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Marketing by Market Structure and Competitive Position

  • Foto del escritor: Mateo Arjona
    Mateo Arjona
  • 9 mar 2023
  • 3 Min. de lectura

VOL. 0011 – FLORIDA, THURSDAY, MAR 9, 2023


Marketing duro y marketing suave

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Juan F. Arjona Harry

President & CEO Strategee



In addition to the structural perspective -which restricts the ability of each variable of the marketing mix to produce effective results, there is another perspective that also impacts the way in which we conceive the Marketing Plan, and it is precisely the competitive position.

I mean; both the Market Structure and the Competitive Position model each of the variables of the marketing mix, with the percentage of investment that must be made in each variable.

In such a way, the Market Structure and Competitive Position draws a profile and a different competitive territory for each category and its correct interpretation differs from the type of marketing that must be done in another category.

For example, if we were in charge of a leading dairy company in its category: for reasons of market structure and competitive position, the variable Innovation and Product has a higher relevance in percentage and marketing investment, very different, for example; a if we are in charge of a cement company in the position of follower, where the variable Innovation and Product -although it is necessary- it does not become as key and decisive as in the dairy company. In this hypothetical example, both companies will make different levels of investment attributable to the variable "Innovation and Product".


That's exactly what our Insight this week is all about, finding a way to "get on the court" and formulate high-value marketing.

There are, as we said, 44 Market Structures, which apart from taking into account whether it is a Tangible Product or a Service and whether it is the Industrial Market or the Consumer Market, are delineated by the following structures:


  1. Monopoly.

  2. Differentiated oligopolies (with four levels of concentration).

  3. Undifferentiated oligopolies (with four levels of concentration).

  4. Monopolistic competition.

  5. Perfect competition.

Thus we would have 11 Structures in Industrial Markets, 11 Structures in Consumer Markets, 11 Structures in the Product Market and 11 Structures in the Services Market.


In each Market Structure, the variables of the Marketing Mix are typified with a different relevance. The variables of the Marketing Mix -already updated- are the following:


  1. Innovation and Product.

  2. Pricing.

  3. Branding.

  4. Trade Marketing.

  5. Channels & CrossChannel.

  6. Omnichannel.

  7. Promotional to customers.

  8. CRM.

  9. Service and Servuction.

  10. DataBased Marketing Algorithms.

They will move at different rates with investments and financial resources of greater or lesser magnitude, depending on the Market Structure in question.


However, it is not yet enough to take into account the Market Structure; There is another perspective that tells us that the intensity of marketing and its nature depend precisely on the type of competitive position from which the brand or company competes; being these competitive positions, the following:

  1. Leader Position: is that brand or company that models or formats the category.

  2. Challenger position: is that brand or company that decides to challenge the leader in some flank, brand, channel, segment or market.

  3. Follower position: is that brand or company that decides to follow the leader in each movement he makes in any of the variables of the marketing mix. Their presence is not a threat.

  4. Niche Competitor: is that brand or company that focuses exclusively on a segment of the market, transforming it and becoming the leader of its segment.

A Matrix that allows crossing the Competitive Position -for each brand or market- with the Market Structure, will define exactly how to distribute 100% of the marketing investment in each of the variables and know the intensity and nature of the marketing as well as the drivers of the demand to activate. This is the right way to do effective marketing.

In Strategee -together with our clients- we build this Marketing Matrix Mix by Markets and by Competitive Position in such a way that the money you have for marketing investment is effectively assigned to each variable and thus obtain effective and visible results.

 
 
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