the need for the marketing strategy to be consistent with the business, the product and the market

8.2 Marketing Strategy – Approaches to Marketing Strategy

Learning Objective

Explain why a marketing strategy must be consistent with the overall business strategy, the product offering and the chosen market(s); evaluate the main approaches to developing a marketing strategy and the tools used to monitor its performance.

---

1. The Marketing Plan – Core Contents

Section	What it should contain	Why it matters (benefits)	Potential limitations
Executive Summary	Brief overview of the whole plan – objectives, key actions and expected outcomes.	Quick reference for senior management; aids communication.	May oversimplify complex issues if too brief.
Marketing Objectives	SMART targets (Specific, Measurable, Achievable, Relevant, Time‑bound) – e.g., 8 % market‑share growth in 12 months.	Sets clear direction; facilitates performance measurement.	Over‑ambitious or unrealistic targets can demotivate staff.
Market Research & Analysis	Segmentation, targeting, positioning (STP); primary/secondary data; competitor and macro‑environment analysis (PESTLE, Porter’s Five Forces).	Ensures decisions are evidence‑based; identifies opportunities/threats.	Research can be costly and time‑consuming; data may become outdated.
Marketing‑Mix (4 Ps)	Detailed actions for Product, Price, Place, Promotion (including pricing & promotion methods, elasticity considerations).	Shows how objectives will be achieved; encourages internal coordination.	Too rigid a mix can limit flexibility in fast‑changing markets.
Resources & Budget	Financial, human and technological resources required; budget allocation across the mix.	Controls spending; links strategy to organisational capacity.	Budget constraints may force compromise on strategic ambition.
Implementation Timetable	Gantt chart or milestone schedule – who does what and when.	Facilitates coordination and accountability.	Unforeseen delays can render the timetable unrealistic.
Control & Monitoring	Key performance indicators (KPIs), review dates, corrective‑action procedures.	Allows early detection of problems; supports continuous improvement.	Over‑reliance on numbers may overlook qualitative issues.

---

2. Consistency – Linking Business, Product and Market

1. Business‑level strategy – mission, vision and long‑term corporate objectives (e.g., become market leader in sustainable home appliances).
2. Product‑level strategy – life‑cycle stage, core competencies, unique selling proposition (USP), price positioning.
3. Market‑level strategy – segmentation, target‑market selection, positioning statement.

The marketing strategy must sit at the intersection of these three layers; any mis‑match creates internal conflict and confuses customers.

---

3. Strategic Analysis Tools (used before choosing an approach)

Tool	Purpose	Key Questions
SWOT	Identify internal Strengths & Weaknesses and external Opportunities & Threats.	What can we do better than competitors? What external trends could we exploit?
PESTLE	Analyse macro‑environmental forces.	How do political, economic, social, technological, legal and environmental factors affect us?
Porter’s Five Forces	Assess industry attractiveness.	What is the bargaining power of buyers/suppliers? Threat of new entrants or substitutes?
Blue‑Ocean	Find uncontested market space.	Which customer pain points are currently unaddressed?
Scenario Planning	Prepare for uncertain futures.	What are the best‑case, worst‑case and most‑likely market conditions?

---

4. Marketing‑Mix (4 Ps) – Expanded Detail

4.1 Product

• Core product, actual product, augmented product.
• Key decisions: features, quality, branding, packaging, after‑sales service.
• Link to product‑level strategy – life‑cycle stage, USP, core competence.

4.2 Price – Methods & Elasticities

• Pricing methods:
  • Cost‑plus (markup) pricing
  • Penetration pricing – low initial price to gain market share.
  • Skimming pricing – high initial price for early adopters.
  • Psychological pricing (e.g., £9.99)
  • Dynamic / real‑time pricing (common in e‑commerce).
• Elasticity concepts (Cambridge requirement):
  • Price elasticity of demand (PED) = %ΔQ / %ΔP.
    Example: A 10 % fall in price of a smartphone leads to a 20 % rise in quantity sold → PED = –2 (elastic).
  • Income elasticity of demand (YED) = %ΔQ / %ΔI.
    Example: Luxury watches have YED = +1.5 (demand rises faster than income).
  • Cross‑price elasticity (XED) = %ΔQ of product A / %ΔP of product B.
    Example: If a 5 % rise in the price of coffee increases tea sales by 2 %, XED = +0.4 (substitutes).

4.3 Place (Distribution)

• Channel design – direct vs. indirect, intensive vs. selective vs. exclusive.
• Logistics considerations – warehousing, inventory management, e‑fulfilment.
• Fit with market‑level strategy (e.g., online‑only for tech‑savvy millennials).

4.4 Promotion – Methods & Media

• Advertising (TV, print, digital, social media), sales promotion, public relations, personal selling, direct marketing.
• Promotion mix decisions must reflect the chosen positioning and target segment.
• Digital‑first tactics – programmatic advertising, influencer marketing, content marketing.

---

5. Product Development Process (Cambridge requirement)

---

6. Sales Forecasting (Cambridge requirement)

Two broad families of methods are used in A‑Level examinations:

6.1 Quantitative – Moving‑Average

• Simple 3‑period moving average:
  Forecast for period t+1 = (S_t + S_t‑1 + S_t‑2) / 3
• Centered 4‑period moving average (more accurate for seasonal data) – average of two successive 4‑period averages.
• Useful when a reliable sales history exists and trends are stable.

6.2 Qualitative – Market‑Research & Expert Opinion

• Delphi technique – iterative questionnaires with a panel of experts.
• Sales‑force composite – salespeople estimate future sales for their territories.
• Consumer surveys – intention‑to‑buy questions, willingness‑to‑pay.

Worked example (centered 4‑period moving average)

Quarter	Sales (units)
Q1	120
Q2	130
Q3	125
Q4	135
Q5	140
Q6	150
Q7	155
Q8	160

4‑period averages: (120+130+125+135)/4 = 127.5 ; (130+125+135+140)/4 = 132.5 ; (125+135+140+150)/4 = 137.5 ; (135+140+150+155)/4 = 145.0.
Centered average for Q5 = (132.5 + 137.5) / 2 = 135.0 units (forecast for Q5).

---

7. Classic Approaches to Marketing Strategy (Ansoff Matrix)

Strategic Option	Primary Objective	Typical Marketing Activities	Consistency Checks (Business / Product / Market)
Market Penetration	Increase share in current markets with existing products.	Intensive promotion & price discounts Increase distribution points Loyalty programmes	Business: Is volume growth a core profit driver? Product: Does the product have sufficient quality/price appeal to win share? Market: Are target customers price‑sensitive and receptive to more communication?
Market Development	Enter new geographic or demographic markets with existing products.	Geographic expansion (e.g., entering EU market) New demographic targeting (e.g., millennials) Adapted advertising & localisation of packaging	Business: Does the firm have resources for expansion (finance, management bandwidth)? Product: Is the product adaptable to local tastes, regulations or cultural norms? Market: Is there credible research confirming demand in the new segment?
Product Development	Introduce new products to existing markets.	R&D investment & prototype testing Launch campaigns (teasers, events) Brand‑extension strategies	Business: Does the company’s core competence lie in innovation? Product: Will the new offering complement or cannibalise existing lines? Market: Are current customers likely to adopt the new product (needs analysis)?
Diversification	Enter new markets with new products.	Acquisitions, joint ventures or greenfield projects High‑risk promotional tactics (e.g., viral campaigns) Separate branding if required	Business: Is the firm financially robust enough for high risk? Product: Is there a strategic fit between existing capabilities and the new product? Market: Can the brand maintain credibility across unrelated markets?

---

8. Additional Strategic Approaches (Beyond Ansoff)

• Blue‑Ocean Strategy – create a new value curve (e.g., Cirque du Soleil) to make competition irrelevant.
• Porter’s Generic Strategies – choose one of cost leadership, differentiation or focus to guide pricing, product design and distribution.
• Scenario Planning – develop “what‑if” plans for major uncertainties such as Brexit, pandemic spikes or rapid AI adoption.
• Digital‑First / IT‑Enabled Strategies – leverage data analytics, CRM, e‑commerce platforms, AI‑driven personalisation to gain competitive advantage.

---

9. Role of Information Technology & Artificial Intelligence

• Data‑driven market segmentation (big‑data clustering, predictive analytics).
• AI‑powered content creation and chat‑bots for 24/7 customer service.
• Programmatic advertising – real‑time bidding based on user behaviour.
• CRM systems that track lifetime value and trigger automated loyalty offers.
• Potential drawbacks: high implementation cost, data‑privacy concerns, reliance on opaque algorithms.

---

10. International Marketing Strategy

1. Global vs. Local (Standardisation vs. Adaptation)
   • Standardisation – same product, price, promotion worldwide (e.g., Apple iPhone).
   • Adaptation – modify elements to suit local tastes, regulations, or purchasing power (e.g., McDonald’s menu variations).
2. Market‑Entry Modes
   • Exporting (direct or indirect)
   • Licensing / Franchising
   • Joint venture / Strategic alliance
   • Wholly‑owned subsidiary (greenfield or acquisition)
3. Pan‑global vs. Multi‑domestic Strategies
   • Pan‑global – high integration, low local responsiveness (e.g., Zara fast‑fashion supply chain).
   • Multi‑domestic – high local responsiveness, low integration (e.g., local‑brand cosmetics).

---

11. Measurement & Monitoring of Marketing‑Strategy Performance

Performance Area	Typical KPI	Measurement Tool
Sales & Market Share	Revenue growth %, market‑share change	Sales dashboard, market‑research reports
Profitability	Gross margin, contribution per product	Financial statements, cost‑volume‑profit analysis
Customer Behaviour	Customer acquisition cost (CAC), lifetime value (CLV), churn rate	CRM analytics, cohort analysis
Brand & Communication	Brand awareness (% aided), ad recall, social‑media engagement	Surveys, media monitoring tools
Digital Performance	Website traffic, conversion rate, cost‑per‑click (CPC)	Google Analytics, programmatic ad platforms

Regular review cycles (monthly, quarterly, annual) should compare actual results with targets, analyse variances and trigger corrective actions.

---

12. Steps to Ensure Consistency Across All Levels

1. Re‑examine the organisation’s mission, vision and long‑term corporate objectives.
2. Conduct a SWOT and PESTLE analysis to understand internal strengths/weaknesses and external opportunities/threats.
3. Map the product portfolio: life‑cycle stage, USP, price positioning and core competencies.
4. Segment the market(s) and select the most attractive target(s) using criteria such as size, growth, accessibility and fit with resources.
5. Choose a strategic approach (Ansoff option, Blue‑Ocean, Porter’s generic strategy, etc.) that passes the consistency checks in section 7.
6. Develop a detailed marketing mix that reflects the chosen approach and aligns with business‑level goals.
7. Set SMART objectives, allocate resources, and create a Gantt‑style implementation timetable.
8. Define KPIs, budgeting limits and a monitoring schedule; embed a feedback loop for continual adjustment.

---

13. Potential Pitfalls of Mis‑Alignment

• Promising product features that the firm cannot deliver → loss of credibility.
• Pricing that contradicts the brand’s perceived value (e.g., premium branding with discount pricing).
• Targeting a market segment beyond the company’s operational capacity (e.g., low‑cost segment without cost‑leadership capability).
• Launching a new product that cannibalises a high‑margin existing line without clear strategic gain.
• Over‑reliance on technology without adequate staff training or data‑privacy safeguards.

---

14. Suggested Diagram (for classroom use)

---

15. Key Take‑aways

• A marketing strategy is an integral part of the overall business plan; it must translate corporate goals into market‑focused actions.
• Consistency is achieved when the product’s life‑cycle position, the target market’s characteristics and the chosen strategic option reinforce each other.
• Effective planning uses a range of analytical tools (SWOT, PESTLE, Porter, Blue‑Ocean, Scenario Planning) and incorporates modern IT/AI capabilities.
• International expansion adds another layer of decision‑making – standardisation vs. adaptation and the choice of entry mode.
• Regular measurement against clear KPIs and a structured review cycle keep the strategy relevant and profitable.