Functional business strategy is often used by slight businesses to emphasis on and achieve the business's constituent’s parts. By developing distinct goals and purposes for precise functions in the company, business owners and managers can allocate the right people and wealth to the right tasks. An employee with skills in technology, for instance, can be specified work in that field as faced to one with which she isn't used to. The benefits of functional business plan so depend on on seeing employees and funds as ends, not as a means to attaining something else. This often means measuring the strengths and weaknesses of the business's functions and of its funds, including employees.

3. Objective of Functional Strategies

The Functional Strategies must (1) fit with the needs and purpose of functional areas with respect to meeting its goals and objectives (2) be realistic to give the organization available resources and environment (3) be consistent with organizations goals and objectives.

Therefore we can say that functional Strategies must be evaluated to determine its effect on the organization’s sales, costs, image and profitability.

And for the successful implementation of the functional Strategies the organization must rely on the commitment and knowledge of its employees

4. Types of functional strategies

 Marketing

 Production

 Personnel

 Research and Development

 Financial Plans and Policies

The four functional-level strategies in any organization are the level of their operating divisions and departments; this strategic issues are closely linked to each other and to the

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING businesses processes on the value chain, and are

involved in the development and coordination of the company resources through which businesses unit level strategies can be executed effectively and efficiently, thus, provides inputs to all corporate of level strategies, which in turn becomes action plans to each department of any organization that must be accomplished

The efficiency of each employee, the quality developed to each department, the innovation applied as a company and the customer receptiveness arranged to the community, are the core basis of the functional-level strategies that are closely linked to each one, in order to become a successful business entity.

An organization designs functional Strategies to provide a total integration of efforts that focus on achieving the areas stated objectives.

Production strategies involve strategies for procurement, just in time inventory control or warehousing,

Marketing strategies focuses on selecting one or more target markets and developing marketing program that satisfies the needs and wants of members of the target market, Personnel deals with employees recruitment, selection, retention, training and development, evaluation and compensation,

Research and Development deals with various research and development in the products for the success and growth.

Financial Plans and Policies guides an organization so that it can run an efficient, honest and accountable finance system.

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5. Marketing strategy

The subsequent activities are below the purview of the chief marketing officer:

 Product definition and development, and related marketing activities.

 Pricing, advancement, and distribution strategies and practices.

 Administration of the sales force.

 Customer relations.

 Quality control at the product level.

 Quality mechanism at the sales level.

 Analyses of competitors' products and marketing strategies.

 Analyses of additional products and their possible effect on the firm's current and future operations.

 Inventory strategies and practices.

 Customer trade credit policies and practices.

 The preparation of capital budgets for the marketing area.

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING In marketing strategies organizations or companies uses 2 types of strategies:

 Market Development

 And Product Development

In Market Development strategy a company or an organization capture larger market share of an existing market or develop new markets for the current situations or products.

In product development strategy a company or an organization develop new products for the existing markets or develop new products for new markets

Plans and policies related to marketing have to be formulated and implemented on the basis of 4 Ps of marketing mix. The marketing mix is the set of controllable, planned marketing tools which a company uses to produce a wanted reaction from its target customers and market. It contains of everything that a company can do to effect demand for its produce. It is also a device to help marketing planning and execution.

An effective marketing strategy associations the 4 Ps of the marketing mix. Marketing strategy is intended to meet the company’s marketing purposes given that its customers with value. The 4 Ps of the marketing mix are connected, and association to start the manufactured goods position within its target markets.

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6. Four Ps of marketing:

Product, price, place and promotion and their tools to contribute to the marketing mix

The marketing mix can be distributed into four groups of variables usually known as the four Ps:

1. Product: The goods and/or services obtainable by a company to its customers. A manufactured goods is an item that fulfills what a consumer demands. It is a tangible good or an intangible service. Tangible products are those which are independent physical being. Typical instances of mass-produced, tangible articles are the motor car. A less noticeable but pervasive mass-produced service is a computer operating system Every product is subject to a life-cycle containing its growth phase followed by a maturity phase and lastly an eventual period of deterioration as sales fall. Marketers must do cautious research on how long the life cycle of the produce they are advertising is probable to be and application their responsiveness on different challenges that rise as the

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING product moves. The marketer essential also reflect the

product mix. Marketers can enlarge the current product mix by increasing a definite product line's depth or by increasing the number of product lines. Marketers should reflect how to position the product, how to exploit the brand, how to exploit the company's properties and how to constitute the product mix so that to each product complements the other. The marketer must also think through product development strategies for their products for the achievement

2.Price:

Pricing Factors

Pricing should take into account the following factors into account:

1. Fixed and variable costs.

2. Competition

3. Company objectives

4. Proposed positioning strategies.

5. Target group and willingness to pay

An organization can adopt a number of pricing strategies; the pricing strategy will usually be based on corporate objectives.

It is the amount of money paid by customers to purchase the product. The price is very important for any organization as it determines the company's profit and hence, survival. Adjustment in the price may have a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.

When setting a price, the marketer must be aware of the customer perceived value

for the product. Three basic pricing strategies are: market skimming pricing,

market penetration pricing and neutral pricing. The 'reference value' (where the

consumer refers to the prices of competing products) and the 'differential value'

(the consumer's view of this product's attributes versus the attributes of other

products) must be taken into account.

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING Penetration Pricing –under this pricing organization sets a small price to increase sales and market share. Once market share has been captured the firm may then increase their

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING price. For example a television satellite company sets a

low price to get subscribers then increases the price as their consumer’s increases.

Skimming Pricing -The organization sets an initial high price and then slowly lowers the price to create the product offered to a wider market. The objective of this pricing is to skim profits of the market layer by layer. A games console company diminishes the price of their comfort over 5 years, charging a premium at presentation and lowest price near the end of its life cycle.

Competition Pricing- Competition pricing is setting a price in comparison with competitors. A firm has three options and these are to price lower, price the same or price higher. Some firms offer a price matching service to match what their competitors are offering.

Product Line Pricing –It is the Pricing of dissimilar products within the same product variety at dissimilar price points. For example a DVD manufacturer contribution different DVD recorders with dissimilar features at different prices e.g. A HD and non HD version. The greater the features and the benefit obtained the greater the consumer will pay. This form of price perception assists the company in maximizing turnover and profits.

Bundle Pricing -The organization bundles a group of products at a reduced price.

Common methods are “buy one and get one free” advertisings or BOGOF's as they are now recognized. This policy is very general with supermarkets who often offer BOGOF strategies.

Psychological Pricing- In psychological pricing seller will think through the psychology of price and the positioning of price within the market place. The seller will therefore charge Rs.199 instead of Rs.200. The reason why this methods work, is because buyers will still say they purchased their product under Rs.200, even thought it was a rupee away.

Premium Pricing- The price set is high to reveal the selectiveness of the product. An instance of products using this plan would be Harrods, first class airline services, Porsche etc.

Optional Pricing -The organization sells optional extras along with the product to maximize its turnover. This plan is used commonly within the car industry.

Cost Based Pricing- The firms profits into interpretation the cost of production and distribution, they resolve on a markup which they would like for profit to come to their final appraising decision. If a firm functions in a very volatile industry, where costs are varying frequently no set price can be set, therefore the firm will decide on their markup to approve their pricing choice.

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING Cost plus Pricing-under this pricing firm add a

proportion to costs as profit edge to come to their final pricing decisions. For instance it may cost Rs.100 to produce a widget and the firm adds 20% as a profit margin so the selling price would be Rs.120.00

3. Place (or distribution): It denotes to if the product at a place which is suitable for consumers to right to use. Various strategies are used such as thorough distribution, selective sharing, special distribution and permitting can be used by the marketer to accompaniment the other aspects of the marketing mix

There are two types of networks of distribution methods are available. Indirect distribution includes allocating product by the use of an intermediate for example a manufacturer selling to a wholesaler and then on to the retailer. Direct sharing contains distributing direct from a manufacturer to the consumer For instance Dell Computers providing directly to its target customers. The benefit of direct distribution is that it gives a manufacturer complete control over their product.

Above indirect distribution (left) and direct distribution (right).

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING Distribution Strategies

Dependent on the type of product being distributed there are three common distribution strategies available:

1. Intensive distribution it used usually to allocate low priced or impulse purchase products e.g. chocolates, soft drinks.

2. Exclusive distribution it includes limiting dissemination to a single outlet. The product is typically highly priced, and involves the intermediary to place much element in its sell. E.g. sale of vehicles through exclusive dealers.

3. Selective Distribution an insignificant number of retail outlets are chosen to distribute the product. Selective distribution is mutual with products such as PCs, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.

If a manufacturer decides to adopt an exclusive or selective strategy they should select a intermediary which has experience of handling similar products, credible and is known by the target audience

4. Promotion: The activities that transfer the product’s features and benefits and persuade customers to acquisition the product. These are the activities that make the product obtainable to consumers. All of the procedures of communication that a marketer may use to make available information to dissimilar parties about the product. Promotion contains elements such as: advertising, public relations, sales organization and sales promotion

A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organization’s promotional mix strategy can consist of:

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING An effective communication campaign should comprise of a well thought out message strategy. What message are you trying to put across to your target audience? How will you deliver that message? Will it be through effective branding? Logos or slogan design?

Straplines? The message should reinforce the benefit of the product and should also help the company in developing a positioning strategy for the product. Companies with effective message strategies include:

Nike: Just do it.

Coca-Cola: The real thing

Media strategy refers to how the organization is going to deliver its message. What aspects of the promotional mix will the company use to deliver their message strategy.

Where will they promote it? Clearly the company must take into account the readership and general behavior of their target audience before they select their media strategy.

What newspapers do their target markets read? Targeting through effective media campaigns could save the company valuable financial resources.

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7. Product Life Cycle

As we know that every product move through the four stages of the product lifecycle. So different promotional strategies should be employed by the organizations or company. So as to ensure the healthy success and life of the product at these stages to. Stages and promotion strategies employed are as follows:

Introduction

When a product is new the company or organization’s objective will be to notify the target audience of its entry. Television, radio, magazine, coupons etc. may be used by the organization or company to push the product through the introduction stage of the lifecycle. Push and Pull Strategies will be used at this crucial stage.

Growth

When the creation becomes acknowledged by the target market (at this stage of the lifecycle) the organization will employ strategy to increase brand awareness and customer loyalty.

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING Maturity

At this stage of the lifecycle the creation will be go through increased competition and will need believable tactics to encourage consumers to choose their product over their competitors. Any difference advantage/benefit will be need to be clearly communicated to the target viewers.

Decline

As the product influences the decay stage of its life cycle, all the organization can do is use strategy to remind consumers about the product in a bid to slow the inevitable.

Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the announcement is not in a straight line paid for and includes press releases, sponsorship deals, presentations, conferences, seminars or trade fairs and events. Word- of-mouth is any actually informal communication about the product by normal individuals, satisfied customers or people especially involved to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relation

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING Internet Promotion

Four Ps tools are as follows

 Product: variety, quality, design, features, brand name, packaging, services

 Price: list price, discounts, allowance, payment period, credit terms

 Place: channels, coverage, locations, inventory, transportation, logistics

 Promotion: advertising, personal selling, sales promotion, public relations

Amongst the other marketing mix models have been developed over the years is Boom and Bitner's 7Ps, sometimes called the extended marketing mix, which include the first 4 Ps, plus people, processes and physical layout decisions.

There is Another marketing mix approach is Lauterborn's 4Cs, which offerings the components of the marketing mix from the buyer's, rather than the seller's, perception. It is made up of Customer needs and wants (the equivalent of product), Cost (price), Convenience (place) and Communication (promotion).

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8. Lauterborn's four Cs

Apart from the above 4Ps Robert F. Lauterborn offered a four Cs classification in 1990^, which is a more consumer-oriented form of the four Ps that goes to better fit the movement from mass marketing to niche marketing

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING Value addition2.

Using the 4Ps Marketing Mix Model

The marketing mix model can be used to decide how to take a new offer to market. It can also be used to test the existing marketing strategy. Whether to consider a new or existing offer, following steps below helps to define and improve marketing mix.

1. Start by identifying the product or service that we want to analyze.

2. Now go through and answer the 4Ps questions – as defined in detail above.

3. Try asking "why" and "what if" questions . For example, ask why target audience needs a particular feature. What if price drop by 5%? What if we offer more colors? Why sell through wholesalers rather than direct channels? What if we improve Personal selling rather than rely on TV advertising?

4. Once we have a well-defined marketing mix, try "testing" the overall offer from the customer's perspective, by asking customer focused questions:

1. Does it meet their needs? (product)

2. Will they find it where they shop? (place) 3. Will they consider it's priced favorably? (price)

4. And will the marketing communications reach them? (promotion)

5. Keep on asking questions and making changes in mix until it satisfied and optimizes marketing mix, given the information and facts and figures available.

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MODULE NO.23: FUNCTIONAL STRATEGY: MARKETING 6. Review marketing mix regularly, as some

elements will need to change as the product or service, and its market, grow, mature and adapt in an ever-changing competitive environment.

9. Summary

So we can say that marketing plans and policies include the following question:

 Which products or services will be focused on ,present or new ones

 exclusive dealership or multiple channels

 how we promote these products or services,whether to uuse large advertisement or personnel selling

 do we have an adequate sales force?

In other words marketing plans and policies include how will we price,promote,and distribute,and what specific lines of products will we develop with what kind of quality. It also includes finding Profit Opportunities, Creating Competitive Advantage, Challenging Competitive Advantage,Creating Corporate Advantage.

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