Marketing Strategy Formulation
Companies need to formulate a marketing strategy before spending money or time pursuing their business goals. This is because the strategy gives direction and focus to the marketing effort, helping to avert mistakes and take advantage of opportunities. Additionally, it is the basis for tactical decision-making in the key areas of product management, promotion, price and distribution.
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Target Market
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A core task in marketing strategy formulation is to identify a target market, made up of one or more groups of consumers with strong potential to buy the firm's brand. These groups may be selected based on demographics, like age, sex and income, or lifestyle characteristics like frequent travelers or sports fans. Once a target has been pinpointed, marketing messages and other resources can be designed to meet the needs of these consumers more convincingly than competition.
Product Decisions
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Marketing strategy formulation guides the firm in choosing its brand's physical features, functions, benefits and style. Based on their understanding of target consumers' needs and preferences, marketers can create or modify a product on many dimensions. Even a seemingly simple offering like soap can be enhanced and differentiated from other soaps using product tactics like scent, color and packaging. In categories like clothing, furniture and cars, brands often lend themselves to highly distinctive materials and designs.
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Promotion
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The tactical role of promotion is to inform target consumers about the firm's product and persuade them to choose it over competitive brands. When formulating a strategy, marketers identify promotional tools and techniques best suited to their goals. For example, if a strategic objective is to build brand awareness among children, advertising on cartoon television shows would be effective. However, a strategy focused on stimulating trial for a new product would usually need sales promotion support, like coupons or giveaways.
Price and Distribution
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Other tasks in formulating a marketing strategy include making choices in price and distribution. Price is about more than how much money a buyer is asked to exchange for a product; a low price can be used to undercut competition, while a high price can reinforce a luxury brand image. Distribution involves methods of making a product accessible to consumers when and where they like to shop. Marketers can build a large network of wholesalers and retailers or rely on a small number of specialty outlets.
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References
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