Strategy Formulation

By___ Anjali Kushwaha Faculty__ IIBR PUNE

Mission
A strategic marketing plan starts with a clearly defined business mission. Mintzberg defines a mission as follows: A mission describes the organisations basic function in society, in terms of the products and services it produces for its customers.

Elements of Mission

What should a good mission contain?

(1) A Purpose (2) A Strategy and Strategic Scope (3) Policies and Standards of Behaviour (4) Values and Culture

What role does the mission statement play in marketing planning?

provides an outline of how the marketing plan should seek to fulfill the mission provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission?

It provides an incentive to implement the marketing plan

Strategic Intent/ VISION

It is the starting point for all business success A visionary can look into complexity that makes up the marketplace today and quickly distill out a picture of the future for the firm. It must convey a significant stretch for your company, a sense of direction, discovery and opportunity that can convey a worthwhile to all employees.

Market Oriented Vision / Missions

COMPANY PRODUCT-ORIENTED VISION/MISSION STATEMENTS We make cosmetics. MARKET-ORIENTED VISION/MISSION STATEMENTS We sell lifestyle and self expression; success and status; memories, hopes and dreams. We provide fantasies and entertainment -- a place where America still works the way it is supposed to We offer products and services that deliver value to middle Americans

Revlon

Disney

We run theme parks.

Wal-Mart

We run discount stores

Objectives & goals in strategic marketing management

Setting objectives involves a continuous process of research and decision-making. The first step in operational planning is defining objectives - the result expected by the end of the budget.

The objectives must be

1. 2. 3. 4. 5. 6. be focused on a result, not an activity be consistent be specific be measurable be related to time be attainable

Considerations for formulation of marketing strategies

There are two major components to your marketing strategy: how your enterprise will address the competitive marketplace how you will implement and support your day to day operations

 In the process of creating a marketing strategy you must consider many factors
1. If the market is very attractive and your enterprise is one of the strongest in the industry you will want to invest your best resources in support of your offering. 2. If the market is very attractive but your enterprise is one of the weaker ones in the industry you must concentrate on strengthening the enterprise, using your offering as a stepping stone toward this objective.

3. If the market is not especially attractive, but your enterprise is one of the strongest in the industry then an effective marketing and sales effort for your offering will be good for generating near term profits. 4. If the market is not especially attractive and your enterprise is one of the weaker ones in the industry you should promote this offering only if it supports a more profitable part of your business

 Generic' strategies : 1. A COST LEADERSHIP STRATEGY 2. A DIFFERENTIATION STRATEGY 3. A FOCUS STRATEGY

The Product/Service
Factors to consider include: 1. Whether some or all of the technology for the offering is proprietary to the enterprise. 2. The benefits the prospect will derive from use of the offering. 3. The extent to which the offering is differentiated from the competition.

4. The extent to which common introduction problems can be avoided such as lack of adherence to industry standards, unavailability of materials, poor quality control, regulatory problems and the inability to explain the benefits of the offering to the prospect.

4. The potential for product obsolescence as affected by the enterprise's commitment to product development, the product's proximity to physical limits, the ongoing potential for product improvements, the ability of the enterprise to react to technological change and the likelihood of substitute solutions to the prospect's needs. 5. Impact on customer's business as measured by costs of trying out your offering, how quickly the customer can realize a return from their investment in your offering, how disruptive the introduction of your offering is to the customer's operations and the costs to switch to your offering.

6. The complexity of your offering as measured by the existence of standard interfaces, difficulty of installation, number of options, requirement for support devices, training and technical support and the requirement for complementary product interface.

Pricing
A pricing strategy is mostly influenced by requirement for net income and objectives for long term market control. 1. A SKIMMING STRATEGY 2. A MARKET PENETRATION STRATEGY 3. A COMPARABLE PRICING STRATEGY

Promotion
To sell an offering you must effectively promote and advertise it. There are two basic promotion strategies: 1. The PUSH STRATEGY 2. The PULL STRATEGY

 There are many strategies for advertising an offering: 1. Product Comparison advertising 2. Product Benefits advertising 3. Product Family advertising 4. Corporate advertising

Distribution
You must also select the distribution method(s) you will use to get the offering into the hands of the customer: 1. On-premise Sales involves the sale of your offering using a field sales organization that visits the prospect's facilities to make the sale 2. Direct Sales involves the sale of your offering using a direct, in-house sales organization that does all selling through the Internet, telephone or mail order contact

3. Wholesale Sales involves the sale of your offering using intermediaries or "middle-men" to distribute your product or service to the retailers 4. Self-service Retail Sales involves the sale of your offering using self service retail methods of distribution 5. Full-service Retail Sales involves the sale of your offering through a full service retail distribution channel.

The Environment
1. 2. 3. 4. Government actions Demographic changes Emerging technology Cultural trends

The Prospect
1. Selling to past customers or a new prospect 2. Prospect's willingness to pay higher price because your offering provides a better solution to their problem. 3. Amount of time it will take the prospect to make a purchase decision. 4. Prospect's willingness to pay for product value is determined by their knowledge of competitive pricing