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Marketing Strategies

In this article, we will look at various marketing strategies that can be employed for products and services.

Having a well defined strategy allows for a more cohesive mix of products and services that work to complement each other.  Companies with a varied portfolio of products and services may have different marketing strategies that work together for maximum return.

Product differentiation

Your product is very different from competitors.  This is generally achieved through enhanced functionality or reliability.

Service differentiation

Your service is very different from competitors.  In this case, your service is your product.

Product servicing differentiation

You have a superior infrastructure to service your product once it’s been deployed in the field.  For some types of products, the initial purchase price is less important than the total life cycle cost which includes repair and maintenance.

Making it easier to maintain and repair your product can be a significant differentiator from competitors.  If uptime is important to your customer, quick turnaround is important to get them back up and running.

Price skimming

Have a product/technology that people will pay extremely high prices to acquire.  The “killer app”.  This goes beyond price differentiation.  Your product/technology is vastly superior to competitors or it may be so unique that there are no competitors.  In fact, there may not even be a market for it when it’s launched.

This leads to an interesting situation.  Some products are so groundbreaking that they aren’t accepted by the market immediately or ever.  There have been products that were first to market, but were never accepted because the consuming public didn’t understand the need for it, or a fast follower competitor had a better overall strategy that squeezed out the original product.

Niche market

Serving a specialized market.  You have specialized knowledge about the market, as well as contacts that allow you to “own” that part of the market.

Mass market

Serving a broad market.

Luxury brand

High quality product or service.  Price for the consumer is not a big consideration.

Loss leader

Sell product at low margin (or a loss) to sell higher margin product.  Loss leader thrown into package to sell higher margin product.

This strategy can also be used to get customers to purchase entirely from you, without having to make part of their purchase from you and part from a competitor.  Even worse, a competitor may offer a better overall package and they purchase entirely from the competitor.

Pull through

Selling products and services that allow for additional products and services to be sold or “pulled through” to generate additional revenue.

For example, if you sell a product that is part of a larger solution, you may get pull through revenue from the sale of ancillary items.

In some cases, the customer may favor the company that provides a complete solution despite higher cost.  Dealing with one supplier that provides an integrated solution is easier than managing multiple suppliers whose products may not work well together, or the suppliers themselves may not work well together.

Price leader

Sell at the lowest price.  Compete by going for the low end of the market where your product generally has fewer features or capabilities than competitors.  For products with similar features or capabilities, a trade-off in quality versus price may be possible.

Cost advantage

Have the lowest cost structure.  While having a cost advantage is always desirable, this strategy is especially important in competitive markets where you have little control over price.  Therefore, to maintain margins, you have to compete entirely on cost.


Sacrifice margin to gain market share.  If there are several established competitors in the market, this strategy could start a race to the bottom where competitors lower prices to the point where some go out of business.

Unique customer experience

Going to a Starbucks store is more than just the drinks you can buy.  It’s also about the experience you get while being in the store.  Coffee is everywhere, and good coffee is relatively easy to find.  The experience of the Starbucks store isn’t as easy to find.

The Apple store is another example.  The layout, the simplicity, etc. all contribute to the customer experience.

The inverse of this strategy, is a poor customer experience.  Retail stores that are jammed full of product and customers can generate buzz, but it also turns off some part of the consumer population.