Marketing Strategy Development

In a separate article, we saw that marketing strategy is a combination of Product, Pricing, Place (Distribution) and Promotional strategies (known as the 4 P’s). These strategies must be tailored to the Customer, Company and Competition, and can also tap any special advantages offered by the partners of the business, viz. Suppliers, Distributors and other associates. In this article, we look at this dimension of marketing strategy.

Marketing strategies are developed after a detailed analysis of:

• The Customer: The market is segmented into customer groups with differing needs and each group is profiled to identify their requirements and expectations. A clear idea of customer requirements and expectations can help in tailoring the product, price, distribution channels and promotional efforts to these. Profiling is typically done on the basis of such factors as gender, age, ethnicity, location, income levels and behavior patterns.
• The Company: Each company will have certain core competencies and strengths. The strategy must be based on these specific advantages. For example, a company with state-of-the art facilities and highly skilled operators can focus on delivering a superior quality product while another company might have a cost advantage and be able to offer low prices for budget versions of the product. Another option might be to focus on certain products and customers generating highest profits.
• Competitors: Competitors will be profiled analyzing their strengths and weaknesses, typically through a SWOT analysis. Issues examined will include competitors’ cost structure, sources of profits, resources, competencies, product differentiation, and positioning; vertical integration and how they have responded to developments in the market.
• Partners: Suppliers, distributors and other associates will be profiled and an exercise will be undertaken to identify any special advantages that can be exploited for the marketing strategy.
• Context: Value chain analysis identifying the contributions made by different activities to value addition; review of the regulatory environment that affects strategy formulation; and such contextual factors are also important while developing the marketing strategy.

The findings of the analysis will provide a picture of the market, industry trends and marketing practices. The final marketing strategy will include:

• A description of the target market or market segment and the product features important to this market.
• The pricing strategy to be adopted considering the stage in the life cycle of the product and its expected economic life.
• The channels to distribute the product and how these channels are proposed to be put in place.
• Media to reach the market and the sales message to be conveyed through the media.
• The promotional tactics to be employed to achieve optimum levels of sales, including supporting distributors or own sales force.
• The marketing organization to be put in place to implement the strategy.
• A marketing budget to set up the organization and implement the strategy, and also estimates of results expected at each of the outlets and from each campaign.

With a marketing plan as outlined above, the business can go about its marketing activities in a purposeful and motivated manner. It also becomes possible to compare actual results against the estimates and analyze the reasons for any variances in a more meaningful way.