Marketing Aspects of Steady Growth Business Strategy
The article analyzed the importance of marketing to achieve steady business growth, the main strategy of internal development and marketing of its level of development, achieving competitive advantage and the main directions of marketing management. The examples of marketing strategies for leading c...
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irk-123456789-1093312016-11-25T03:02:42Z Marketing Aspects of Steady Growth Business Strategy Gonchar, V. Kalinin, O. Marketing The article analyzed the importance of marketing to achieve steady business growth, the main strategy of internal development and marketing of its level of development, achieving competitive advantage and the main directions of marketing management. The examples of marketing strategies for leading corporations were described. The problems and prospects of the business strategy of extensive growth and diversification were made. У статті було проаналізовано важливість мар- кетингу для досягнення сталого розвитку бізнесу, головні стратегії внутрішнього розвитку маркетингу та його рівні розвитку, досягнення конкурентних переваг та головні напрями маркетингового менеджменту. Надано приклади маркетингових стратегій провідних світових корпорацій. Розглянуто проблеми та перспективи стратегій екстенсивного росту бізнесу та його диверсифікації. В статье были проанализированы важность маркетинга для достижения устойчивого развития бизнеса, главные стратегии внутреннего развития маркетинга и его уровни развития, достижения конкурентных преимуществ и главные направления маркетингового менеджмента. Даны примеры маркетинговых стратегий ведущих мировых корпораций. Рассмотрены проблемы и перспективы стратегий экстенсивного роста бизнеса и его диверсификации. 2015 Article Marketing Aspects of Steady Growth Business Strategy / V. Gonchar, O. Kalinin // Економічний вісник Донбасу. — 2015. — № 4 (42). — С. 131-135. — Бібліогр.: 14 назв. — англ. 1817-3772 http://dspace.nbuv.gov.ua/handle/123456789/109331 339.138+658.8 en Економічний вісник Донбасу Інститут економіки промисловості НАН України |
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Marketing Marketing Gonchar, V. Kalinin, O. Marketing Aspects of Steady Growth Business Strategy Економічний вісник Донбасу |
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The article analyzed the importance of marketing to achieve steady business growth, the main strategy of internal development and marketing of its level of development, achieving competitive advantage and the main directions of marketing management. The examples of marketing strategies for leading corporations were described. The problems and prospects of the business strategy of extensive growth and diversification were made. |
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Article |
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Gonchar, V. Kalinin, O. |
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Gonchar, V. Kalinin, O. |
| author_sort |
Gonchar, V. |
| title |
Marketing Aspects of Steady Growth Business Strategy |
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Marketing Aspects of Steady Growth Business Strategy |
| title_full |
Marketing Aspects of Steady Growth Business Strategy |
| title_fullStr |
Marketing Aspects of Steady Growth Business Strategy |
| title_full_unstemmed |
Marketing Aspects of Steady Growth Business Strategy |
| title_sort |
marketing aspects of steady growth business strategy |
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Інститут економіки промисловості НАН України |
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2015 |
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Marketing |
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| citation_txt |
Marketing Aspects of Steady Growth Business Strategy / V. Gonchar, O. Kalinin // Економічний вісник Донбасу. — 2015. — № 4 (42). — С. 131-135. — Бібліогр.: 14 назв. — англ. |
| series |
Економічний вісник Донбасу |
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AT goncharv marketingaspectsofsteadygrowthbusinessstrategy AT kalinino marketingaspectsofsteadygrowthbusinessstrategy |
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2025-07-07T22:55:30Z |
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2025-07-07T22:55:30Z |
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1837030630483820544 |
| fulltext |
V. Gonchar, O. Kalinin
131
Економічний вісник Донбасу № 4(42), 2015
UDC 339.138+658.8
V. Gonchar,
DrHab (Economics),
O. Kalinin,
PhD (Economics),
Priazovskyi state technical university, Mariupol, Ukraine
MARKETING ASPECTS OF STEADY GROWTH BUSINESS STRATEGY
Setting the problem. The existing controlling and
estimating techniques of business steady growth factors
do not consider many marketing specifics of business
activity, and represented in many ways only as lifecycle
of the goods, services and innovations implemented by
the managers and assumed mainly from short – term in-
vestors point of view but not long-term managers. De-
velopment of marketing strategy of the companies is one
of the most important conditions of their effective de-
velopment. But often managers limit development of
strategy to representation them in the most general view,
without their specific types. As a result strategic plan-
ning is impoverished, it is not possible to connect vari-
ous strategies together and complexity in planning and
management is broken, and strategy becomes impracti-
cal and little connected with real conditions of manage-
ment. Strategies are main products of process of strate-
gic management, but if the product of strategic manage-
ment has indistinct, fragmentary character, instead of
clear and accurate strategy, then such strategy cannot
yield any results but only will worsen competitive posi-
tion of the company in the market.
The company can apply various strategies to the
solution of tasks of development and achievement of
general goals. There is a set of different types of strategy
of production development, growth, reducing, market-
ing, sales, investment, financial and many others. For
better orientation among a set of strategies in admin-
istration managers use various classifications of strategy
allowing to order them in complete system and to create
common language for understanding managers of their
essence.
The last research analysis. Theoretical bases of
marketing as instrument of strategy formation of were
decribed in works of a number of domestic and interna-
tional scientists: A.F. Pavlenko, D.E. Shultz, О.С.
Walker, I. Ansoff, V.V. Bozhkova, N.V. Butenko, V.A.
Vasilenko, T.V. Grigorchuk, G.І. Kіndratska, M.Kh.
Koretskiy, T.І. Lepeyko, M. Meskon, V.D. Nеmtsov, G.
Реаrson etc. Nevertheless, there were not fully investi-
gated the formation problems of a strategy for organiza-
tions steady growth. There is also lack of customer-ori-
ented approach implementation to the management as
well as the usage of a system of integrated marketing
communications aimed at the promotion of services.
The aim of the article is to analyze and to make
recommendations about more detail study and practical
application of the marketing approach development of
business steady growth.
The main part. After having analyzed many defi-
nitions of steady growth, it is proper to choose the most
complex one, which includes several areas. It sounds
like: “Steady growth and development is defined as the
growth for a considerable period, both revenues and
profits, while total income for the investors (expressed
as the share price and reinvestment of dividends) exceed
the cost of capital. Experience shows that few compa-
nies are managed to create shareholder value, without
increasing the high level of marketing management and
having proper marketing strategies.
Marketing strategy focuses on long-term company
objectives and involves planning, marketing programs
so that they help a company realize its goals. Companies
rely on marketing strategies for established product lines
or services as well as for new products and services.
Marketing strategy is the result of decision making by
corporate executives, marketing managers, and other
decision makers. In general, the formal organizational
titles or jobs of decision makers, or the nature or purpose
of the organization, is irrelevant to the formulation of
marketing strategy. When the decisions concern prod-
ucts or markets, the results – i.e., the decisions – are all
considered marketing strategy. In a narrow sense, mar-
keting strategy is a specified set of ways developed by
marketers to achieve desired market ends. In a broad
sense, marketing strategy is composed of objectives,
strategies, and tactics. Objectives are ends sought. Strat-
egies are means to attain ends, and tactics are specific
actions – i.e., implementation acts. A marketing objec-
tive of increasing market share is linked to the marketing
strategy of altering the product line in order to reach new
market segments and to the marketing tactic of introduc-
ing a new brand name and various promotions for a tar-
geted portion of the market [9].
Marketing strategy is developed at different levels
of an organization (the hierarchical dimension), across
core marketing functions (the horizontal dimension),
and for marketing execution and control functions (the
implementation dimension). Strategy is usually devel-
oped in a hierarchical fashion from top to bottom; for
example, there could be several layers of objectives
where each objective is a function of a superstructure of
superior objectives, and a determinant of subordi-
nate objectives (except for the highest and lowest levels
V. Gonchar, O. Kalinin
132
Економічний вісник Донбасу № 4(42), 2015
of objectives). Higher-level decisions – the superstruc-
ture – act as constraints on the one hand, and guides or
aids for decision making on the other. The organization
levels could include the overall corporate level, strategic
business units, product markets, target markets, and
marketing units, depending on the complexity of the or-
ganization.
Strategy is also developed across the core func-
tional areas of marketing: product, price, place/distribu-
tion, and promotion strategies. Any functional level of
marketing, in turn, can have additional levels of market-
ing strategy decisions where refinement of the strategy
might take place. For example, in the advertising com-
ponent of the promotion function, the organization
might develop marketing strategy consisting of adver-
tising objectives, advertising strategies, advertising
themes, advertising copy, and media schedules. In addi-
tion, because of the growing customer emphasis of mar-
keting, marketers have added new customer-oriented
components to the marketing mix: customer sensitivity,
customer convenience, and service. Many international
corporations are also connecting their general and mar-
keting strategies with estimating and maintaining their
market share.
The majority of companies that analyze their mar-
ket position conclude that they are operating below their
optimal market share. They are not exploiting their plant
fully or have not been able to build a plant at the most
economical size; they are not quite large enough to
achieve promotional and/or distributional economies;
and they cannot attract the strongest talent. In sum, they
see a higher market share as promising greater profita-
bility without commensurately greater risk – indeed, of-
ten as reducing that risk.
Share-building strategies must be designed to meet
several considerations – whether the primary market is
growing, stable, or declining, the product is homogene-
ous or highly differentiable, the company’s resources
are high or low in relation to its competitors’ resources,
and there are one or several competitors and how effec-
tive they are [12].
The most effective strategy for market-share gain
is product innovation. Its weak sister, product imitation,
may be appropriate for growth in a growing market, but
it will probably not alter existing market shares. Such
companies as Xerox, Zenith, Control Data, and Polaroid
made their mark because they found a better product. At
the same time, innovation is an expensive and risk-laden
strategy requiring a careful analysis of market needs and
preferences, a large investment, and astute timing.
Market segmentation may also be used to build
share. Many dominant companies concentrate on the
mass market and neglect or undersatisfy various fringe
markets. This mistake is illustrated by the big three
American auto makers, who for years sought the major-
ity market, concluding that the small-car market seg-
ment was too small to be profitable. The vacuum they
created was first filled by Volkswagen and then later by
other European and Japanese auto companies at a high
profit [14].
A third strategy for building market share is distri-
bution innovation. In this instance, the company finds a
way to cover a market more effectively. Timex achieved
its growth as a watch manufacturer by entering uncon-
ventional outlets like drugstores and discount stores.
These outlets then refused to carry additional brands of
low-priced watches, leaving Timex king of the moun-
tain. Avon achieved its spectacular growth as a leader in
cosmetics by resurrecting the old and neglected channel
of door-to-door selling rather than by fighting bloody
battles for space in conventional retail outlets.
A final strategy for share building is promotional
innovation. Consider Avis’s “We’re No. 2, We Try
Harder.” A clever and distinctive campaign or promo-
tion, once established, is hard to duplicate or offset. At
the same time, however, too many organizations empha-
size promotional innovation when they should be
searching for real product, segment, or distributional in-
novations. Flashy promotion has a hollow ring when un-
supported by improvements in consumer value [8].
In evaluating their market positions, some compa-
nies will find that they are in fact operating at an optimal
share level. The cost or risk of increasing their share
would cancel out any gains. On the other hand, a decline
in their current share would reduce their profitability.
These companies are intent on maintaining market
share.
Such organizations find, however, that stabilizing
their share is almost as challenging as expanding it. Un-
derdog competitors are constantly chipping away at the
stable company’s share. They introduce new products,
sniff out new segments, try out new forms of distribu-
tion, and launch new promotions. One of the most an-
noying and common forms of attack is price cutting [5].
The high-share company is always wrestling with the
question of whether to meet price cuts and maintain its
share or give up a little share and maintain its margins.
If the high-share company maintains its prices, it loses
share. If it loses more than it expects, it may discover
that rebuilding costs more than the gains from holding
prices.
In general, the best defense for maintaining market
share is a good offense – product innovation, the same
strategy that works so well for the underdog. A domi-
nant company must refuse to be content with the way
things are. It has to anticipate its own obsolescence by
developing new products, customer services, channels
of distribution, and cost-cutting processes. A second line
of defense is market fortification. The dominant com-
pany plugs market holes to prevent competitors from
moving in. A third and less attractive defense for share
maintenance is a confrontation strategy. Here the domi-
nant company defends its empire by initiating expensive
promotional or price-cutting wars to discipline upstart
V. Gonchar, O. Kalinin
133
Економічний вісник Донбасу № 4(42), 2015
competitors. Confrontation may work, but it is under-
taken at some risk and contributes less to social welfare
than would more innovative responses [7].
The marketing aspect is very important for the sus-
tainable development of the company from the point of
view that without strong aspects in the promotion pol-
icy, the company will not be able to conduct effective
marketing policy, and thus its potential and competitive
advantage will be reduced. The strongest impact of mar-
keting activities on the development of strategies is
shown at strengthening its stable and strong market po-
sition, which is created by achieving extremely high and
stable level of loyalty in a well-defined market segment.
For example: only 5% growth in terms of retention of
credit by their best customers may lead to a 75% in-
crease in terms of value creation. This jump is due to the
extension of the potential value of new customers, as
well as the constant increase in the growth rate due to
changes in retention rates and customer loyalty. Since
the successful customer retention does not dry up the
source of growth, a growing company can increase the
growth rate of only 5-10% due to one-time increase cus-
tomer retention. Few improvements in the business have
a dramatic effect on sustainable profitable growth. They
are all depicted in table 1.
Table 1
Marketing management strategy destinations
Clients Marketing channels Product or the abilities Finance
Excellent quality
service and rela-
tionships with cli-
ents(loyalty)
The dominant position in the
channel
Low costs of production
High devaluation,
creating transac-
tion currency
High costs of
choosing another
company
Partnership with leading par-
ticipants of the channel
Top /unique characteristics
Availability of
capital
Best informing
about the behavior
requirements Controlling position in the
network
Innovative products
Business Model
built around a new
segment
Patents
Major share in buyers costs
Most companies face some form of competition, no
matter what the industry, because of deregulation and
because of the globalization of many industries. Conse-
quently, marketing strategy has become all the more im-
portant for companies to continue being profitable. The
effectiveness of marketing strategies is based on internal
growth strategy.
Internal growth strategy (table 2) refers to the mar-
keting growth within the organization by using internal
resources. Internal growth strategy focus on developing
new products, increasing efficiency, hiring people, bet-
ter marketing etc. Internal growth strategy can take
place either by expansion or diversification.
By diversifying successfully into markets that are
different from the one it dominates, a company can en-
sure that a steady stream of profits will continue even
after something as drastic as an antitrust divestiture has
occurred.
Many high market-share companies have done just
this. For example, the Brookings Institution’s classic ex-
amination of the pricing practices of 20 major corpora-
tions (including General Motors, General Electric, Gen-
eral Foods, and U.S. Steel) revealed that antitrust con-
cerns seemed to motivate several high-share companies
to diversify. The report states:
Many of the companies interviewed expressed a
preference for making their way into new markets,
wherein their share would be a minor fraction, to domi-
nating the market in the established product.”
The adoption of diversification strategies by domi-
nant organizations normally has positive social benefits.
Their movement into new industries tends to create
healthy competition throughout the entire economy and
help to create financially more strengthen structure of
business. Diversification strategy is attractive for steady
growth because allows effective ways for capital alloca-
tion.
Conclusions. In response to the continued growth
of the instability of the environment a significant part of
companies pays special attention to the strategic level of
management. The use of marketing, importance of
which in the activities of companies over the last century
has steadily increased, today is not limited exclusively
to the tactical aspects. Strategic marketing is used to jus-
tify the company's objectives, the choice of markets,
where the company has competitive advantages to de-
velop the benefits of these strategies. At the same time,
work on strategic marketing - Analysis of internal fac-
tors, market segmentation, competitive assessment, de-
velopment of marketing strategy – is preceded by the
creation and promotion of the product on the market and
largely determine the effectiveness of tactical marketing
tools.
V. Gonchar, O. Kalinin
134
Економічний вісник Донбасу № 4(42), 2015
Table 2
Internal growth strategy destinations
Expansion Diversification:
Market penetration
strategy:
Involves selling existing
products to existing markets.
To penetrate and capture the
market, a firm may cut
prices, improve distribution
network, increase promo-
tional activities etc.
Vertical diver-
sification
In vertical integration new products
or services are added which are
complementary to the present prod-
uct line or service. The purpose of
vertical diversification is to improve
economic and marketing ability of
the firm.
Market Develop-
ment strategy:
Involves extending existing
products to new market. This
strategy aims at reaching new
customer segments or expan-
sion into new geographic ar-
eas. Market development
aims to increase sales by cap-
turing new market area.
Horizontal di-
versification
Involves addition of parallel prod-
ucts to the existing product line. For
example: A company, manufactur-
ing refrigerator may enter into man-
ufacturing air conditioners. The pur-
pose of horizontal diversification is
to expand market area and to cut
down competition.
Product Develop-
ment strategy:
Involves developing new
products for existing markets
or for new markets. Product
development means making
some modifications in the ex-
isting product to give value
to the customers for their
purchase.
Concentric di-
versification
When a firm diversifies into busi-
ness, which is related with its pre-
sent business it is called concentric
diversification. It is an extreme
form of horizontal diversification.
Conglomerate
diversification
Diversifies into business, which is
not related to its existing business
both in terms of marketing and tech-
nology it is called conglomerate di-
versification. It involves totally a
new area of business. There is no
relation between the new product
and the existing product.
The most difficult is to define the strategy for cli-
ents with elastic demand and high quality requirements.
In this area the most severe competition and customers
are often offered a huge selection of virtually identical
in quality and price of similar groups of goods and ser-
vices from different vendors, differing only in individ-
ual functions. In these segments of the market it is diffi-
cult to clearly choose one or another strategy and follow
it, as competitors will react instantly and use the weak
spot. Development and choice of strategy is a complex
and creative process that cannot be squeezed into the
framework of pre-designed templates and a set of rec-
ommendations. This process cannot be standardized, as
the creation of technical products. Only non-standard
creative strategy allows achieving market leadership.
With the help of different combinations of factors, mar-
ket environment and institutional factors, companies
create a large number of possible strategic options for
development. The main task of the company manage-
ment is to develop a strategy for the development of
products based on innovation, create and maintain a sus-
tainable competitive advantage to ensure the success of
the company.
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Гончар В. В., Калінін О. В. Маркетингові ас-
пекти стратегії сталого розвитку бізнесу
У статті було проаналізовано важливість мар-
кетингу для досягнення сталого розвитку бізнесу,
головні стратегії внутрішнього розвитку маркетингу
та його рівні розвитку, досягнення конкурентних пе-
реваг та головні напрями маркетингового менедж-
менту. Надано приклади маркетингових стратегій
провідних світових корпорацій. Розглянуто проб-
леми та перспективи стратегій екстенсивного росту
бізнесу та його диверсифікації.
Ключові слова: сталий розвиток, управління,
стратегія, маркетинг, маркетинговий менеджмент,
маркетингові стратегії, зростання бізнесу.
Гончар В. В., Калинин А. В. Маркетинговые
аспекты стратегии устойчивого развития биз-
неса
В статье были проанализированы важность
маркетинга для достижения устойчивого развития
бизнеса, главные стратегии внутреннего развития
маркетинга и его уровни развития, достижения кон-
курентных преимуществ и главные направления ма-
ркетингового менеджмента. Даны примеры марке-
тинговых стратегий ведущих мировых корпораций.
Рассмотрены проблемы и перспективы стратегий
экстенсивного роста бизнеса и его диверсификации.
Ключевые слова: устойчивое развитие, управ-
ление, стратегия, маркетинг, маркетинговый мене-
джмент, маркетинговые стратегии, рост бизнеса.
Gonchar V., Kalinin O. Marketing Aspects of
Steady Growth Business Strategy
The article analyzed the importance of marketing
to achieve steady business growth, the main strategy of
internal development and marketing of its level of de-
velopment, achieving competitive advantage and the
main directions of marketing management. The exam-
ples of marketing strategies for leading corporations
were described. The problems and prospects of the busi-
ness strategy of extensive growth and diversification
were made.
Keywords: steady growth, management, strategy,
marketing, marketing management, marketing strate-
gies, business growth.
Received by the editors: 07.12.2015
and final form 28.12.2015
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