The basic purpose of formulating a marketing strategy is to plan to use your resources in the most efficient way to get a competitive advantage. So in order to plan your future strategy related to marketing, you have to consider financial statistics like Profit on sales, Return on investments, Net profit and other figures. It would be only after this analysis that you would be able to formulate the strategy that is best for you.
Financial Information basically comprises of Financial statements and reports. It includes Balance sheets, income statement, statement of retained earnings, cash flow statements etc.
The information contained in these documents is very important for the company as a whole and for the marketing department in particular. It lets the company know how a product is faring currently in relevance with the expenditures on that product. Subsequently, the management can decide to increase the marketing and promotion budget of that product. If the financial figures have been declining for that product, they can decide to cut off the marketing budget due to its non-viability.
Marketing strategy includes the decision about the launch of a product in a specific market, the pricing strategy, location, features of the product for a specific target market and ways of promotion. Now the financial information gives relevant data to make decision about each of these components.
For example, when you explore the financial information you will come across the major target market which is most profitable for your company. You can narrow your target audience and you can reformulate your marketing strategy to serve that customers' segment only. Similarly, financial information will give you the cost analysis of the company on the basis of which the marketing strategy of your company can be decided. Similarly, financial information like interest rate in the market can also play an important role in formulating the marketing strategy. For example, a marketer plans to launch a new product and for this he has to look for the expected interest rates. The reason is that when rates will fluctuate then inflation will change, so the cost of product will change as well as price will need adjustment.
Financial information is very important in marketing strategy formulation. The reason is that marketing strategy comprises of product, price, place and promotion. Now say, you want to determine the price of the product you are going to launch, then obviously without calculating the cost per unit and the profit margin, you would never be able to find out what should be the right price.
Similarly, if Nike wants to open its outlet in a location which is the most attractive location in the market. But how Nike can take this initiative without consulting the financial department because it needs investments for this work. For the promotional purposes the company have an allocated budget which can be based on percentage of sales etc. Without financial information how a company can decide that how much it can spend on the promotions.
In this way, when the company starts formulating its marketing strategy, it has to get enough financial information about each factor like price and promotion to formulate the strategy. In this way financial information plays a very significant role.
Marketing strategy formulation is the development of the marketing mix for the target audience of the company. There are four major components of the marketing strategy which include product, price, place and promotion. There are various important considerations which the company has to look over while formulating a good marketing strategy. One of the areas under consideration is the financial information. There are various ways through which financial information of the company can help in developing the strategy. For example, how much investment is available to the company to open its outlets for a specific product in a specific region like if a company launches a clothing brand for upper class group then it cannot open its outlet in a village or average location. The most attractive location will be a metropolitan location, therefore, the company has to look into the budget available to it and then selecting the right location. Get more details from the given link: marketing strategy formulation
Whenever marketing department thinks of a new product idea, it needs to immediately consult finance department to see the viability of the ventures in terms of finances available for the product. For making a marketing strategy, one needs to have full grip on the issues including pricing of the product, development costs, R&D costs, competitors cost and pricing structure, funds available for carrying out its promotion or distribution etc. Hence financial information plays an important role in implementation of marketing strategy. It gives a fair picture of viability of a marketing strategy.
