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Elements of Marketing Strategy

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Definition | Elements | See also

What is strategy? What does it mean for marketing? Read on...

Definition

Strategy is...

Strategy is the first level of planning for an organization, making the big decisions that shape the lower-level detail. It takes account of resources available and makes broad decisions about how these are to be allocated.

Medium-term strategy takes account of the longer-term strategic intent of the firm, including its vision, mission and values.

Strategic planning is the process of identifying and formalizing strategy, including writing the strategic plan.

Strategic planning usually looks at least a year ahead and possibly up to ten years or more. How far you can practically plan for depends on the rate and depth of change.

Marketing strategy is...

Marketing strategy both influences and is influenced by overall organizational strategies. It has a primary customer focus in selecting who should be customers and then guiding what and how to sell to them.

The marketing strategic plan is best written in parallel with the business strategic plan so each influences the other. Sometimes the reality is that the marketing plan follows the business plan (though this can cause many problems). 

Elements

There are many elements of marketing and, if a marketing-led view of the firm is taken, they touch all aspects of the company.

Although these elements are discussed separately below, they are all interlinked and can have bi-directional influence on one another.

Segments

The first big decision is who should be our customers and who should not. In other words, what customer segments will be addressed.

This is based first on the overall strategic intent of the firm, for example to be a high-end exclusive and low-volume provider, or to compete in mass markets where price is critical.

The decision is also based on research that indicates the profitability of different customers groups and how well the company is able to compete in each segment.

Brand

The brand is the overall intended message of the company, its products and services. It describes what customers and others should think and feel whenever they encounter the company or its products and services.

Brand is influenced by and influences the strategic intent of the firm and helps focus all other communications, products and interactions.

Brand is fragile in that it is what customers think and feel rather than what the company communicates. This makes shaping decisions about brand critical.

Competition

An important marketing decision is the nature of competition, for example whether to compete on quality, price, service, etc.

Decisions here will be affected by brand and will shape further activity such as the approach towards promotion, the use of advertising, the response to competitive action, and so on.

Products

Having understood and selected customers, marketing strategy should have a significant influence on the products created.

This not only includes the overall functionality but also the focus on quality, features, price points and so on, in order to produce products that align with the brand and complete effectively in the marketplace.

Price

While the exact price may not decided in strategic planning, the price ranges should be understood particularly in terms of what the target customers are willing and able to pay, and also what price breaks are important to be able to compete in the markets being addressed.

Promotion

Promotional strategy includes decisions about what approaches to promotion will be used, for example TV advertising, direct marketing and so on.

Promotion can be extremely expensive, so a key part of the strategic decision here is in the amount of budget that is being allocated.

Communication

Related to brand and promotion, the way that communications with customers and other stakeholders (such as the media) needs to be decided.

This includes broadcast information about products, one-to-one and things in between. It also includes how service conversations will be conducted, for example using web interfaces or direct phone conversation.

Outsourcing

A big decision that can be applied within any of the above is the 'make or buy' choice of whether to do things in-house, bring in external experts or pass on the work to third party suppliers.

Two key factors in the outsourcing decisions are first the ability of the company to do the work in comparison with suppliers, and secondly the costs of doing this.

The impact on brand should be a key consideration also. Many companies who outsource such as service calls have suffered huge brand damage from suppliers who do not deliver brand values.

See also

Brand management, Understanding Markets