A marketing strategy is a plan to achieve marketing objectives through the marketing mix. It involves deciding which products to sell, who to target, how to reach them and how to position the product in the market.
Developing a marketing strategy
The key steps in developing a strategy include:
- Market analysis – assessing market size, growth, customer needs, competitors and external influences (e.g. economic, legal and technological factors).
- Setting marketing objectives – such as increasing sales, building market share, launching new products or entering new markets.
- Budgeting – allocating resources to different marketing activities.
- Designing the marketing mix – selecting appropriate product features, pricing, distribution and promotional methods to meet objectives.
- Implementation – putting the plan into action.
- Monitoring and evaluation – measuring results against objectives and making adjustments where necessary.
Legal and ethical considerations
Marketing activities must comply with laws regulating advertising content, data protection, consumer rights and intellectual property. Businesses should also consider ethical issues such as truthful advertising, avoiding misleading claims and respecting consumer privacy.
Legal controls to protect consumers
Governments enact consumer protection laws to safeguard buyers from unfair or unsafe business practices. Key areas include:
- Product safety: Goods and services must meet safety standards; unsafe products must be withdrawn or recalled.
- Trade descriptions: Businesses must not make false or misleading claims about the quality, features, price or origins of products.
- Sale of goods and services: Items sold must be of satisfactory quality, fit for their intended purpose and as described; consumers have rights to refunds or replacements if these conditions are not met.
- Consumer credit: Regulations protect borrowers by setting standards for loans, interest rates and advertising of credit agreements.
- Data protection and privacy: Laws require businesses to handle customers’ personal data responsibly and securely.
- Price information: Prices must be clearly displayed and include all charges; hidden fees are prohibited.
Failure to comply with these regulations can result in fines, legal action and damage to the business’s reputation.
Entering international markets
When businesses expand abroad, they must adapt their marketing strategy to local cultures, regulations and consumer preferences. Options for entering new markets include exporting, licensing, franchising, forming joint ventures or establishing overseas subsidiaries. Businesses must also consider exchange rate risks and trade barriers.
Effective marketing strategies are dynamic. Firms must monitor changes in the market and be prepared to innovate and evolve their plans to remain competitive.
Methods of entering new markets
| Method | Description | Advantages | Disadvantages |
|---|---|---|---|
| Exporting | Selling products directly to customers in another country. | Low risk; avoids setting up production abroad; quick market entry. | Transport costs; tariffs and quotas; limited control over marketing. |
| Licensing | Allowing another company to produce and sell your product in exchange for fees. | Low investment; rapid expansion; royalties provide income. | Loss of control; potential loss of intellectual property; quality issues. |
| Franchising | Granting a franchisee the right to operate under your brand. | Fast expansion with limited capital; franchisee bears many costs. | Loss of control; reputation depends on franchisee performance. |
| Joint venture | Partnering with a local business to share ownership and expertise. | Shared risk; local partner’s knowledge of the market. | Potential conflicts; shared profits; complex management. |
| Direct investment | Setting up or acquiring production facilities abroad. | Full control; long‑term presence; avoids trade barriers. | High cost and risk; cultural differences; political and economic instability. |
Examples and applications
A small craft brewer planning its marketing strategy might analyse the local market and find that customers value unique flavours and sustainability. Its objectives could include increasing sales by 20 per cent and entering the regional market. It sets a budget for social media advertising and tasting events, designs distinctive labels (product) and decides to sell through independent retailers (place) at a premium price. After implementation, the brewer monitors sales and customer feedback, adjusting the plan as needed.
Businesses expanding overseas choose different entry methods. A fashion brand might start by exporting to retailers in neighbouring countries, then franchise its stores to local entrepreneurs in more distant markets. A food manufacturer could license a foreign firm to produce and sell its products using the original recipe, collecting royalties in return. Large car companies often form joint ventures with local manufacturers to share costs and knowledge; for example, Toyota has partnered with local firms in China. Some technology giants build their own factories abroad (direct investment) to gain full control and avoid import tariffs.
