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You are here: Home / Marketing / What Are Asset-Led Marketing Advantages and Disadvantages

What Are Asset-Led Marketing Advantages and Disadvantages

Updated on April 14, 2022 by Ahmad Nasrudin

What Are Asset Led Marketing Advantages and Disadvantages

Asset-led marketing has both advantages and disadvantages. Although more focus on internal strengths to satisfy consumer’s needs and wants is relatively inexpensive, core competencies are not always relevant to market demands. The market environment is dynamic. Tastes and consumers can change from time to time. Likewise, competition is also dynamic. Such factors can make the competitive advantage built through past core competencies no longer sustainable.

Before discussing the advantages and disadvantages of asset-led marketing, let’s briefly review what it is?

What is asset-led marketing?

Asset-led marketing is a marketing approach in which your company focuses on internal strengths to meet customer needs. Internal strength comes from the resources and capabilities your company has. Both form core competencies if they are valuable for creating value, rare, expensive to imitate, and non-substitutable.

Then, your company utilizes these core competencies to produce products. For example, your company leverages a strong reputation and brand image to develop and market new products around existing products.

This approach does not completely ignore consumer tastes or preferences. But, your company is more based on internal strength to produce innovative products. Thus, your company bases its strategy on existing strengths and assets instead of spending big bucks to properly identify consumer needs and wants and then develop appropriate products, including acquiring new resources if needed.

Furthermore, designing products according to consumer needs and wants does not guarantee long-term success under a market-based approach. Consumption tastes and preferences are constantly changing, as are their needs for products. In addition, meeting the needs of all customers in the market can send costs skyrocketing and lead to losses.

Advantages of asset-led marketing

The asset-led approach consumes less resources. That’s because your company exploits existing resources and capabilities. You already know your power to produce products. And, you probably don’t need to invest in new assets just to meet consumer needs.

In addition, there are several other advantages of asset-led marketing. Here are some of them:

Brand loyalty

Your company focuses its strategy around your core competencies to create innovative and quality products. So, success in one product can contribute to the success of other products that you launch. As a result, they end up reinforcing each other. And, it helps you in creating brand loyalty for all your products, leading to increased revenue.

Save cost

This approach requires less expensive market research, thus reducing the dollars you spend. But, on the other hand, under a market-based approach, you may have to do regular research to produce accurate information about the needs and wants of the market. That’s because the market is dynamic from time to time, both related to consumer tastes and preferences, competition, and competitive strategy.

In addition, when you adopt a market-led approach, your company may have to acquire new resources to make your products relevant to the needs and wants of consumers. Of course, such an investment can consume significant costs.

On the other hand, under an asset-lead approach, that doesn’t happen because your company relies on what’s available today. Of course, you pay attention to consumers’ needs and wants, but that is not your focus.

Good acceptance by consumers

Your company expands business to new products around your existing product. You leverage your company’s popularity, brand equity, and reputation to build new product success.

Some successful companies do it. They develop new innovative products and campaign vigorously to influence consumer perceptions. Finally, many consumers are willing to queue to buy. A good example is Apple products.

Disadvantages of asset-led marketing

Although less costly, the asset-led approach also carries risks. Its main drawback is its low adaptability. Your company is less quick to respond to changing consumer tastes and preferences. So, while you may be making an innovative product, the market may not want it. As a result, you may have difficulty generating sales.

Other disadvantages of asset-led marketing are:

Missing growth opportunities

Your company may concentrate too much on what they have and forget about other marketing opportunities. As a result, you are less responsive to market developments and trends. As a result, your company could lose growth momentum.

Inward bias

Your company assumes internal strengths – which have produced a competitive advantage – will remain relevant to market demand. Such views often result in bias due to the changing market environment. Consumer preferences and tastes are constantly changing. Likewise, with competitive strategy, it is always dynamic.

So, the market may perceive the opposite than you think. You think your company’s core competencies are still relevant to building competitiveness, but that’s not the case.

Less competitive

Your company must continue to think about the existing strategic competitiveness. However, it may not work in the market because competitors build up a better competitive power. In addition, because you may be too focused on your internal strengths, you may forget to identify and consider them in designing competitive strategies. Eventually, your company’s competitive position begins to weaken as your competitors are more adaptive to the market.

Negative ripple effect

The success of one product can support and lead to the success of other related products. But, this logic also applies the other way around. 

Your failure to launch a new product could impact other existing products and your company’s reputation. Indeed, you can take advantage of the popularity of existing products to support new products. But, that’s no guarantee for the new product to be successful.

Topic: Asset-led Marketing, Marketing Orientation Category: Marketing

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