Essential Marketing Concepts & Strategic Business Frameworks

Posted on Sep 26, 2025 in Business Administration and Management (BAM)

Core Marketing Concepts Explained

Understanding fundamental marketing concepts is crucial for any business strategy. These principles drive exchange processes and shape consumer interactions.

Need Satisfaction: The Exchange Motivator

  • Need satisfaction is the element that motivates the exchange process. This exchange can be physical or not, often developed through relational marketing.
  • A need is a sensation of “lack of something”, a real state different from a desired state for the consumer.
  • When a need is detected, the consumer is motivated to satisfy it by acquiring products.
  • Needs are inherent to human beings; therefore, marketing cannot create new needs, but it can develop different ways to satisfy them (infinite ways), which are called wishes.

The Broad Concept of “Product”

  • We cannot understand the product concept only as “goods”.
  • A “product” in a wider sense is anything (tangible or not) that leads to satisfying needs. It is the vehicle, the way to satisfy consumer needs.
  • Products can be classified as follows:
    • Tangibility: Goods and services
    • Hopes and Desires: Benefits and satisfaction (experiences)
    • Different Kinds of Products: Goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

Demand: From Wish to Purchase

Only a wish cannot motivate a product purchase. A product offered by a company will be successful if it provides value and satisfaction to the potential consumer.

  • Consumer: Gains advantages and benefits through the product (subjective satisfaction level).
  • Company: Drives products to the consumer and obtains benefits from the final transaction.

Demand will occur when the consumer decides to buy a product to satisfy a need and has the capability to acquire it (economic and legal capability).

Utility: Subjective Product Perception

  • Utility is the subjective perception of the advantages provided by a product.
  • Utility is directly related to the price a consumer is willing to pay.
  • This utility has different degrees and is based on subjective perceptions. For example, a Montblanc pen has the simple utility of writing, but it is perceived with other symbolic and cultural attributes, so the consumer is willing to pay more.

Main Market Drivers & Competitive Forces

Understanding the forces that shape a market is essential for strategic planning and maintaining a competitive edge.

Actual Competitive Situation

  • This is the center of all market tensions and changes within the micro-environment.
  • It directly affects a business firm’s situation and tactical reactions.
  • It is influenced by other factors or forces. Companies must monitor competitor actions to develop proactive tactical plans and leverage their market position.

New Competitors

  • (See BCG Matrix: Question Mark and Star segments)
  • In markets with high growth trends, competitors detect a “strategic positive window” and decide to develop business in a different operating market, directly influencing a company’s market share and business.

New Substitutive Products

  • (See BCG Matrix: Question Mark and Star segments)
  • These substitutive products can be directly proposed (same concept, copying the product and offering it in the same way with different price-format conditions) or even indirect substitutive products in other markets that affect consumption moments.

Negotiation Power of Distributors

  • This reveals the company’s conditions for effective distribution at points of sale and its positioning within the store (Share Of Shelf, SOS).

Negotiation Power of Suppliers

  • This indicates the company’s dependence on obtaining materials used for transformation and commercialization.
  • When only a few suppliers can guarantee the product in the supply chain, production costs normally increase.

Strategic Windows & Ansoff Matrix for Growth

Strategic windows represent opportune moments for investment, while the Ansoff Matrix provides a framework for growth strategies.

Strategic Windows: Identifying Market Opportunities

There are limited periods in which the fit between the key requirements of a market and a particular firm’s competencies match, becoming an optimum for investment plans. This depends on investment (economic and financial) capabilities and flexibility in dealing with changes (considering internal and external barriers).

These strategic windows arise as a result of market evolution (often detected by Porter’s Five Forces). Markets are not static or unchanging entities; they change substantially in nature over time, as follows:

  1. The development of new primary demand.
  2. The emergence of new competitive technologies which cannibalize existing ones.
  3. Market redefinition.
  4. Channel or distribution pattern changes.
  5. Market deregulation.
  6. Impact of substitutive products.

Therefore, organizations need to:

  1. Identify opportunities and threats posed by the opening and closing of strategic windows.
  2. Analyze all relevant internal and external environmental factors acting upon the firm.
  3. Determine the best strategies likely to enable the company to take best advantage of the strategic window.
  4. Ensure enough resources to implement chosen strategies.
  5. Implement in the market and evaluate results (correcting deviations).

Ansoff Matrix: Four Growth Strategies

The Ansoff Matrix outlines four distinct strategies for business growth:

  • Market Penetration Strategy: Sell more of your existing product to existing customers. Attract customers from competitors with new and improved features, a lower price, or increased service.
  • Market Development Strategy: Introduce your existing product or service to a completely new market or segment. This could include a new region, country, or demographic group.
  • Product Development Strategy: Develop a new product for customers already loyal to your brand. This entails additional product development costs but eliminates the cost of acquiring new customers.
  • Diversification Strategy: Enter a new market with a completely new offering. Doing this entails significant costs and risk but can be extremely rewarding.

Formulating a Competitive Business Strategy

Developing a robust competitive strategy involves a structured process of inquiry and analysis.

Three Steps to Competitive Strategy Formulation

This process consists of three basic steps, formulating three key questions:

1. What is the business doing now? Where are we now?

  • Identification: Reflecting on the current strategy (internal analysis).
  • Assumptions: Regarding competitive position, strengths and weaknesses, competitors, and industry trends to develop a viable and long-term strategy.

2. What is happening in the environment?

  • Industry Analysis: Analyze key factors influencing competitive success, and main opportunities and threats.
  • Competitor Analysis: Capabilities, abilities, and limitations of existing and potential (future) competitors.
  • Societal Analysis: Present opportunities and threats based on macro-micro environmental analysis.

3. What should the business be doing?

  • Test of Assumptions and Strategy: How to merge main assumptions to develop a strategic (long-term) plan with the results and questions formulated before.
  • Strategic Alternatives and Contingency Plans: React and modify previous decisions when the environment changes, using control tools.