From my personal experiences as a marketing student and later as a lecturer in marketing with the Chartered Institute of marketing Ghana, I realized that most text books are awash with foreign examples that are sometimes difficult for students to grasp. Marketing as a course is clearly related to our ‘day-to-day’ activities and it should be as practical as possible and full of fun. This article seeks to explain a few marketing-related strategies with illustrations from the Ghanaian corporate environment. It has been written from an individual perspective based on personal observations from afar and may not necessarily reflect the strategic intent of the organizations used.
What is Marketing?
There are various definitions of marketing but the essence of marketing is the delivery of customer-centric solutions to maximize the achievement of organizational goals. Every organization exists to offer some form of solution to its target market and those solutions can be in the form of products or services. Those solutions should be ‘customer-centric’ in the sense that they should be developed from the perspective of the consumer. Organizations should be able to put themselves in the shoes of their target audience so that they will be able to satisfy the customer’s needs adequately!
Every organization has a goal be it profit or non-profit but marketing should seek to maximize the achievement of those goals through a clear identification of customer needs, a detailed assessment of organizational competences/capabilities and detailed analysis of the external environment in order to identify the strengths and weaknesses within the organization and the opportunities and threats inherent in the external environment.
Marketers should then devise strategies to help the organization to improve its internal weakness and use its identified strengths to exploit the opportunities in the external environment and minimize external threats. Some of the marketing-related strategies that will be discussed include; position-based competitor strategies, Porter’s competitive strategies, branding strategies and Ansoff’s Growth Strategies.
Competitor Strategies (Position-based)
Position-based competitor strategies originated from military strategies and they are strategies that organizations can deploy to fight their competitors. The type of strategy the players deploy depends on their market position/market share. Theoretically, players in the industry are classified as Market leaders, challengers, followers and Nichers with 40%, 30%, 20% and 10% market shares respectively. Practically, some of the strategies may not necessarily be applicable within a particular context and may also not be the exclusive preserve of players with certain market shares. Some of the competitor strategies that will be discussed include; Frontal attack, flank defense, encirclement attack and bypass attack.
The focus of a flank defense or attack is for the company to protect its flanks (weakness) or attack a competitor’s flanks. Within the radio broadcast industry, the Multimedia Group has been able to deploy a flank defense and an encirclement attack effectively. The liberalization of the airwaves by the National communications authority in 1994 resulted in the proliferation of various privately owned frequency-modulated radio stations in the country. What can be termed the mad-dash to tune in started in 1995 with the introduction of Joy Fm and subsequently Radio Gold. The FM stations broadcasted only in English and were deemed to be only for the educated Ghanaian. The non-English speaking Ghanaian felt alienated as all the programmes including the news broadcasts were in the English medium.
Peace Fm blazed the trail in 1999, when it was established as an Akan-speaking radio station. It generated euphoria amongst the Akan Speaking segment of Accra’s population and made it the most widely tuned-in radio. The educated Ghanaian who hitherto was perceived as averse to local language programming also started tuning-in and thus Peace Fm started chirping at the market share of Joy Fm and Radio Gold. The success of Peace FM transformed the broadcasting style of the radio stations and opened the floodgates for other stations to broadcast in the local language. As various local content radio stations sprung up it became relatively difficult for the likes of Joy Fm to increase their market share.
Joy Fm was faced with a dilemma as to how to compete head-on with Peace Fm. Joy Fm couldn’t introduce local content as that will tend to distort its brand positioning and lead to confused positioning and brand dilution. The Multimedia Group strategically acquired Adom Fm (a local content radio station), and used it to pursue two basic competitor strategies; Frontal attack and Flank defense.
The acquisition of Adom Fm offered Mulitmedia Group the luxury of competing head-on with Peace Fm (Frontal Attack) without any effect on the group’s premier brand (Joy Fm) since Adom Fm operated as a distinct brand independent of Joy Fm.
The second was a flank defense as it enabled Joy Fm to defend its weakness of not being able to compete directly for the huge local language market. It also prevented these local language broadcasters from chirping away its market share and revenue.
Finally, the Multimedia group launched an encirclement attack by launching various brands into the radio broadcasting market to cater for various segments of the market. For example, they launched Hitz fm for the music loving youth and Asempa Fm for Sports loving fans. These multi-media brands help them to compete more effectively with the likes of Happy Fm.
A bypass strategy involves using superior technology to leapfrog a competitor or serving markets that competitors are currently not serving. A classic example within the Ghanaian corporate environment is the “analog-digital” saga in the telecommunications industry. Mobitel (Now Tigo) was the innovator in the mobile telecommunications market but it entered the market with analog technology. Spacefon (now MTN) entered the market with digital technology which gave consumers the option of changing their swapping handsets and overtook Mobitel as the market leader. A position it has defended tenaciously for many years.
Porter’s Competitive Strategies
Porter (1980) argues that for organizations to compete effectively in the market place they must pursue one of three distinct generic strategies of Cost Leadership, Differentiation and Focus. Though various alternative combinations have been proposed and the three generic strategies have been extended I will stick with these three for the purposes of this illustration.
Cost leadership involves minimizing the cost of operations and achieving high operational efficiency in order to pass on the cost advantages to the consumer in the form of low price. Cost leadership strategy is normally deployed by firms who intend to use low price as their basic competitive strategy. In Ghana, the most recognizable example is Melcom whose competitive advantage and competitive stance is based on low price.
Differentiation involves providing a superior and distinct product offering that is clearly differentiated from that of competing offerings. The uniqueness should be relevant to the target audience to the extent that they will be willing to pay a premium for it. In Ghana, consumers are willing to hang-out at upscale pubs and purchase drinks at premium prices because they place premium on the ambience and as such are willing to pay about 5x the market prices for drinks.
Focus or Niche strategy involves identifying a narrow segment of the market with an unmet need and then producing products and services to serve the needs of that specific segment. The segment must however be substantial enough to be profitable. As various radio stations jostled for position within Ghana’s broadcasting industry, Atlantis Radio decided to target a narrow segment of the market by targeting the matured, upwardly mobile segment of the market who prefer stress-free radio and enjoy country music, Jazz, soul and R&B. As a marketing professional, the target segment was so vivid that I had a mental image of a typical target audience. From my perspective, Atlantis dropped that segment or diluted that brand positioning when they started various youth-oriented positioning and also introduced too much-talk though in recent times they seem to be going back to that initial segment.
Another classic example that can be used to illustrate the concept of Focus strategy is UT Financial Services (Now UT Bank). Many years ago, the Ghanaian importer and other businessmen had problems raising quick loans to clear their products from the ports or to take advantage of lucid business opportunities as the banks were relatively slow to grant loans. UT Financial Service was established to offer quick loans to serve the peculiar needs of this target segment. It positioned itself as “a loan in 48 hours” and delivered consistently on its brand promise. The UT example also represents a case of successful brand positioning.
Most marketing strategies and concepts are related but the key differences hinges on the context and rationale underpinning their usage. Marketing is an exciting course and lecturers and practitioners should ‘practicalize’ and domesticate it as much as possible to bring the concepts to life.