Marketing is the process of planning and executing the concepts of pricing, promotion and distribution of ideas, goods and services that satisfy individual and organizational goals (AMA).
Successful marketing requires a winning strategy. Understanding marketing strategy formulation lets you properly evaluate your organization's marketing needs. You can then gear your marketing strategies to achieve maximum effectiveness.
Marketing strategy formulation is the process of defining an organization's marketing goals and objectives. This allows formulators to create a guide. They examine the market and in doing so, use that information to determine what marketing approaches will be ...view middle of the document...
The idea is to get a firm idea of where your business is now and where it will be after the strategy is implemented. Finally, take all the information you gathered throughout the process and choose which strategy best fits your goals and needs.
The choice of strategy hinge on competitiveness, it is about being different. The essence of strategy lies in creating tomorrow’s competitive advantage faster than competitors mimic the ones you possess today (Gary Hamel & C.K. Prahalad). Established marketing strategies include: market segmentation, targeting, product positioning within the market (Market positioning), value proposition for target market, and market mix.
The focus of this task is on the strategic relevance of pricing in marketing strategy formulation. We shall consider this from both conceptual and theoretical frameworks perspectives with particular reference to strategy formulation and pricing models.Competitive strategy modelslike Porter’s Five Forces and product portfolio analyses like Boston Consulting Group (BCG) Growth-Share Matrix as well as general pricing modelsas suggested by different scholars and practitioners such as Kotler& Keller (2009), Campo and Gijsbretchs (1999) etc. involving two types of organizations namely price makers and price takers We will also consider the imports of these concepts and theories as they impact directly or remotely on our immediate environment (precisely in Nigeria’s context).
The prices of products perform different functions and strategic roles in organizations. For manufacturers and retailers, the prices of their products perform several functions, some of which may conflict with each other. First and foremost, it is a key part of the company’s marketing mix. For this reason, it is used as
* An instrument for boosting the demand for a product
* An instrument for responding to the offensive moves/threats from competitors and
* A major determinant of profit margin obtainable from different products (Campo and Gijsbrechts, 1990).
The extent to which an organization will be able to use price as a strategic tool in their marketing decisions will actually be determined by a number of factors in practice. These factors include but are not limited to the following (Cravens, 1997).
* Ability to be able to estimate how buyers will respond alternative prices for a product or service.
* The cost of producing and distributing the product. This is because cost affects a company’s ability to compete as it sets the lower boundaries for pricing.
* The current and potential competitors in the market segment being targeted. This is because their response pattern to the company’s pricing strategy if not properly anticipated, could result in loss of revenue and profit.
* Legal and ethical constraints from within the business environment. For example, the Government of the day may institute price control mechanism covering bspecific weak sectors of...