Strategy Formulation

MARKETING STRATEGY FORMATION FOR INDUSTRIAL PRODUCTS

Formulating marketing strategies Analysis for determining strategic marketing alternatives:  Intensive analysis * Reviewing existing business units to determine

whether opportunities exist to improve the performance * Take aggressive marketing efforts to attract customers * Strategic alternatives may be generated by developing new markets through regional, national, or international expansion or by developing differentiated product versions to new market segments.

Formulating marketing strategies Diversification Analysis: • Concentric diversification, which consists of searching for new products that have technological or mkg. Synergies with the firm’s existing product lines & that will appeal to new customers. • Horizontal diversification, which consists of adding new, technological unrelated products that appeal to firms present customer base • Conglomerate diversification, consists of seeking new businesses that are totally unrelated to company’s present technology, products or markets.

Developing marketing strategy Development of marketing strategy rests on • Market segmentation analysis • Target market selection • Development of marketing mix strategies

Developing marketing strategy Market segmentation & Targeting • Segmentation – process of dividing large markets into sub markets, each having different demand patterns,needs,buying styles & response to various suppliers marketing strategies. • Segments – assessed in terms of market potential,competition,customer profiles & company’s capabilities in serving them. • Assessment of potential market must be based on - their current size - Their potential for future growth - Whether they are owned or occupied by existing competition - Whether there exists a relatively unsatisfied need that firm can satisfy better than its competitors

Formulating marketing mix strategy • Marketing strategy address the components – product, place,price & promotion • Decisions on how product lines, features,quality levels,services & NPD satisfy customer needs – formulated & integrated with mfg.,R&D & technical services • Distribution strategy – concerned with developing right combination of factors as inventory levels,storage facilities &transportation modes – ensure consistency with total marketing strategy • Promotion strategy – To communicate with target market – provides a base for formulating personal selling,advertising,sales promotion & media selection plans • Pricing strategy – Influence on demand & supply,profitability,customer perception & regulatory response – developed in conjunction with internal factors(cost,ROI,profitability) --Produce synergistic marketing effect

Formulating marketing mix strategy Promotion strategy: • Employ PUSH strategy to encourage intermediaries • Employ PULL strategy to stimulate customer demand Pricing Strategy: • Set low price for new products to discourage competition • Set low price for new products to encourage high sales volume • Provide minimum extra services to permit lower prices Distribution strategy: • Provide additional outlets to reduce distribution cost • Use one warehouse to minimize inventory control problems

Developing marketing plans • Marketing planning – involves developing specific marketing activities as test mkg a new product,training sales personnel & developing advertising programs. • Also involves developing budgets, based on realistic sales projections for each of the company’s divisions & products & allocating those budgets across the various components of the marketing mix • Successful planning – careful timing & implementation • Scheduling – means of controlling timing of activities & deployment of resources in implementing plans Employs CPM/PERT

Implementing & controlling marketing plans • To evaluate & control performance of the strategies, standards for control – established • Since mkg strategies are formulated to achieve objectives –taken as std of control to measure performance • Evaluation & control methods not only determine better impact on current mkg activities on cost, revenues & profits but also respond quickly on opportunities & threats Performance measures: • Sales performance analysis compare last year’s sale, competitors sales, forecasted sales or industry sales • Net profit analysis subtracts direct & indirect cost from sales to determine profitability.