is intended to clarify that companies are most successful when engineers do engineering and marketers do marketing, not vice versa.

The marketing orientation orients the business or organization as a whole to meeting the needs of customers, or as it is sometimes described, managing customer value. A company with this orientation is market-driven. It focuses its strategy and operations on understanding and meeting the needs of customers in a manner which is superior to competitors.

Procter & Gamble is one of the largest and most successful companies in America, and it has a strong marketing orientation. SAS Airlines, FedEx and other leading companies around the world have a passion for understanding and meeting the needs of customers. That’s how they became so successful, and that’s how your organization can become more successful than ever before, whether you aim to be a world leader or just the best in your neighborhood at what you do.

As marketing strategy consultants, we hope to persuade you to adopt the marketing orientation, and this website as well as our ebook explains how to do that. It is the surest path to business success, especially achieving consistent and increasing income. But we realize that you may not have the power or interest to transform your business from a production, sales or engineering orientation to a marketing orientation. So we are going to push on with the understanding that you may just want to use marketing strategy to increase your company's income. However, from time to time we may point out that, if you practiced the full marketing orientation, you could be even more successful!

Marketing Strategy On Yahoo

marketing strategy - Yahoo! News Search Results
marketing strategy - Yahoo! News Search Results

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