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The next step of the marketing planning process involves developing strategies.
The next step of the marketing planning process involves developing strategies. A company might simultaneously execute business strategies to enter a new market, grow market share in an existing market, and improve organizational efficiency. The marketing strategies must identify a plan that will use the marketing function’s resources and expertise most effectively to achieve its mission, objectives, and goals.
To be effective, marketing strategies must capitalize on the resources at its disposal within the company, but must also take advantage of the market forces that are outside the company.
The marketing strategies define how the marketing mix (product, price, place, and promotion) can best be used to achieve marketing objectives. At its centerpiece is the target customer. Often organizations get so absorbed in their own strategies, initiatives, and products and forget to focus on the target customer. While the corporate strategy may have elements that focus on internal operations or seek to influence external forces, each component of the marketing strategy should focus on the target customer.
Having identified the target market, marketers must decide which strategies and tactics will best align with and support the marketing objectives. The marketer must evaluate all aspects of the marketing mix and determine which combination of product, price, promotion, and distribution will be most effective.
Product strategies define the characteristics of the product, including tangible and intangible elements. Tangible elements can include specific product features and packaging, while intangible aspects can include things such as branding, service agreements, and warranties. For example, a wearable GPS tracker might come in six colors, feature 50+ sport modes, be water repellent, and integrate with a smart phone through an interactive and robust app.
Place strategies identify how the target customer can expect to gain access to the product. This includes decisions about where the company intends to sell the product, such as through traditional retail or online outlets, along with how products will travel along the distribution path, either directly from the company to the consumer, or indirectly, by using intermediaries such as wholesalers and retailers. Place strategies can also include the distribution intensity, referring to the number of outlets involved in distributing the product in a market area, and other logistical aspects of supply chain management, including how orders will be processed, how distribution centers or warehouses will be used, how inventory will be managed, and specific forms of transportation. For example, with the wearable GPS tracker, place strategies might involve selling exclusively through a large sporting goods retailer, with both physical storefronts and an online location, offering expedited shipping for online orders.
Price strategies are used to establish the price point for a specific product. When launching a new product, companies will typically decide to pursue either a penetration pricing strategy, price skimming strategy, or competitor-based pricing strategy. Penetration pricing involves entering the market with a low price point, with the goal of maximizing market share. Price skimming involves entering with a high price point, establishing a strong price-quality relationship, and maximizing profit. A competitor-based pricing strategy carefully considers prices of competing products before establishing a price point. Additionally, pricing strategies might include other considerations such as the decision to bundle multiple products for a special price, the use of reference pricing, various forms of discounting, financing options, and psychological pricing such as odd/even pricing. Continuing with the wearable GPS tracker, pricing strategies might include using a price skimming strategy to denote quality, while offering financing options to make the product more accessible to the target market.
Promotion represents how the target market learns about the product or service and takes many forms. Many consumers learn about products through digital and social media strategies, such as online advertising, engagement on social media platforms, and through search engines. Today’s marketers often incorporate promotional strategies related to digital and social media, while also considering traditional advertising, public relations, personal selling, and sales promotion in the promotional mix. For the wearable GPS tracker, strategies might include working with fitness influencers on social media platforms to gain exposure to the target market, along with digital advertising on search engines, complemented by traditional advertising in fitness publications. In addition, a limited time rebate might provide an incentive for a timely purchase.
Decisions about the marketing mix variables are interrelated. Each of the marketing mix variables must be coordinated with the other elements of the marketing program. Consider, for a moment, the marketing of the wearable GPS tracker. The company will want to carefully select the exclusive retailer to ensure that the pricing strategies align with the expectations for customers that commonly visit that retailer. In addition, promotional strategies will engage the target market with the key product features and benefits and drive traffic to the retail partner with enticing promotional incentives. The organization must find the right combination of product, price, promotion, and distribution so it can gain a differential advantage over its competitors and appeal effectively to the target market.
Once the marketing strategy has been defined, marketers determine how to implement the strategy. Implementation is the tactics used to execute the strategy. It might include such things as determining when to promote the product, how specifically to get the product to the consumer, and setting a commission rate for salespeople. Tactical planning describes what marketing will do or how they will do it to achieve the desired business results and achieve the marketing objectives. Implementation is typically presented in the form of an action plan, which details the specific tactics that will be completed, by what due date, and by whom. For example, with a place strategy of identifying an exclusive retailer for the wearable GPS tracker, an implementation tactic could be to “identify and research potential retail partners” by December 31, 20XX. Additionally, another tactic could be to “negotiate a two-year contract with the chosen retailer” by April 30, 20XX. In each tactic it is important to identify who specifically will be responsible for that action to provide an accountability checkpoint.
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