Marketing Strategies

Introduction

The main components of marketing strategies are based around supply and demand, ie cost leadership, differentiation, focus on cost and focus on differentiation.

The first row in the below diagram represents a competitive advantage from the supply side, ie low costs and consumers' perceived differentiation, on the other hand, the first column depicts the competitive advantage from the demand side, ie industry and segment (with industry intended as a wider portion of the market than segment)

(source: Albert Carniel, 2019)

1. Cost leadership (usually very efficient in manufacturing and logistics; works with high volumes and standardises products; keeps strong relationships with suppliers, especially raw material ones; gives incentives based on quantity-based objectives; they target
"...- Taking control of the whole market (mass marketing)
     - Limiting the differentiation
     - Producing high quantities
     - Having low margins......
  continuously tries to decrease costs and offer its products for a cheaper price..."
Albert Carniel, 2019)

The key elements of cost leadership strategy are
"... - Logistics and production efficiency
     - High-volume standard products
     - Preferential access to raw materials
     - Bonuses on quantity target achievements
     - Focus on low-cost and prices
     - Aiming at mass-market
     - Poor differentiation and markup..."
Albert Carniel, 2019)

2. Differentiation (aim to increase brand esteem and making their products and/or services unique; usually invest a lot of money in R&D and marketing communication; need to be creative; focus on low quantities with high margins; as it sells unique products and/or services, consumers are willing to pay more; generate turnover by brand loyalty; distinguishing factors are
"... - brand unicity
     - prestige perceived
     - excellent communications
     - extensive innovation
     - low quantity but high markups..."
Albert Carniel, 2019)

3. Focus on costs (experts at lowering costs)

4. Focus on differentiation (aims to conquer a niche with a special offer; tailored marketing mix)
(for more detail, see frameworks in the Knowledge Base)