CHAPTER ELEVEN

Formulating Marketing Strategy

The Significance of Marketing Strategy

The Plan/Instrument for Value Delivery

Helps Realise the Unit’s Marketing Objectives

Example of Dabur Foods;

To become a leading, integrated players in Indian fruit processing marketing.

To make its fruit juice brands Real, activ, major contestants in their segment.

To Achive a total sales turnover of Rs 500 crore by 2010.

Chapter 11: Formulating Marketing Strategy

The Significance of Marketing Strategy

In Particular, Helps Realise the Targeted Income and Profit

Specifies the Position the Unit will Seek in its Industry and How it will Compete Therein

What Market Segments to Serve? And What Products to Offer?

Who are the Firm’s Competitors? Whom to Compete, Whom to Avoid?

The Growth Path: Market Penetration? Market Development? Product Development?

Chapter 11: Formulating Marketing Strategy

The Significance of Marketing Strategy

On What Differentiation Strength to Compete? On What Competitive Advantages Will the Fight be Based? What are Resources?

Chapter 11: Formulating Marketing Strategy

Formulating the Marketing Strategy The ‘STP Plus Marketing Mix’ Approach The ‘STP’

Segmentation of the Market Targeting (picking the appropriate segments)

What part of the market do we serve? What part we choose not to serve

Positioning the offer STP

Formulating the Marketing Strategy Assembling the Marketing Mix

Chapter 11: Formulating Marketing Strategy

Formulating the Marketing Strategy The marketing mix can be assembled in many different ways

Selecting the optimum combination is the name of the game

The elements have to be harmonised and synthesised Deciding the weightage for each P

Godrej Storewel gives higher weightage to product Asian paints places higher emphasis on distribution The mix has to take its cue from the customers

Marketing mix cannot be a static thing; it has to be juggled as required Change in environmental variables warrants the juggling of the mix In particular, change in customer preference warrants the juggling Change in PLC stage too demands change in the mix Changes within the firm too necessitate modifications in the mix Freezing the marketing mix would mean marketing inertia

Chapter 11: Formulating Marketing Strategy

Formulating the Marketing Strategy

The marketing mix has to be separately worked out for each brand

Marketing mix is the visible part of marketing strategy Both quantitative analysis and judgement have a role in

finalising marketing mix Marketing mix needs the support of competitive advantage

Marketing, the interaction between marketing mix variables and environment variables

The controllable and the non-controllable variables of marketing

Linkage between marketing mix, marketing effort and marketing budget

Assembling and managing the marketing mix is the main task in marketing

Discussions on marketing mix are spread through the entire text ‘STP plus marketing mix’ sums up marketing strategy

Chapter 11: Formulating Marketing Strategy

Conditions for Success of Marketing Strategy Correct Sizing up of the Competitive Forces

Strategy and forces of competition impact mutually; strategy reflects as well as shapes forces of competition

Possession of Relevant Competitive Advantages While price route requires cost advantage, differentiation

requires relevant competitive advantages Cost advantage desirable whether the strategy is price-oriented

or differentiation oriented: Price and Differentiation Routes Cannot Remain Mutually Exclusive Neither Price Competitiveness, nor Differentiation is Sufficient; the

Firm has to be Value Competitive

Chapter 11: Formulating Marketing Strategy

Marketing Strategy has to Result in an Executable Marketing Plan