Marketing is any activity in business that is designed to acquire or keep customers. It therefore includes advertising, email campaigns, online content publication, and social media activity. However, what do we mean by the term ‘strategic marketing’? In particular, how can strategy be applied to marketing, and how can marketing contribute to business strategy?
This page unpacks the term, to explain more about the activities involved. It also discusses how businesses can develop the necessary skills.
Defining Strategic Marketing
There are many definitions of strategic marketing (see box).
Definitions of strategic marketing
“Strategic marketing focuses on understanding continuously changing markets to build a competitive advantage; maximising opportunities to develop products and services that deliver both customer value and high profit potential.”
Chartered Institute of Marketing
“Strategic marketing is a method through which an organisation differentiates itself from its competition by focusing on its strengths to provide better service and value to its customers. In a nutshell, the goal of strategic marketing is to make the most of an organisation’s positive differentiation over its competition through the consumers’ perspective.”
Berlin School of Business and Innovation
“Strategic Marketing is the use of marketing disciplines to achieve organizational goals by developing and maintaining a sustainable competitive advantage. It addresses high-level considerations such as what markets to target, which services to offer and how to price and promote them.”
Marketing consultancy Hinge
Bringing these definitions together, strategic marketing is about:
understanding your market, your customers and your products, and
using that knowledge to support the business, and helping it to develop a sustainable competitive advantage.
Both these activities are delivered through marketing activities such as gathering and analysing information, and developing a marketing plan.
Unpacking Strategic Marketing
Strategic marketing starts by answering three questions: where, how and when to compete.
The Chartered Institute of Marketing describes three important aspects of strategic marketing:
1. Strategic analysis
This is the process of gathering and analysing information to understand more about your market and your customers.
This enables you to develop insights into both, and particularly how you can deliver value to customers.
This process starts with gathering information—but not just any information. You need to seek out information that will provide the answers that you need about your market, including both your customers and your competitors.
There is more information about this process in our page on Gathering Information for Competitive Intelligence. You may also find it helpful to use a framework like Porter’s Five Forces or PESTLE to structure your intelligence-gathering.
You then need to turn the information into action, by using it to support decision-making.
For example, this knowledge will tell you where you can best compete, and how to approach your customers most effectively. There are two main elements of this: supporting organisational growth and supporting brand and product positioning.
2. Growth strategy
This is the part of strategic marketing that supports business growth.
It includes strategies to retain existing customers and increase customer loyalty. These might include improving the customer experience, or offering loyalty bonuses or reductions to valued customers. Customer segmentation is a useful tool here because it allows you to distinguish between customers, and identify those who are worth more to your company.
Growth strategy also includes expanding into new markets, and exploiting both new markets and new products to grow sales by acquiring new customers.
The Boston and Ansoff Matrices are tools designed to help organisations to think about their product portfolios and how to grow the business. They may be old—the Boston Matrix dates from the 1970s, and the Ansoff Matrix from the 1950s—but both still have a place in strategic marketing.
The Boston Matrix covers products, and enables businesses to explore their product portfolio by looking at growth potential. It considers both the growth potential for the market for the product, and the product’s position within that market.
The Ansoff Matrix covers potential strategies, including expanding into new products within existing markets, taking existing products into new markets, or developing new products for new markets, also known as differentiation. These vary by both risk and the skills required.
When you put together the two matrices, you can think strategically about which options to pursue for growth, depending on the level of risk you want to take.
3. Positioning strategy
This describes the ability to differentiate your product or brand so that it appeals to your customers and potential customers.
Marketers often use the 7 Ps of Marketing to consider differentiation. These are product, price, people, place, processes, promotion and physical evidence. Sometimes this is also known as the marketing mix, although that term is also used for the tactics and activities chosen for marketing.
Pricing is covered separately in our page on Pricing Strategies. You may also find it useful to read our page on Customer Segmentation, which discusses the process of distinguishing between groups of customers for marketing purposes.
Strategic vs. Tactical Marketing
The Chartered Institute of Marketing distinguishes strategic marketing from two other areas:
Business strategy or the process of developing overall goals and objectives for the business, and setting out how you can deliver them. You can find out more about this process in our pages on Strategic Thinking and Developing a Business Idea; and
In effect, strategic marketing bridges the gap between these two activities. It takes the organisational goals, and looks at what marketing activities and tactics will be appropriate to help deliver those goals.
Writing a strong and carefully considered marketing strategy will ensure that you move seamlessly between the two.
Skills Required for Strategic Marketing
Finally, what skills are required for strategic marketing?
It should be clear by now that marketers need strong analytical skills to gather and interpret information about their customers and competitors within their chosen market. They also need to be able to analyse the impact of their activity by measuring return on marketing investment. Marketing has now become very much more of a science than an art.
Marketers also need strong strategic thinking skills to apply the information gained, and plan how to move the business to the desired point.
There is more about the skills needed by marketers in our page on Marketing Skills.
A Final Word
Marketing is an essential activity in any business. However, strategic marketing can enable the business to move forward rapidly, reaching new customers and markets with confidence.