Developing Your Marketing Strategy
Connecting Products With Customers
If you've ever led a successful marketing team, you'll know that there's much more to marketing than "promoting the right product, in the right place, at the right time."
It takes a lot of thought and understanding to market a product or service successfully, and you do an important part of this thinking through the process of developing your marketing strategy.
This is where you ask questions like "Who are our customers, and our competitors?"; "What will make our product or service stand out in the market?"; "Which market trends can we take advantage of?"; and "How can we promote our product, so that we make best use of our company's opportunity?"
These are just a few of the questions that you need to answer, and this article looks at some of the tools, frameworks, and concepts that you can use to develop an effective marketing strategy.
Talking about "products and services" is cumbersome – where we refer to "products" on their own below, these points are just as relevant to services!
The Key Elements in Marketing Strategy
There are many different approaches that you can use to develop your marketing strategy, and there is no one, single, authoritative process that you can follow. However, you'll need to consider the following four areas (at least) when you are thinking about how you'll market your product:
- Situational Analysis.
- Customer Analysis.
- Competitor Analysis
- Promotional Strategy.
We'll now look at each element separately, and then examine how these fit together.
1. Situational Analysis
This stage helps you identify the trends, opportunities, threats, and factors for success that form the context that you are operating in.
First, look at the big picture of what's happening in the market right now. Use tools like PEST Analysis and Porter's Five Forces to evaluate what's going on around you, and identify and analyze industry trends that may affect you.
PEST Analysis helps you think about the Political, Economic, Socio-cultural and Technological changes that are happening in your market. These are the things that will change people's preferences; and affect how your product is received in the marketplace now, and in the future.
Porter's Five Forces helps you understand the balance of power in your market, so that you can adjust your approach appropriately. By finding out who has power in your market (whether you, or your suppliers, competitors or customers), you can identify your best possible strategy for success.
You can also use SWOT Analysis to look at your strengths and weaknesses in the market, and to determine the things you can do to improve your position; while VRIO Analysis helps you identify organizational resources that you can draw on for success.
2. Customer Analysis
Once you have a good understanding of your situation, you can start looking at the people who may be your customers. Here, you're trying to identify groups of people who you can reach cost-effectively, with a uniquely beneficial product.
Customers vary in terms of what they want and expect from your products, so you should tailor your marketing strategy to meet these differing needs.
An effective way of doing this is through Market Segmentation, which is a useful approach for identifying groups of customers with common needs, who can be served using common channels. By segmenting your market, you can start to understand the differing needs of each group, and then target your marketing decisions to meet each set of needs.
To do this well, you need to understand your market segments and the customers within them. For instance:
- What segments exist right now?
- How large is each segment, and is it growing or declining in size?
- What is the revenue potential of each segment?
- How profitable could each segment be?
Gather information that you can use to identify critical success factors for each segment that you're interested in; and then look at the geographic, psychographic (needs, values, attitudes and fears), and demographic features that characterize the people within it.
Now you're ready to start thinking about the direction that you should be going in. The key questions to answer include:
- Which segment(s) will you target?
- How do you want to be perceived in the market?
- How will you brand yourself?
Your decisions here will guide your competitor analysis, and your eventual promotional strategy.
The Ansoff Matrix can help you think about the opportunities and risks associated with new products and new markets.
3. Competitor Analysis
You also need to understand your competitors and their products, so that you can develop a sales proposition that wins against them.
As part of this, you need to identify what customers value about your product, and what differentiates it in the marketplace – this is where Unique Selling Proposition (USP) Analysis, and Core Competence Analysis help.
USP Analysis helps you think about the factors that matter to your customers when they make a purchasing decision, and it gives you a framework for comparing how you rank against your competitors for these things. Meanwhile, Core Competence Analysis helps you think about how you can develop uniquely valuable skills within your organization.
Key questions to ask when you analyze your competitors include:
- Who are your key competitors?
- What market positions do they occupy?
- What do they offer that you don't?
- What are their strengths and weaknesses?
- What do you do better or worse than they do?
- What are their Unique Selling Propositions?
- What future competitive moves do you anticipate?
- What competitive moves do you plan to make?
- How are competitors likely to react to any moves?
See our article on Game Theory to find out more about analyzing the "competitive game" that may unfold.
4. Promotional Strategy
This last part of developing your marketing strategy helps you think through the tactical decisions that you will make to meet your marketing objectives.
This is where you take an in-depth look at your marketing mix to determine your product, price, promotion, and distribution (place) strategies.
Key issues to address here include:
- What marketing objectives will you set for the next six months? Next year? Next five years?
- What metrics will you use to measure and track success?
- What product mix will you offer? (The ideas of the Product Life Cycle and the Product Diffusion Curve will help here.)
- What pricing strategy will you use?
- How will you promote your product? And will you use elements like web marketing, social media, or other Internet marketing to promote and sell your product?
- How will you distribute your product, and where will you sell it?
Make sure that your marketing strategy is aligned with your organization's overall business strategy. It's a big problem if these don't line up!
You may need to cycle through the Customer Analysis, Competitor Analysis and Promotional Strategy phases a few times as you refine your strategy.
There is no defining process for developing a marketing strategy, but there are some great tools that you can use to develop one.
First, analyze your situation by looking at your business environment. Then identify your customers, and the areas of the market that you'll target.
You also need to analyze your competitors to get a good understanding of how you can position yourself in the marketplace; and work to learn what customers value about your product, so that you can promote this to potential clients.
Then, use this information to decide on your promotional strategy, and remember that you may need to work back through the process to ensure that all parts of your strategy are consistent.
There is no defining process for developing a marketing strategy, so don't be afraid to adapt your approach to suit your situation.