What is Marketing Strategic Direction?
In my opinion (you can have your own), the company should be focused and follow one main Strategic Direction and frame it in the line with the objectives and goals. In an easy way, Marketing Strategic Direction can answer the question “Who we want to be in future?”. And, the more clear is the answer, the better. Strategic Direction is a way which company takes towards the answer of this question. Once it is specified, all tactics and programs should be in line to follow this “way”.
Which options does company have? – To be Market Leader or Follower. To gaining market share by Diversification of the products/ services offer or Containing sustainable competitive advantage by the efficient production process or ultimate high level of the customer service. The company can decide the Strategic Direction based on the Strength and Opportunities in SWOT analysis. Due to the fact that it is not possible to be a Market Pioneer if the firm does not offer the unique and new product in the market. and so on…
How do specify Marketing Strategy?
Marketing strategy has the fundamental goal of increasing sales to get profit and achieving a sustainable competitive advantage to keep functioning in the long-term perspective.
The firm can decide about the Marketing Strategic based on the Internal company Strength and External environment and industry Opportunities mentioned in SWOT analysis. Apart, the company should be aware of Weaknesses and Threats to be able to compensate them. It will not be easy to be a Market Pioneer if the company does not offer the unique and new product in the market, and so on…
Schemes to specify Marketing Strategic Direction
There are different schemes to specify Marketing Strategic Direction. Following are some examples:
- Market Dominance Strategies. Companies are classified based on the market share or dominance in the industry. Typically there are three types of Dominance Marketing Strategies:
- Nicher (less common)
- Growth Strategies. Question about market share can be asked: “How should the firm grow?”. There are different ways to answer this question. But the more common are:
- Horizontal Integration
- Vertical Integration
- Innovation or Entrant Strategies. According to Lieberman and Montgomery companies are rated within the emphasis on the new product development and business model innovations. It asks if the firm is on the cutting age of the development and innovations. Main 3 types are:
- Market Pioneers
- Close followers
- Late followers
- Generic Strategy Framework. Base on the strategic scope and strategic strength classification. Strategic scope is related to the Market penetration strategies. Strategic strength to the containing sustainable competitive advantage. Some of them are:
- Product Differentiation
- Market Segmentation
Additionally to mentioned before,
Raymond Miles’ strategy categories. In 2003, Raymond Miles proposed a more detailed scheme using the categories:
Marketing Strategy, Goals, Objectives, Tactics
Strategic models are used to generalize the set of marketing tactics.
- The 3C’s: Customer, Corporation and Competitor. This model uses these three key factors which lead to a sustainable competitive market (Kenichi Ohmae).
- The Ansoff Matrix. This model focuses on four main areas; Market penetration, Product development, Market development and Market Diversification. These are further split into two areas known as the ‘New’ and ‘Present’. (H. Igor Ansoff). Applied together with the Growth Strategy.
- Marketing Mix Model (4P’s). Product. Price. Promotion. Place. Was designed as an easy way of specifying Marketing Strategy in the scope of tactics. 4p’s is the form of Marketing Strategy integration in real life. Or, the scope of tactics.
Application in Marketing Planning
As mentioned before, Marketing Strategic Direction is the core stone of Marketing Plan. However, before choosing Marketing Direction Internal and External (micro and macro) analysis should be done and as minimum preliminary Marketing research.
- Primarily, Internal and External analysis together with Marketing research should be done. SWOT analysis, PESTLE analysis, Porter’s 5 forces analysis, customer survey, etc.
- After, General Company Mission, Vision and Values are defined.
- Only then, Marketing Strategic Direction can be specified together with the Objectives. This step is based on the previously obtained information (especially SWOT analysis and mission).
- Next, find out necessary information about target customers by Segmentation, Targeting, Positioning and analyzing Future Trends.
- Following, develop Marketing Tactics (for example in the form of Marketing Mix 4P’s). Based on the market research and analysis, Product/Service offer can be developed and specified. A Communication plan, Distribution and Pricing strategies should go in line with the target audience characteristics and needs.
- Aaker, David Strategic Market Management 2008.
- Baker, Michael The Strategic Marketing Plan Audit 2008.
- Miles, Raymond (2003). Organizational Strategy, Structure, and Process. Stanford: Stanford University Press.
- Vliet, Vincent van (February 17, 2015). “3C model by Kenichi Ohmae”. toolshero.com.