the development of marketing strategies focused on achieving specific marketing objectives

8.2 Marketing Strategy – Approaches to Marketing Strategy

Learning Objective

Develop marketing strategies that are aligned with specific marketing objectives, evaluate the most appropriate approach for a given business context (including international markets), and understand the full structure of a marketing plan.

1. Contents of a Marketing Plan (Cambridge 9609 – 8.2)

• Marketing objectives – written using the SMART criteria.
• Resources – budget, staffing, technology, time‑frames.
• Market research – primary and secondary data that inform the objectives, target market and mix decisions.
• Marketing mix (4 Ps) – product, price, place, promotion.
• Implementation & control – timetable, responsibilities, KPIs and review mechanisms.
• International marketing considerations – entry mode, adaptation vs. standardisation, cultural and regulatory factors.

1.1 Resources & Research

When drafting a plan, students should state:

• Budget allocation – how much will be spent on product development, advertising, distribution, etc.
• Personnel – internal teams (marketing, finance, operations) and any external agencies.
• Technology – CRM systems, data‑analytics tools, AI‑driven platforms.
• Research methods
  • Primary – surveys, focus groups, interviews, test‑markets.
  • Secondary – industry reports, competitor analysis, government statistics.

1.2 Benefits & Limitations of Formal Marketing Planning

1.3 International Marketing Strategy (8.2.3)

• Entry modes – exporting, licensing, joint venture, wholly‑owned subsidiary.
• Standardisation vs. adaptation – decide whether the 4 Ps can be used unchanged or need local modification.
• Cultural & regulatory analysis – use PEST/PESTLE to identify legal, economic, social and technological factors in the target country.
• Resource implications – additional budget for localisation, overseas distribution networks, and cross‑cultural training.

2. Setting Marketing Objectives

Use the SMART framework to ensure objectives are actionable and measurable.

1. Specific – clearly state what is to be achieved (e.g., increase sales of product X).
2. Measurable – attach a metric (e.g., 10 % rise in market share).
3. Achievable – confirm that resources and capabilities exist.
4. Relevant – link to the overall business strategy.
5. Time‑bound – give a deadline (e.g., within 12 months).

3. Strategic Approaches – Choosing the Right Fit

3.1 Ansoff Matrix

Growth options based on the relationship between products and markets:

• Market Penetration – increase share of existing products in existing markets.
• Market Development – sell existing products in new geographic or demographic markets.
• Product Development – introduce new products to existing markets.
• Diversification – launch new products in new markets (highest risk).

3.2 Porter’s Generic Strategies

• Cost Leadership – become the lowest‑cost producer; requires economies of scale, efficient processes and tight cost control.
• Differentiation – offer unique attributes valued by customers; demands strong R&D, branding and superior service.
• Focus – concentrate on a narrow market segment; can be a cost focus or differentiation focus, depending on the chosen competitive edge.

3.3 STP Model (Segmentation, Targeting, Positioning)

1. Segmentation – divide the market by demographic, psychographic, geographic and behavioural criteria.
2. Segment‑attractiveness checklist
   • Size and growth potential
   • Competitive intensity
   • Profitability
   • Accessibility (distribution & communication)
   • Fit with company resources and objectives
3. Targeting – select one or more attractive segments.
4. Positioning – craft a clear value proposition that occupies a distinct place in the target’s mind (e.g., “premium, low‑sugar refreshment”).

3.4 Strategic‑Fit Checklist

Before finalising the approach, conduct a brief SWOT (internal strengths & weaknesses, external opportunities & threats) and a PEST analysis (political, economic, social, technological). Then ask:

• Does the strategy support the firm’s mission and long‑term vision?
• Are the required core competencies (e.g., R&D, distribution, brand management) in place?
• Is the target market compatible with the company’s existing resources?
• Will the chosen approach complement the overall business strategy (growth vs. consolidation, domestic vs. international)?

4. Linking Objectives to Strategic Choices

5. Coordinated Marketing Strategy (Integration of the 4 Ps)

For a strategy to be effective, the four elements must work together and be aligned with other business functions:

• Product – coordinated with R&D and operations to ensure feasibility, quality and lifecycle management.
• Price – linked to finance (cost structures, profit margins) and to positioning (value‑based vs. cost‑based).
• Place – requires logistics, supply‑chain management and retail/online partnerships.
• Promotion – must be supported by IT systems (CRM, data analytics) and sales teams for consistent messaging.

6. The Changing Role of IT & AI in Marketing

• Data‑driven segmentation – AI clusters customers based on purchase behaviour and online activity.
• Personalised communication – programmatic advertising and chat‑bots deliver real‑time offers.
• Predictive analytics – forecast demand, optimise pricing and allocate media spend more accurately.
• Automation of routine tasks – email workflows, social‑media scheduling and performance reporting.
• Ethical considerations – data privacy, algorithmic bias and transparency.

7. Developing the Marketing Mix to Support the Chosen Strategy

• Product – features, quality, branding, lifecycle management, and any required localisation for international markets.
• Price – penetration, skimming, value‑based pricing aligned with cost structure and positioning.
• Place – channel selection, coverage intensity, logistics optimisation, and adaptation for overseas distribution.
• Promotion – integrated communications (advertising, sales promotion, public relations, direct/online marketing) with consistent messaging across markets.

8. Measuring Success (KPIs)

• Market share: Market Share = (Sales of Firm / Total Market Sales) × 100 %
• Sales growth: Growth % = [(Current Period Sales – Previous Period Sales) / Previous Period Sales] × 100 %
• Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV).
• Return on Marketing Investment (ROMI): ROMI = (Incremental Revenue – Marketing Cost) / Marketing Cost
• Benchmarking – compare each KPI with industry averages or key competitors to assess relative performance.

9. Example Application

Scenario: A mid‑size beverage company wants to increase its UK market share by 8 % in the next 18 months while also preparing to launch the same range in the EU.

1. SMART objective: “Increase market share from 12 % to 20 % in the UK soft‑drink market and achieve a 4 % share in Germany by December 2026.”
2. Strategic choice: Market Penetration (UK) + Market Development (Germany) using a joint‑venture entry mode; differentiation through low‑sugar, natural‑flavour variants.
3. Marketing mix adjustments
   • Product – launch low‑sugar, natural‑flavour drinks; adapt packaging to meet EU labelling regulations.
   • Price – competitive pricing in the UK; premium‑skimming in Germany to support the “health‑first” positioning.
   • Place – extend distribution to convenience stores, gyms and e‑commerce platforms in both markets; partner with a German distributor for market entry.
   • Promotion – health‑focused advertising, influencer partnerships, QR‑code‑driven loyalty app; localized social‑media campaigns for Germany.
4. Resources & research: £2 M budget, dedicated product‑development team, market‑research survey of 1 500 UK consumers and 800 German consumers, PEST analysis for Germany.
5. KPIs: UK market share, German market share, sales volume, brand‑awareness lift, ROMI, and benchmark against the soft‑drink industry averages.
6. Control: Quarterly reviews, AI‑driven dashboard to track real‑time performance, and a trigger system to adjust promotional spend if ROMI falls below the industry benchmark.

10. Summary Checklist for Developing a Marketing Strategy

• Define clear, SMART marketing objectives (including any international targets).
• Conduct primary & secondary research; perform SWOT and PEST analyses.
• Allocate resources – budget, staff, technology, and time‑frames.
• Analyse internal capabilities and external market conditions.
• Choose an appropriate strategic approach (Ansoff, Porter, STP) and confirm strategic fit.
• Ensure the 4 Ps are coordinated with each other and with finance, operations, IT and HR.
• Set measurable KPIs, benchmark them against industry standards, and link them back to the original objectives.
• Implement, monitor (using dashboards/AI where possible), and adjust the strategy regularly.