Strategic Marketing class is in session. So, what is strategic marketing? Strategic marketing is all about analyzing business opportunities and attempts to answer the following basic questions for a business: what might we do, what do we do best, and what must we do?
Thus, marketing strategy is the commitment and the plan for what you must do given the definition of your business. To generalize, there are four basic strategies:
1. Market penetration- Sell more of what you have in your current markets. This presumes that there is still more opportunity available.
2. Market development- Sell existing products in new markets. This presumes that other markets have similar wants or needs.
3. Product development- Create new products for existing markets. Your intimacy with your market has uncovered other product opportunities which you can deliver.
4. Diversification- Create new products for new markets. Your past success encourages you to boldly strike out for new opportunities.
What factors drive a company to change or modify their strategy? The list is long, but here a few of the drivers of strategic decisions:
– Make more profits; money is good and more would be better.
– Balance risk with reward; successful firms can become adventuresome.
– Environmental changes such as global warming.
– Fear, failure, or doubt; nothing wakes you up like lost money or decreasing market share.
– Greed and more greed.
– Technological changes such as the pervasiveness of the internet.
– Political changes such as emission controls.
– Socio-economic changes such women becoming the dominant consumer force.
– Population shifts such as our aging population.
For some firms, the status quo dictates their decision and they will choose to not modify their strategy; this may work for a while, but not for long.
Jack Welch said, “Change before you have to”. I recommend you listen to Jack.
John Bradley Jackson
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