What is Strategic Marketing?
Strategic marketing can be defined as identifying one or more sustainable competitive advantages an organization has in the market. It is a way that is used by an organization to differentiate itself from competitors by capitalizing on its strengths. This aims at providing a better opportunity to customers. Its purpose is to develop plans and actionable items to ensure that the competitor’s motives and actions are blocked and secure an enviable position in the market.
With strategic marketing, it is possible to overcome obstacles that come to your company’s success. The main task of strategic marketing is to remove all the hurdles that come their way to achieve established goals and targets. A strategic marketing idea guides the planning team in choosing the right course of action to improve the company’s performance and help the organization in achieving its long-term objectives.
Table of Content
- 1 What is Strategic Marketing?
- 2 Developing Strategic Marketing Plan
- 3 Tools for Strategy Development
Strategic Marketing decides: where to compete, how to compete, and when to compete.
Thus, to attain the position of competitiveness, this requires careful analysis of several factors which have a position to impact the survival of the business.
Factors which are responsible for achieving the competitive advantage are as follows:
- Careful and detailed understanding of market dynamics. This may include technological advancement and its injection into business processes
- The emergence of new entrants in the market. This is again another important factor that ensures that the company or an organization may face competition from multiple dimensions and each of these competitors has tremendous potential to annihilate the survival of the business
- The fragmentation of the consumer base. This is another important factor that needs to take into account while developing the strategy for countering the opponent’s plans
- The challenges of meeting the requirements of the regulatory bodies and the government policies
- The financial service is greatly impacted by the perception of the individual they are required to take into account the various perceptions of the quality to develop plans and strategies to counter the impact of the competitors’ strategies
Thus, by keeping in mind the above parameters and factors in mind the organization is required to market the financial products and services accordingly.
The marketing strategy helps in achieving the following goals:
- Increase sales
- Widen your customer base
- Keep current customers engaged
- Launch a new product or service
- Increase market share
- Establish your brand
- Improve customer loyalty
- Launch an advertising campaign
- Launch a PR campaign
- Encourage word of mouth
- Increase market share
- Retain existing profitable customers
- Make customers feel more valued Offer existing customers exclusive offers
- Ensure business stays fresh and new
Strategic marketing requires the efficient allocation of an organization’s valuable and scarce resources. In addition, it manages the external forces that influence the organizational environment. Examples of external forces are technological changes, increasing competition, and the advent of liberalization, privatization, and globalization.
An organization practicing strategic marketing achieves the following benefits:
- Successful marketing mix combination
- Facilitates breakthrough thinking about the future goals of the organization
- Creates a vision and mission for the organization
- Develops guiding principles and strategic goals for the organization
- Converts inputs of the organization into outputs
- Optimizes the organizational performance and process to deliver quality products and services
Organizations aim at achieving maximized returns on invested funds and gain financial success through effective strategic marketing. A strategic financial thinker makes plans and policies to manage the funds of the organization. Plans and policies are related to the decisions regarding financial investment and borrowings, reserves, and surplus.
The financial strategies focus on:
- Determining the least cost combinations of resources
- Taking investment decisions that maximize the net present value and shareholder’s wealth
- Identifying scarce financial resources and balancing them effectively
- Raising funds for the organization through the issue of shares
- Performing cash, credit, and risk management
Thus, financial strategists aim at the optimum utilization of financial resources. The excellent management of funds leads to the successful implementation of financial strategies in an organization.
Developing Strategic Marketing Plan
Strategic marketing is a plan that explains how goals will be achieved within the stipulated timeframe. It also determines the preference of market segment, positioning of brand, marketing mix, and resource allocation. A strategic marketing plan combines product, price, place, promotion, and other elements to achieve the marketing goals of the organization within a timeframe. It gives a defined route to any business to achieve set objectives.
Let us now discuss the process of developing a strategic marketing plan for financial services.
The process of developing a strategic marketing plan in the case of financial services is not a simple task. It requires the understanding and analysis of the financial market and the customers as well as it requires a detailed step-by-step approach to develop the same. A properly analyzed and designed strategic plan has the power to take your business to the top.
Determining the objective of the plan
It is one of the most important steps that need to be addressed in the beginning. Unless the objective of the plan is considered, the whole purpose of developing the strategic marketing plan remains passive or fruitless. Once the objective is set, the direction for developing the plan is already laid out. It makes it easier to process the development of the plan further easily and smoothly.
This step involves determining marketing goals to answer basic questions, such as what financial product/ service to launch, when to launch, and how to launch. These financial marketing objectives should be set after considering organizational goals.
Define the scope of the plan
This is another vital step that needs to be taken into consideration. The scope sets limits for developing the individual components of the plan. For instance, the insurance plan to be developed should state the components such as period, premium, maturity amount, etc.
Determine the process and the measures for measuring the performance of the processes
The step ensures that the various processes that have been identified need to be measured to manage the plan developed. For instance, a premium calculator should be checked on websites so that consumers can check premiums to be paid for insurance plans they are planning to buy.
Develop the plan for corrective and preventive actions based on the feedback received from the execution of the plan
This vital step ensures continuous progress and thus also provides a competitive edge over competitors. By following the above steps, the organization may be able to develop a sound strategic marketing plan.
Tools for Strategy Development
Promotional tools are required for developing a strategy for the promotion of the product. While developing the strategy, the use of the promotional tools is focused on the usage of the medium to be deployed for the promotional campaign. Financial institutions use advertising, direct marketing, personal selling, public relations, and sales promotion techniques to make customers aware of their financial products and services.
This is the tool required for developing the strategy for financial services concerning the positioning of the product. In general, this tool takes into account the factors such as what is the correct time for the product or the service to be launched in the market, i.e. during the festival times; during the happening of an event.
According to Kotler, “Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market.” It locates the brand in a customer’s mind, to maximize the latent benefits to the organization.
Brand positioning gives target customers a reason to buy a certain brand in preference to others. It confirms that all brand actions have a shared aim, which is guided, directed, and delivered by the reason to buy a certain brand. It has been emphasized all points of customer contact.
This is another factor that needs to be taken into consideration in the development of strategy. This is focused on the aspect such as the price of the product or the service that is to be launched. A high price of the product or the service will deter the customers especially if the price of other products is relatively small while the low price of the product will reduce the profit margin as well as will induce a low confidence in the customers.
This is another important aspect that needs to be taken into consideration while developing the strategy. Branding refers to bestowing brand supremacy on any product or service. It is nothing but creating a difference between the offerings. Branding is when a marketer tries to make customers aware of ‘who’ their product producer is. They do it by giving it a name, and also by highlighting other elements that differentiate it from other products offered by the competitors.
Branding helps in preparing a mental structure according to which consumers organize their information about the offering in a way that makes them take a purchase decision. This, in turn, provides value to the organization.
In general, this aspect focuses on the aspects such as how to build the brand; how to ensure that the customers are somehow or the other gets linked to the product and the like. This question of branding the product is of great importance in the marketing of products and services of financial entities.