Most businesses now have a marketing strategy in place. A marketing strategy can be a major factor in increasing profitability and the overall performance on the sales side of a business. Businesses which implement marketing strategies have a focus in terms of meeting the needs of their target customers. Businesses with marketing strategies in place will concentrate their efforts in a targeted, pre-determined fashion, which will enable them to predict and anticipate future growth and profitability.
So What Is A Marketing Strategy?
A marketing strategy explains how a business will achieve the objectives laid down in the overall marketing plan. The marketing strategy will explain how the business we reach its target audience, which should lead to an increase in sales. Marketing strategies should include clearly defined roles and responsibilities and should also set time scales to each task. There are a number of common strategies, with most falling into one of the following;
• Current product or service in existing market. A business may wish to increase its market share and overall brand awareness. So a market strategy in this scenario would concentrate on new customer acquisition.
• Current product or service in a new market. This strategy involves moving into a new market with existing products or services; which could be a different area of the businesses existing country, or an entirely different country or continent.
• New product or service in existing market. This strategy involves an expansion of the range of products and services offered, with a view to marketing these to the businesses existing customer base.
• New product or service in a new market. This strategy carries highest level of risk and will also be the most expensive to implement. This is diversification on a larger scale when compared to the previous three options, and is similar to setting up a completely new company.
A marketing strategy may seem similar to a business strategy, however it is different in that it focuses on one specific aspect of the business; the customers. A business strategy looks at all the components of a business such as; the supply chain, the manufacturing operation, human resources and so on. The marketing strategy is only concerned with effecting a plan that will bring the businesses products or services to their target audience.
A marketing strategy is often also confused with the marketing mix. The marketing mix does play a part in an overall marketing strategy, but is only one facet of it. The marketing mix is concerned with establishing a Unique Selling Point (USP), which includes delivering the message of the USP to potential customers. The marketing strategy is more in depth and covers goal setting and the definition of the target market. The marketing strategy will also outline a plan which will be used to achieve the goals which have been set. The marketing strategy will then form part of the overall marketing plan. The marketing plan will go a stage further and will contain detailed information in respect to finance and budgetary constraints. It is a good idea to create a marketing strategy first, with a view to then building an overall marketing plan around that. Marketing plans and strategies can be fluid, and can be readjusted to reflect new trading conditions and other external factors.
What Information Is Needed Before A Marketing Strategy Can Be Created?
Any business looking to create a marketing strategy must first fully understand the conditions in which they are operating. The easiest way to do this is via a S.W.O.T analysis, which will look at the strengths and weaknesses of the business, as well as the opportunities and threats in the market place. Once these factors are examined the business should have a good understanding of:
• The business potential. The business will understand who its customers are, how big the market place is, in addition to current market share. Once a business ‘knows’ its customer base, it can provide more targeted offerings, based on the real needs of its customers.
• The business objectives. What does the business want to achieve? Is it increased profitability? A higher percentage of market share? Or a wider level of brand awareness to a wider customer base?
• The marketing mix. This will cover the fours ‘P’s’. Where is the product or service sold (place)? How is the product or service promoted? What is the price of the product or service? What is the product or service?
When any business is devising its marketing strategy it is important to ensure that the plan is achievable. Does the business have the budget to deliver the strategy? Is there enough stock to fulfill addition orders? Does the business have enough employees to deal with the increased work load? All of these are important factors which will determine the success or failure of the plan itself.
We have created a marketing strategy template, which can be viewed below. It is generic, but can be adapted to most business:
This marketing strategy template is split up into a number of key areas, which are as follows;
• Business Overview
• Current Market
• Target Customers
• Competition Analysis
• Product Or Service Information
• Promotional Activity
• Sales Channels
• Pricing Strategy
This template works in a questionnaire format. The marketing strategy would be created by answering each of the following questions:
1. Business Overview.
a) What is our business? What market or markets are we in? How do we meet the needs of the customers in this market or markets?
b) What do we provide? What are our products? What services do we deliver?
c) What are the primary objectives of the business over the short, medium and long term? How many new customers are we looking to acquire? What are the target revenue and profit margin figures? What is the target market share?
d) Why is the company is business? What are the core values of the business? How will we conduct business in the future?
2. Market Potential.
a) What level of opportunity is available in the market place? What is the overall size of the market?
b) How can you split up the potential market? (Geography, Age, Sex, Lifestyle)
c) What factors are leading to current success? What factors may affect future growth and increased market share?
d) What is the economic climate in which we are currently operating? What are the future forecasts regarding the state of the economy in the existing and target markets?
e) Is the business seasonal? How do different periods of the year affect trading conditions? How does this affect the stability of the business? What implications if any does it have for cash flow?
3. Target Customers.
a) What market sectors are being currently targeted? What do we understand about the current market sectors targeted? Which market sectors are not currently being targeted? What is the reason for this?
b) What type of customer is currently being targeted? What is their demographic? What are their likes and dislikes? Who are the priority customers? What makes this customer group a key target? Rank customers in order of priority; including both existing and new customers.
c) Why does our current audience buy our products or services? What is their buying motive? Is our product a necessity or luxury item?
d) What are the key differentiators in terms of our product and service, when compared to similar offered by the competition? Why do our customers choose us?
e) What is the perception of our product or service in the market place? Has is received any publicity, either negative or positive? Are there any underlying concerns with regards to our product or service?
4. Competition Analysis
a) What type of competition can have a detrimental effect on our ongoing success? Prioritize these in order of the biggest to smallest threat.
b) Who are our key competitors? What level of threat do they pose? How to they differentiate themselves from us? What is their current perceived marketing strategy? What are their strengths? What are their weaknesses? List in order of perceived threat level.
c) What company has the largest market share in both our existing and target markets? Which of our competitors has the highest level of brand awareness?
d) When considering; a), b) and c) how do we differentiate ourselves from our competition? Why could consumers choose us over one of our competitors? What is our unique selling position?
e) What are the barriers to entry in new markets? List both internal and external factors.
5. Product Or Service Information
a) What specifics needs does our product or service address? Do these match the needs of our target customers? List the needs of our target audience.
b) What are the features of our products or services? What are the key benefits for customers buying our product or services? Match the features and benefits to the needs of the target customers?
c) How do we present the features and benefits described in b) to our current and target audience?
d) What features and benefits listed in b) and c) differentiate us from our competitors?
e) How can we make our products or services better? How can they be amended to better suit the needs of our customers?
f) Is there a gap in the market for new products and services, which would meet the needs of our existing customers?
6. Promotional Activity
a) What is the perception of our business in the market place? What do our target customers think about our business and offering?
b) What is our primary marketing message? What is the key factor which must be effectively communicated to our entire target audience?
c) How can we back up our marketing messages? What proof do we have? What do existing customers say about our product or service?
d) What is our single most important marketing message?
e) Do we have any specific happy customers that can be referenced in our marketing activity?
f) How do we want to be perceived by our customers? What is the desired ‘tone’ in terms of our communication?
g) What is the overall view we would like our client to have about our business after being exposed to our marketing activity?
7. Sales Channels & Sales Process
a) How do we bring our product or service to the market? Do we sell directly to the consumer? Are we a wholesale business? Do we use direct or indirect sales channels?
b) Why does our audience buy our product? Is it a planned necessity, or is it a luxury impulse purchase?
c) What are the steps involved in terms of our customers being able to purchase our product? Is it available at a physical location? Is it only available online? Does it require delivery? Will there be a time delay in terms of the customer receiving the product or service after it has been ordered?
d) What are the key points considered by our customers when making a purchase of the type offered by our product or service?
e) What do our customers look for when selecting a sales channel or location when purchasing our product or service?
8. Pricing Strategy
a) How important of a factor is price for consumers who are considering the purchase of our product or service?
b) How do we arrive at the price of our product and service? Do we offer any incentives or discounts? Is our pricing structure clear to follow?
c) How does our pricing compare to that of our competitors? Which of our competitors offers the lowest price? How are they able to do that?
d) How can we reduce costs and pricing, without jeopardizing the quality of the offering?
e) How do customers feel about our pricing against their perceived value of the product or service itself?
f) What value is currently contained within our offering? How can we increase the value?
g) What discounts or offers are forecast in the future?
h) What are our competitors doing? Is there a trend for an increase or decrease in pricing?
Have you a marketing strategy in place? More importantly, are you using your marketing strategy? please share your thoughts.