How to Build an Effective Marketing Strategy
An effective marketing strategy means the strategy that makes the organisation successful by realizing the organisational goals. The marketing strategy has to provide the marketing team with the guidelines to achieve the overall objectives of the business such as increment in the revenue, increase in profits and cost reduction.
The important aspects of any marketing strategy are
* product offering
* product pricing
* distribution channels
* planning and budgeting
* make or break implication
The magnitude of the marketing strategy: This is usually the first step in the marketing strategy. It is in this initial phase of marketing strategy that crucial factors are taken into consideration for formulating the marketing strategy. Some of these crucial factors are as follows.
* Company size
* The life cycle of the company (starting, growth, maturity and decline)
* The scope of the marketing strategy, whether for one product or all the products of the company
* Experience at formulation of marketing strategies.
Every action in the corporate sector has to be done methodically. The formulation of any marketing strategy should be a systematic and methodical. Some of the important ingredients are the information needed, structured guidelines, elements of the guidelines, and above all the people teaming up together to formulate the strategy. Thus the formulation of a marketing strategy needs to be structured so that there is no waste of time, money and energy.
Creation of Marketing Strategy:
Marketing starts with the customer and ends with the customer. This means all the aspects and elements of marketing are interdependent and cannot be dealt with in an isolated manner. This make it clear that the formulation of marketing strategy is both the starting and ending of marketing.
The two main aspects of preparing for the formulation of any marketing strategy are as follows:
1. Prepare the outer sketch of formulating the marketing strategy.
2. One should collect information about the business associates or partners, market or industry, competitors and finally the customers. The information should be relevant, accurate, comprehensive and current.
Formulation of the Marketing Strategy:
After collection of the information, comes the next step of formulating the marketing strategy. The information needs to be analyzed thoroughly from each and every angle of view. Usually the aspects taken for consideration while formulating the marketing strategy are the size, growth, share and trend of the market. After the churning of the relevant information for formulating the marketing strategy, comes the step of strategic recommendation. The strategic recommendations include
1. Product Strategy
2. Pricing Strategy
3. Communications Strategy
4. Channel Strategy
Product Strategy: This strategy deal with how you want the market to understand your product as. This is also known a product positioning. The key issues taken for consideration during product strategy are as follows.
1. The features of the product
2. The benefits of the product
3. The extent to which the products meets the customer satisfaction level
4. The edge does the product have above the product of the competitors
5. The changes that may be needed to make the market position better and stronger.
Pricing Strategy: This Strategy deals with the price that should be quoted in the market. The main factor that influences the pricing strategy is the product positioning strategy. There are two types of pricing strategies especially with reference to product positioning.
Cost Based Pricing: This pricing takes into consideration the total cost of the product and the profit margin. When multiple products are taken into consideration this becomes a complex financial exercise. The association between the product and the cost in some cases is simple but in some very complicated.
Value Based Pricing: This pricing is based on the willingness of the customer to pay for a product. This depends upon the benefits and features of the product.
Sometimes the product costing becomes so high that it can be targeted for people with higher income. The number of people with higher income is usually much less than the number of people with low income. If the product is priced in such a way as to target the lower income group the quantity of the sales can increase many fold.
While pricing, the discounts and promotional incentives have to be taken into consideration. It is possible that because of competition the product will have to be launched with a temporary reduction in the product price.
Communications Strategy: Communications Strategy is about how you transmit the information about the products and the company to the people concerned. The communication strategy depends on the people that are associated with your company (associates, suppliers and customers) and product-positioning strategies. The ultimate aim of formulating the communications strategy is as follows.
* High level customer impression of your company and the products should be established. This impression should be consistent with the product positioning
* Messages that are created should be consistent, concise, and based on benefits. These messages should be able to build the desired impression in the mind of the target people or audience.
* The communication method should be appropriate for each customer segment.
Channel Strategy: The channel strategy is about the distribution channels and the means to reach and have accesses to the prospective customer or client. The strategy is mainly concerned with making the product available for the customer in the best possible cost effective manner. The more the mediators between the manufacturer and the customer more is the price of the product. Thus the ultimate aim of channel strategy is to formulate a network to facilitate the accessibility of the product or services by the customers or the clients.
Tactical Plan and budget: These are the penultimate steps before the product or the services reach the customer or the client and the feedback is sought. The sequence of specific actions to be taken in particular time duration forms the basis of the tactical plan. Scheduling is an important issue in tactical planning. Money is one of the biggest factors that dominate the business world and no business is exempted from money. Every action and step of the marketing strategy needs to be budgeted.
Feedback: This can be called to be the ending or starting of any marketing strategy. Once the feedback is received from the clients it can be satisfactory or corrections can be suggested to the strategy. The feedback can help avoiding mistakes as well as help correcting them.
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