1.1 Introduction to Marketing Strategy

In a word, the answer is yes! And in so many ways. As a buyer, think about a recent purchase you made. Now consider how the purchased product or service affects your life. How does the product/service solve a problem, minimize pain, or increase pleasure for you? How does the product/service make your personal world better? As a seller, think about a product/service you sold recently (personal item or selling for a company). How is your world better because you made the sale?

Now think beyond your world. Consider entrepreneurs in emerging markets. Can marketing improve their world? A Journal of Marketing1 study examined the effects volunteer marketers have on entrepreneurs in Uganda. Specifically, the researchers asked the question, “Can marketing help entrepreneurs in emerging markets grow their business?” Many emerging market entrepreneurs struggle to grow their businesses because they lack differentiations in the market, and they fail to attract customers. To test the question, researchers conducted a field experiment with 930 Ugandan businesses. The experiment examined the impact of marketing support intervention from volunteer professional marketers. These volunteer marketers helped Ugandan entrepreneurs market their businesses, including differentiating product offerings from competitors and attracting customers. The results show that volunteer marketers helped grow monthly sales by 51.7%, monthly profits by 35.8%, total assets by 31%, and paid employees by 23.8%! Yes, marketing can help entrepreneurs in emerging markets.

Marketing strategyA cohesive marketing mix of product, place, price, and promotion, designed for a specific target market. Marketing strategy answers the question, “How do we orchestrate the marketing mix to deliver value to a particular market segment?” provides an overview of the marketing elements that must come together to make a successful business. It determines how a company or organization selects customers and identifies competitors. Once customers are selected, marketing strategy provides a framework for creating value for customers using a customized marketing mix of product, price, promotion, and place (distribution ). Sustainable competitive advantage begins by continually creating more value than our competitors do for our customers. Indeed, customers make buying decisions based on perceived value.

What is marketing? Initially, people think marketing is advertising or selling. Yes, advertising and selling are part of marketing, but marketing includes much more. The American Marketing Association (AMA) defines marketingThe “activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” as the “activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”2

Important Components of Marketing

For economists, markets are structures that allow buyers and sellers to engage in exchange. Generally, sellers offer goods and services to buyers in exchange for money. Marketers focus on the people of the exchange—the buyers and sellers—rather than the structure. So, for marketers, marketsThe aggregate of individuals and organizations that have (1) needs and wants and (2) the ability, willingness, and authority to purchase products and services. represent the aggregate of individuals and organizations that have (1) needs and wants and (2) the ability, willingness, and authority to purchase products and services that satisfy their needs and wants. All markets, ultimately, are people. The two general classifications of markets are business and consumer.

The business marketIndividuals within organizations and companies purchasing products and services for use or consumption within the organization or for resale; also called the business-to-business market or B2B. includes individuals within organizations and companies purchasing products and services for use or consumption within the organization or for resale. For example, BMW purchased tires from Michelin. The tires are used in the assembly of the BMW 3 Series automobiles. This market is also called the business-to-business marketIndividuals within organizations and companies purchasing products and services for use or consumption within the organization or for resale; also called the business market or B2B., or B2B market.

The consumer marketIndividuals purchasing products and services for personal consumption; also called the business-to-consumer market or B2C. includes individuals engaging in exchanges of products and services for personal consumption or use. When someone purchases a candy bar from the local convenience store for personal consumption, they are engaging in the business-to-consumer marketIndividuals purchasing products and services for personal consumption; also called the consumer market or B2C., also known as the B2C market.