Marketing and sales strategy

The essentials

A marketing strategy is a plan for reaching target customers and persuading them to buy, while a sales strategy deals with the actual process of selling and closing deals. For a new enterprise, both must be planned carefully because resources are limited.

Steps in building a marketing strategy:

• Segmentation: dividing the market into groups of customers with similar needs (by age, income, location, lifestyle and so on).
• Targeting: choosing one or more segments to serve.
• Positioning: creating a clear place for the product in customers' minds compared with competitors, for example "affordable quality" or "premium".
• Marketing mix (4 Ps): deciding the Product, Price, Place (distribution) and Promotion for the target segment.

Key points

• Cost-plus pricing: a fixed margin is added to the cost.
• Penetration pricing: a low initial price to win market share quickly.
• Skimming pricing: a high initial price for early buyers, lowered later.
• Channels of distribution: direct (producer to consumer) or indirect (through wholesalers and retailers); online channels are increasingly used.
• Sales strategies: personal selling, direct selling, dealer networks, online selling, and building long-term customer relationships.
• Customer feedback helps improve both product and service.

Exam tips

• Low price to enter a crowded market → penetration; high price for a new, unique gadget → skimming.
• Know that "place" means distribution, not just the shop location.

Common mistakes

• Confusing targeting (choosing segments) with positioning (shaping the product's image in those segments).
• Assuming one price strategy suits every product.