The marketing strategy explains the companys overall mission statement and future goals. Mostly marketing strategies are set with careful consideration by senior management. Marketing strategy must in cooperate the mission statement of the business. Shankar and Carpenter (2012, p.2) “views marketing strategy as a broad plan of managerial initiatives and actions relating an organization to its customers and markets. Further states that there are three key aspects of marketing strategy as follows:
Marketing strategy focuses on the strategic decisions necessary to allocate resources.
It concerns managerial actions that have long-term effects.
Decisions relating to marketing strategy are made by marketing executives in an organization and implemented by many others through the organization and beyond.”
Following are the four major activities involved in managing a customer-driven marketing strategy and the marketing mix are, i.e.
Consumers are the centre of all marketing activity. The basic goals for all businesses are to create value for customers and build a strong profitable customer relationship. As stated by Kotler and Armstrong (2008, p.45) “The marketing logic by which the company hopes to create this customer value and achieve these profitable relationships.” Since the company owns the means of production it has the overall power to decide which customer to serve (segmentation and targeting) and how it will serve them (differentiation and Positioning). The business identifies the total market, then divides it into smaller segments, selects the most promising segments, and focuses on serving and satisfying customers in these segments in order to secure maximum profit. Using the market strategy the company then designs an integrated marketing mix made of factors under its control .i.e. Product , Place, Price, Promotion “The four Ps”. In order to find the best marketing strategy the company then uses market analysis, planning, implementation, and control. Through these activities fulfills the changes in demand from consumer behavior and adopts to the marketing environment. As stated by Mullins and Larreche (2006, p.3) “IBM’s competitive strategy was also quite consistent over the years, Given that the firm was never the lowest-cost producer in the industry, it did not try to compete with low prices. Instead, the firm pursued a quality differentiation strategy by offering superior products backed up by excellent technical service and selling them at premium prices.”
Customer-Driven Marketing Strategy
In order to succeed in the modern competitive marketplace companies need to be customer centered, .i.e. they must fulfill the rapidly changing demands of the customer. Companies must draw the customer from competitor business, make them brand loyal and grow them by delivering greater value. Before anything a company must understand the needs and wants of its customers, only then it can fulfill by using the marketing strategy. Thus the company must use a careful market analysis.
The modern market is full of many types’ customers, products and needs. The company then determines which demand it can fulfill best and gain maximum benefits. Consumers are grouped in various ways geographic, demographic, psychographic, and products are made to fulfill their needs and wants. As stated by Kotler and Armstrong (2008, p.46) “The process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, who might require separate products or marketing programs is called market segmentation. Market segmentation consists of consumers who adopt in a similar way to different marketing efforts. In the car market for example wealthy consumers own the top notch cars but still make up only one segment of the market. Then we consumers who are price conscious and make up another market segment. It would difficult to fulfill needs of both segmentations so companies focus on the needs of one segment.
After a company has defined one of its market segments it can target different segments of consumers. Market targeting involves information of each market segment and then selecting one or more segments to enter. The company must target segments in which it can best fulfill the needs of consumers. Wise companies enter into a segment from which they can achieve success in gaining customer loyalty and sustain it over time. A company might use the strategy “niche marketing” and target only a few segments from which the major competitor over looked.
Alternatively companies might serve different kinds of customers but with the same wants, .i.e. Coca Cola. Multi nationals may serve the needs of all market segments. Most companies enter the market serving only segment of the market but as they gain success they grow and target a range of segments. Companies that attain the most success will eventually have the means necessary to serve all segments of the market; these leading companies have the different product design for each different market segment.
Market Differentiation and Positioning
After a company has chosen its market segment to enter, it must be decide how it will differentiate its market offering from competitors and must have unique way of serving its chosen target segment in order to secure maximum profits. A product’s position is the place it has in place of its competitor in the minds of consumers. The position of the product is one of the most crucial things in order to get consumers to buy it and attain brand loyalty from them. If products were similar consumers would have no way of differentiating between products and thus there would be no need to buy it. Positioning is the business securing a unique space in the minds of consumers in comparison to competitor’s products.
When positioning its products the company identifies the plus points it has in that segment that provides competitive advantage over competitor. The company can give greater value to customers at low prices in comparison to competitors and attain a unique position in the market and win consumer brand loyalty. If a company promises greater value then it must differentiate its product from competitors and must deliver greater value in order for the product to maintain position in minds of the consumers. Thus effective positioning begins with differentiation, actually differentiating the product so that it gives consumers more value. When a company has achieved a successful position it must make strong steps to deliver and communicate that position to target consumers. The entire marketing program of a company appreciates the chosen position strategy.
Developing an integrated Marketing Mix
After developing the market strategy the company begins to plan the details of the marketing mix. The marketing mix a set of controllable marketing tools that the firm uses to produce the response it wants to get back from the target market. The marketing mix is whatever a firm has the power to do in order to influence demand on its product. The marketing mix consists of the four Ps Product, Price, Place, and Promotion.
Product means the goods and services combination the company the target market. Price is the amount of money customers would have to pay to obtain the product. Different companies target different range of customers i.e. luxury car makers target the wealthy consumers. Place includes the different locations the company’s product is available to target consumers. Promotion means attract consumers and persuades them to buy the product.
Ferrell and Hartline (2011, p.17) explains, “The role of social responsibility and ethics in marketing strategy has come to the forefront of important business issues in today’s economy. Our society still reverberates from the effects of corporate scandals at Enron, WorldCom, and ImClone, among others. Although these scandals make for interesting reading, many innocent individuals have suffered the consequences from these companies’ unethical behavior”.
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