Professional Documents
Culture Documents
DEVELOPING A MARKETING
STRATEGY
INTRODUCTION marketing budget for carrying out the
strategy.
Your MARKETING PLAN is a focused and It should spell out the following in detail: -
functional plan for all your marketing
activities. Remember your marketing plan what marketing mix will be offered;
cannot be developed in isolation. The to whom (target market);
marketing plan has to support the STRATEGIC for how long;
PLAN. The marketing strategy is the starting what company resources will be
point for your Marketing Plan and is derived needed at what rate;
from the GENERAL STRATEGY of a business. what results are expected (sales and
NB. Also see the articles on "Strategic profits).
Analysis" and "Strategy Development". No
effective functional strategy can be developed
on its own. Remember the business is a DEVELOP A MARKETING STRATEGY
system built up from various functional
systems that have to support one another. By now you should already:
For example, marketing has to support
production and visa versa. The only way this have decided on the nature of your
will happen is when both functions are derived business and you know that your
from and in support of the general business business idea is
strategy, which is the main driving force of feasible;
any successful business.
have also identified your market and
You should therefore kick off by making sure decided on your target market;
that the marketing strategy supports your
general strategy. Your MARKETING STRATEGY know what the needs of your
can then be formulated by using the customers are and you have identified
information you gathered in your MARKET and assessed your
RESEARCH. Competition.
the price you will charge. service, or a blend of both. Remember that a
product is not limited to a physical good. The
These four decision variables are the important thing is that your product and/or
ingredients of the so-called marketing mix. service should satisfy a specific customer
Your task is to create these elements need.
effectively in order to market your
product/service to the target market in an At the most fundamental level we normally
optimal way. talk about the core product. The core product
answers the question "what is the buyer really
buying?" The woman buying a camera is not
CREATE AN EFFECTIVE MARKETING MIX buying a mechanical box, she is buying the
opportunity to take photo's, when she want to
The MARKETING MIX consists of all the have and keep forms of "immortality" or
controllable variables the company puts precious moments. The marketers' job is to
together to satisfy its target market. A typical sell these core benefits of the product or
MARKETING MIX includes decisions service.
regarding the product, the price of the
product, how to promote the product and how
to get the product to the right customer at the Branding means the use of a name, term,
right time and place. symbol, design, or a combination of these, to
identify a product. It includes the use of brand
All these variables are controllable elements in names, trademarks, and practically all other
the marketing mix and can be reduced to four means of product identification. A brand name
basic ones, each starting with a P (also known is a word, letter, or a group of words or
as the four Ps): letters. Examples include Nike, IBM, and
Kellogg's. Trademark is a legal term and
Product. includes only those words, symbols, or marks
Place. that are legally registered for use by a single
Price. company.
Promotion.
Brand promotion has advantages for sellers as
The four Ps are those factors that you can well as for customers. A good brand name
control directly, for example, you develop your speeds up shopping for the customer, if the
product, you decide how to get it to the customer can immediately recognize the
customer, you determine the price and you product, and it will reduce the seller's selling
choose the promotion mix. The four Ps are, time and effort. When customers repeatedly
as you will realize now, with the selection buy by brand, the seller is protected against
of your target market are the basic competition from other companies. Good
ingredients of your marketing strategy. brands can improve the company's image, and
thus speed up acceptance of new products
All four Ps are needed in a marketing mix and marketed under the same company name.
should therefore be tied together. When a
marketing mix is developed, all final decisions
about the P's should be made. All four Ps Packaging involves promoting and protecting
should be in harmony and aimed at satisfying the product. This can be important to both
the customer's needs in an optimum way. sellers and customers. It can make a product
more convenient to use or store. It can
You do have control over the marketing mix prevent spoiling or damage. Good packaging
and can vary it to suit the needs of your makes products easier to identify and
customers and the resources of your business. promotes the brand at the point of sale and
Customers are continuously matching their even in use.
needs with the products offered by you and
your competitors. In addition to branding and packaging if the
formal product is a physical object, the market
You should now know your target market and may recognize it as having characteristics like
the needs of your potential customers. From a quality feel, specific features, as well as
analyzing your competitors, you can identify styling. If it is a service, it may have some or
what they offer the target consumer through all of these facets in an analogous manner.
their marketing mixes. This determines what
your marketing mix and your competitive The total product can also consist of elements
advantage will be. All of the marketing mix like free delivery, installation, warranties,
elements must reinforce the image of the services, maintenance systems, customer
product or service that the business portrays advice, financing and other things that
to the potential customer. customers perceived to be of value.
Sales of R400 000, expenses of R120 000 and The typical service business can benefit from
a profit of R80 000 are expected in your effective pricing techniques, but too often
business. The initial mark up % therefore small businesses simply charge the going rate
= (120 000 + 80 000) 400 000 = 50% or they set a price they deem suitable for the
specific set of circumstances.
You must verify your retail price by answering
the following questions: A service business generally establishes a price
based on the materials used to provide the
Will it cover costs and generate the service; the labor employed an allowance for
desired profit? overheads, and a profit. They charge
Is it in line with the company's overall customers on an hourly basis, usually the
price image? actual number of hours required to perform
Is it within an acceptable price range? the service.
How does it compare with the prices
charged by competitors?
Are the customers willing and able to CONSTRUCT THE PROMOTION MIX
pay this price?
The last P is concerned with telling the target
The manufacturing case study market about your product/service. Promotion
includes PERSONAL SELLING, MASS
The most commonly used pricing technique for SELLING, and SALES PROMOTION. It
manufacturers is cost - plus pricing. This involves direct communication between sellers
method is also known as absorption costing. and potential customers.
Using this method, the manufacturer
establishes a price composed of direct PERSONAL SELLING usually takes place face
materials, direct labor, factory overheads, - to - face, but sometimes the communication
selling and administrative costs, plus the occurs over the telephone.
desired profit margin. Lets look at Bennys
business: MASS SELLING is communicating with large
numbers of customers at the same time. The
Benny manufactures tables. His monthly two main forms of mass selling are:
operating figures are: ADVERTISING - any paid form of non-
personal presentation of ideas, goods, or
Rental for the factory = R5 000 services by an identified sponsor, and
Raw direct materials used = R11 000 PUBLICITY - any unpaid form of non-
Wages of workers = R20 000 (The personal presentation of ideas, products, or
workers are paid per table services.
manufactured)
Telephone = R800 SALES PROMOTION refers to those
Salaries = R16 200 promotion activities, other than advertising,
publicity, and personal selling that stimulate
On average 2500 tables per month are interest, trial, or purchase by final consumers
manufactured and sold. Benny intends making or others in the channel. This can involve use
a 25% net profit. of coupons, samples, signs, catalogs,
novelties, and circulars.
EBSOnlineArticle Page -5-
Generally a good advertisement should attract Only if you measure the results of each
attention, develop interest, create the desire advertisement, will you be able to eliminate
to have the product or service (convince the ineffective advertising and concentrate on
reader), and get action. You can increase an what works best. There are many methods of
advertisement's impact by applying the measuring results, such as:
following principles:
Asking your customers how they
Design the message to reflect the found out about your product or
image of the company. service.
Keeping a record of telephone
Plan the advert in advance to ensure inquiries concerning a particular
consistent appearance and message. advertisement.
Having a feedback mechanism such
Use attention-getting techniques, as coupons.
value-packed words like free, save, Measuring the volume of store traffic
you, new, bargain, or after an advert.
Testimonials from customers. Judging the effectiveness by
comparing sales of those items
Layout should be simple. advertised with pre-advertised
sales.
Message should be short, direct, and
built around a single idea.