Outlining the Principles of Marketing Strategy
by Professor Stephen Ho

Sharpening one's skills is not only essential in show business but also in the commercial world as well. Adding value is of key importance, besides, the chances for success would be increased as well by grasping the latest targeted market intelligence.

Again we have invited Professor Stephen Ho, adjunct professor of the HKU School of Professional and Continuing Education to outline important strategies in marketing. Studying cases of success and failure can help your chances to move ahead in business.

The Fundamental Marketing 4Ps
Before we get into the details, Professor Ho makes a clear distinction between the concepts of market strategy, and sales and promotions. While the former emphasises a systematic strategy, the later comprises parts of it. Successful sales strategies generate short-term profits whereas effective, tightly-knit marketing strategies can build up a brand.

An in-depth understanding of market trends can also help create a 'sure win' result. "A successful marketing strategy starts from market research, which explores market potentialities," says Professor Ho. "Based on the research findings, a company can then develop new products or improve existing products to meet ever changing market demands."

A careful study of marketing cannot be done without examining the long-standing 4Ps: Product, Price, Place and Promotion. A marketing strategy with a perfect mix of these 4Ps is rarely developed but it can surely help you reach your marketing objectives. Just a strong grasp of one of the 4Ps may be enough to give you a competitive advantage.

With reference to Place strategy, Professor Ho cites the case whereby “Before stepping into the mainland market, Budweiser Beer from the US bought out the Harbin Beer Company because of its fine brewery and well-connected distribution network in northern China.” In fact, international beer sales recorded an increase of 13.3% in the fourth quarter of 2005, and a remarkable 50.8% for the entire year. The results mainly came from the dramatic sales growth of Budweiser in the China, Canada and Mexico markets as well as the acquisition of Harbin Beer in mid-2004.

The Critical Marketing 3Ps
Other than the 4Ps, new theories have also emerged over the past 10 years with the addition of the 3Ps.

The first P is People. Imagine it's Christmas Eve and you're stranded in airport due to a bad storm. You yell at the airline check-in counter staff repeatedly to get you a ticket. Then, happily the staff with a sincere smile tells you that they have already prepared your hotel accommodations, dinner as well as a seat on a flight that departs early the next day with a complimentary upgrade to business class. Now you're being pampered and have a good impression of the airline. You will probably also recommend this airline to your friends. This case highlights the importance of staff who can really understand customers' needs. These are the people who are indeed the treasured assets of a company.

In many service industries like real estate and banking, service staff are key factors that can influence customers' purchase decisions. Therefore customer relationship management is essential. "According to many research findings, the cost ratio of retaining loyal customers and attracting new customer is 1:5," says Professor Ho. This means that holding on to good staff can lead to retaining more customers at lower cost.

Process, the second P, refers to the three stages of the consumption process: Pre-buy, Buying and After-sales. In many cases, customers are scared away at the Pre-buy stage, like many ticket and customer service hotlines where customers are frustrated at having to press a series of number keys on their phone. In addition, the After-sale stage is also an important step in retaining customers. "Giordano is particularly effective at the After-sale stage. In the 80s when few companies offered refunds, Giordano launched a unique 7-day refund for customers who felt dissatisfied with the products they bought," says Professor Ho.

Finally, Physical Evidence is the third P, which places emphasis on the physical presentation of services, including product packaging, staff uniforms and company websites, etc.