UNIT 1

LEARNING OBJECTIVES

After studying the unit the students will be able:

• To understand the concept of marketing strategy
• To study the role of marketing strategy in business
• functioning
• To discuss the essentials of a successful marketing strategy
• To understand the different strategy levels
INTRODUCTION

A marketing strategy is something that every single business; no matter how

big or small, needs to have in place. Businesses exist to deliver products that
satisfy customers. Marketing is the process of planning and executing the
conception, pricing, promotion, and distribution of ideas, goods, and
services. A marketing strategy is composed of several interrelated
components called the marketing mix.

The Marketing mix consists of answers to a series of product and customer

related questions.
MEANING AND DEFINITION OF MARKETING STRATEGY

• A marketing strategy is a written plan that includes marketing topics like product
development, promotion, distribution and pricing approach. It identifies company's
marketing goals and explains how company can achieve those goals.
• Marketing strategies help in identifying strengths and weaknesses of the company and
that of its competitors.
• Marketing strategy helps to identify the areas on which the company has to focus its
marketing tactics.
• EXAMPLE:
• For example, marketing objective may relate to becoming the market leader by delighting
customers. The strategic plan therefore is the detailed planning involving marketing
research, and then developing a marketing mix to delight customers.
Definitions:

1. “Strategy is a plan of action or policy designed to

achieve a major or overall aim.” - Oxford Dictionary
2. “Marketing Strategy is a process that can allow an
organization to concentrate its resources on the optimal
opportunities with the goals of increasing sales and
achieving a sustainable competitive advantage.” - David
Aaker,
SIGNIFICANCE OF MARKETING STRATEGY

• Strategic Planning
• Establishes Effective Distribution
• Streamlines Product Development
• Developing Financial Goals
• Preparation of marketing Plan
• Understanding the customers
• Assists with Marketing Communications
• Facilitates optimum use of resources
• Selection of the Right Communication Tactics
• Enhances corporate image
Strategic Planning:

• The most important aspect of marketing strategy is that it

involves strategic planning. Strategic planning is a concept that
encompasses marketing, promotion, sales, and financial goals
and is essentially about developing goals for your business.
Having a strategic plan for the business means having a plan in
place to deal with both expected and unexpected situations. For
example if company knows that its mortgage will increase by 5
percent next year, then a strategic plan will outline how
company will increase sales or decrease expenses to meet this
additional outflow.
Establishes Effective Distribution

• With the effective marketing strategy company can establish an

effective distribution network to reach its customers. Once the
strategy is finalized it is very easy to locate target customers and
also the market areas where it can sell product effectively. For
example younger customers will be more likely to shop using a
smart phone or on a website. Older customers might prefer to
shop at retail outlets. If the market research shows that the
company’s product need to be in retail stores but if the company
doesn’t have a sales force, then it can use a wholesaler or
distributor.
Streamlines Product Development

• A marketing strategy helps the company to create products and

services with the best chances for making a profit. This is
because marketing strategy starts with market place research,
taking into Consideration Company’s optimal target customer,
what your competition is doing and what trends might be on the
horizon. Using this information, company can determine the
benefit customers and clients want what they’re willing to pay
and how company can differentiate its product or service from
the competition.
Developing Financial Goals

• Marketing strategies are also important for guiding the business into the
development of financial goals. Financial goals are two-fold: They are
related to sales targets and also to expenses budget. Sales targets are
initially set as part of the marketing plan but might change over time
according to changing market conditions, increases in product price, or
increases or decreases in consumer demand. Monitoring expenses is also
part of financial goal development. If business tends to spend more than it
brings in, it will have a serious problem maintaining long-term business
viability. However, if the business is able to closely monitor its outflows,
only spending what it absolutely needs to, then it will be better equipped to
increase the profit margins
Preparation of marketing Plan

• Marketing strategies are often first brainstormed and written as part of an

organization's marketing plan. Most marketing plans include the current or
expected strategies for your products, the price points of those products,
how to distribute the products, and also the advertising and marketing
tools. A marketing plan is also important for developing a promotional
strategy as it helps the business to identify its target markets and to set
measurable goals. It is vital to the success of the organization that
implements a marketing plan that aims for growth and positive change in
the bottom line.
Understanding the customers

• Marketing strategies can also assist the business in understanding and

connecting with clients and customers. If the marketing plan is loosely
structured, company will not have much success at targeting products to
the "right" demographics. Effective marketing strategy enables a business
firm to identify market segments that it will serve and what product offers
it will make. A well defined marketing strategy clearly describes whom to
serve and whom to exclude.
Assists with Marketing Communications

• Market research will help to create brand, or image it wants to

establish about business. It facilitates the company to
communicate to its target customer. Marketing strategy facilities
the company to determine if a particular magazine, radio station
or website fits company’s selling plans.
Facilitates optimum use of resources

• There can be optimum utilization of resources in order to

achieve the desired objectives. If there are no proper strategies,
then the organization may not be able to make arrangement of
proper resources. There may be arrangement of fewer resources,
in which case, the organization may not be able to undertake its
activities and there may be also arrangement of more resources
that what is actually required and as such it may lead to wastage
of resources.
Selection of the Right Communication Tactics

• A clear understanding of the target audience and an idea of the desired goal
will help to drive the selection of appropriate media choices. For instance,
if the target audience is elderly, the Internet is not likely to represent a
good communication tactic. Conversely, if the target audience is college-
age students, local newspapers are not likely to be a good choice. The
company’s goals also provide insight into communication tactics. A goal of
increasing marketing share by 25 percent might require an extensive multi-
media campaign; a goal of adding 10 new customers might require only a
news release and an ad in the local paper. Marketers rarely benefit by over-
reaching their goals and being unable to meet demand.
Enhances corporate image

• Well defined strategies can generate corporate image of the

firm. This is because strategies when implemented properly
bring good returns to the organization. The organization is in a
position to undertake its social responsibility towards
customers, employees, suppliers and others and as such the
organization can earn goodwill in the market.
CONDITIONS FOR A SUCCESSFUL MARKETING STRATEGY

• Knowing the target audience

• Proper market segmentation
• Unique selling proposition
• Situation Analysis
• Objective oriented
• Identification of competitive advantage
• Simplicity
• Flexibility
• Resource deployments
• Comprehensive
• Consistency
• Periodical review
Knowing the target audience

• For a truly effective marketing strategy, company must study

and evaluate its business and its target audience, then create a
plan of action and follow through with it. The first part of
business is to evaluate the actual business the company is
having. This means looking at business from a customer’s or
end user’s point of view and finding what they truly get out of
company. And many business owners are surprised to find that
it’s not what they actually thought
Proper market segmentation

• To have effective marketing strategy proper market

segmentation is required. Market segmentation facilitates
demographic segmentation of the customers. For example a
plumbing business might focus on homeowners, whereas the
companies that supply video games might focus on teenagers. It
can’t be said enough how important it is to know who your
target audience is, and how you can best appeal to them.
Unique selling proposition

• The next part of creating a great marketing strategy is finding out what
company offers that no other company does. To set the company apart, it
should advertise the thing that makes the company special – the magic that
no other company has. This unique selling proposition may include
offering products at the lowest prices, providing the best customer service
etc. This must not only be included in marketing strategy, but it must be a
part of every aspect of marketing done by the company.
Situation Analysis

• Marketing strategy should conduct market analysis i.e. SWOT

analysis (strengths, weaknesses, opportunities, and threats), and
a competitive analysis. The market analysis will include a
market forecast, segmentation, customer information, and
market needs analysis. This analysis will make the strategy
effective.
Objective oriented

• The strategy should be objective oriented. It should be

developed by considering the organizational objectives.
Strategies, which are not consistent with the objectives of the
organizations, do not serve any purpose. The strategies which
are consistent with the organizational objectives will be able to
achieve desired objectives.
Identification of competitive advantage

• One important part of any strategy is a specification of how the

organization will compete in each business and product-market within its
domain. How can it position itself to develop and sustain a differential
advantage over current and potential competitors? To answer such
questions, managers must examine the market opportunities in each
business and product market and the company’s distinctive competencies
or strengths relative to its competitors.
Simplicity

• The marketing strategy should be simple and clear to understand. It should

be well defined. Clarity in terms is important while framing marketing
strategy. While designing the marketing strategy ambiguity should be
avoided. It should be understood by all in the organization.
Flexibility

• Business has to survive in the competitive and uncertain

business environment. These environmental factors are not
constant. To adjust with these changes, marketing strategy
should be flexible. It should allow the changes in the short run.
They should not be rigid. It should allow modifications
whenever the situation demands.
Resource deployments

• Every organization has limited financial and human resources.

Formulating a strategy also involves deciding how those
resources are to be obtained and allocated, across businesses,
product-markets, functional departments, and activities within
each business or product-market.
Comprehensive

• The marketing strategy should be comprehensive in nature. It

should cover all those areas which are relevant to the firm. A
good strategy always considers the factors which are affecting
the business functioning directly or indirectly.
Consistency

• The marketing strategy should be consistent with the

strategies of the other departments of the organization.
All the functional strategies should be complimentary to
each other, ultimately all the functional strategies of the
organization should be consistent with the overall
organizational strategy.
Periodical review

• Strategies should be periodically reviewed. Such a

review allows the firm to make necessary changes in
the strategy depending upon the needs of the firm.
Periodic review also benefits to incorporate the
fluctuations taking place in the business environmental
factors.