Marketing strategy is the set of programs that are matched with the target market opportunities in order to achieve organizational objectives. Drawing up a marketing strategy essentially consists of three steps: target market selection, setting marketing objectives and developing the marketing program.
A firm may choose to market its products to all users or to some sub-groups. The strategic decision that a firm has to make at this point is whether to sell to the entire product market en masse, or instead to concentrate on a portion of the market. In addition, firms have to determine when an existing target market strategy needs to be modified, and also when to make a decision to stop serving a particular target market. Products which become irrelevant and which are not able to survive against competition, and which show slow growth rates because of declining industry growth, force management to withdraw from a market.
Marketing objectives should be set and stated for each target market in quantitative terms like sales, market share, contribution to profit and qualitative terms like getting new customer groups, strengthening brand image, and building customer awareness and attitudes. Quantitative objectives essentially involve demand forecasting. Forecasting is done at various levels. Market potential is the maximum possible sales of a product in a specific market in a specific time period. It is the aggregate of the sales possible by all the sellers in that industry.
The marketing program consists of strategic use of the variables that influence demand- the product, price, place and promotion. These four elements together constitute the marketing mix. The variables must be consistent with one another. A quality product image is inconsistent with a heavy price discount or making the product available at a low class retail outlet. An economy image is inconsistent with a highly stylized product placed in an exclusive retail outlet. Target market selection without consideration of the firm’s resources constitutes a mistake.
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