The basic elements of a marketing strategy consist of (1) the target market, and (2) the marketing mix variables of product, price, place and promotion that combine to satisfy the needs of the target market. The outer circle in Figure lists environmental characteristics that provide the framework within which marketing strategies are planned.

Figure 1.1.1 Elements of a marketing strategy and its environmental framework

Marketing activities focus on the consumer. Therefore, a market-driven organization begins its overall strategy with a detailed description of its target market: the group of people toward whom the firm decides to direct its marketing efforts. After marketers select a target market, they direct their activities towards profitably satisfying that target segment. Although they must manipulate many variables to reach this goal, marketing decision making can be divided into four areas: product, price, place (distribution) and promotion (marketing communication). These 4 Ps of marketing are referred to as the marketing mix. The 4 Ps blend to fit the needs and preferences of a specific target market. These are the four variables that a marketer can use and control in different combinations to create value for customers. Figure illustrates the focus of the marketing mix variables on the central choice of consumer or organizational target markets. In addition, decisions about the 4 Ps are affected by the environmental factors in the outer circle of that figure. Unlike the controllable marketing mix elements, the environmental variables frequently lie outside the control of marketers.

The product strategy involves deciding what goods and services the firm should offer to a group of consumers and also making decisions about customer service, brand name, packaging, labelling, product life cycles and new product development. The pricing strategy deals with the methods of setting profitable and justifiable prices. Marketers develop place (distribution) strategy to ensure that consumers find their products available in the proper quantities at the right times and places. Place-related decisions involve the distribution functions and marketing intermediaries (channel members). In the promotional strategy, marketers blend together the various elements of promotion to communicate most effectively with their target market. Many firms use an approach called Integrate Marketing Communications (IMC) to coordinate all promotional activities so that the consumer receives a unified, consistent and effective message. Marketers do not make decisions about target markets and marketing mix variables in a vacuum. They must take into account the dynamic nature of the five marketing environmental dimensions as shown in Figure – competitive, political legal, economic, technological and social-cultural dimensions. Marketers compete for the same consumers. So the developments in the competitive environment will have lot of repercussions. The political-legal environment includes the governing and regulatory bodies who impose guidelines to the marketers. Adherence to the law of the land is an imperative for a marketer to be a good and responsible corporate citizen. The economic environment dictates the mood in the target market who take decisions such as to buy or save, to buy now or later. The technological environment can spell life or death for a marketer with break-through technologies. Marketers often leap forward or get left behind owing to the changes in the technological environment. The social-cultural environment offers cues for the marketers to ‘connect’ well with the target market. Failure on part of the marketer to understand the social-cultural environment will have serious consequences. A marketers cannot afford to rub a society/culture on the wrong side!