Too many misconceptions about what a marketing strategy is. Let us bring a clear definition about this catch-all term.
Years after years, decades after decades, 'marketing strategy' has become an unclear catch-all term even for marketing managers and executives. Because this is an important topic that needs to be clarified, we will define – in the simplest way we can – what a marketing strategy is, its role and, why it is vital for ambitious companies to have one. Ready?
Operational effectiveness vs. strategy.
This confusion between 'operational effectiveness' and 'strategy' is probably the root of the problem. To be clear, both notions allow businesses to perform better, but they are two distinct notions acting for different purposes.
We probably all agree to the fact companies must be flexible in facing the constant market changes. One of the solutions could be to develop a business according to its most performing activities, reinforce investment for faster production, deliver higher value, focus on higher profitability, improve employees' skills and so forth, right?
But do such choices protect a business from being copied by other companies? Do these decisions allow a business to be ahead of competitors on a long-term base? Definitely not.
Thinking that ‘operational effectiveness' is the same thing as ‘strategy' is a dangerous belief. Michael E. PORTER brings an excellent short definition of operational effectiveness as being "the means to perform similar activities better than competitors perform them."
By lacking a marketing strategy, competitors will spend their time imitating each other in a race where no one can win. Moreover, it will not translate those operational gains into sustainable profitability. Therefore, operational effectiveness is not enough.
Strategy brings essential trade-offs.
Being different is being competitive; different by performing activities rivals do not provide or by performing similar activities differently. It is called 'strategic positioning.'
You would think positioning is a function on the customer or demand side but not necessary. What about a set of activities that will bring a difference on the supply side by proposing differences in existing operations?
Nonetheless, adopting a strategic position alone does not guarantee a long-term competitive advantage. Just because new-comers are highly flexible, companies need to make trade-offs to focus on a set of cooperative activities that will reinforce their reputation, operations, and internal coordination.
Doing so avoid being everything and nothing at the same time. Otherwise, it could create a high risk of confusion for employees, customers, and the perceived brand image. Therefore, managers who think eliminating trade-offs is a good thing might be wrong.
Trade-offs are essentials to strategy because they create a framework for choices and limit what a company offers. Companies without any will endlessly run faster and faster to stay competitive and will never reach a sustainable advantage.
While operational effectiveness is about achieving excellence in individual activities, marketing strategy is the ability to see the company as a whole. Thus, when a marketing strategy can conceive a strong set of complementary businesses, it protects a company from being imitated.
Even if some fundamental interconnections are identified, competitors will gain little by not adopting the whole interlocked activities. That is the reason why companies with a strong marketing strategy and operational effectiveness are far less threatened.
A marketing strategy could be summarized as the action of performing differently from competitors by strategically positioning a company via a unique and sustainable set of interlocked activities, guided by a framework of trade-offs. The ability marketers will have to determine this set of actions will demonstrate the capability of companies to compete in the long run and not fall into the trap of a daily operational effectiveness race.
Last but not least, a marketing strategy is not static at all. This discipline takes into consideration two main external factors knowing, (1) business opportunities and (2) structural changes. When one of the two occurs, companies must consider it to adjust their strategy.
If you are interested in the marketing strategy, we highly recommend reading articles and books written by Michael E. PORTER and other specialized authors.