Selecting marketing strategies

Selecting marketing strategies

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Types of strategies

Low cost;

Offers a way of attracting customers. Used by businesses that are late entrants to the markets and do not have an established name. Requires them to have a low cost base and be able to maintain or reduce cost levels when established competitors respond.

Differentiation;

Making a product separate and distinct from rivals, giving consumers a reason to buy their product. Allows the business to charge higher prices as demand is likely to become more price inelastic.

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Porters Five Forces Model

Considers .. 

  • New entrants
  • Substitute products
  • Power of buyers
  • Power of sellers
  • Intensity of rivalry
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Ansoff's matrix

The matrix considers product and market growth and analyses the degree of risk attached to the range of options open to the business. Key findings are;

  • Staying with what you know represents relatively little risk
  • Moving into new markets with new products is very high risk (http://www.marketingteacher.com/image/content/Ansoff_lesson.gif)



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Market penetration

  • Existing product, existing market
  • Chosen to market existing products to existing customers more strongly
  • Avoids expense and time involved in developing new products
  • Can necessitate heavy promotional expenditure
  • Increasing brand loyalty
  • Low risk
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Market development

  • Existing products, new markets
  • Involves targeting the existing product range at potential customers in a new market
  • New markets could be overseas.
  • Medium risk
  • Avoids need for developing new products
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Product development

  • New products, existing markets
  • New product marketed to existing customers
  • Business knows its customers and easier to conduct research off them
  • Medium risk
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Diversification

  • New products, new markets
  • Sell completely new products to new customers
  • High risk strategy as they lack experience of the product and customer base
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