Strategic formulation:

Goals indicate what a business wants to achieve; strategy is a game plan for getting there.
Every business must design a strategy for achieving its goals, consisting of a marketing
strategy and a compatible technology strategy and sourcing strategy.
Porters generic strategies: Michael Porter has proposed three generic strategies that
provide a good starting point for strategic thinking.
i)
Overall cost leadership: the business works hard to achieve the lowest
production and distribution costs so that it can price lower than its competitors
and win a large market share. Firms adopting this strategy must be good at
engineering, purchasing, manufacturing and physical distribution.
ii)
Differentiation: Differentiation is the process of adding a set of meaningful
and valued differences to distinguish the companys offering from
competitors offerings. The business concentrates on achieving superior
performance in an important customer benefit area valued by a large part of
the market. The firm cultivates those strengths that will contribute to the
intended differentiation. The firm tries to differentiate something of the
product so that they can compete with the competitors.
The differentiation must meet the following criteria
a) important: the difference delivers a highly valued benefit to a sufficient number of
buyers.
b) Distinctive: the difference is delivered in a distinctive way.
c) Superior: the difference is superior to other ways of obtaining the benefit.
d) Preemptive: the difference cannot be easily copied by competitors.
e) Affordable: the buyer can afford to pay for the difference.
f) Profitable: the company will find it profitable to introduce the difference.
Differentiation tools: a company can differentiate its market offering along five
dimensions: Product, services, personnel, channel and image etc. differentiation variables
are shown in table
Product
Services
Personnel
Channel
Image
Form
Ordering ease
Competence
Coverage
Symbols
Features
Delivery
Courtesy
Expertise
Media
Performance
Installation
Credibility
Performance
Atmosphere
Conformance
Customer
Reliability
Events.
Durability
training
Responsiveness
Reliability
Customer
Communication
Repairability
consulting
Style
Maintenance
Design
and repair
Miscellaneous

iii)

Focus: the businesses focus on one or more narrow market segments. It is very
difficult to enter all the segments of the market. so the firm has to focus a
narrow segment and want to capture large share of the market.

Marketing alliances: many strategic alliances take the form of marketing alliances.
These fall into four major categories;
i)
Product or service alliances: one company licenses another to produce its
products or two companies jointly market their complementary products or a
new product.
ii)
Promotion alliances: one company agrees to carry a promotion for another
companys product or service.
iii)
Logistics alliances: one company offers logistical services for another
companys product.
iv)
Pricing collaborations: one or more companies join in a special collaboration.
It is common for hotel and rental car companies to offer mutual price
discounts.

Program formulation and implementation:

Now the company must work out detailed supporting programs to achieve the objectives.
If the unit has decided to attain technological leadership, it must plan programs to
strengths its R&D department, gather technological intelligence, develop leading-edge
products, train the technical sales force and develop ads to communicate its technological
leadership.
After formulating the strategy, the company must implement these strategies properly and
effectively. A great marketing strategy can be sabotaged by poor implementation.
According to McKinsey and Company, strategy is only one of seven elements in
successful business practice. They have proposed a model for successful strategy
implementation. McKinseys consultants found that neglecting any one of seven key
factors could make the effort to change a slow, painful and even doomed process. The
figure show that each of these factors is equally important and interacts with all the other
factors. McKinseys framework for business success is shown in figure
Structu
re
Strateg
y

System
Shared
values

Skills

Style

Staff
The first three elements are considered the hardware of success; these elements are
strategy, structure and systems.
The next four elements are considered the software of success; these elements are style,
kills, staff and shared values.
Style: Style means that the company employees share a common way of thinking and
behaving. McDonals employees smile at the customer, and IBM employees are very
professional in their customer dealings.
Skill: skills means that the employees have the skills needed to carry out the companys
strategy. The term skills refers to those activities organizations do best and for which they
are known. For example, P&G is known for product management. Strategy changes may
require organization to add one or more new skills.

Staff: it means that the company has hired able people, trained them well and assigned
them to do the right jobs. Successful organization view people as valuable resources who
should be carefully nurtured, developed, guarded and allocated. To managers devote time
and energy to planning the progress and participation of existing managers and use job
assignment policies to actively foster the development of new managers.
Shared values: it means that the employees share the same guiding values. This refers to
guiding concepts, values and aspirations that unite an organization in some common
purpose.
Structure: they point out that in todays complex and ever changing environment, a
successful organization may make temporary structural changes to cope with specific
strategic tasks without abandoning basic structural divisions throughout the organization.
Strategy: the seven s-model emphasizes the development of strategies for the successful
implementation.
System : this category consists of all the formal and informal procedures that allow the
organization to function, including capital budgeting, training and accounting systems.
For example, a consumer goods manufacturer might find it impossible to implement a
new portfolio strategy if its management information system is not adjusted to produce
the necessary cost data by segment. Because, there would be no way to compare the
different segments of the business.
Feedback and control: as it implements its strategy, the firm needs to track the results
and monitor new developments. The business unit will need to review and revise its
implementation, programs, strategies and even objectives if there is any change in the
environment.
Corrective action will be taken if necessary.

Product planning: the nature and contents of a marketing plan.

The marketing plan: the marketing plan is the central instrument for directing and
coordinating the marketing effort. To marketing department does not set the marketing
plan by itself. Plans are developed by teams, with inputs and sign-offs from every
important function.
The marketing plan operates at two levels:
i)
The strategic marketing plan: it lays out the target markets and the value
proposition that will be offered based on analysis of the best market
opportunities
ii)
The tactical marketing plan: it specifies the marketing tactics including
product features, promotion, merchandising, pricing, sales channels and
service.
Each product level must develop a marketing plan for achieving its goals. The marketing
plan is one of the most important outputs of the marketing process.
Marketing planning procedures and content vary considerably among companies. Most
marketing plan covers one year. Some companies take their plan very seriously whereas
others see them only as a rough guide action.

1)

2)

3)

4)

5)

6)

Contents of the marketing plan:

Executive summary: the marketing plan should open with a brief summary
of the main goals and recommendations. The executive summary describes the
overview of the entire marketing plan.
Current marketing situation: this section presents relevant background
data on sales, costs, profit, market, competitors, channels and the forces in the
macroenvironment.
Opportunity and issue analysis: here, management reviews the main
opportunities found in the SWOT analysis and identifies the key issues likely to
affect the organizations attainment of its objectives.
Objectives: the product manager outlines the plans major financial and
marketing goals, expressed in sales volume, market share, profit and other
relevant profits.
Marketing strategy: here the product develop the strategy how to achieve the
objectives. The product manager defines the target segments then establishes the
product lines competitive positioning which will inform the game plan to
accomplish the plans objectives. All this is done with inputs from other
organizational areas such as purchasing, manufacturing, sales, finance and human
resources to ensure that the company can provide proper support for effective
implementation.
Action programs: here the manager develop the action program to be used in
achieving the business objectives. Each marketing strategy element must be
elaborated to answer these questions; what will be done? When will it be done?
Who will do it? How much will it cost? How will progress be measured?

7) Financial projections: here the product manager project a financial budget

for achieving the action programs. On the revenue side, this budget shows the
forecasted sales volume in units and average price. On the expense side, it shows
the expected costs of production, distribution and marketing broken down into
finer categories.
8) Implementation and controls: implementation is the most important part of
the marketing plan. Even a good marketing plan can be sabotaged by the poor
implementation. This section outlines the controls for monitoring and adjusting
implementation of the plan. Here management can review the results and can
take the corrective action if necessary or needed.