There are many elements to strategy. However, if we were to design marketing strategy as an environment, then we will find that the 7 elements shown in the diagram are the ones which make a huge difference in marketing strategy.
Each of these elements is dynamic in nature on their own. Naturally, when one element changes, then all the others will also change. Each of the 7 key elements of marketing strategy, have their own depending variables which define that element.
So for example – A customer as an element is not just a customer, but he also includes different variables like customer service of the company, customer’s expectations, his value definition and many different such variables which keep changing. And the combination of these variables for the single element i.e Customer. So if there are 7 different key elements of marketing strategy, then you can understand how many different variables are involved in defining marketing strategy.
Hence, strategy decisions are always difficult and are left to the most experienced people in the organization.
The key elements of marketing strategy are divided in two parts. One is the internal environment and the other is the external environment.
The internal environment (environment which the company can control) consists of customers, corporation and competition. These are entities which the company can control and at least influence. And hence these three entities form a triangle, each influencing the other.
The external environment (environment which the company cannot control) consists of the PEST environment. This environment influences the decision making of the internal environment. However, each entity of the internal environment cannot influence the external environment.
Although customers have the most power, the technology, political, economical or social aspects can change at any time due to any incidence. And hence, to survive the external environment, the internal environment has to adjust very fast.
1) Customers – The reason why marketing is evolving and the reason we need so many strategies in place is the Customer. I am writing this article and i am a customer. My purchase habits, decisions are completely different then you, who are reading this article and are also a customer. Any strategy considers customers as the starting point of the strategy and then moves forward. Hence, strategies generally start with segmentation, targeting and positioning and then move forward.
2) Corporation – By corporation, we mean the internal strengths and weaknesses of the company. SWOT analysis is a strong analysis tool of corporations to determine what the corporate is capable of, and what cannot be achieved by the corporate. To design a strategy, the corporate needs to conduct its own internal analysis and then take the right decisions.
3) Competition – The competition influences both – corporation as well as customers. In fact, competition can become one of the contributors to external environment, specifically technological environment. Tackling competition is one of the biggest challenges in the internal environment – a challenge which consumes maximum time of the company and involves maximum resources to be spent. Branding and marketing activities take place partially because of ever increasing fear of competition.
4) Political environment – Many things influence the political environment of a country. Level of control over policies, business friendliness, political structure as well as various other factors help build the political and legal environment of a country. Places like Syria, Iraq and Iran are not places where businesses will find the political environment conducive.
5) Technological environment – Many of my readers will be reading this article on a smartphone. Was that possible a decade back? What happened to all those companies which were top of the line a decade back? Where is Nokia? The technological environment changes so fast, that companies that do not adapt, fail. Hence, technology is a prominent element of marketing strategy.
6) Social environment – McDonalds keeps changing its menu in each new country it enters. This is because of the social environment. Countries like US and UK are beef friendly whereas in places like India it is mostly banned & people dont go to beef serving hotels and restaurants. So the social environment is different in different places. Based on the social environment, the strategy also differs.
7) Economic environment – If you wanted to launch a premium product, then the economical environment of a country matters a lot. Many brands are still present only in developed countries, and not even in developing countries. This is because of the low GDP of developing and under developed countries, which will not give the desired margins to a premium established brand. Hence, while designing a strategy, you need to target the right economic market to enter. Even FMCG’s consider the economy of a market before entering that market, although FMCG products are known to be the most penetrative.
Overall, in the framework of strategy, the above 7 elements are critical to design the appropriate marketing strategy.