Chapter 14 - Marketing Strategy
Lesson Objective: To understand what is marketing strategy and be introduced to some legal controls over business activity
You should be a pro on the 4 most important Marketing Decisions by now:
All these decisions, as you know, are inter-connected and part of something called the Marketing Strategy. The importance of these 4 decisions is not necessarily equal in every situation.
A Marketing Strategy is a plan prepared by the Marketing Department in which all the four decisions are included in to reach Marketing Objectives with a given Marketing Budget.
Why making such plan?
For the simple reason that it's easier to reach your Marketing Objectives once you have a strategy on how to do it!
Marketing Objectives include:
- Increase revenue;
- Create a strong brand image;
- Increase profits;
- Attract new customers;
- Develop customer loyalty;
- Increase brand reputation.
The Marketing Budget are the resources that can be used to reach the Objectives.
Activity 14.1
Can a business do whatever it wants to do to reach its Objectives and Strategy?
There are Legal Controls in place to regulate business activities. Such controls are there for various reasons:
To protect customers from faulty / dangerous products:
- Different countries have different quality standards (e.g. chemicals quantity);
- Such standards force businesses to improve their quality (adding costs).
To prevent businesses from using false advertisement:
- Which also adds business costs as companies need to take down ads and sometimes even pay fines.
To protect customers when there is little or no competition (monopoly):
- Laws to prevent Collusion and Cartels;
- Laws to avoid monopolies (mergers and acquisitions).
Collusion Example:
Three companies manufacture and sell widgets;
They charge different prices at first:
Company A: $,1000
Company B:$1,050
Company C: $1,100
Companies A, B, and C agree to all charge $1,150 for their widgets so that they profit more.
To-Do List:
Activity 14.2
Chapter 14 - Marketing Strategy
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