Why is marketing understanding so important in strategy formulation?

Marketing understanding is fundamental for strategy formulation. It is vital for managers to understand which customers are attractive, how customers respond to marketing mix variables, and which marketing mix variables are critical to success.

The marketing mix variables, also known as “4 Ps”, are four variables used in marketing to achieve organizational objectives. The 4 Ps are Product, Price, Place and Promotion.

Product: Anything that may be supplied to a market to meet a demand or need is referred to be a product.

Price: Price is the amount of money needed to purchase a product or service.

Place: Place is where the product is available.

Promotion: Promotion is any activity undertaken to inform or persuade target audiences to purchase a specific product.

A firm can take steps to ensure its product meets the needs of its customers and is competitive in the market.

The marketing mix variables can also be thought of as controllable variables.

A firm can control what product it offers, what price, where, and how the promotion is conducted. The marketing mix variables are also interrelated.

For example, a firm can price a product low, and offer a warranty, or offer an extended warranty, or offer an extended warranty for high priced products.

Offering an extended warranty for a high-priced product, would be a promotional strategy, reflecting how the firm is pricing its product (i.e., high priced products, get extended warranty).

A firm can control what product it offers, what price, where, and how the promotion is conducted.

The marketing mix variables are also interrelated. For example, a firm can price a product low, and offer a warranty, or offer an extended warranty, or offer an extended warranty for high priced products.

Offering an extended warranty for a high-priced product, would be a promotional strategy, reflecting how the firm is pricing its product (i.e., high priced products, get extended warranty).

Marketing understanding is fundamental for strategy formulation.

It is vital for managers to understand which customers are attractive, how customers respond to marketing mix variables, and which marketing mix variables are critical to success.

Marketing objective is the overall goal a firm wants to achieve. The objective, or goals, are broad in nature, and reflect what the firm does, e.g., “Be the market leader in our market”, “Offer a low-cost product in our market”, “Make a profit”, etc.

Marketing objectives are broad in nature.

The firm may want to offer low-cost products or offer products in all price ranges. The firm may want to offer products in all geographic areas or offer products in all market segments.

A firm may want to offer a low-cost product in all market segments or offer a high-cost product in all market segments.

Marketing objectives are broad in nature and reflect the what the firm does.

An organisation may have many marketing objectives. These objectives, however, can be broken down into lower, more specific objectives.

For example, a firm may have the overall marketing objective of “Make a profit“.

strategy formulation

They may define, for example, the objectives of “Make a profit in the luxury segment of the market”, “Make a profit in the mass market segment of the market”, “Make a profit of $10 million”, etc.

These marketing objectives can be further broken down into even more specific objectives. For example, a firm may define the objective of “Make a profit of $10 million in the luxury segment of the market”, as “Make a profit of $10 million in the luxury segment of the market by offering a low-cost product”.

A marketing objective is an overall goal a firm wants to achieve. The objective, or goals, are broad in nature, and reflect what the firm does, e.g., “Be the market leader in our market”, “Offer a low-cost product in our market”, “Make a profit”, etc.

A tactical objective is a marketing objective that breaks down a broad marketing objective into specific, measurable goals. A firm may wish to increase market share by 5% or increase profit by 10%. A firm may use a tactic to increase its profit.

For example, a firm may accomplish a tactical objective to “increase market share by 5%”, by using a tactic “to increase advertising expenditures by 5%”.

A firm may use a tactic to increase its profit. For example, a firm may accomplish a tactical objective to “increase market share by 5%”, by using a tactic “to increase advertising expenditures by 5%”.

A strategy is a plan for achieving a marketing objective.

A strategy describes how a firm will accomplish the tactics needed to accomplish the marketing objective.

A strategy is a plan for achieving a marketing objective. A strategy plan describes how a firm will accomplish the tactics needed to accomplish the marketing objective.

For example, a firm may accomplish a tactical objective to “increase market share by 5%”, by using a tactic “to increase advertising expenditures by 5%”.

It is a proactive, dynamic, and systematic process. It provides a roadmap for achieving marketing objectives.

It creates focus and enables firms to respond quickly to changes in the environment.


lewis-anderson
lewis-anderson

Lewis Anderson is a parent of 3 children and has been an IT Technician since 2013. He has been practicing spiritual teachings since 2008 and is on a path of personal growth. His other interests include A.I, Advanced Robotics, astrology, autonomy, quantum mechanics, and anything related to consciousness and human experience. He writes about, blogging, parenting, marketing, online business, and all his other interests on his personal blog. You can find him on Twitter and on his other social media platforms. Lewis is always happy to help other parents and people with IT needs, so feel free to reach out to him with any questions or comments.

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