CHAPTER 4 - 7.5.2 ELEMENTS OF A MARKETING STRATEGY A...

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7.5.2 ELEMENTS OF A MARKETING STRATEGY A marketing strategy is composed of several interrelated elements. The first and most important is market selection: choosing the markets to be served. Product planning includes the specific products the company provides, the makeup of the product line, and the design of individual offerings in the line. Another element is the distribution system: the wholesale and retail channels through which the product moves to the people who ultimately buy it and use it. The overall communications strategy employs advertising to tell potential customers about the product through radio, television, direct mail, and public print and personal selling to deploy a sales force to call on potential customers, urge them to buy, and take orders. Finally, pricing is an important element of any marketing program. The company must set the product prices that different classes of customers will pay and determine the margins or commissions to compensate agents, wholesalers, and retailers for moving the product to ultimate users. Depending on the nature of the product and its markets, the marketing strategy also may include other components. A company whose products need repair and maintenance must have programs for product service. Such programs are often businesses in themselves and require extensive repair shops, technical service personnel, and inventories of spare parts. For some companies, the nature and amount of technical assistance provided to customers is critical to marketing success and, therefore, an important part of strategy. In many businesses, customer credit is an important element of the marketing program. Companies that operate gasoline stations, retail stores, or travel agencies, for example, must extend credit simply to compete for business. So must companies selling industrial equipment, raw materials, and supplies. In businesses where products can be shipped only a certain distance from the plant, plant location determines the company's available market. A container plant, for example, can serve only a limited geographic area, because shipping costs are high in relation to the product's unit value. When transport over long distances becomes uneconomical, plant location becomes a strategic marketing decision. Brand name also can be an important element of marketing strategy. A company may have to choose between using a family brand name (such as Kraft for cheeses, jams, jellies) or a distinct name (such as Lite for a beer made by Miller Brewing Company). Other elements of strategy especially for consumer goods companies, are display of the merchandise at the point of sale, and promotions to consumers (e.g., cents-off coupons, two-for- one sales, and in-package premiums), retailers, and wholesalers. The list of elements that might shape marketing strategy is long and will vary among products, markets, and companies.
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