Close this search box.

(800) 931-4267

AMS Fulfillment logo in green text

What Is A Competitive Marketing Strategy?

A competitive marketing strategy is a long-term marketing plan that solidifies a company’s market position and gain a competitive advantage. As with any long-term company strategy, competitive strategies in marketing take time to properly research, analyze, develop, and ultimately execute.   

Components of a Competitive Marketing Strategy

There are five main components of a good marketing competitive strategy:


1. Target Audience – Ideal Client Profile (ICP)

Conducting market research – internally and externally – will help you establish a solid foundation. A good marketer needs to know the company’s ideal client, and often the ideal client can differ for each department. A client that might be easy to integrate with and easy for accounting, could be a nightmare for the Operations teams.

Finding the balance between all departments and their requirements will go a long way in developing your competitive strategy.

Once you defined your target audience, you will need to develop your specific market segments. This step will refine your target audience a bit further. Market segmentation includes demographic, geographic, psychographic, or behavioral types.  

Armed with the target audience and market segmentation data, you can create a fictional Buyer Persona. The Buyer Persona is a representation of your ideal customer where you associate details to the persona such as pain points, buying patterns, age, and income. 

With a thoroughly vetted target audience, you are now ready to start the next component of your company’s competitive strategy.

2. Goals & Objectives

Setting goals and objectives are often oversimplified. Too often goals and objectives are too broad, such as “increase brand awareness”.

Creating a SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis before developing your marketing competitive strategy goals and objectives will help you develop Specific, Measurable, Attainable, Relevant, and Time-bound (SMART) Goals.  

A good goal would look like this “Boost our social media lead-to-customer conversion rate by 5% for Q1 by implementing a lead nurturing strategy that includes publishing social content aimed at our ideal buyers”.

3. Competitor Analysis 

Let’s go back and talk about the SWOT analysis. A good SWOT analysis will include a lot of internal questioning and competitive research. This includes reviewing competitors’ websites, social media sites, industry review sites, content strategy, and perhaps secret shopping them. This step can be tedious but will go a long way in developing a competitive strategy.

Investing in marketing software can make this step easier. Using sites like SEMRush and Owler can provide insights into their SEO rankings, email marketing efforts, PR efforts, and company financials. Knowing a competitor’s marketing efforts will go a long way in developing your unique selling position (USP).

4. High-Quality Content

In 1996, Bill Gates wrote an essay entitled Content is King. Gates stated that “Content is where I expect much of the real money will be made on the internet…”  

There is a reason that Gates is a visionary – the importance of content has not much since then. 

Content is the backbone of a well-planned marketing competitive strategy. It directly impacts SEO, email marketing, social media, and paid search – ultimately leading to conversions. 

The numbers support content marketing as part of a competitive strategy – conversion rates increase by 6%, and more than 80% of content consumption ends in a site visit. The best part of these stats – content marketing costs about 62% less than paid and traditional marketing efforts!

5. Measurement

Over the last several years, marketing has turned more into a science than an art.  It is data-driven. With the rise of marketing automation platforms and access to real-time data, measuring marketing efforts is easy and allows marketers to make changes quickly. 

Using data to measure campaigns, collateral, email marketing, and social media marketing is important to show what is working and what is not. This is one of the reasons that marketers need to establish the SMART goals discussed in point 2 above. Use your goals as your “guiding light.”

Four Major Competitive Strategies 

Now that we discussed the five components of a competitive marketing strategy, let’s talk about four different marketing strategies.

After establishing your target audience, goals, metrics, and content and analyzing your competitors, it’s time to determine what marketing competitive strategy is best for your organization’s competitive advantages. The four major competitive strategies are:

  1. Cost Leadership Strategy
  2. Differentiation Leadership Strategy
  3. Cost Focus Strategy
  4. Differentiation Focus Strategy


1. Cost Leadership Strategy

The cost leadership strategy is also known as the “low-cost strategy.” Consumers are very cost-conscious this strategy would be ideal for brands that have a lower cost structure and will be able to increase revenue through volume.

Some companies that have successfully executed this strategy include Walmart, Spirit Airlines, and Dollar General.

This competitive strategy has many benefits. Business strategy deals with high volume, brands can negotiate lower material costs, and invest in automation to reduce overhead labor costs.

This is a great strategy for larger organizations that can handle narrow margins and be willing to lower prices to retain market domination.


2. Differentiation Leadership Strategy

Your brand is unique – your competitors may not have the technology, design, or integrations that you do. This broad marketing competitive strategy allows you to focus on the value your company provides.

Apple is a great example of a differentiation leadership strategy. Apple’s innovation, cutting-edge technology, and perceived value allow them to charge a premium price – and consumers stand in line for hours to be the first to buy their products. 

Since this is a broad marketing competitive strategy, it is ideal for companies that have a leading, unique product offering – Apple and Tesla are two companies that use this board strategy. 

With this business strategy, businesses become superior to their rivals in the market, which allows them to charge more for their products. 

3. Cost Focus Strategy 

This strategy is also known as the Best-Cost Strategy. The basis of this strategy is a product that is of higher quality and offered at a lower cost than the competition. This competitive strategy offers consumers more value for their money. Unlike the cost leadership strategy, the cost focus strategy is not focused on volume, but rather on quality.

Toyota Motor Company launched its premium brand, Lexus, in 1989. The original marketing strategy was to offer a premium, luxury automobile to compete with BMW and Mercedes-Benz, but at a lower cost. Since the brand launch, Lexus has been one of the top-selling premium automobiles yet retains a lower sticker price.   

4. Differentiation Focus Strategy

This marketing strategy is focused on niche markets. A focus strategy offers niche customers a product customized to their tastes and requirements. It is directed toward serving the needs of a limited customer group.

Companies that utilize a differentiation focus strategy, can hyper-target their audience and maximize their ad spend. Healthy Paws is a pet insurance carrier that was started in 2009 and provides pet insurance. They know their market – pet owners, pet breeders, pet trainers, and veterinarians. By targeting their marketing efforts, Healthy Paws has become successful, especially as pet owners have been embracing pet insurance at rates never seen before.  

A competitive strategy will take time to research and develop, however, with this, the strategy will be successful. And Marketing should never attempt to do the research alone – involving other departments like Sales, IT, Operations, and Finance will result in a holistic competitive strategy that considers the entire business.

Good competitive strategies can take months to research and develop – months well spent given the importance of marketing efforts.

Recent Posts:
Sign up for our Newsletter