What is the Formulation of Marketing Strategy?

Strategy preparation is the longest marketing activity. At this level, complex and subtle integration is required with other corporate functions. What is the Formulation of Marketing Strategy? All functional strategies should fit together in a business strategy. Because marketing is related to customers and competitive environment, this is an early part of the process of preparation of the total strategy.

When done well, it is impossible to separate the marketing strategy from the corporate strategy. Two melt into an integrated whole. The strategic process is one of the things to do with the dynamics of the market (a particular segment or selection of market) to achieve a concrete position of product/service offering, in which the consumer has a clear "profit promise" which Is different. Competition and which deploys the firm well for potential competitive reactions for its actions.

Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. The process of strategy formulation basically involves six main steps.

Though these steps do not follow a rigid chronological order, however, they are very rational and can be easily followed in this order.

Setting the Organization's objectives:

The key component of any strategy statement is to set the long-term objectives of the organization. It is known that strategy is generally a medium for the realization of organizational objectives. Objectives stress the state of being there whereas Strategy stresses upon the process of reaching there.

The strategy includes both the fixation of objectives as well the medium to be used to realize those objectives. Thus, the strategy is a wider term which believes in the manner of deployment of resources so as to achieve the objectives.

While fixing the organizational objectives, it is essential that the factors which influence the selection of objectives must be analyzed before the selection of objectives. Once the objectives and the factors influencing strategic decisions have been determined, it is easy to take strategic decisions.

Evaluating the Organizational Environment:

The next step is to evaluate the general economic and industrial environment in which the organization operates. This includes a review of the organization's competitive position. It is essential to conduct a qualitative and quantitative review of an organizations existing product line.

The purpose of such a review is to make sure that the factors important for competitive success in the market can be discovered so that the management can identify their own strengths and weaknesses as well as their competitor's strengths and weaknesses.
After identifying its strengths and weaknesses, an organization must keep a track of competitor's moves and actions so as to discover probable opportunities of threats to it's market or supply sources.

Setting Quantitative Targets:

In this step, an organization must practically fix the quantitative target values for some of the organizational objectives. The idea behind this is to compare with long term customers, so as to evaluate the contribution that might be made by various product zones or operating departments.

Aiming in context with the divisional plans:

In this step, the contributions made by each department or division or product category within the organization is identified and accordingly strategic planning is done for each sub-unit. This requires a careful analysis of macroeconomic trends.

Performance Analysis:

Performance analysis includes discovering and analyzing the gap between the planned or desired performance. A critical evaluation of the organization's past performance, present condition, and the desired future conditions must be done by the organization.

This critical evaluation identifies the degree of the gap that persists between the actual reality and the long-term aspirations of the organization. An attempt is made by the organization to estimate its probable future condition if the current trends persist.

Choice of Strategy:

This is the ultimate step in Strategy Formulation. The best course of action is actually chosen after considering organizational goals, organizational strengths, potential, and limitations as well as the enal opportunities.

#Marketing Strategy:

Marketing literature recommends that company objectives can be accomplished in various ways. It is the job of strategy to select the most effective course of action to fulfill objectives. In order to attain objectives, marketers must engage in marketing decision-making which indicates where resources (e.g., marketing funds) will be directed.

However, before spending begins on individual marketing decisions, the marketer needs to establish a general plan of action that summarizes what will be done to reach the stated objectives. Generally, marketing strategy involves the accomplishment of marketing objectives through the determination of target markets, the setting of competitor targets and the creation of competitive advantage.

1. Product/Service Strategy:

What mix of products and services will company sell and how does that best meet customer needs and how does it compare to your competitors. Product decisions involve choices regarding brand names, features, quality and design, packaging, warranties, and the services that will accompany the product offering.

2. Pricing Strategy:

How will the company set its price for products/services relative to competitors, and what impacts will that have on the volume of sales. Pricing decisions involve choices regarding list price, discounts, credit terms and payment periods.

3. Place/Location Strategy:

How will the proposed or current location of business best meet the needs of customers and/or create an advantage over competitors? Place decisions involve choices regarding the distribution channels to be used and their management, the location of outlets, methods of transportation and inventory levels to be held.

4. Promotional Strategy:

How will the company promote business and how will that make customers aware of business and motivated to buy products/services. Promotion decisions involve choices regarding advertising, personal selling, direct and Internet marketing, sales, and promotions and public relations.

5. Positioning Strategy:

What values do company want potential customers to relate with business, and how will they set apart from the competition.