Developing Functional Strategies
Functional strategy refers to the set of strategic initiatives taken in one part of a business. Some authors refer to these as functional "strategies": "A functional strategy is the short-term game plan for a key functional area within a company" , some others prefer to regard them "as plans, or tactics, for carrying out the business strategy". A company needs a functional strategy for every major functional activity.
Functional strategies must be developed in the following areas: finance, marketing, production/operations, R&D, and personnel. The primary role of a functional strategy is to support the company's overall business strategy. Functional strategies help in implementation of grand strategy by organizing and activating specific subunits of the company to pursue the business strategy in daily activities.
Marketing consists of four strategic considerations: products/services, pricing, channels of distribution / location of outlets, and promotion. In general, the mix of these elements should be appropriate, and the plans for each of the elements must also be appropriate.
Marketing strategy is concerned with matching existing or potential products or services with the needs of customers.
The particular generic strategy adopted by a business unit influences the types of products or services the business offers, its prices for those products or services, the channels of distribution it uses, the location of its outlets, and its advertising and promotional policies. Products or services are characterized by number, diversity, and rate of change.
The marketing strategy selected by an organization is dependent on whether the organization is attempting to reach new or existing customers and whether its products or services are new or already exist.
With a marketing penetration strategy, the firm attempts to gain greater control in a market in which it already has a product or services.
A market development strategy consists of introducing the firm's existing products or services to customers other that the ones it currently serves.
A firm using a product development strategy creates a new product or service for existing customers.
With a diversification marketing strategy, an organization offers a new product or service to new customers.
A number of pricing options are available. A lower price will be desirable to increase volume. However, pricing is a complex issue because it is related to cost-volume-profit trade-offs and because it is frequently used as a competitive weapon.
The functional strategy for the place component identifies where, when, and by whom the product/services are to be offered for sale. This component of marketing strategy guides decisions regrading channels to ensure consistency with the total marketing effort.
Promotion refers to the methods which are used to put products and services in the public eye. Functional strategy for the promotion component should provide marketing managers with basic guides for the use and mix of advertising, personal selling, sales promotion, and media selection.
The key is to strive for consistency among these all marketing elements.