MARKETING STRATEGY FORMATION FOR INDUSTRIAL

PRODUCTS

Formulating marketing strategies

Analysis for determining strategic marketing alternatives:Intensive analysis

* Reviewing existing business units to determine whether opportunities exist to improve the performance

* Take aggressive marketing efforts to attract customers

* Strategic alternatives may be generated by developing new markets through regional, national, or international expansion or by developing differentiated product versions to new market segments.

Formulating marketing strategies

Diversification Analysis:

• Concentric diversification, which consists of searching for new products that have technological or mkg. Synergies with the firm’s existing product lines & that will appeal to new customers.

• Horizontal diversification, which consists of adding new, technological unrelated products that appeal to firms present customer base

• Conglomerate diversification, consists of seeking new businesses that are totally unrelated to company’s present technology, products or markets.

Developing marketing strategy

Development of marketing strategy rests on

• Market segmentation analysis

• Target market selection

• Development of marketing mix strategies

Developing marketing strategy

Market segmentation & Targeting• Segmentation – process of dividing large markets into

sub markets, each having different demand patterns,needs,buying styles & response to various suppliers marketing strategies.

• Segments – assessed in terms of market potential,competition,customer profiles & company’s capabilities in serving them.

• Assessment of potential market must be based on- their current size- Their potential for future growth- Whether they are owned or occupied by existing

competition- Whether there exists a relatively unsatisfied need that

firm can satisfy better than its competitors

Formulating marketing mix strategy• Marketing strategy address the components –

product, place,price & promotion• Decisions on how product lines, features,quality

levels,services & NPD satisfy customer needs – formulated & integrated with mfg.,R&D & technical services

• Distribution strategy – concerned with developing right combination of factors as inventory levels,storage facilities &transportation modes – ensure consistency with total marketing strategy

• Promotion strategy – To communicate with target market – provides a base for formulating personal selling,advertising,sales promotion & media selection plans

• Pricing strategy – Influence on demand & supply,profitability,customer perception & regulatory response – developed in conjunction with internal factors(cost,ROI,profitability)

--Produce synergistic marketing effect

Formulating marketing mix strategy

Promotion strategy:

• Employ PUSH strategy to encourage intermediaries

• Employ PULL strategy to stimulate customer demand

Pricing Strategy:

• Set low price for new products to discourage competition

• Set low price for new products to encourage high sales volume

• Provide minimum extra services to permit lower prices

Distribution strategy:

• Provide additional outlets to reduce distribution cost

• Use one warehouse to minimize inventory control problems

Developing marketing plans

• Marketing planning – involves developing specific marketing activities as test mkg a new product,training sales personnel & developing advertising programs.

• Also involves developing budgets, based on realistic sales projections for each of the company’s divisions & products & allocating those budgets across the various components of the marketing mix

• Successful planning – careful timing & implementation

• Scheduling – means of controlling timing of activities & deployment of resources in implementing plans

Employs CPM/PERT

Implementing & controlling marketing plans

• To evaluate & control performance of the strategies, standards for control – established

• Since mkg strategies are formulated to achieve objectives –taken as std of control to measure performance

• Evaluation & control methods not only determine better impact on current mkg activities on cost, revenues & profits but also respond quickly on opportunities & threats

Performance measures:• Sales performance analysis compare last year’s sale, competitors sales,

forecasted sales or industry sales• Net profit analysis subtracts direct & indirect cost from sales to

determine profitability.