The design of marketing strategies is one of the main aspects to work within marketing. The marketing strategies define how they will achieve the business objectives of our company . For this, it is necessary to identify and prioritize those products that have the greatest potential and profitability, select the public we are going to target, define the brand positioning that we want to achieve in the minds of customers and strategically work on the different variables that they form the marketing mix (product, price, distribution and communication).
Not all the products in our portfolio have the same profitability, nor the same potential. That is why we need to make strategic decisions about our product portfolio, in this way we will be able to prioritize the investment of resources depending on the importance of achieving these over the marketing objectives that we have set.
To make the strategic decisions about the product portfolio in a correct way and start working on our marketing strategies, we can use the McKinsey-General Electric matrix, also called the attractiveness-competitiveness matrix. First of all, and depending on the number of products that we have in our portfolio, we must decide whether we will work by products individually, grouping them by product lines or if our portfolio is so broad that we must work dividing it by business units.
The McKinsey matrix is made up of two axes. In the X axis we find the “competitive position” while in the Y axis is the “market attractiveness”. In the axis of “competitive position” we must assess the ability of our product to compete against other options on the market and classify it in one of its three quadrants: weak, medium or strong.
On the other hand, in the axis of “market attractiveness” as its name indicates, we will analyze the market attractiveness in which the product operates, and later also classify the result in one of its three quadrants: low, medium or high.
As we can see in the matrix image, there are three areas that correspond to three portfolio marketing strategies:
Invest / Grow: This area of the matrix has absolute priority when allocating our resources. By making our investment we will obtain rapid growth, therefore we will allocate as much of our investment as possible.
Select / Benefits: In this area you can invest, but with special care and depending on the analysis of each case. If we have finally decided to invest, there are two strategies: 1- invest solely to maintain the current situation in which it finds itself or 2- invest a greater amount of our budget item since we see that there is growth potential.
Harvest / Divest: It is advisable to observe this area in the short term, withdraw investments, collect profits and try to sell to eliminate the stock.
Segmentation Marketing Strategies
In the 21st century, considering the market as a unit and addressing it with the same offer is a mistake. Perhaps it worked in the 1920s when the economy of scale was the winning horse of companies. In those years there were very few options for consumers and they had no choice. The following sentence by Henry Ford is an example of the old paradigm: “the customer can choose the car of the color they want, as long as it is black”. Can you imagine, currently, a car manufacturer that only manufactures them in black?
Today there is a completely different scenario, we could even say that we are completely at the other extreme. We have gone from a shortage of supply and options to saturation. Furthermore, the market is made up of different clients, with different needs. Therefore, if we want to optimize our marketing budgets, it is necessary to divide the market into groups that have similar characteristics and needs. In this way we will be able to offer a different value proposition that adapts to each target group. The segmentation strategy is one of the main marketing strategies.
There are four variables to segment the market: Geographic: countries, cities, postal codes. Psychographic: personality, social class, lifestyle. Demographic: income, education, gender, age, profession, nationality. Behavioral: level of fidelity, search for profit, frequency of use.
In the blog I have already spoken on other occasions about market segmentation, if you want you can expand information by clicking here .
Below you can see the different segmentation strategies that you can follow:
Undifferentiated Strategy: despite having identified different segments with different needs, the company chooses to approach them with the same offer, to try to achieve the maximum number of possible clients.
Differentiated Strategy: we target the different market segments that we have identified, but with a different offer for each of them. Although this strategy has a higher cost, it will allow us to satisfy the specific needs of each selected segment.
Concentrated Strategy : we will only address those segments that demand said offer with a single offer, we will avoid distributing our efforts in other segments.
Marketing strategies on Positioning
The brand positioning is the space that occupies the product in the minds of consumers over its competitors. To correctly establish our positioning strategy, we must take into account certain aspects such as knowing the attributes that add value to consumers, our current positioning and that of our competition, or the positioning we aspire to and its viability.
The main marketing strategies for brand positioning are:
Benefit: This strategy is based on positioning the product for the benefit it offers.
Quality / Price: offer the highest quality possible at a competitive price or position yourself for high or low prices.
Attributes: it is about positioning the product by the attributes it offers. If you try to position several attributes it will be more complicated, since you lose effectiveness.
Use / Application: Another option is to position yourself based on the use or application that can be given to the product.
Categories: position yourself as a leader in a product category.
Competitor: comparing our attributes with those of other competitors is a classic in products such as detergents, toothpastes, etc.
The functional strategy is formed by the marketing mix strategies or also called the 4Ps of marketing, they are the essential variables that a company has to achieve its commercial objectives. These four variables (product, price, distribution and communication) have to be totally consistent with each other and must complement each other.
Let us take the elite brand of Rolex watches as an example , observe how it maintains a strict coherence between the 4 variables. Rolex watches are products that have the highest quality standards, guarantee maximum security and durability. They also take care of the smallest detail, from their packanging to all the materials used in their watches (steel, gold and stones) precious). Rolex has an elitist brand image, becoming an aspirational brand (it gives the owner a status, a social class and exclusivity). As for the price variable, the brand uses its high prices as a positioning reinforcement, to remember its quality and prestige. As it could not be otherwise, it follows a selective distribution, it is only distributed in high-end watches and exclusive points of sale. Finally, its communication strategy contributes once again to the coherence that the brand follows, advertising only in media aimed at the upper social classes and sponsoring sporting events that require precision and of course that confer social prestige (tennis, golf, formula 1, ski , nautical, etc).
The marketing mix is made up of the following variables:
Product: packaging, brand, image, warranty, after-sales services …
Price: price modification, discount scales, payment terms, etc.
Distribution: packaging, storage, order management, inventory control, location of points of sale and transport.
Communication: advertising, public relations (PR) and direct marketing and sales promotion.
As you have seen, marketing strategies are one of the most important aspects for business competitiveness. Unfortunately, it is one of the pending subjects of many companies. Focusing solely on performing operational marketing actions without having defined your strategies before, is a big mistake. To be effective in the short / medium term, we must first have established a correct strategic vision in the organization. If you have questions about how to define your company’s marketing strategies or how to prepare your marketing plan, do not hesitate to contact me. I hope the article has been helpful to you.