Marketing strategies evolve over time to go along with market changes, changes in customer preferences and all the internal changes that happen inside the business organization.
In order to be a successful business, the business managers need to take proactive steps – constantly follow those changes to adapt their marketing decisions to suit their customers and markets.
Otherwise, without keeping up with the changes, marketing strategies will be ineffective causing the business to remain uncompetitive in the market. It is important to mention that those changes among customers and markets can happen without any prior warning.
Changes in marketing strategies
There are many factors that cause businesses to change their marketing strategies. This is because the amount of money people spends on buying products is affected by a number of factors.
Main reasons why marketing strategies evolve over time include changing customer preferences, changing consumer spending patterns and changes in the business environment.
A. Changing consumer preferences
Consumer tastes are constantly subject to change. They can change rapidly without any warning. This means that the market for products will also change over time.
- Changes in tastes and fashion. Certain products becoming more popular will have positive effect on sales while certain products becoming less popular will have negative effect on sales. These changes in tastes and fashion can be either a short-term fad such as wearing colorful socks with formal suit or a long-term trend like eating healthier food and drinking less sugary drinks. Companies need to decide what products to produce.
B. Changing consumer spending patterns
Having insight into their customers’ preferences can help the firm to better fulfill needs and wants.
- Consumer income. Consumers buy more products when they have more money and less products when they have less money. If consumer income decreases as a result of workers losing their jobs, they will have less money to spend. When consumers have less money to spend, they will buy basic items necessary for living and not purchase luxury goods. If consumer income increases as a result of workers getting their new jobs, they will have more money to spend. When consumers have more money to spend, they will not only buy basic items necessary for living but also purchase luxury goods. Companies need to decide whether to sell necessities or luxuries.
- Price of the product. There is a relationship between the price of the product, demand for this product and sales. In general, according to the law of supply and demand, the higher the price of the product the lower the quantity sold. And, lower the price of the product the higher the quantity sold. Companies need to decide whether to charge high prices or low prices.
- Price of competitors’ products. Due to market competition, if the product sold by the business is very similar to competitors’ products, then customers are likely to buy the product that has the lowest price. If the product sold by the business is completely different from competitors’ products, then customers are likely to pay much higher price. Companies need to decide whether to sell the same products as competitors or totally different ones.
C. Changing business environment
The business environment constantly changes too. Market trends may decline while others may enjoy high growth rates. Business environment include the combination of internal factors and external factors that influence the business organization.
- Spending on promotional activities. All businesses spend money, time and effort on promoting their products one way or another. Most promotional activities of a business are aimed at informing customers about the goods and services that the company is selling, persuading them to buy the product instead of competitor products and remind the customers that the product still exists. Usually, the bigger the business organization is the more money it spends on a single advertising campaign. Some multinational businesses such as The Coca Cola Company, McDonald’s or Pepsi spend huge amounts of money to create a certain brand image that will help them to sell their products at higher prices simply because of the brand name, even though there are similar cheaper alternatives of non-branded products available on the market.
- Shorter Product Life Cycles. When changes in the markets happen more often due to the pace of change and the intensity of competition, the product life cycle of products will be much shorter. It means that certain products will have shorter lifespans making it difficult for marketing managers to maintain sales growth. Hence, companies will need to apply various extension strategies to prolong the maturity stage preventing sales from declining when the market becomes saturated.
- Demographic changes. This include mainly changes in population size and population structure. When a country’s population grows in size, this increases the size of the market. When a country’s population shrinks in size, this decreases the size of the market. Population growth is very likely to increase business sales. Population decline is very likely to decrease business sales. In addition, the structure of the population changes over time as some countries have more children being born while other countries have fewer children being born. The more children are there in the country, the larger the market is going to be. Hence, the sale of products for children will increase. The less children are there in the country, the smaller the market is going to be. Hence, the sale of products for children will decrease.
- Development of technology. Thanks to the Internet and smart phones E-Commerce revolution has emerged. Businesses that are present online have wider distribution network to meet needs and wants of larger groups of customers. Businesses that are not present online have narrower distribution network to meet needs and wants of smaller groups of customers. With technology, customers have far more choice of products than ever before. With technology, customers have far less choice of products.
- Competitive rivalry. Usually, competition threatens survival, growth and profitability of businesses. The more intense competition in a market is, the more marketers will be forced to adapt and evolve their marketing strategies. Constantly evolving the firm’s marketing strategies can be a strategy against competitors who threaten the organization’s market position. The less intense competition in a market is, the less marketers will be forced to adapt and evolve their marketing strategies.
- Rise of globalization. Globalization has made businesses more interdependent on others. This integration has forced marketing departments to start thinking globally, but adapting their strategies to suit preferences of local customers. Modern marketers need to evolve their marketing strategies to match the local needs and wants of consumers.
How to respond to the need of changing marketing strategies?
There are many ways that the business can take to respond to changes in consumer spending patterns, consumers’ preferences and increased levels of competition in the market.
1. Develop new products. Do the market research. Identify changing needs and wants of customers. Create new products or improve existing products to satisfy those needs and wants. Remain competitive.
2. Look for new markets. Look for new markets following the changing patterns of customers spending. Target different market segments. Sell in markets with less competition so more people are likely to buy your products.
3. Increase promotion. Spend more effort than competitors on persuading customers that your product is better than a competitor’s product. Use new promotional techniques. Increase advertising budget. Find creative ways to promote goods and services.
4. Remain competitive. Use all the business resources efficiently. Reduce the waste. This will allow your business to reduce the average cost of production. Thanks to lower average cost you will be able to reduce the prices of your products encouraging more people to make a purchasing decision.
If a business organization fails to positively respond to those changes and stay ahead of competition, it is unlikely to grow and prosper in the long-term or even survive in the short-term.
