In North American academic marketing the area of strategy research seems to be losing its place. [Written in 2015 some are a bit more positive now]. We need to ensure strategic thinking is rigorous. Critically, it also need to be seenas rigorous by managers and fellow academics. One way to do this is by forming models of marketing strategy.
Marketing Strategy Is Faltering?
Look at the self-declared specialties of Ph.D. students on the job market [again written in 2015]. You will see that consumer behavior now dominates marketing. Often one worries these are just psychologists who want to be paid more and have better lives in business schools. (A pretty good reason to be honest).
There is also a clear, and even more lucrative, place for empirical researchers. These specialize in analyzing secondary data. Such researchers often have strong backgrounds in economics. Their backgrounds can be so economics-focused that occasionally you might wonder if they have heard of marketing. Some are even so magnanimous as not to be embarrassed when you call them a marketing professor.
I don’t want to be too negative. The skills brought into marketing from psychology and economics have much to offer. [2021 note, add computer science to that list]. Still, it would be a shame if marketing academia’s tie to strategy faded. One way to maintain a strong tie may be to bring the formal logic of analytical models to describe the problems of marketing strategy.
Models Of Marketing Strategy
As such, I admired Sharan Jagpal’s Marketing Strategy and Uncertainty. This ambitious book uses the tools of formal economic analysis to understand marketing strategy. Jagpal starts his analysis with strategic pricing. He states that: “Price is not a marketing tool when the firm operates in an industry with undifferentiated products.” (Jagpal, 1999, page 2). An undifferentiated product cannot have a price premium. It is the same as other’s products so why pay more.
He is keen to note that even in undifferentiated markets there is room to compete on superior service though. He then goes on to explain more differentiated markets. This is important because one could say that the whole point of marketing is to ensure you do not sell undifferentiated products. Differentiation and marketing strategy are like Clark Kent and Superman. Or maybe Batman and Bruce Wayne as he was better with money.
Profit And Share
Jagpal makes a point that I am keen to emphasize to my students.
Maximizing profit and maximizing market share are inconsistent objectives.
Jagpal, 1999, page 4
Maximizing market share could theoretically be a good thing. That said, it isn’t the same as maximizing profit. (Plus market share is easier to fake). The sort of disciplined thinking that Jagpal shows, I believe, is useful. It can help in ensuring that marketing strategy retains an important place in North American marketing academia.
For more on marketing strategy and market share see here, here, and here.
Read: Sharan Jagpal (1999) Marketing Strategy and Uncertainty, Oxford University Press, New York