Marketing Strategy Models

Abstract

A marketing model is a mathematical representation of a marketing phenomenon. Marketing strategy models are models focused on strategic marketing problems. The main purpose of a marketing strategy model is to develop tools and insights for the formulation of marketing strategies. Marketing strategy models can be classified into three types: descriptive models, normative models, and predictive models. Game theoretic models, which are based on normative behavioral assumptions, exist for analyzing competition in strategic marketing variables such as order and sequence of market entry, positioning, and defensive reactions and in strategic levels of product, price, distribution channels, and advertising. Empirical industrial organization models – models that focus on marketing strategy decisions through analysis of both demand (e.g., sales, market share) and supply (e.g., pricing strategy, marketing allocation strategy) functions – are growing in popularity. Although marketing strategy models span several areas of strategy, models on three topics, namely, new‐product development and product management strategy, market entry and growth strategy, and defensive strategy, are discussed in detail in this article. More models and decision support systems are needed for marketing strategies related to international entry, allocation between product development and marketing expenditures, product portfolio analysis, and allocation across own marketing and comarketing spending.