Marketing Strategies
marketing strategies
Porter has identified three types of generic strategies that help a firm to cope with competitive forces and outperform other firms in the industry. These strategies are:-
1. Overall Cost leadership strategy
2. Differentiation strategy, and
3. Focus strategy
1. OVERALL COST LEADERSHIP STRATEGY:--
? The Overall Cost leadership strategy is aimed at gaining a competitive advantage through lower costs.
? The low cost leader in any market gains competitive advantage from being able to many to produce at the lowest cost. Factories are built and maintained; labor is recruited and trained to deliver the lowest possible costs of production. 'cost advantage' is the focus.
? Financial considerations and budgetary constrains play a critical role here in shaping competitive price of the products.
? Besides the production effiency, brand and marketing skills plays a important role in this kind of competition.
? For example:--Some organizations, such as Toyota, are very good not only at producing high quality autos at a low price, but have the brand and marketing skills to use a premium pricing policy.
2. DIFFERENTIATION STRATEGY:--
? A firm with a differentiation strategy attempts to achieve a competitive advantage by creating a product or service that is perceived as unique.
? Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin.
? The benefits of differentiation require producers to segment markets in order to target goods and services at specific segments, generating a higher than average price.
? For example, British Airways differentiates its service by providing focus on exceptional good quality of service rather than focusing on low price.
? The differentiating organization will incur additional costs in creating their competitive advantage. These...
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