Saturday, June 2, 2012

The 2 Main Questions to Address When Creating a Marketing Strategy













strat·e·gy/ˈstratəjē/

1  -   A plan of action or policy designed to achieve a major or overall aim.
    -    The art of planning and directing overall military operations and movements in a war or battle.

The development of a strategy may be daunting for most organizations.  Common questions include:
“Where do we start?” 
“We came up with a great idea for a product (service, app, etc.).  Can’t we just build it,  put it out there, and see what happens?”

That’s fine if you don’t know where you want to go or how you should get there.  I wonder how many individuals randomly purchase a ticket to hop on a plane to go some where, not knowing what they’ll do when they get there, or how they will manage once they get there.  Perhaps there are some fly-by-the-seat-of-your-pants types of individuals out there, but most select a destination, prepare some sort of itinerary and purchase the ticket. 

I advise  a lot of start-up organizations, including graduate students developing business plans for their own potential start-up.  They all have one thing in common - a great idea.  The idea is that they’ve come up with a “bigger/better/cheaper/faster” type of product or service than what currently exists in the marketplace.  Perhaps at a cursory view of the business problem/pain point they are trying to resolve, it is better, bigger, faster, etc.  However, once they take a closer look at the competitive and industry landscape, the result is that they need to go much deeper with the product development.  Establishing a marketing strategy from the onset will save you a lot of development time building the wrong solution.

There are two key questions to address when developing a marketing strategy:

  •       Which customers will we serve?  (involves segmentation and targeting)
  •       How will we create value for them? (involves positioning and differentiation)

“STPD” is an acronym to use to remember the main components to address.

Segmentation” – select the market segments you will serve.  It can be grouped by geographic, demographic, psychographic, behavioral, etc.  Most important, the segment should be measurable and large enough to earn a profit.  Understanding the size of your markets is important.  Also, they need to be reachable so you can communicate how/where they can purchase your product.   Once you select and understand the market segments (“target markets”) you are going to sell to, it will help you define your marketing program.   

“Target Marketing” -  there are four basic strategies to address target markets:  
  •        Undifferentiated marketing (mass marketing)
  •        Differentiated marketing (a very clear competitive advantage)
  •        Concentrated marketing (focus on a very specific target market)
  •        Micromarketing/ Niche marketing. (subset of a market segment; addressing the needs of a small group)
“Positioning” – create an identity, or impression, in the minds of your target market.  Focus on separating your product and brand from the rest of the pack.

JackTrout first addressed the concept of positioning back in 1969 with his paper in “Industrial Marketing” - Positioning" is a game people play in today’s me-too market place."

“Differentiation” – is a source of competitive advantage.  Create a product/service that separates you from the competition, and is attractive to your target markets. 
A quick way to see if you truly are unique compared to your competition is to take the marketing collateral (one sheet, sales sheet, etc.), cover up your branding and read the content and ask yourself “Can our competitors say the same thing?”  I’ve found that 9 out of 10 times, the answer is “yes.”  Most companies believe they have done an excellent job in creating something unique, but the reality is, it’s not.  

Where do you go from here?  Take an unbiased look at your marketing materials as well as your products and services.  What value are you truly delivering?  Ask your customers why they use your product, what could be improved, etc.  Listen to what they have to say and incorporate that into your product development.  Take a look at what your competition is saying in the marketplace.  Finally, take a look at what’s being said by the media, industry analysts, bloggers, and more.  Analyze and synthesize the data to glean insights that can help your organization get to the next level.  There are a lot of great ideas out there.  It’s how they are executed in the marketplace that will determine how successful and profitable your organization becomes.

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