Marketing Strategy Decisions
- Market Segmentation-divide the total market into smaller, relatively homogeneous groups or segments that share similar needs, wants, or characteristics.
- Target Markets-he or she identifies one or more segments of individuals, businesses, or institutions toward which the firm’s marketing efforts will be directed.
- Product positioning-involves establishing a mental image, or position, of the product offering relative to competing offerings in the minds of the minds of target buyers.
- Pricing decision: First, the price is the only element of the marketing mix that leads to revenue and profit. Second, price typically has a direct connection with customer demand. Third, pricing is the easiest element of the marketing program to change. Finally, pricing is a major quality cue for customers. One of these reasons that pricing is so interesting is that price represents a major point in marketing strategy where buyer and seller motivations come into conflict.
Distribution and Supply Chain Decisions
The goal of distribution and supply chain management to get the product to the right place, at the right time, in the right quantities, at the lowest possible cost. Distribution and supply chain issues are critical for major reasons: product availability and distribution costs.
Integrated Marketing Communication-the coordination of all promotional activities (media advertising, direct mail, personal selling, sales promotion, public relations, packaging, store displays, website design, personnel) to produce a unified, customer-faced message.
Marketing implementation-process of executing the marketing strategy is the “how” of marketing planning
Developing and Maintaining Customer Relationships
- Transactional Marketing-complete a large number of discrete exchanges with individual customers
- Relationship Marketing-develop and maintain long-term, mutually satisfying arrangements where both buyer and seller focus on the value obtained from the relationship
Taking on the Challenges of Marketing Strategy
One of the greatest frustrations and opportunities in marketing is change-customers change, competitor’s change, and even the marketing organization changes. One of the most basic shifts involves the increasing demands of customers. The decline in satisfaction can be attributed to: customers have become much less brand loyal than in previous generations. Today’s customers are very price sensitive. Product commoditization pushes margins lower and reduces brand loyalty even further
Strategic Marketing Plan
The Strategic Planning Process
An in-depth analysis of the organization’s internal and external environments-sometimes referred to as a situation analysis
Marketing Plan-a written document that provides the blueprint or outline of the organization’s marketing activities, including the implementation, evaluation, and control of those activities; clearly explains how the organization will achieve its goals and objectives
Organizational Mission Versus Organizational Vision
- Mission/mission statement-seeks to answer the question “What business are we in?”
Elements of the Mission Statement
1. Who are we?
2. Who are our customers?
3. What is our operating philosophy? (basic beliefs, values, ethics, etc)
4. What are our core competencies or competitive advantages?
5. What are our responsibilities with respect to being a good steward of our human, financial, and environmental resources?
One portion of the strategic plan that should not be kept confidential should be included in annual reports and major press releases, framed on the wall in every office, and personally owned by every employee of the organization. Goals, objectives, strategies, tactics, and budgets are not for public viewing.
Mission Width and Stability
If the mission is too broad, it will be meaningless to those who read and build upon it. The well-designed mission statement should not stifle an organization’s creativity, it must help keep the firm from moving too far from its core competencies. Overly narrow mission statements that constrain the vision of the organization can prove just as costly. The mission should change only when it is no longer in sync with the firm’s capabilities, when competitors drive the firm from certain markets when new technology changes the delivery of customer benefits, or when the firm identifies a new opportunity that matches its strengths and expertise.
Customer-Focused Mission Statements
Mission statements have become much more customer oriented
Corporate or Business-Unit Strategy
1) Corporate Strategy-central scheme or means of utilizing and integrating resources in the areas of production, finance, research, and development, human resources, and marketing, to carry out the organization’s mission and achieve the desired goals and objectives
2) Business-unit Strategy-determines the nature and future direction of each business unit, including its competitive advantages, the allocation of its resources, and the coordination of the functional business areas (marketing, production, finance, human resources, etc.) An important consideration for a firm determining its corporate or business-unit strategy is the firm’s capabilities. When a firm possesses capabilities that allow it to serve customers’ needs better than the competition, it is said to have a competitive, or differential, advantage. The key issue is the organization’s ability to convince customers that its advantages are superior to those of the competition
Functional Goals and Objectives
Marketing and all their business functions must support the organization’s mission and goals, translating these into objectives with specific quantitative measurements
Marketing objectives: units of measure might include sales volume (in dollars/units), profitability per unit, percentage gain in market share, sales per square feet, average customer purchase, the percentage of customers in the firm’s target market who prefer its products, or some other measurable achievement.
In marketing strategy, the process focuses on selecting one or more target markets and developing a marketing program that satisfies the needs and wants of members of the target market.
The strategy must:
(1) Fit the needs and purposes of the functional area with respect to meeting its goals and objectives
(2) Be realistic given the organization’s available resources and environment,
(3) Be consistent with the organization’s mission, goals, and objectives.
Involves activities that actually execute the functional area strategy. All functional plans have at least 2 target markets: an external market and an internal market. In order for a functional strategy to be implemented successfully, the organization must rely on the commitment and knowledge of its employers-its internal target market.
Evaluation and Control
The key to coordination is to ensure that functional areas maintain open lines of communication at all times. Evaluation and control occur after a strategy has been implemented. The implementation of any strategy would be incomplete without an assessment of its success and the creation of control mechanisms to provide and revise the strategy or its implementation. Evaluation and control serve as the beginning point for the planning process in the next planning cycle.