Marketing in the process of formulation and implementation of strategy

Introduction:
Marketing is a process by which a product or service is introduced and promoted to
potential customers. Marketing is perhaps the most important activity in a business because
it has a direct effect on profitability and sales. This is why the role of marketing needs to be
comprehensively

understood

and

carefully

considered

while

formulating

and

implementing strategy for any business. Larger businesses will dedicate specific staff and
departments for the purpose of marketing. It is important to realize that marketing cannot
be carried out in isolation from the rest of the business. For example: The marketing section
of a business needs to work closely with operations, research and development, finance and
human resources to check their plans are possible. Operations will need to use sales
forecasts produced by the marketing department to plan their production schedules. Sales
forecasts will also be an important part of the budgets produced by the finance department,
as well as the deployment of labor for the human resources department. A research and
development department will need to work very closely with the marketing department to
understand the needs of the customers and to test outputs of the R&D section. The overall
marketing umbrella covers advertising, public relations, promotions and sales. Without
marketing, business may offer the best products or services in industry, but none of the
potential customers would know about it.
Strategy Formulation and Role of Marketing

Strategy Formulation
Strategy formulation refers to the process of choosing the most appropriate course of action
for the realization of organizational goals and objectives and thereby achieving the
organizational vision. The process of strategy formulation basically involves six main steps.
Though these steps do not follow a rigid chronological order, however they are very
rational and can be easily followed in this order.
Setting Organizations objectives - The key component of any strategy statement is to set
the long-term objectives of the organization. It is known that strategy is generally a medium
for realization of organizational objectives. Strategy includes both the fixation of objectives
as well the medium to be used to realize those objectives. Thus, strategy is a wider term
which believes in the manner of deployment of resources so as to achieve the objectives.
Evaluating the Organizational Environment- The next step is to evaluate the general
economic and industrial environment in which the organization operates. This includes a
review of the organizations competitive position. It is essential to conduct a qualitative and
quantitative review of an organizations existing product line. The purpose of such a review
is to make sure that the factors important for competitive success in the market can be
discovered so that the management can identify their own strengths and weaknesses as well
as their competitors strengths and weaknesses. After identifying its strengths and
weaknesses, an organization must keep a track of competitors moves and actions so as to
discover probable opportunities of threats to its market or supply sources.

Setting Quantitative Targets - In this step, an organization must practically fix the
quantitative target values for some of the organizational objectives. The idea behind this is
to compare with long term customers, so as to evaluate the contribution that might be made
by various product zones or operating departments.
Aiming in context with the divisional plans - In this step, the contributions made by each
department or division or product category within the organization is identified and
accordingly strategic planning is done for each sub-unit. This requires a careful analysis of
macroeconomic trends.
Performance Analysis - Performance analysis includes discovering and analyzing the gap
between the planned or desired performance. A critical evaluation of the organizations past
performance, present condition and the desired future conditions must be done by the
organization.
Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of
action is actually chosen after considering organizational goals, organizational strengths,
potential and limitations as well as the external opportunities.
Role of Marketing
Marketing Managers will assist in formulating and implementing marketing strategy and
will extend their role by engaging in counterintelligence work. By thinking strategically,
marketing manager will identify company vulnerabilities and help to put strategic
marketing intelligence systems and processes in place. This will ensure that the company
adopts a customer focus and that the products and services on offer meet customer

expectations. The wide-ranging influence of marketing managers on higher-level strategic

decisions is clearly shown in a recent survey of managers in 280 US and 234 German
business units of firms in the electrical equipment, mechanical machinery, and consumer
package goods industries. The study examined perceptions of marketing managers
influence relative to managers from sales, R&D, operations, and finance on a variety of
strategic and tactical decisions within their businesses
The study found that, on average, marketing and sales executives exerted significantly more
influence than managers from other functions on strategic decisions concerning traditional
marketing activities, such as advertising messages, pricing, distribution, customer service
and support, and measurement and improvement of customer satisfaction. Interestingly,
though, the influence of sales executives was perceived to be even greater than that of
marketing managers on some of these decisions. One reason particularly in the industrial
goods firms selling electronic equipment and machinery may be that sales managers have
more detailed information about customer needs and desires because they have direct and
continuing contact with existing and potential buyers.
More surprisingly, marketing managers were also perceived to wield significantly more
influence than managers from other functional areas on cross-functional, business-level
strategic decisions. While the views of finance and operations executives carry more weight
in approving major capital expenditures, marketing and sales managers exert more
influence on decisions concerning the strategic direction of the business unit, expansion into
new geographic markets, the selection of strategic business partners, and new product
development.

Might the relative influence of the different functions become more similar as firms adopt
more integrative organizational forms, such as cross-functional work teams? The studys
results suggest not. Marketings influence was not significantly reduced in companies that
had instituted cross-functional structures and processes.
But marketing managers may not play as pervasive a strategic role in other cultures as they
do in the United States. The study found that marketers influence on both tactical and
strategic issues was significantly lower in German firms. As one of the studys authors
points out, Germany has traditionally stressed technology and operations more than the
softer, customer-oriented aspects central to marketing. So even when the environment
changes, a signal to top-level German managers that marketing should be playing a greater
role, they are reluctant to give it that role
Market-Oriented Management
Market-oriented organizations tend to operate according to the business philosophy known
as the marketing concept. As originally stated by General Electric four decades ago, the
marketing concept holds that the planning and coordination of all company activities
around the primary goal of satisfying customer needs is the most effective means to attain
and sustain a competitive advantage and achieve company objectives over time.
Thus, market-oriented firms are characterized by a consistent focus by personnel in all
departments and at all levels on customers needs and competitive circumstances in the
market environment. They are also willing and able to quickly adapt products and
functional programs to fit changes in that environment. Such firms pay a great deal of

attention to customer research before products are designed and produced. They embrace
the concept of market segmentation by adapting product offerings and marketing programs
to the special needs of different target markets. IBM formed a high-level cross-functional
task force to reevaluate its market environment, develop a new strategic focus, and map
new avenues toward future growth. The company has also formed alliances with enterprise
software developers, such as PeopleSoft and Great Plains Software, to improve its ability to
help customers integrate Web technology into their business processes
How competitive factors affect a firms marketing orientation?
Organizational success largely depends on determining the needs and wants of target
markets and delivering satisfactions to those markets/consumers more effectively and
efficiently than competitors do. Market orientation is a central tenet of marketing, its
activities and behaviors are related to; a proactive search for marketplace opportunities;
problem solving, and future positioning (Morgan & Strong, 1997). For several decades until
now, market orientation has been the central idea of many published works in the
marketing and strategic management literature. Market orientation has been identified as
an important theoretical construct in marketing and it has stimulated much conceptual,
empirical and executive attention.
Market orientation has been regarded as a source of competitive advantage and can be an
important determinant of firm performance. Superior organizational performance can be
achieved as a market oriented firm is able to satisfy customers through tracking and
responding to customer needs and preferences (Jaworski & Kohli, 1993).

How Strategic role of marketing is affected by recent development?

Globalization: The process of increasing social cultural political and economic
interdependence has resulted in several changes in business environments. Global market
opportunities and threats are major effects on globalization. While the former refers to
increase in market potential, trade and investment potential and resource availability the
later refers to increase in number and level of competition and uncertainty. Market
globalization is the decline in barriers to selling in countries other than the home country.
This change will make it easier for a company to begin selling products internationally,
since lower tariffs keep consumer prices lower, and fewer restrictions when crossing
borders make it easier for a company to enter a foreign market. It also means that
companies must consider other cultures when developing their business strategies, and
potentially adjust the product and marketing messages if they aren't appropriate in the
target country. This may not be an issue in the camera industry, but a hamburger company
entering India would definitely need to revisit their product and strategies to be successful!
Importance of Service: The essence of the business movement towards service is the shift
from product-centered thinking to customer-centric thinking. Service provision aims at
developing relationships with customers, increasing their satisfaction, inducing switching
costs over time, building customer loyalty, and, ultimately, improving performance by
expanding revenues. According to the service logic (enabled by information technology),the
key unit of analysis is the value of the relationship between the firm and each individual
customer. The lifetime value of the customer base is firms most important asset. Therefore,

as companies become increasingly service oriented, marketing strategy will need to

accompany this shift and become less product-centered and increasingly customer-centered
The shift towards service can be seen worldwide in several industries. For instance,
software companies, personal computers and electronics manufacturers are experiencing a
massive change in their business mission, from manufacturing goods to providing services
to customers. Companies such as IBM, Dell, Oracle and HP are relying on services as their
most importance source of profits. It becomes imperative to review the firms internal
structure, strategic goals and, most importantly, the relationships with customers.
Information Technology: Effective marketing is all about getting messages in front of
potential consumers in appealing ways that have the potential to influence purchase
decisions. Doing so in the 21st Century requires the use of various information technology
tools. From managing your own schedule to keeping up with previous contact to
distributing marketing oriented information via email and online marketing channels, it's a
fact that information technology is ingrained in modern marketing jobs. Examples of
information technology tools that marketing professionals are likely to use on a regular
basis

include

Blogging,

Computerized

Presentations,

Customer

Relationship

Management(CRM) system, Email Communication, Email Marketing etc. Companies often

use sophisticated CRM software applications to keep track of all types of customer contact,
including sales calls, presentations, purchases, complaints and more. Marketers need to be
able to access information that is in the system as well as input additional data as it becomes
available.
Changes or trends in marketing that affect strategic planning

Among the more important marketing trends that will impact strategic planning involves
social networking. This is a two-part enterprise. Marketers will focus more energy on
monitoring social networks for information beneficial to their marketing strategies, while
also advertising more, and more selectively, on particular networks. Monitoring social
media for consumer comments regarding trends or preferences or complaints regarding
specific goods or services will grow in importance as programs like Facebook and Google+
continue to remain relevant or, in the case of the latter, assume a more prominent role in
networking. Facebook is estimated to have almost 200 million users worldwide. Marketing
to them without inadvertently making a cross-cultural faux pas is a challenge, but one that
companies will have to continue to overcome.
Twitter has become another ubiquitous presence in modern society, and is expected to
continue to be widely used.

Strategic planning will clearly place a high priority on

marketing to the enormous number of people globally who utilize it. While Facebook,
however, already reaches hundreds of millions of users in the United States, Twitter is
currently used by an estimated 49 million Americans.

[Data is from Twitter Has A

Surprisingly Small Number of US Users, Business Insider, October 4, 2013] That said,
Facebook and Twitter are very different networking tools, with Facebook a more
personable means of communication.
Another marketing trend that should become more important is the emphasis on
environmental protection and restoration. The so-called Green movement has succeeded
in becoming institutionalized, and increasing numbers of consumers are sensitive to

environmental considerations. Marketing to that growing segment of the public will be

more and more important to long-term business considerations.
Finally, mention was made earlier of Google+. Google+ is the next step in combining social
networking, information technologies and content-targeting. If the average consumer is
already wary of being monitored and studied, this will certainly contribute to that anxiety.
As a marketing tool, however, it represents a trend that cannot be ignored. The manner in
which Google+ is expected to connect people with each other and identify potential markets
for specific products may have a major impact on strategic planning in the years ahead.
Conclusion
Without marketing, potential customers may not be aware of the product or service your
business is selling. Without customers, business may meet its demise. Marketing plays a
vital role in business because planning how a company is going to reach potential
customers helps to ensure that people are aware of products or service and that company
have an opportunity to convert that awareness into paying customers. Marketing planning
serves as a written guide for a business to follow in promoting its products and services.
Planning the marketing strategies ahead of time allows companies to be proactively
involved in the success of its sales. Because the marketing plan is a portion of the overall
business plan, a company can align marketing strategies during the planning stages with its
overall business goals.