Marketing strategies and tactics
A marketing strategy includes medium to long term marketing plans used to achieve marketing objectives and to support the overall corporate strategy. It combines product development, promotion, distribution, and pricing approach, identifies the firm's marketing goals, and explains how they will be achieved within a stated time frame. The marketing strategy determines the choice of target market segment, product positioning and allocation of resources.
Marketing tactics are the short-term, sometimes day-to-day, operational decisions that are adopted to keep the marketing objectives and strategies on target and to move from one milestone to another in pursuit of their overall goals.
In an organisation strategy is developed by the board of directors, and tactics by individual department heads for implementation by more junior employees. So, as we have seen, marketing is a philosophy but it also contains strategy. We shall see tactical planning a little later in this module - it's the day-to-day decision-making that is operational. In other words it's how you put the strategy into action. The overall strategy of a football team may be to prevent the other team scoring; the tactics are how individual members of the team play to create the desired result.
In most business situations the strategy is developed in five components. These components should be seen as part of a process and not a set of separate key areas that somehow operate independently of each other. The components are:
- Market research - ways of seeking out customer needs and discovering the target market.
- Product planning and development - making the products that satisfy the needs.
- Distribution - getting the products to the customers.
- Pricing - ensuring that customers perceive that products provide value for money.
- Promotion - communicating the availability of the products to potential customers.
Within any strategy lie tactics, or the ways in which the long-term ideas/policies are actually applied/put into action. Marketing has its own tactics and later we shall be looking at such familiar areas as:
- Sales promotion
- Selling techniques
A firm always need to look for a range of methods to get its message to existing and potential customers; marketing goes well beyond merely selling what a firm has already produced.
Developing marketing strategies
Putting objectives into practice is the task of those responsible for developing the marketing strategy (usually the marketing department in consultation with others). The firm will need to ask the following questions:
- What type of market is the firm operating in? Is it a large or mass market, or a specific segment or niche?
- What type of product will we develop? This will take into decisions relating to the product life cycle (more later - see section 3.4.3) and which products earn us our money. We will 'mature' products that generate cash. This in turn will allow us to research and introduce new products.
- What range of products will we produce? Will we have to produce a range, or portfolio of products? Another tool of business, namely the Boston Matrix is used to help us develop this essential of any successful enterprise. Later in the course we shall learn about cash cows and other parts of the matrix. At this stage all you need to think about is that we will need a balanced range of products if we are to survive and grow.
- What value do we add? This is how the customer sees (perceives) our products and why they buy them. It might be our unique selling point (USP) or some other factor e.g. a guarantee that makes our brand more popular than its rivals. Always think WHY it is that you buy something? Is it design, function, image or the actual service that the product gives you?
Correctly assessing and applying the above allows the firm to develop customer loyalty and plan with some degree of security.