Formulating the Marketing Strategy:
Formulation of marketing strategy consists of two main steps:
1. selecting the target market.
2. positioning the offer.
3. assembling the marketing mix.
The essence of the marketing strategy of any firm can be grasped from the firm's target market and marketing mix. The target market shows to whom the firm intends to seli the products. The marketing mix shows how the firm intends to sell. Together they consistue the marketing strategy platform of the firm.
1. Selecting the target maket: to say that target market selection is a part of marketing strategy development is an under statement. It does not fully bring out the import of the close and inseparable linkage between the two. When the selection of the target market is over an important part of the marketing strategy of the firm is already determined defined and expressed. The process of market segmentation and market griding throws up not one but several market segments with varying degrees of potential profitability and risks. The firm may not be interested in all these segments. There may be segments assuring immediate profits there may be segments demanding heavy investements by way of market development some other segments may show very great potential but may display tough barriers to entry. As such the question which segement the firm should select as its target market assumes crucial importance. The firm may analyze the risks analyze the profitability and size up the competiton in the different segements. Still it may not be possible for it to readily up the target segements.
2. Positioning the offer: the next major dimension of marketing strategy relates to positioning of the offer. The firm has already selected the target market and decided its basic offer. Now what is the conjunction between these two entities? How do they get connected? What is the interface? In other words what is the locus the firm seeks among the customers in the chosen target market with its offering? How would the firm want the consumer to view and receive the offer? the point is that the firm has to clarify what it proposes to do with its offering how it wants the offer to perceived by the customer what position it seeks and what image it proposes to build for its offer. These are the issue the firm has to grapple with in postioning. And while formulating the marketing mix too the firm will agitate over these issues.
3. Assembling the marketing mix: the target market and the marketing mix together constitute the marketing strategy platform of the firm. Assembling the marketing mix simply means assembling the four ps of marketing is the right of combination. Involved in this process are the choice of the appropriate marketing activities and the allocation of the appropriate marketing effort to each one of them. Product strategy is a part of these processes. Matching the products with market needs and consumer aspirations is the purpse of product strategy. Distribution strategy is another part of the exercise. Taking the product where the consumer wants it and delivering the product to him in a manner that is most convenient to him is the essence of the distribution strategy. When other elements link pricing advertising and promotion are superimposed appropriately on this frame work the marketing mix get assembled.