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Businesses need marketing to help capture market share, introduce customers to new products and to drive sales. Just deploying a grab bag of marketing tactics, such as social media engagement, TV ads and a public relations blitz, does not do the job. Marketing tactics require a marketing strategy to guide them toward achieving the business goals.
Businesses typically employ one of four marketing strategies: penetration, market development, product development or diversification. The choice of which strategy to use depends a number of factors, ranging from the time a business has been in a market to whether the business intends to focus on existing products and services or new products and services. A business new to a given area, for example, would probably employ a penetration strategy to build product interest and a customer base. Regardless of the particular marketing strategy chosen, all of the strategies tend to share three common objectives.
Marketing identification represents one of the key objectives of a marketing strategy. In order for a marketing strategy to serve the more general business goal of increased profit, it must account for which demographics represent viable customers. A business that provides high-volume water filtration equipment, for example, would likely focus marketing efforts on large manufacturing or industrial concerns that require high volumes of filtered water, such as food production. Targeting home owners, by contrast, would waste time and resources, because residential water consumption tends toward the low end of volume.
Positioning hovers in a middle ground between a business objective and a marketing objective but has implications for both the business and its marketing. In essence, positioning boils down to how the business wants the customer to perceive its products or services. While they are similar, in some respects, do not mistake positioning for branding. Branding deals in emotional response, visuals and identification with a culture built around a company, rather than specific perceptions about the products or services. For example, Apple brands the company as innovative, but it positions the iPad as the market leader for tablet computers.
The business must also determine its marketing mix as a main objective of a marketing strategy. The classic model, called the 4 P’s, consists of the product and pricing, as well as place and promotion. The 4 P’s encompass an extremely wide array of factors. Some of the factors align with typical ideas of what marketing does, such as public relations and advertising, while other factors do not, such as pricing strategy, inventory management and warranties. Deciding on the marketing mix helps the business clarify issues, such as how customers get the product or service and how much the business can tentatively expect to make.