In our previous blogs, we saw what marketing really is, and the 4 P’s essential for formulating a proper marketing strategy. We also discussed about the product life cycle. Now, coming to marketing strategy, let us see what it actually is.
To describe it, it is a written plan (usually a part of the overall corporate plan) which combines product development, promotion, distribution, and pricing approach, identifies the firm’s marketing goals, and explains how they will be achieved within a stated timeframe.
Marketing strategy determines the choice of target market segment, positioning, marketing mix, and allocation of resources.
“Strategy”, originally a military term, in a business planning context strategy/strategic means/pertains to why and how the plan will work, in relation to all factors of influence upon the business entity and activity, particularly including competitors (thus the use of a military combative term), customers and demographics, technology and communications
Scanning the Market Environment
Whilst scanning the market environment, the following questions are likely to crop up- What demographic changes are likely to affect your target market(s)? What economic trends might influence the future of the market? What technological changes can potentially affect products and their development? What current or emerging political-legal issues are likely to affect the market?
To answer these questions, we need to look at certain factors-
Demographic factors: associated with changing nature and volume of population. It follows how people are conducting themselves in the new world, increasing per capita income, urban migration, ethnically diverse cities and mega cities. These are some demographic factors companies are monitoring. For example, a country like India and China are showing highest concentration of youth population where as Japan is showing high number of retired workers. Therefore, demand and consumption of product will also be different.
Economic factors: deals with function like purchasing power parity, income level, savings level and interest rates among many other. For example, countries with a high income level are more likely to afford luxury items compare to a low income level country. Savings level and interest rate determine the borrowing power as well as spending power of consumer
Ecological factors: consist of natural resource composition in a given county. For example, demand for fossil fuel has sky rocketed in recent years there by increasing general price level in the market. Companies, therefore, are looking forward to designing products which eco-friendly design that is they are less fuel dependent and give out less pollution.
Technology factors: like internet and connectivity are changing the face of business. More and more people are doing business online. Science and medicine are also part of technology factors. Challenge for the company is to keep up with innovation and offer products, which are not obsolete.
Political environment: is also changing with more and more market based system rather than the socialist system. Furthermore, regulatory requirements like competition policy, investment policy, tax policy, etc. companies should investigate before taking their business to a particular country.
Culture environment: deals with factors like opinion people have towards themselves, others, organization and society in general. People have become more eco conscious, contributing one or many causes they can relate to, want organization to be responsible for their action and are looking to open society with meaningful co-existence.
Apart from all of this, an organization, when developing a marketing strategy, should keep in mind that they comply with the rules and regulations which may be organization centric or government imposed. Tools like VComply help in this regard by handling the necessary compliances and governance laws. Along with that, it also keeps track of people and the targets that they are supposed to be meeting.
The post Marketing Strategy-what are the factors that need to be considered? appeared first on The Compliance Blog - Compliance. Simplified..
