Marketing Strategy - Overview, How To Develop, 4 P's
What is Marketing Strategy?
A marketing strategy refers to a long-term plan formulated by a business to achieve specific organizational objectives. The plan details how the business will reach its target market, and the exact process it will follow to turn potential customers into actual consumers of the company’s products and services.
Marketing strategies should be long-term and forward-looking, and they should provide guidelines on how the organization will utilize its scarce resources to increase its sales. A good marketing strategy should contain the company’s value proposition, target customer demographics, brand messaging, and other elements geared towards increasing the organization’s revenues.
Summary
- A marketing strategy refers to the overall plan for reaching potential customers and turning them into actual consumers.
- A marketing strategy serves as the building block of the marketing plan, which details the marketing activities to be carried out by the company.
- A good marketing strategy helps an organization utilize its scarce financial resources efficiently to generate more revenues.
How to Develop a Marketing Strategy
When creating a marketing strategy, it is important to choose the specific actions that the organization will focus on to increase sales. A good marketing strategy should align itself to these elements:
Segmentation
A company’s target market falls into different segments. The company can identify the segments and use its market data to categorize customers based on their needs. The segments created should comprise customers who share the same interests, needs, or live in the same locations, and who will respond similarly to the marketing strategies of the company.
By grouping customers into smaller segments, the company can utilize their time and money more efficiently rather than running marketing campaigns targeting each customer individually. Also, if a specific segment responds more positively than other segments, the company can prioritize its resources better to maximize results.
Targeting and Positioning
Targeting involves identifying the most attractive segments in the target market and planning the marketing activities to make the segment appealing. The segment selected should be the most profitable for the business. The products or services offered to the segment should meet the needs and expectations of the customers in the target segment.
Positioning is the final stage of the segmentation, targeting, and positioning process, and it focuses on gaining a competitive advantage in the market over the competitor’s products. The company must assess its competitive advantage in the segment and plan how to position itself as the most attractive option in the mind of the consumer.
Overall, positioning should provide better value to consumers than competitors, and communicate the product’s uniqueness in an effective way to the end consumer.
Promotional Tactics
Promotional tactics are activities that direct how an organization promotes products or services. It is the process that companies use to make sure that the target segment is aware of the product or service, and how the product offered can meet their needs.
Using the best promotional tactics can help a company utilize its scarce financial resources efficiently. Promotional tactics may include activities such as distributing promotional products, TV and broadcast advertising, social media communication, public relations campaigns, exhibitions, etc.
Monitoring, Assessment, and Evaluation
Once the organization’s developed a marketing strategy and rolled it out, it should monitor and evaluate it to determine how well it is performing, and whether the desired outcomes are being achieved.
Strategy evaluation should be an ongoing process – rather than a one-time process. It should help the management make changes to the current marketing strategy and understand how to structure future marketing strategies.
Marketing Mix – The 4 Ps of Marketing
When creating a marketing strategy, an organization must conduct market research to understand the target market, know its competitors, and identify other factors that affect its ability to turn potential customers into actual consumers of its products or services.
The organization should then incorporate the 4 Ps of marketing into the marketing strategy. The 4 Ps are involved in promoting a brand’s unique value and help an organization stand out from the competition.
The following are the 4 Ps of Marketing:
Product
A product is the good or service offered to the target customer to satisfy their needs and wants. The product should meet an existing need in the target market, and marketers should have a clear concept of what the product stands for. F
or the product to be successful, an organization should understand the product life cycle and how to deal with the product at each stage of its life cycle. The organization should also understand how the product stands out from the competition.
Price
The price of a product is the monetary value of a product, and it is an important factor in how much revenue the company will earn. When setting the price of a product, an organization must consider the real and perceived value of a product.
They must skillfully determine the appropriate price of the product so that it is not too low or too high in a way that damages the brand reputation. Marketers should also determine when discounting the product’s price is appropriate.
Place
Place refers to the location where the organization’s products or services will be available for sale. The marketers should determine where to sell the product and how the organizations will deliver the products to the end consumer. The organization should ensure that the customer not only has easy access to the product but that the product is conveniently located.
Promotion
Promotion includes all marketing tactics employed by the organization, including advertising, public relations, social media marketing, direct marketing, etc. The goal of promoting a product is to communicate relevant product information to the consumer and reveal why they should pay a certain price for it. The digital age has made product promotion easier, and marketers can target a larger audience at a lower cost than traditional marketing.
Additional Resources
CFI is the official provider of the global Commercial Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below will be useful:
