Glimpse of Marketing Strategey--Marketing Management

This paper takes a quick look at the relationship between the concepts of marketing strategy & profitable growth, customer satisfaction, and the product life cycle. If a company is marketing a product in the early growth stage, it should choose a ‘growing demand’ or ‘increase market share’ strategy—as both of these strategies are focused on adding new customers to the company’s customer base—something which is significantly easier in the early growth phase. An example of this can be seen by looking at the early days of the wireless telecommunications industry: in order to expand its customer base, wireless phone companies first had to convince customers that they needed a wireless phone (grow demand) and then, often simultaneously, persuade the consumers to choose them as their wireless service providers (increase market share).
As the product life cycle matures and reaches the late growth/early maturity stage, interesting opportunities lie in the paths of those companies that survived the initial shake-out. While increasing market share will continue to be desirable, increasing revenue per customer, lowering variable costs or increasing marketing efficiency may become more popular marketing strategies; this is a time when customer satisfaction will produce some of its greatest dividends: if customers are happy with the product/service they are receiving, their level of trust with the company may be high enough to persuade them to spend more money with the company. Verizon is able to realize very attractive margins because customers have learned that a wireless phone is of little value if you can’t get a signal; it further demonstrates that the market has matured enough to value prompt, empowered customer service—this is what customers expect and find with Verizon, which is why they have no reason to leave, and every reason to spend more money in the future with the company by purchasing additional features, more minutes and better phones. Cingular, on the other hand, has taken a different approach: purchase AT&T Wireless (along with the problems and dissatisfied customers) and increase profitability by sharing fixed marketing expenses.
As the marketplace enters a time when some of Verizon’s customers are starting to show dissatisfaction at Verizon’s seemingly stingy restrictions, and former AT&T customers are getting familiar with the friendlier face of Cingular, it will be interesting to see who emerges as the winner of the next round of the wireless provider battle.