creating a competitive position. - Marketing Strategy

At a fundamental level marketing strategy is about markets and products. Organizations are primarily making decisions about which markets to operate in and which products/services to offer to those markets. Once those essential decisions have been taken the company then has to decide on what basis it is going to compete in that chosen market. Segmentation is therefore at the heart of strategic marketing decision making. In essence it is a strategic rather than an operational issue and has to be treated as such.

The previous chapters have been concerned with establishing the organization’s strategic intent and formulating the organization’s overall strategic approach. Initially any organization has to identify how it can, in general, gain competitive advantage. The stage that we will now explore is concerned with creating a specific competitive position. The first crucial step is to decide in which specific market segments to operate. The criteria that can be used to identify discrete segments within a market. Once segments have been identified they then have to be evaluated in order that an organization can decide which particular segments it should serve. Target marketing, or targeting, is the common term for this process.

Once target markets have been chosen an organization then has to decide how it wishes to compete. What differential advantage can it create that will allow the company’s product or service to hold a distinctive place in the chosen market segment? This process is normally called positioning. Targeting and positioning are critical processes that require the attention of senior management.

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